The first Kazakh nuclear power plant will be built by the Russian state-owned company Rosatom. The technology supplier and the Atomic Energy Agency of the Republic of Kazakhstan have approved the preliminary deadlines for the project.
On June 14, the Atomic Energy Agency announced that Rosatom had been selected as the leader of an international consortium for the construction of a nuclear power plant (NPP) in Kazakhstan. On June 20, on the sidelines of the St. Petersburg International Economic Forum in Russia, the parties approved the Indicative Roadmap, which outlines the stages of project preparation and implementation, including engineering and survey work, the conclusion of an EPC contract, and the development of project documentation.
On the same day, Kazakhstan Nuclear Power Plants (KNPP, a subsidiary of the Samruk-Kazyna Fund) and Atomstroyexport JSC (Rosatom's engineering company) signed a framework agreement defining the key principles of cooperation.
At the same time, the agency also reported that China's China National Nuclear Corporation (CNNC) will become the leader of a consortium to build another nuclear power plant in Kazakhstan
The agency explained why the Russian and Chinese companies were selected as suppliers of reactors for future Kazakh nuclear power plants. Recall that in addition to them, the short list of potential technology suppliers included South Korea's Korea Hydro & Nuclear Power (KHNP) and France's Electricite de France (EDF).
Who chose the supplier and how
"Rosatom is the founder of nuclear technologies in the world, and has the most developed and experienced "nuclear school". The world's first nuclear power plant was launched in Obninsk (Russia) in 1954. At the same time, it should be noted that the world's first industrial fast neutron reactor BN-350 was built using Russian technologies and operated in our Aktau, on the shores of the Caspian Sea," the agency said, commenting on the choice of the contractor.
The department noted that "on the technical side, all reactors have a design service life of 60 years. However, the nuclear reactors APR1000 (Korea) and EPR1200 (France) do not have operating experience, unlike the Russian VVER-1200, the Chinese HPR1000, and the Korean APR1400."
The agency also reported that Russia and China are building more than 20 reactors, both at home and abroad. In contrast, France and Korea are building two reactors using APR1400 technology in Korea, APR1000 in the Czech Republic, and EPR1600 in the UK.
"Moreover, Russia and China have more extensive experience in participating in international consortia, since they can effectively combine equipment from different manufacturers in one project. In general, at present, only Russia and China can independently offer a full range of services, from financing to localization of the nuclear fuel cycle, including redistribution, personnel training, design, construction, handling, and reprocessing of spent nuclear fuel. At the same time, Russia has the best experience in building nuclear power plants abroad with more than 20 reactors in China, Turkey, Bangladesh, Belarus, India, Iran, and Egypt, including complex adaptation to national requirements and working with local industry," the agency said.
When selecting a contractor, the safety of the proposed technologies, the supplier's international experience, project financing issues, personnel training, production localization, etc., were considered. The main selection criterion was safety, which considered the presence of a double hermetic shell in the reactor, a combination of active and passive protection systems, emergency power supply systems for generators, and the likelihood of accidents or failures.
The department noted that from the point of view of safety, all technologies of the companies are comparable to each other, withstand or can be adapted to a maximum design earthquake of 9 points, and the probability of an accident does not exceed 10⁷ per year, that is, 1 in 10 million.
According to the agency, "it is more difficult to implement projects abroad than at home," since it is necessary to adapt the local regulatory environment, use local infrastructure and resources. In addition, it is necessary to form an effective international consortium, which requires the experience of the consortium leader in interaction with other equipment suppliers.
The selection of Rosatom as the leader of the consortium was made at various levels: by nuclear industry experts, the Atomic Energy Agency, the Interdepartmental Commission on the Development of the Nuclear Industry, and the methodology for evaluating the submitted reactor technologies and other proposals of potential suppliers was confirmed by an independent international consultant - the French engineering company Assystem. The decision does not imply a revision and is considered final for the first nuclear power plant, the agency noted.
Established in 1966 to support EDF in the commissioning of French nuclear reactors, Assystem today serves nuclear power plants throughout their entire life cycle and is one of the world's top three engineering companies in this field. At the same time, the French company recommended that Turkey choose Rosatom for the construction of the Akkuyu nuclear power plant, and now provides research, design, and supervision services to this project. In 2017, it signed a memorandum with Atomstroyexport, agreeing to cooperate in the design, construction, and commissioning of nuclear power plants outside Russia.
According to the agency, Assystem cooperates with most countries that are just starting to develop nuclear energy, including the UAE, Saudi Arabia, and Turkey. At the same time, in contractual relations, the company everywhere acts on the side of the customer and therefore protects the national interests of the country.
"Indeed, the company has experience of interacting with Rosatom on behalf of the government of the countries building nuclear power plants, it is well aware of their advantages and disadvantages," the agency notes.
At the same time, the agency cannot give public access to the results of a comparative analysis of suppliers' proposals, "since some of the information provided by vendors is confidential and is not subject to disclosure by signed agreements on the non-proliferation of information."
