Get Yer Cheap Nukes Now

Are discount nuclear plants a good idea? Russia thinks so. The Kremlin has set about recasting Russia's once top-secret nuclear industry as the world's leading mass marketer of cheap, reliable reactors. As energy prices soar, nuclear power has been gaining in popularity, and Russia is the market leader in cut-price reactors. Current models of its VVER1000 cold-water reactors cost just $750 per kilowatt of capacity, compared with $1,900 to $2,300 for a French reactor. Russia also offers small reactors of 300 to 400 megawatts for countries with small budgets. "Our power stations are not a bit worse than anyone else's," says Sergei Shmatko, the president of Atomstroyexport, Russia's atomic-power-station construction company. "My dream," he adds, "is to make the export and construction of our nuclear stations as simple and as fast as putting IKEA furniture together."

Russian President Vladimir Putin signaled his seriousness about marketing Russian nukes in the spring of 2006 when he appointed his chief of staff, Sergei Sobyanin, as chairman of TVEL, an umbrella body that oversees the country's nuclear-power industry. Already the industry brings in $2.6 billion a year in electricity sales and $2.4 billion from selling nuclear fuel. The next step: an aggressive marketing campaign aimed largely at developing-world consumers. It has customers in China and India (both have plants under construction) and Iran, which has a single-reactor plant on the Persian Gulf coast at Bushehr but has expressed interest in up to 20 more. Buyers from Vietnam, Turkey, Belarus, Kazakhstan, Egypt and Morocco have all been in talks with Russia as well.

Russia has longstanding experience exporting reactors, mostly to former Soviet clients like Bulgaria, Hungary, Slovakia and the Czech Republic. For some, the post-Soviet nuclear program is a welcome purveyor of clean energy, and at least one country, Bulgaria, is negotiating with Atomstroyexport to build a second plant. Others are less happy. Lithuanian environmentalists are deeply concerned that the Ignalina reactor, a Chernobyl-type plant situated on the shores of the Baltic, is a time bomb that will cost millions to shut down and clean up. Neighbors are concerned too. "We believe that Russian reactors are very dangerous," says Aleksandr Nikitin, a Soviet naval captain turned environmental activist for the Norwegian group Bellona. A recent Bellona report blasted safety practices--though not design faults--at Russian power stations, and warned against Moscow's plans to prolong the working life of Chernobyl-style reactors that have already reached their designated retirement dates.

The problem, according to one senior Russian expert at Moscow's Scientific-Technical Center of Nuclear Security who is not authorized to speak on the record, is that concerns about sloppy maintenance are real. "Unfortunately, Chernobyl did not teach us," says the expert. "Once again we have a generation that is in a hurry to build more, to build fast, and who think that they are very smart." He adds, however, that Iranian supervisors at Bushehr are "tough" and work "strictly according to the rulebook."

Russia's Nukes-R-Us marketing has raised the hackles of the United States. While Russia exports cold-water reactors that aren't much use to produce weapons-grade fuel, a civilian reactor of any kind can serve as cover for dabbling in weapons-related activities. Iran, for one, has used its Russian-supplied reactor as an excuse to insist on developing its own means to enrich fuel for the plant--despite Russian offers to provide fuel, or even to enrich Iranian uranium on Russian soil. Russians insist they keep scrupulously to the rules. "We will never work with countries that have problems with international law," says Shmatko. Indeed, the International Atomic Energy Agency has never presented evidence that Iran acquired any of its illegal uranium-enrichment technology from Russia. And a sanctions resolution against Iran drafted by Britain, France and Germany allows Russia to continue work on Bushehr.

Still, the international community has lingering suspicions. A 1998 report by the U.S. Congress's General Accounting Office cited evidence that Russia's Federal Security Service had sent rocket scientists to Iran to help develop its first medium-range ballistic missile, the Shahab-3. At least 20 Russian research institutes and companies have been under U.S. boycott since 1999 for their alleged transfer of controlled missile and nuclear technology to Russian students and companies. And in 2005, Yevgeny Adamov, Russia's Atomic Energy minister, was arrested in Switzerland on a U.S. warrant. He was accused of stealing more than $9 million of U.S. aid money earmarked for improving the safety of Russian reactors. After spending time in a Swiss jail he was extradited to Moscow, which promised to prosecute Adamov at home.

"We're willing to believe that the Russians are playing it straight now," says a Moscow-based Western diplomat charged with policing nuclear proliferation. "But we're not dealing with a very reassuring pattern of previous behavior." That is all in the past, says Sergei Kiriyenko, head of Russia's Federal Atomic Energy Agency. These days, "peaceful nuclear power is the right of all humanity--we do not have the right to deny anyone that right." The question is, can Russia's customers around the world be relied upon to share Moscow's newfound probity?

Copyright 2006 Newsweek: not for distribution outside of Newsweek Inc.

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