Ukraine Opens for New Nuclear Business with America

  • Ukraine Opens for New Nuclear Business with America
  • Nuclear Energy is an ESG Investable Asset Class: GEN IV Forum Report

Ukraine Opens for New Nuclear Business with America

ukraine map(WNN contributed to this report) Ukraine and the USA have agreed to “deepen and intensify” their strategic cooperation in energy. Nuclear power leads a suite of agreements with a project to complete Khmelnitsky unit 4, followed up with four new Westinghouse AP1000 units at an estimated cost of $30 billion.  (Full text of joint statement)

There are two agreements here. The first agreement is at the ministerial level between the respective energy ministers of Ukraine and the U.S. This is a bilateral agreement to seek joint opportunities between the two countries in energy-related matters including nuclear, renewables, etc. It does not contain funding commitments for any of these actions.

The $30 billion figure is actually related to a second agreement between the nuclear utility in Ukraine and Westinghouse. Like the first document, the memorandum of understanding (MOU) is an agreement in principle and not a contractual mechanism to start work.

However, energy minister of Ukraine Herman Halushchenko is also the former CEO of the Energoatom utility which creates a common link for both the ministerial agreement and the MOU between Westinghouse and Energoatom.

Westinghouse Signs MOU with Ukraine’s Energoatom for Five Nuclear Reactors

A separate memorandum, e.g., agreement in principle, was signed by by Patrick Fragman, Westinghouse president and CEO, and Petro Kotin, acting president of Energoatom.

westinghouse logoEnergoatom and Westinghouse envisage jointly completing the fourth reactor at the Khmelnitsky nuclear power plant. The sites for four of the reactors have not been identified by the parties to the agreement.

The completion of the 4th reactor at Khmelnitsky would precede start of work on four new reactors. It’s kind a a “try before you buy” plan.

4 tiresEnergoatom’s Petro Kotin visited a Westinghouse AP1000 manufacturing center in South Carolina last April that looks a lot like it was part of an effort to kick the tires.  According to World Nuclear News Kotin also did some shopping for left over parts intended for the now cancelled V C Summer project which can be used on the Khmelnitsky #4 nuclear power plant.

Perception is 9/10s of Reality

The geopolitical effects of the two agreements are probably felt most strongly by Russia which until 2017 regarded Ukraine as a captive market when it came to exporting nuclear reactors. The fact that the two MOUs are just agreements in principle is overshadowed by the perception that Russia has been sidelined by the US.

During the past two decades, Russia has used nuclear reactor exports as a form of political influence. The use of this tactic by the US in Ukraine, which draws that nation closer to the West, probably raised the blood pressure of more than a few key people in the Kremlin.

Background to the Westinghouse / Energoatom MOU

Two Russia-supplied VVER-1000 PWRs units have been under construction in Ukraine at Khmelnitski-3 and -4 since the late 1980s. These reactors started out as a VVER design reactor in 1987, but construction stalled in 2017 at 28% completion. Progress has stalled for years because of financing and political issues. Also, Russian annexed the Crimea peninsula and occupied several eastern areas in two provinces of the country with its military forces. It is not likely that Rosatom will be sending a delegation to Kyiv anytime soon to negotiate further work on these plants.

The agreement between Westinghouse and Energoatom includes a plan to complete Khmelnitski Unit 4 “using AP1000 technology.” It isn’t clear how the two very different designs of pressurized water reactors could be combined to produce a working power plant. Westinghouse would be faced with the job of trying the complete a Russian VVER design without Russian components.


The more significant section of the MOU envisions a deal, at a future unspecified date, in which Westinghouse would supply four 1150 MWe AP1000 PWR type nuclear reactors as completely new construction in Ukraine. Fuel for the plants would also be part of the contract since no one else makes fuel for the AP1000.

The MOU is Long on Vision, Short on Money

The lack of financing for the big iron is a crucial missing piece. The total value of these 4 units and Khmelnitsky 4 is stated to be $30 billion. That figure is probably short of what will be needed to complete the work scope in the MOU. At $6500/Kw, the four AP1000s  (4600 MWe) will likely cost $30 billion alone. Khmelnitski-3 and -4, both at 1035 MWe, would easily cost another $4 billion each to complete. Only Unit #4 is in the mix for the time being.

