Whatever else Russia may have accomplished with
its bullying of Ukraine, it has left Europe thoroughly frightened of Moscow's
ability to lord its energy dominance over the continent. Except, oddly enough,
when it comes to nuclear power -- and Russia's plans to build reactors across
Europe are proceeding with nary a hiccup.
Despite a chorus of international condemnation
for Russia's annexation of the Crimean peninsula, plenty of hand-wringing over
the latest disturbances in eastern and southwestern Ukraine, talk of tougher
economic sanctions, and a mad dash to secure alternatives to Russian natural
gas, nuclear power projects with Russian participation are going ahead as
planned in Finland, Hungary, and Turkey.
The Russian push doesn't stop there. Rosatom,
Moscow's state-owned nuclear company, is busy building reactors in Vietnam and
Bangladesh and bidding for projects in Slovakia and South Africa.
Moscow's nuclear dealings are another sign
of the West's inability to find a way of hammering Russia hard enough that it
will stop harassing Ukraine. The United States and Britain have suspended nuclear-energy cooperation with Russia in the wake
of the Ukraine crisis, but other European countries -- even those who have been
most vocal about the threat posed by Russia's control of natural-gas
supplies -- have hardly batted an eye.
"It surprises me that the Europeans
are going forward with it," said Andrew Holland, senior fellow for energy
and climate at the American Security Project, a Washington, D.C.-based think tank.
Russia's use of oil and natural gas exports
as a geopolitical tool steal most of the headlines, especially with
concerns mounting in Europe that the Ukraine crisis could again trigger a
shut-off of natural gas flows from Russia.
But nuclear power is a key part of Russian
energy diplomacy, too: It ensures long-term relationships with countries that
buy it, with a soup-to-nuts commercial relationship that includes reactor
construction, nuclear fuel supply, and the ongoing employment of Russian
technicians. Moscow's energy strategy through 2030 highlights
the state's role in promoting nuclear power, both domestically and overseas.
Rosatom is currently building 19 reactors around the world.
Spreading Russian nuclear technology is so important
to Moscow that it is willing to basically underwrite the cost of building
expensive new reactors for cash-strapped countries from Hungary to Bangladesh,
usually offering favorable terms for loans that would cover at at least 80
percent of the multi-billion price tag for each project, something no Western
nuclear firm can match.
But even the threat of rival incursions into
markets Russia considers its own, such as Ukraine, prompt outrage in Moscow.
The decision by Ukraine's
electricity utility to renew a nuclear-fuel contract with U.S. firm
Westinghouse, not Rosatom, prompted apocalyptic warnings from Moscow about
impending nuclear disaster at Ukraine's reactors.
In the wake of the annexation of Crimea,
and signs of further destabilization in eastern Ukraine, there are signs
that Europe might temper its appetite for Russian nuclear deals.
Government ministers in the Czech Republic
this spring floated the idea of removing Rosatom from the bidding for the
construction of a pair of new nuclear reactors there because of Moscow's
Ukraine invasion. Opposition parties in Hungary -- worried
over deepening energy ties with Russia, especially plans for a pair of Russian
financed nuclear reactors -- tried to oust Prime Minister Viktor Orban, who
ultimately secured a landslide reelection win earlier this month. Public
opinion in Finland turned against a proposed new nuclear
power plant in the aftermath of the Russian invasion, primarily due to Moscow's involvement in the reactor.
The new push to oppose Russian nuclear deals on
political grounds are dovetailing with other, broader concerns about nuclear
power, from cost to safety. Bulgaria's decision last year to scrap a Russian reactor was
due to both political divisions and rising costs.
"Now many European countries see a
political dimension to the choice, because of Crimea," said Henry
Sokolski, executive director of the Nonproliferation Policy Education Center.
The question facing many European countries now, he said, is: "How do we
associate ourselves more clearly with the West? We need to do this for our
security, so how do we reduce our ties with the Russians?"
Sokolski noted that the Ukraine crisis, the prospect of
tougher Western sanctions on Russia, and the suspension of civilian nuclear
cooperation with the United States could soon make it tougher for Rosatom to
close deals. That's because Rosatom has used generous financing and the ability
to point to safety work with topflight U.S. regulators to hawk its technology.
Sanctions could imperil Rosatom's ability to offer juicy financing, one of its
biggest selling points.
Rosatom declined requests to comment.
So far, Russia's aggressive behavior in Ukraine
has not derailed its nuclear ambitions, in Europe or anywhere else. Just this
week, Fennovoima, the consortium building Finland's new reactor, reaffirmed plans to go ahead with
Rosatom now holding a 34 percent stake.
