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While the west has had a considerable amount of success imposing energy sanctions on Russia in response to the ongoing war in Ukraine, Russian nuclear sector exports have proven harder to kick. But now, as more western nations get serious about cutting Russia out of their nuclear energy supply chains, they are pushing more and more economic and geopolitical power into the hands of China.
While it seemed impossible to wean Europe off of Russian oil and natural gas without devastating the economy and dangerously compromising European energy security, the European Union has had remarkable success cutting those ties thanks to a surge in renewable energy production and a very mild winter during the critical transition phase. But the potency of those efforts has been undermined by the continued global reliance on Russian nuclear energy supply chains.
Russian state-operated nuclear energy firm Rosatom has long been one of the primary exporters of nuclear fuel and uranium enrichment services around the world. European countries including Hungary, the Czech Republic, Slovakia, Finland, and Bulgaria have increased their imports of Russian nuclear fuel in order to make up for Russian fossil fuels, meaning that they’re still providing significant funding to the Kremlin. The Belladonna think tank estimates that nuclear fuel exports earned over $739 million for Moscow in the last year alone. Rostatom is also a major source of funding for the construction of new nuclear facilities on a global level. At present, nearly one in five nuclear power plants on the planet is either in Russia or is Russian-built.
But Russia’s influence in certain nuclear markets appears to be faltering as the nation’s ongoing war in Ukraine compromises its ability to deliver on its projects. Bulgaria has pleaded with the United States to help get out from under Russia’s nuclear thumb, and Hungary seems to be trying to get out as well Rosatom’s Paks II nuclear power plant in Hungary has been delayed and over budget since its earliest planning phases in 2014, but the setbacks have intensified in recent years as Europe’s stance toward the Kremlin and heightened security measures have complicated Russia’s ability to finalize the project.
As Russia continues to spin its wheels on Paks II, Hungary appears to be turning to China to continue its nuclear energy development. China’s President Xi Jinping will be making a stop in Budapest later this week, where he is expected to sign 16 agreements with the Hungarian government, including one which concerns “cooperation covering the entire portfolio of nuclear energy.” This would seem to include Paks II, signaling that Hungary is looking to cut Rosatom out of its nuclear industry.
This is not the first time that nuclear energy has been a ‘geopolitical flashpoint’ between Russia and China. The two economic giants have also been facing off for nuclear dominance in emerging economies, and particularly in sub-Saharan Africa, where the growth potential for a nuclear power industry is enormous and in dire need of funding to kick off the prohibitively expensive development phase of nuclear power plant planning and construction. But with Moscow’s attention and resources caught up in wartime chaos, China has a clear upper hand.
This potential transition of nuclear energy power and profit toward China is part of a much bigger trend in the global energy landscape. Beijing has been outspending the rest of the world on renewable energy and green infrastructure and manufacturing for years now. Beijing has placed itself at the nexus of global clean energy supply chains, becoming indispensable to growing clean energy sectors in developed nations in Europe and the Americas while simultaneously expanding its energy influence in emerging economies. Filling Russia’s shoes in the global nuclear energy industry is just one more step toward Beijing’s consolidation of power over global energy markets.
By Haley Zaremba for Oilprice.com
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The EU did indeed reduce its dependence on piped Russian gas but at what a disastrous price as manifested by the EU economy growing in 2023 at 0.6% and expected to grow at another anaemic 0.8% in 2024. Moreover, the EU continues to import Russian LNG in increasing volumes.
Sanctions against Russian nuclear fuel exports will meet the same fate particularly that 34% of nuclear fuels used in US nuclear plants is imported from Russia.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert
Thus the key benefit of the fuel business for RosAtom is that it offers complete package: construction, providing fuel AND taking its fuel back once consumed. Moreover, while the successful completion of nuclear project, within timetable and budget, and with good financial deals as well is providing considerable prestige to Russia etc., it is a smallish part of the export. although with growth potential.