Interview of Mr. G.V. Efremov to Internet portal Eurasia. Expert

June 16, 2017

«The will be a revolutionary breakthrough in the area of closing the nuclear fuel cycle»

Gleb Efremov

The closed nuclear fuel cycle elaborated by Russian researchers will allow to get rid of nuclear waste as well as resolve the problem of nuclear fuel supplies by using the elements of the spent nuclear fuel. Another issue of no less importance for atomic energy today is to ensure nuclear non-proliferation in the world. The International Uranium Enrichment Center was founded in this purpose, the Center guarantees the supplies of nuclear fuel to any country making unnecessary for the countries to perform own nuclear studies. A correspondent of Eurasia. Expert met with Mr. Gleb Efremov, the General Director of the IUEC, to talk about the nuclear business and big politics behind it, the threats of proliferation, and to know whether it is worth waiting for revenge of atomic energy after the events at Fukushima-1, and whether the "green" energy is able to replace the peaceful atom.

- Mr. Efremov, please tell, what is the key objective of the International Uranium Enrichment Center?
- As of today, the International Uranium Enrichment Center is the organization with participation of several foreign shareholders: Kazakhstan, the Ukraine and Armenia. This year we are celebrating the 10-years anniversary of our company. For the first time the necessity in establishment of a global network of so-called international centers for rendering services in the area of nuclear fuel cycle was declared at the Summit of EurAsEC by the Russian President Vladimir Putin in February 2006. The Russian initiative was supported by the Government of the Republic of Kazakhstan, and in September 2007 the company International Uranium Enrichment Center was registered as a legal entity.
The time for the IUEC initiative declaration was chosen not occasionally. The point is that any country that takes possession of uranium enrichment technology becomes one step away from development of a nuclear weapon, and this is the growth of global threat around the world. In 2006 the world became aware of a new member of the nuclear club, North Korea, the proliferation of the uranium enrichment technologies indicated the predictable emergence of new nuclear states, actual those days Iranian nuclear program was on the agenda. In a number of cases the expansion of the club of nuclear states pursues military purposes, in the other - economic and political: the countries that are not confident in the supplies from commercial market strive to obtain its own sources of the fuel fabrication.
As a counterweight to those trends it was suggested an alternative option, which allowed the embarking countries that wished to develop the technologies and establish production capacities for uranium enrichment to receive the guaranteed at the level of Russian government supplies of nuclear fuel cycle products and services, thus making unnecessary to develop the technologies and establish these production capacities in such countries.
In addition to this initiative several political projects are implemented in the world that represent the highest level of guarantees of nuclear fuel supplies. It is the management of the so-called international fuel banks. Russia became the first and, insofar, for eight years, remains the only state in the world that in practice has implemented a project on establishment of an international fuel bank.
Today the IUEC manages the guarantee stock of low-enriched uranium, the untouchable reserve that is stored at the site of our Center in Angarsk under the supervision of the IAEA. The purpose of the guarantee stock is to ensure the supply of the stored in it material to the IAEA for its further delivery to the IAEA member-state that happens to be in a situation of political force majeure, when it is denied in the supplies of nuclear fuel due to commercial or technical reasons.
The work in these two areas including increase of the number of the Center shareholders is the key objective of the IUEC.
- Since 2011 the uranium price has been continuously descending. In the end of 2016 it attained its lowest value during this period, it was less than $18 per pound of U3O8. How the IUEC manages to maintain the profitability and optimize the expenditures? What it has to refuse from?
- You are right, the current quotations indicate descending trends, the prices continue to decrease for several years already. Surely, we respond to it. The uranium price is about 40 % in the total price for the fuel of nuclear power plants. In addition to it the price of nuclear fuel includes the costs of uranium conversion and enrichment, costs for fabrication of fuel assemblies. The decrease of quotations for such reprocessing was not so considerable. And the IUEC is primarily the services for the uranium enrichment. That is why the prices for for the uranium enrichment decreased but not so significantly.
However, the IUEC is a member of the consolidated team of the State Corporation Rosatom. Today, the general costs optimization program is implemented in the industry that envisages the costs reduction for 10 % as minimum. The objective is not simply reduce the costs for managerial, business-trips and advertisement expenditures. The objective is to learn application of new practices, which do not impact the quality of the rendered services along with the costs reduction. This works very successfully in our company. The comparison of our current expenditures with the previous periods indicate significant savings. Recently, we have revised our stuffing structure, that allowed us to decrease the share of outsourced services. We have optimized our office premises mainly at the site in Angarsk and received multiple costs reduction there.
