Energy co-operation

The commencement of the Belarusian Power Plant construction was officially announced at the minsk meeting of the Prime Minister Vladimir Semashko and the Rosatom’s Director General Sergey Kirienko

The first power plant at the station, which will have a capacity of 1,000 megawatts, is due to be opened no later than 2017. The construction is estimated to cost $6-7bn, the largest investment project in Belarus in recent years. The power station will provide 25 percent of the country’s needs, with some of the output expected to be exported to western markets.

Logical choice
Belarus has negotiated with companies in several countries as well as Russia, studying the possibilities of American-Japanese Westinghouse-Toshiba, French-German Areva-Siemens and Chinese partners. Initially, the experts noted that Russia’s Atomstroyexport JSC (which is part of Rosatom — author’s remark) is likely to act as the general contractor. “I think that, politically, the issue is settled,” concluded Mr. Semashko at the above-mentioned meeting.
A contract for the construction of the nuclear power plant is to be signed in May. In June, the Belarusian and Russian sides will conclude a credit agreement defining the mechanism for financing the project. In September, construction work will begin in Ostrovets District of Grodno Region.
Rosatom’s experts greatly appreciate Belarus’ preparations for the construction and Mr. Kirienko especially praises the neutral impact of the project on the environment. “This meets all international norms,” he said, adding, “Public hearings have taken place, which is also very important for future construction.”
Rosatom considers the Belarusian plant to be ‘the most modern project’. According to the experts, some of its technological solutions are not just better but unique in the world.

Transparent accounting
Minsk and Moscow have already agreed the cost construction for the nuclear power plant, which will be transparent. Rosatom says this is unprecedented, noting, “We’ll operate in Belarus according to the same rules as are applied in Russia. We’ve never worked this way with any foreign customer.” As a rule, companies involved in the construction of nuclear power plants are not open about the cost breakdown. A customer is proposed a final price, which is negotiated. However, it seems that Rosatom will have no commercial secrets in its relations with its Belarusian partners. The expenses for the project will be monitored by state authorities in Moscow and in Minsk. The parties will purchase equipment jointly and make joint decisions regarding construction...
Rosatom plans to involve Belarusian builders completely. “Everything relating to construction assembly which is possible to do here, will be done here, and we will work hard to use local materials and equipment,” explained Mr. Kirienko. “About 30 percent of the large-scale orders for materials will go to Belarusian firms.” Rosatom went on to say that if it became clear that Belarusian firms could supply all the materials and work to a higher standard than Russian firms, and to do so at less cost, than it is quite possible that they could be invited to construct a Baltic nuclear power station in Kaliningrad Region.

Not rivals but partners
The authorities in Moscow believe that it is important that the Belarusian power station and the plant that Russia is to build in the Baltic Region should not become rivals. “This might happen. This is why we are raising the question of establishing a joint company to sell electric power from Belarus to western markets,” explained the Russian Ambassador to Belarus, Alexander Surikov, last December. “This would help us avoid rivalry.”
The construction of a Baltic nuclear power station in the Neman District of Kaliningrad Region started in 2009. It will generate 2,300 megawatts, with the launch planned for 2016 — almost simultaneously with the Belarusian plant. With this in mind, the establishment of a joint company to sell some of the generated electricity to the West seems a logical initiative.
Since the Ignalina nuclear power station in the Baltic Region closed in 2009, there has been a shortage of cheap electric power. A joint project of Lithuania, Latvia, Estonia and Poland is expected to saturate the market, through the construction of a Visagina nuclear power plant. However, it is understood that construction will not start until 2013. Moreover, its financing is not yet secured. Many seriously doubt the viability of the four states’ partnership (for a start, Estonia has plans to build its own mini nuclear power plant). At the same time, Lithuania is unlikely to finance the construction of the plant without the help of its neighbours.
Consequently, the Baltic and Belarusian stations have good export prospects. It is now vital to develop a mutually beneficial sales plan. The Deputy Energy Minister, Mikhail Mikhaduyk, recently announced that, after long talks, Belarus and Russia have reached an agreement to set up a joint venture to export electric power. “Our expert negotiators have secured a mutually acceptable arrangement that ensures the joint sale of electric power via jointly owned cross-border infrastructure on mutually beneficial terms,” he said.
This was announced in December and, in January, Mr. Kirienko and Mr. Semashko announced that Minsk and Moscow would be signing an intergovernmental agreement on the parallel operation of our energy systems. This means that a Belarusian-Russian joint company will be set up this June to export electric power. As a result, all the main issues surrounding the construction of the nuclear power plant have been settled. The time for the practical application of the agreement has begun.

By Vladimir Vasiliev