Now, the agency, together with KNPP and Rosatom, will begin work on creating an international consortium. According to the signed framework agreement, Atomstroyexport will be the first to join it and will become the general contractor for construction. It holds a similar position in the Akkuyu NPP project in Turkey, which is managed by Rosatom.
The general contract with Rosatom will be concluded after Kazakhstan and Russia sign Intergovernmental Agreements on the basic conditions for cooperation and the provision of export financing.
Finances are a decisive factor
Earlier, at the stage of choosing a supplier, we wrote that the government may choose Rosatom, since the Russian company provides financing for the project. Now the agency reports that the parties have reached agreements that the Russian Federation will provide Kazakhstan with export financing on preferential terms.
"The parameters of this financing are at the stage of negotiations. The funds of the export credit, among other things, will be used for the purchase of equipment with a long production time, such as a nuclear reactor, steam generators, main circulation pumps, as well as for construction work. These costs are necessary to comply with the project implementation schedule and prepare for full-scale construction," the department said.
The agency believes that it is too early to talk about the final cost of the project, which is influenced by a few factors, including the results of engineering and survey work. Also, the progress of construction may be affected by the meteorological and seismological conditions of the plant location, the use of equipment from international manufacturers that are not part of the reactor technology supplier. The cost of nuclear power plants will also depend on the level of localization in the production of equipment and building materials in Kazakhstan, the degree of participation of construction and installation enterprises and qualified specialists, that is, whether there are human resources for construction or whether it will be necessary to attract them from abroad. It is also necessary to consider logistical, financial, and other costs. The final cost will be determined based on the results of the completion of the design and the passage of the expertise.
According to data from open sources, for the construction of nuclear power plants by Rosatom in Belarus and Bangladesh, the Russian government approved the issuance of loans to these countries in the amount of $10 billion and $11.4 billion, respectively. In both cases, we are talking about two-unit power plants with a total capacity of 2400 MW. Reactor type - VVER-1200. If we assume that the construction of the Kazakh nuclear power plant will be carried out according to a similar scheme and parameters, then the total cost of the first nuclear power plant will vary between $10-15 billion, considering inflation and construction time.
The total cost of the Akkuyu nuclear power plant, with a capacity of 4.8 GW (four power units with VVER-1200 reactors), the construction of which is also financed by a loan provided by the Russian Federation, is estimated at $20 billion, according to the owner and operator of the power plant. Although in June last year, Rosatom Director General Alexei Likhachev said that the price of building the Akkuyu nuclear power plant "at current prices" is already $24-25 billion.
At the Akkuyu nuclear power plant, the first power unit with a capacity of about 1,200 MW is due to be commissioned this year. However, the construction of the facility, which began in 2013, "is associated with numerous delays and cost overruns, which casts doubt on the likelihood of the timely launch of all four planned stages," Reuters notes.
If the first power unit is to be commissioned this year, then the three remaining units in 2026, 2027, and 2028.
Given the advanced stage of general construction work on the site, it is possible to complete the construction of the remaining reactors as planned. However, due to strict sanctions on several Russian businesses following Russia's invasion of Ukraine in 2022, Rosatom reported difficulties in acquiring some parts from suppliers. Further delays and difficulties with deliveries may arise in the future after the imposition of new sanctions against Russia by the administration of US President Donald Trump, Reuters believes.
An intergovernmental agreement on the Akkuyu NPP was signed between Russia and Turkey in May 2010, and the construction of the first power unit began in 2018.
The Atomic Energy Agency of the Republic of Kazakhstan reports that the period from the design, construction, and commissioning of the power plant will take 10-12 years. The approximate completion date of the construction of the first Kazakh nuclear power plant is 2035-2036. Rosatom confirmed compliance with these plans.
Will it make the list or not?
Another risk associated with Rosatom is the possible imposition of sanctions on the Russian state-owned company. Earlier this year, the outgoing U.S. administration imposed sanctions on more than 200 entities and individuals involved in the Russian energy sector, including Rosatom Director General Alexei Likhachev and his deputies, to cut revenues for Russia's war on Ukraine.
The Russian company itself then said that Rosatom had adapted to the sanctions, was ready for any development of events, and would fully fulfill its obligations to partners. The company called the sanctions against its management unjustified and perceives them as an element of "unfair competition from unfriendly states."
The Kazakh Atomic Energy Agency notes that, according to the latest data, Rosatom is not on the sanctions lists.
"In case of any risks associated with the strengthening of sanctions in certain countries in the future, we will have appropriate contractual mechanisms that Kazakh companies have used in other projects. For example, there is a possibility of applying appropriate sanctions clauses and other legal instruments. At the same time, nuclear energy, which is related to social and humanitarian needs and the climate agenda, is not included in the sanctions lists," the ministry said.