I would also like to add that for several years already the IUEC has been operating in the framework of the quality management system. The optimization and improvement of internal processes are a way for costs optimization, as we work more efficiently, we resolve the set tasks faster.
But in these conditions it is necessary to try to not only save money but earn more. Than the profitability will be maintained at the due level. We always follow up our plans to be updated in accordance with the market trends.
- Do you expect any change of the uranium prices?
I believe, yes. A question, in which way? The matter is that the price of any product is determined by the ratio between demand and offer at the market. Currently, the uranium market is very strongly «overheated». The market overheating first of all is associated with the accumulated stocks made by traders at their understanding of low prices, while the prices at the moment of acquisition of the stocks did to reach its «bottom».
However, realizing the level of natural uranium production costs, trends, rapid growth of the world population, and as a consequence doubling the energy consumption in the world every 20 years, I am sure, the demand for nuclear energy will grow, which inevitably lead to higher uranium prices.
- Do you plan the production growth?
-The higher the demand is the more we must respond and be prepared to provide to our partners, our customers the quantity of products that will be consumed. The IUEC is more political in the nature than industrial or commercial. We do not have our own production capacities or industrial enterprises. We render services of the so-called guaranteed access to Russian facilities of uranium enrichment. The Rosatom allocates the necessary production capacities at Russian enterprises on uranium enrichment for the IUEC production program, these capacities will be expanded under conditions of the demand growth from the Center shareholders.
Russia applies the technologies of centrifuge uranium enrichment. In fact, these capacities are unique and allow to vary the quantity of the fabricated products.
The works that are performed in the industry for elaboration of new generations of the gas centrifuges under conditions of rapid growth of the demand for the uranium enrichment services will allow to replace in the operative manner the equipment of the uranium enrichment facilities along with reduction of operating costs.
- What is the difference between Russian-Kazakhstan Uranium Enrichment Center and the International Uranium Enrichment Center?
We are similar only in the name, all the rest is different. The Uranium Enrichment Center (UEC) is a purely commercial venture founded on a parity basis by Russia and Kazakhstan. The UEC is engaged in fabrication of enriched uranium products for its sales at the market. In addition, the UEC does not envisage any expansion of the participants, it is a purely bilateral project, which stakeholders are the countries-founders, i.e. Russia and Kazakhstan.
The IUEC, as I have mentioned already, renders the services of guaranteed supplies, it is a kind of an insurance company at commercial market. Our objective is to remedy possible interruptions is supplies of nuclear fuel cycle products and services from commercial market, primarily to the countries that became the Center shareholders. In addition, thanks to the right for a guaranteed quota from the IUEC, which is currently 60 000 SWU/year for each shareholder (the quantity of uranium enrichment sufficient to produce the enriched uranium necessary to refuel the 440 MW NPP unit), some shareholders of the Center use participation in it as an additional, diversified source of receiving the products outside the commercial market.
Thus, the purpose of the first project (the UEC) is fabrication of the products in the purposes of its commercial sales at the market. The purpose of the second project (the IUEC) is the delivery for any interested country in the world, provided such country is a member of the IAEA, of additional guaranteed sources of enriched uranium supply, if this country is threaten by unstable situation at the commercial market or physical supplies of the enriched uranium to this country, if there is an interruption in supplies of nuclear fuel from the commercial market occurred with respect to this country.
- China acquired the uranium enrichment technology. How will this affect the activities of the IUEC and world market of nuclear power?
- According to the Treaty on Non-Proliferation of Nuclear Weapons of 1967 China is a nuclear state. The development of uranium enrichment technology is a natural tendency for countries that not only possess the technologies of nuclear fuel cycle, but also nuclear weapons. The fact that there are new technologies and capacities of uranium enrichment in China should be evaluated in terms of how these facilities will affect the overall balance of the world's uranium enrichment capacities.
It is obvious, that the quantity of products fabricated by China will increase the already intensive competition at the market of nuclear fuel cycle products and services. China is currently the fastest developing country in the field of construction of new nuclear power plants, so this increase is primarily aimed at the domestic market.
It is clear, however, that to win a larger share of the world market China will come out with this production for export, and thereby enhance its competitiveness not only in the area of NFC products and services, but also in the sector of reactor production industries. Of course, we will have to seriously compete with this supplier in the foreseeable future, the impact to the global market of nuclear energy developments in China will be exactly like this.
Regarding the IUEC, the objective of our Center is to promote the emergence of a growing number of the world's countries, addressing the development component of its energy sector through construction of nuclear power plants. Today, anyone who is on the verge of choosing how to produce the electricity in the country faces a huge number of issues.
