Russian Rosatom dominates global nuclear energy market
Besides playing an important role in setting the global geopolitical agenda as the world's key natural gas and oil producer and exporter, Russia captures an even more dominant position in nuclear technology. Oilprice.com reasons why nuclear energy is essential for Russia.
The Russian nuclear industry is one of the most mature in the world. The development started after the end of the Second World War when nuclear technology became essential as a deterrent towards the competing power bloc during the Cold War. It was also a sign of prestige. In 1954, the USSR launched the world's first nuclear power plant connected to the grid. Later, global nuclear power plant construction was dominated by three countries: France, the US and the Soviet Union.
In modern Russia, the development of nuclear technology has reduced significantly, but in 2007 President Putin signed a decree to solidify the domestic civil nuclear technology sector in the framework of a state-owned holding company, Rosatom. The effort has turned out to be a success: Rosatom's order book has steadily increased to $300 billion in recent years. Now it accounts for 60% of all nuclear power plants planned or under construction worldwide, with 34 reactors in 12 countries being built. China, which has the largest number of reactors under construction, is one of Rosatom's main customers. However, Beijing's export-oriented nuclear power technology development renders risks for the Russian nuclear industry in the long term.
Russia's nuclear packages are so attractive because Rosatom provides not only actual construction of the power plants and the shipping of nuclear fuel but also financing and day-to-day management of the facilities. Besides, the Russian company offers far greater discounts than its competitors. The constructed power plants will be the first in the countries' history for many of Rosatom's customers.
Nonetheless, Moscow also faces risks such as a heap of nuclear waste, which Rosatom is contractually obliged to take care of in some cases. This hazardous waste needs to be protected against theft by terrorists or criminals. In addition, the civil nuclear energy sector is highly responsive to public opinion. A negative attitude can quickly decrease developments like it happened after the meltdown at the Fukushima power plant. Demand for liquified natural gas and investment in renewable energies in Japan and Germany has skyrocketed in recent years due to the accident. Rosatom should also be on guard, as one mistake or accident that affects the company's reputation and safety could break its winning streak overnight, considers Oilprice.com's contributor Vanand Meliksetian.