The agency promises that during the implementation of the project, it is planned to maximize the use of building materials of Kazakhstani production and attract local personnel after passing the necessary certification and confirmation of competencies.
"It is economically inexpedient to bring building materials and workers from Russia, especially if the necessary resources and specialists are available in the Kazakh market at a more competitive price," the department believes.
The first Kazakh nuclear power plant is planned to be built in the village of Ulken, Zhambyl district, Almaty region, on the shores of Lake Balkhash. It is expected that its capacity will be about 2.4 GW.
So far, there is no information about the construction site of the second Kazakh nuclear power plant, as well as about its estimated capacity and cost. Earlier, the press widely disseminated information that the construction of the first nuclear power plant could be entrusted to the Chinese CNNC, which is ready to make this nuclear power plant twice as cheap as the Russian Rosatom.
The second is on the way
The announcement that China is ready to build two nuclear power units with a total capacity of 2.4 GW for $5.47 billion was announced by Li Yudong, deputy chief representative of CNNC for Central Asia and Eastern Europe, during the KazAtomExpo exhibition held in Astana in August 2024. According to him, the company is ready to supply one power unit with a capacity of 1.2 GW for 20 billion yuan, and build it in 5 years. Journalists converted yuan into tenge and dollars at the exchange rate at that time, considered what capacity was planned to be chosen for the first nuclear power plant in Kazakhstan, and reported that a plant with two reactors with a capacity of 2.4 GW would cost the country $5.47 billion.
At the same time, similar reports appeared in the Chinese media.
"Hualong One (HPR-1000) is a third-generation nuclear power technology independently developed by China. Pakistan and Argentina are fighting for it. It has an excellent safety record and can also survive earthquakes and tsunamis. It can be called a "tank in nuclear energy". Moreover, China has also pledged to help Kazakhstan with its nuclear fuel cycle and research infrastructure. How can Russia compare to this comprehensive after-sales service?" the author of the publication asks.
The Hualong One or HPR-1000, a pressurized water nuclear reactor, is a joint development of CNNC and CGNPG. It was created based on a line of French reactors and technologies of its own production.
CNNC has already built two nuclear power units in Pakistan based on Hualong One technology. These are the first two Chinese reactors of this type built abroad.
In August last year, the State Council of the People's Republic of China approved the installation of 11 nuclear reactors at five sites in the country. The total cost of the projects is $31 billion, that is, the average price of one reactor will be less than $3 billion, while all of them have a nominal capacity of at least 1000 MW. The construction of the facilities should be completed in about five years.
That is, theoretically, China can build a nuclear power plant in Kazakhstan with a capacity of at least 2 GW in five years for a total of no more than $6 billion. After all, these 11 reactors will be inside China. And abroad, the cost of technology is already becoming more expensive. For example, in 2022, CNNC signed a contract with the Argentine authorities to build a nuclear power plant with the installation of the 1200 MW Hualong One reactor for $8 billion, while the company said it would finance 85% of the cost of the project, and the state would take over the rest.
As for Rosatom, for the construction of a two-unit nuclear power plant (2.4 GW) in Belarus, the Russian government approved the issuance of a $10 billion state export credit. Construction, considering delays, was carried out between 2013 and 2023, and approximately $5.4 billion of the loan was used. In other words, theoretically, Rosatom can reduce the cost of supplies to $2.7 billion per reactor.
Recently, the Chairman of the Atomic Energy Agency of the Republic of Kazakhstan, Almassadam Satkaliyev, met in Astana with the Deputy Minister of Ecology and Environmental Protection of the People's Republic of China, concurrently the head of the National Nuclear Safety Administration, Don Baoton. The talks were devoted to the expansion of Kazakh-Chinese cooperation in the field of peaceful use of nuclear energy.
The agency reported that Kazakhstan has expressed interest in exchanging experience in key areas, including licensing, supervision, and technical expertise. Satkaliyev noted that the republic is focused on the implementation of international standards and best practices in the field of regulation, environmental sustainability and nuclear safety.
China cooperates with Kazakhstan in the processing of natural uranium and the production of final products. China General Nuclear Power Group (CGNPG), the second Chinese company operating in the nuclear industry after CNNC, has a joint venture with Ulba Metallurgical Plant JSC (a subsidiary of the national company Kazatomprom) - Ulba-FA LLP. In November 2021, they launched a plant in Ust-Kamenogorsk to produce low-enriched uranium in the form of fuel assemblies (FA). In December 2022, the plant sent the first batch of fuel produced at the enterprise for Chinese nuclear power plants to China. And in January of this year, the plant reached its design capacity of 200 tons of products per year. The implementation of this project made it possible for Kazakhstan to enter the list of states supplying nuclear fuel for nuclear power plants.
If soon the government determines the location for the second nuclear power plant, and CNNC chooses the supplier of the reactor, then it may build and put into operation its facility before Rosstat (Russian State Federal Statistics Services) does.