Putin’s Most Power Dark Horse: The Rosatom Company
- Since the Russian invasion of Ukraine in the Feb of 2022, Russia and its economy have faced numerous sanctions. The restrictions have significantly influenced many leading companies operating in Russia, aimed at weakening the Russian economy. As a result, several companies have been banned, and their exports to the international market have been restricted by the EU and Western states such as the USA.
- However, amidst this chain of events, there is one company that has managed to emerge unscathed from the sanctions imposed by the West and the EU. This company is ROSATOM, which is not involved in the supply of hydrocarbons such as gas, crude oil, or coal, nor is it a manufacturing company. Despite the challenges faced by the Russian economy, ROSATOM has managed to thrive and become one of the most powerful players in the Russian economy.
- Many of Russia’s energy exports have faced Western sanctions following their invasion of Ukraine, but nuclear power remains a notable exception. Rosatom, Russia’s state-owned nuclear energy monopoly, controls Europe’s largest nuclear plant located in Ukraine’s Zaporizhzhia region, which was seized by Russian forces a year ago. Rosatom exports and enriches uranium and is also involved in constructing nuclear power stations globally.
- According to Kyiv, Russian forces have converted the complex into a military base and are using it as a shield to launch attacks. Ukraine cannot retaliate as it risks hitting one of the plant’s reactors. The country has also accused Russia of causing explosions at the site, including one that occurred last year. Energoatom, Ukraine’s atomic energy company, has expressed concerns about the militarization of the plant, as well as the decline in the number of experienced staff on site. However, the Russian press service for the plant told CNN that new employees are being recruited to guarantee the safe operation of the facility.
- Kotin stated that in the event of any emergencies or consequences, Energoatom would be unable to intervene as they lack control over the territory, and Russia has the authority.
- Kotin has expressed concern over the increasing possibility of a safety breach or error at the Zaporizhzhia plant. Despite repeated calls by Kyiv for sanctions on Rosatom, the Russian company has remained relatively unaffected, except for the recent UK sanctions on its top management and some subsidiaries, as well as Finland’s termination of a power plant deal last May. Experts argue that Rosatom remains safeguarded by its crucial role in the global nuclear power industry and the difficulty in finding an easy replacement for it.
- Paul Dorfman, a long-time advisor to the UK government and the nuclear industry and chair of Nuclear Consulting Group, describes the issue as a complex web of interdependent relationships. Firstly, Rosatom is a significant nuclear fuel exporter. The US, for instance, depended on the Russian nuclear monopoly for 14% of the uranium that powered its nuclear reactors in 2021. Additionally, nearly a fifth of nuclear fuel purchased by European utilities came from Rosatom. According to Dorfman, the European Union has made minimal headway in reducing its reliance on Russia’s nuclear industry.
- In addition to nuclear fuel exports, Rosatom is also a significant provider of enrichment services, supplying 28% of what the United States needed in 2021. The company has constructed several nuclear power plants globally and even financed their development in some instances. As of the end of 2021, nearly one in five of the world’s nuclear power plants were either located in Russia or constructed by Rosatom outside of Russia. Furthermore, Rosatom is currently working on constructing 15 additional plants outside of Russia, as per the Centre on Global Energy Policy at Columbia University.
- Such dependency can trump other considerations. For example, Hungary has been the European Union’s most vocal opponent of sanctions on Rosatom. It is also one of only several EU countries that rely on nuclear energy for more than 40% of their electricity and it has a long-term financing deal with Rosatom to build a nuclear power plant.
- Experts suggest that the dependence on Rosatom can outweigh other considerations. For instance, Hungary has been the most outspoken opponent of the European Union’s sanctions on Rosatom. It is also one of the few EU member states that rely on nuclear energy for over 40% of their electricity, and it has a long-term financing agreement with Rosatom to construct a nuclear power plant. The experts add that it could take several years to find alternative suppliers to replace Rosatom in the global nuclear industry.
- Despite occupying the Zaporizhzhia plant, Rosatom’s foreign revenue has continued to grow, which suggests that the company’s actions have not deterred potential customers. According to Aleksey Likhachev, Rosatom’s Director General, the company’s overseas revenue is expected to increase by about 15% in 2022 compared to the previous year. However, Kotin at Energoatom believes that the poor maintenance of the plant’s equipment by Rosatom may cause irreversible damage if the occupation continues for another year. Diplomatic efforts to return control of the plant to Ukraine have stalled, according to Ukraine’s Energy Minister Herman Halushchenko. Meanwhile, Russia has accused Ukraine of shelling the Zaporizhzhia plant, but Rosatom’s press service for the plant has denied that there is heavy military equipment on the site.
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