"We do not see that current political events
around Ukraine and Crimea should influence the progress of our project," a
spokesperson told Foreign Policy. "Fennovoima is in the business of constructing
sustainable electricity generation in Finland; it is a commercially driven
investment and not involved in politics."
Finnish government officials stressed that the
nuclear deal is a commercial transaction, not a government decision; only if
Europe-wide sanctions were to be implemented on Russian firms would plans for
that new reactor likely change.
With parliamentary elections out of the way,
Hungary is also doubling down on its nuclear bet with
Russia, thanks in large part to $13.7 billion in financing provided by Moscow.
Hungarian officials said that there has been no discussion about backing out of
the nuclear deal, though any future economic sanctions could change that.
Russia still hopes to build a new reactor
in Slovakia, though the economics there are problematic in the absence of
Slovak government guarantees, and plans for a Russian reactor in Turkey are still going ahead
as before. Further afield, Rosatom's expansion into Asia is also picking up
steam, with the company exploring prospective deals in India, Bangladesh, and Vietnam. This
week, top Vietnamese and Russian leaders met, and Hanoi reaffirmed the strategic
importance of its relationship with Moscow, including nuclear-energy development.
The one nuclear casualty this spring -- the sudden
cancellation in the Czech Republic of plans to build a pair of new nuclear
reactors -- was officially chalked up to lousy economics by the state-owned utility in charge of the
project, not a revival of Cold
War politics; low wholesale power prices and the lack of financial guarantees
ostensibly made the expensive nuclear project untenable.
Still, some Czech government ministers hinted
that politics may have indeed played a part in the cancellation and said that
the nuclear expansion could be restarted if there were more bidders than just
Toshiba's Westinghouse and Russia's Rosatom. Nevertheless, the Czech ambassador
at large for energy security, Vaclav Bartuska, told FP that the cancellation
had nothing to do with Russia's behavior or concerns of deepening ties with
"The answer is very simple: no," he
said, adding that Toshiba's Westinghouse scored higher in preliminary rankings
than Rosatom in any event.
There are several explanations for the
difference in European reactions to natural gas dependency and nuclear
dependency. For starters, gas is a fuel, not a massive energy complex that can
operate for a half-century. The huge investments, infrastructure requirements,
and long-term nature of nuclear projects mitigate against decisions being made
on a whim; many of the European projects have been in the works for years, if
At the same time, many countries that are pressing
ahead with nuclear deals with Rosatom have political leaderships that are
more pro-Russian than the rest of the European Union, notes Mark Hibbs, a
Berlin-based nuclear policy researcher at the Carnegie Endowment for International Peace. That includes Slovakia and Hungary, though far-right
parties throughout Europe are also increasingly sympathetic to Vladimir Putin.
The battle for new nuclear business is one way
that the United States and the West could, theoretically, push back against
Moscow's state-dominated energy diplomacy. Senior U.S. officials, including
President Barack Obama and Secretary of State John Kerry have talked up the prospects
of using U.S. natural-gas exports to undercut Russia's dominance in that
market. Others mull flooding the oil market
to bring down crude oil prices to inflict economic pain on Moscow.
These days, the nuclear option is gaining
currency, even though it would be far from a short-term fix. Barbara Judge, a
former senior British atomic official, has called for European countries
to make it easier for Western firms to build nuclear power plants, as a way to
blunt Russia's advantage in both gas and uranium.
But U.S. firms, in particular, have a tougher
time competing in the international market than many of their foreign rivals.
The United States has legal restrictions on civilian nuclear deals, such as on fuel
enrichment, that industry officials say sometimes makes it tough to do business
And the U.S. government provides nowhere near
the financial support for the nuclear export business that other countries,
especially Russia, do. The small amount of American aid available through the
Export-Import Bank is in danger of evaporating this year; the Ex-Im Bank
charter could expire and is the subject of a fierce political fight in Washington. Removing
some of those barriers would help the industry take advantage of any European
reluctance, no matter how small, to do business with Russia's nuclear industry
"We could really change the game, especially
right now -- this is a huge opportunity for us," said Ted Jones, director of
supplier international relations at the Nuclear Energy Institute, a trade
As attractive as the nuclear quiver may be in
the Western arsenal against Russia, the lack of any coordinated government
strategy to promote nuclear power overseas makes that difficult, said the American Security Project's Andrew
Russians are playing a completely different game than we are. They're playing a
geopolitics game, while we think it's all laissez-faire, free-market, open
competition," he said.
Attila Kisbenedek - AFP - Getty