Westinghouse Demonstrates that Rosatom-Built Reactors May Not be Dependent on Its Proprietary Fuel Supplies

It was announced during the first week of 2015 that Westinghouse Electric Co. had reached an agreement with a Ukrainian utility company to “significantly expand” its nuclear fuel deliveries through 2020.  Ukraine’s nuclear fuel supply is currently dominated by Rosatom subsidiary, TVEL, which powers an industry that generates half of the country’s electricity.  That said, Westinghouse fuel is currently already used at two units of Energoatom’s South Ukraine Nuclear Power Plant.  At this plant, Westinghouse fuel reportedly shares space with TVEL-supplied fuel, demonstrating the feasibility of having Westinghouse fuel not only work properly in a Rosatom-constructed reactor, but also have the two types of fuel function safely side-by-side.  Westinghouse has supplied fuel to Ukraine since 2003 as the result of a reportedly quasi-political arrangement orchestrated by the U.S. government.

Nevertheless, this agreement was met with some bitterness by Moscow, which responded to the announcement by invoking the Chernobyl accident and suggesting that Ukraine was risking the safety of its citizens in order to advance a political agenda and make a point of demonstrating that it is not dependent on Russia for nuclear fuel.  Nevertheless, Westinghouse has expressed its hopes that it will be able to garner an increase share of the Ukrainian nuclear fuel market.  It is important to Westinghouse to prove that its fuel is accepted by Russian-built reactors, given the large — and, in some areas, growing — portion of the market that is comprised of such reactors.

There have been some earlier technical difficulties in making this work, however, including, reportedly, in the Czech Republic.  Ukraine’s contract extension to Westinghouse through 2020, however demonstrates progress and confidence that the two are compatible and safe.  Hans Korteweg, a spokesman for Westinghouse, said, “It is standard practice around the world to have two fuel vendors in the same core.”  The significance of this usability of Westinghouse fuel in a Rosatom-constructed reactor is of high significance, given Moscow‘s expectations that a successful Rosatom nuclear power plant construction contract in a foreign country equates to maximum long-term strategic leverage.  A principal way of attaining such leverage is to secure the long-term fuel supply relationship and to have each reactor dependent on its fuel (without which the reactor could be yielded unsafe).

It is likely that the Ukrainian precedent could trigger some response from Rosatom, ranging from contract terms associated with its plant construction projects to the design of its core and the capability the customer has to comingle supplies of third party fuel.  Depending on the technical realities here, alternative — more political and strategic — responses and adjustments could be made as well.