In case of selection the option associated with the NPP construction there is a question, how the nuclear power plant will be supplied with fuel. To build a nuclear power plant and become in a situation, when there is no fuel supply source for it, this is a catastrophe, a failed project with investments in several billion dollars. Our objective, therefore, is to bring to the market a growing number of embarking countries, showing them that there is a great number of insurance mechanisms to guarantee supplies of nuclear fuel under any conditions.
In this regard, for us as a company that works in nuclear sector, the development of new processing facilities in China is certainly an event. But from the point of view of the goal that we strive to achieve, this event does not affect directly the activities of the IUEC.
- It was planned to establish in Zheleznogorsk of Krasnoyarsk area a research cluster to deal with the issues of irradiated fuel management. Could you please tell, what is going on in this respect?
I can make the assessment of the progress in the research cluster exclusively subjective. I think that the work is going on well. Today the points of active economic growth are precisely such centers of innovation development, where take place the creation of a consolidated production, research and educational complex from various industries. This cluster in Zheleznogorsk is no exception, it combines nuclear and space industries.
The cluster was established in difficult times, in August 2011 in the immediate aftermath of Fukushima. Of course, in those circumstances, the initially laid down cluster development strategy was supposed to change. Based on the figures of 2016 the cluster is developing, the figures indicate that the decisions made and following practical actions undertaken to progress the project were correct. The region development is obvious. The scope of research and development activities performed by the businesses within the cluster has attained tens of billions rubles. The standard of living, social infrastructure, the average wages in the region are steadily increasing. The competition for entry to the Siberian Federal University, which is a participant of the cluster, grew up. The young professionals after graduation from the University stay to live in the region. These are the evidences that the work is going on in the right direction.
Regarding the issue of irradiated nuclear fuel management, this is one of the most important tasks for nuclear power. Nuclear power in the world today works with the so-called deferred decision of spent nuclear fuel (SNF) management. The deferred decision is the long-term storage of spent nuclear fuel.
The project, where also engaged the cluster in Zheleznogorsk, is the closing of nuclear cycle, return of the products derived from reprocessing of spent nuclear fuel back into the nuclear fuel cycle, development of MOX fuel for BN-800 fast breeders with sodium coolant to begin implementation of research activities in the area of nuclear fuel cycle closing and creation of so-called eternal nuclear power plant producing the minimum volumes of waste.
The second project, which is now implemented in the Russian nuclear industry, is the project «Breakthough» (Proryv). The project purpose is to create a demonstration reactor installation Brest at the Siberian Chemical Combine. It is also one of the elements of creating the closed nuclear fuel cycle technologies, which allows to return the irradiated nuclear fuel back into the fuel cycle, rather than put it to the store and think, what are we going to do with it in the centuries.
The IUEC is an international project, which participants today are Russia, Kazakhstan, the Ukraine and Armenia. Could you please tell us, how did change the cooperation with the Ukraine as a result of the Russian-Ukrainian crisis?
- We have excellent relationships with our shareholder [from the Ukraine]. These relationships have not deteriorated, but have gained some «coloring» under the influence of foreign policy background, under which two states are forced to coexist today.
The Ukraine is regular annual customer of our products and services. Starting with 2012 we have had no disruption in supplies. All contractual obligations from both their and our part are fully implemented. This year, I hope, too, will be no exception. We have already come to the stage of practical implementation of the delivery this year, currently, the corporate procedures for approval and signature of the contract are in the progress.
Surely, there are some difficulties in our interaction, but these difficulties are rather of financial nature. But we manage to find solutions, the cooperation continues.
The point is that the NPP shutdown is associated with a huge number of problems due to, primarily, the necessity of the fuel unloading, and then reactor restarting. These are enormous economic losses. The common objective of the Ukraine and ours is to ensure stable operation of NPP units at the territory of the Ukraine.
- Do you hold negotiations on accession of new members to the International Uranium Enrichment Center?
- Yes, we do, but we try to be very careful in disclosing these issues to the media, because its contain sensitive information and trade secrets of our partners. Unfortunately, the foreign companies coming to us and holding accession negotiations (and such negotiations are conducted, its geography is very wide) are started to be asked with difficult questions.
- of a political nature?
- Exactly, all questions are politically motivated. We try to carefully treat this as participation in the International Uranium Enrichment Center - it is above all a question of political character and accession of a new country to the International Uranium Enrichment Center begins with intergovernmental political process, when at the level of the Ministries of Foreign Affairs of the IUEC member-countries and a newcomer-country the decision is made that these countries want to cooperate in the framework of accession to the intergovernmental agreement on the establishment of the International Uranium Enrichment Center.
But let me repeat once again, we are open, the negotiations on expanding of the IUEC are conducted, the prospects of such expansion exist. The IUEC participant can be any country that fulfills two conditions: the country has ratified the Treaty on the Non-Proliferation of Nuclear Weapons, and it is a member of the IAEA.
As I have already mentioned in the initiative on establishment of the IUEC the Russian Federation pursued the goal to promote nuclear power as a safe, secure, stable element of the energy component of the states and to involve in the global nuclear industry as many newcomer-countries as possible.
The Russian offer at the market is a proposal that allows to build in an individual state the whole nuclear industry, including creation of industrial, scientific, educational centers along with suggestion of political mechanisms of guaranteed supply of nuclear fuel cycle products and services validated by the example of successful implementation of the International Uranium Enrichment Center project.
For a newcomer-country it is important not only to become a country, which joined the nuclear club and started to generate electricity by means of its production at the nuclear power plant. The contribution of any state to non-proliferation of nuclear weapons - it is also a politically important component in the development of atomic energy for many countries. Currently, this is the kind of a political trump card, which is clearly seen at the example of states that are central at the continents.
- In your opinion, what future expect the nuclear power? Is rejection of it and transition to alternative energy sources possible?
- The accident at Fukushima did not result in the catastrophe of the same scale as it used to be in Chernobyl, although the reactor was older and its operational lifetime much longer. This evidences that with a reasonable approach to nuclear power it is possible to ensure a certain safety. Yet the events in Japan caused a series of retirements in use of the energy of atom over the world. The geography of nuclear retirements is mainly in Europe, and it is not unjustified.
In my opinion, the incident at Fukushima was picked up and «warmed up» by the lobbying interests of those, who promote technology and products, primarily in the field of hydrocarbons - oil and gas. Europe is the largest consumer of gas in the world. In this regard, it was not unjustified that nuclear retirements first of all occurred there, and it was under the influence of the largest oil and gas suppliers - the United States, and the Gulf countries, which were interested to promote their commercial interests in the region.
Since Fukushima occurred as an event, it is still required to make definitive conclusions. One of the issues that we continue to discuss today - probably it is still not necessary to build nuclear power plants in the regions specified with high seismic activity, tectonic faults and daily earth shocks? Probably these are the very places, where it is worth to consider perspectives of energy development from renewable sources?
The conclusion on the feasibility of use in such cases alternative, renewable energy sources seems to be obvious. However, this conclusion may not be true, because, given the rate of population growth in the world, the pace of industrialization and growth of industry, renewable energy sources alone will not be able to meet the electricity demand in the future. This problem also applies to Japan as a highly industrialized state with the third economy in the world.
As such, the implementation of renewable sources along with nuclear retirement will not stop the hydrocarbon energy. It will exist in parallel. Therefore, we will continue to deal with technogenous disasters caused by the use of hydrocarbons: oil and mazuth spills, pipeline explosions. There is also a hypothesis that pumping the oil and gas from the earth, we are violating its geological structure, which leads to a climatic catastrophes.
I can cite several more arguments, why it is impossible to solve all the problems of energy generation by means of renewable energy sources.
Let us look, for example, at the electricity generation by means of solar energy. The debates on hazards and high cost of solar panels production still continue in the discussions on solar energy. It is proved that the production causes enormous environmental damage to nature. As a result, it turns out that solar energy is not so cheap, and not that safe.
Any plants that use natural energy (solar, wind) for electricity production require large areas for construction sites, and this also makes some complexities both in densely populated Europe and Asia.
The desert territories of the United Arabian Emirates seem to be suitable for siting the solar plants. But these territories are completely unsuitable because of fine sand dust that cover everything and negates the possibility of using solar panels. For such panels to be operable there it is necessary to hire the whole army of people, who would go around with rags wiping the panels continuously.
I am aware that for development of wind generation in Russia were performed the surveys of the territories, where it is feasible to install wind generators taking into account its maximum efficiency. As it turned out, these are the areas of the Far North, the coasts of the Kara and Laptev seas. To generate electricity there and transmit it to the mainland is a nonsense, because the electricity should be produced in the place, where it is consumed.
Today, the distribution of the population is already the fact of reality. For example, it is impossible to move to Moscow the Laptev sea coast and install the wind turbines in the new location. Therefore, in selection of the generation type it is necessary to rely on the type that is simultaneously cost effective, completely safe and reasonable.
And in this regard in a number of cases there is no alternative to nuclear power. It seems to me that nuclear retirement is of temporary character. Moreover, in view of developing technologies in the area of closing the nuclear fuel cycle there will be made a revolutionary breakthrough that will enhance the safety of nuclear power plants, reduce the amounts of nuclear waste, improve economic efficiency of this type of energy generation. That is why one day nuclear power will have revenge!
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Interviewed by Julia Ruleva

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