This is the third nuclear energy agreement the U.S. has inked with an eastern European country for full size reactors. During the Trump administration, Sec. of State Pompeo made promises to Romania and Poland that potentially involved billions of dollars.

He offered Romania $8 billion to boot China out of a deal to complete Cernavoda Units 3 & 4 which are CANDU type PHWRs. Romania did just that. As a practical matter a big chunk of the work, if ever funded, could go to SNC Lavalin, which owns the intellectual property / rights to all of Atomic Energy Canada’s (AECL) know how and expertise to build CANDU type PHWR reactors.

Candu schematic

Also, Pompeo offered Poland $18 billion towards building as many as six PWR type reactors in order to close some of its coal fired power plants. This promised level of funding briefly set off an international feeding frenzy of nuclear reactor vendors which faded away once the Trump administration lost the 2020 election.

The Biden administration, which is seeking to spend over three trillion dollars to U.S. infrastructure at home, is unlikely to fulfill either of Pompeo’s grandiose promises. It follows that coming up with $30 billion for Ukraine’s nuclear reactor plans is not in the cards either. Also, unlike the Romanian situation, Biden’s team will want a any US funding or other export financing for reactors in eastern Europe to include a strong element of “buy American” provisions.

What About Small Modular Reactors for Ukraine?

What are the prospects for smaller, cheaper reactors? Separately, Ukraine, like other eastern European countries, has signed multiple MOU’s with SMR developers including Holtec and NuScale. These MOUs related to SMRs do not contain funding commitments nor schedules to secure the funds nor start any projects.

smr cartoon

Westinghouse is working on an advanced micro reactor design, the eVinci, but the 5  MWe “transportable” plant is intended to support defense installations and not baseload power for cities.

Separately, GE-Hitachi is working on its BWRX-300, and has inked MOUs with Estonia, Poland, and the Czech Republic, but not Ukraine.


Holtec has a business unit in Ukraine which supplies spent fuel dry casks for nuclear power plants. Its main business in the US is decommissioning closed nuclear power plants.

The firm has not yet sold any of its 160 MWe SMRs, the design for which is still under development. Holtec has plans to build an SMR original equipment manufacturing (OEM) center in Ukraine  which is expected to be a mirror for a similar Holtec OEM SMR manufacturing plant in Camden, NJ.

The firm has proposed to build its first of a kind SMR at the former Oyster Creek reactor in New Jersey which it is also decommissioning. Holtec has not yet submitted an application to the NRC for safety design review of its SMR. The firm is still in the pre-application engagement stage with the NRC.  As many of the documents that are part of the process at contain proprietary information, it isn’t clear how far along things are at this stage.

Like NuScale, Holtec has an MOU with Energoatom (2018) to build SMRs there. Under the agreement with Holtec, Ukraine will become a manufacturing hub for SMR-160 components and systems mirroring the capabilities of Holtec’s Camden plant. Holtec is also in talks with Ukrainian suppliers of specialty machinery such as turbines and generators to integrate their products in SMR-160.


NuScale, which is much further along than Holtec in developing its SMR, this week also signed a new “meet and greet” MOU with Ukraine’s Energoatom to explore opportunities to build its SMRs there.

Previously, in February 2020 Nu Scale signed an agreement to work on the evaluation of national regulatory and design processes related to the implementation of NuScale small modular reactor (SMR) technology in Ukraine.

NuScale is on track to break ground later this decade for its first of a kind 50 MWe SMR at a site in Idaho for UAMPS, a consortium of western states utilities. The firm has plans to uprate the power for design in future sales.

Under the new MOU, NuScale will support Energoatom’s examination of NuScale’s SMR technology, including a feasibility study for proposed project sites, the development of a project timeline and deliverables, cost studies, technical reviews, licensing and permitting activities, and project specific engineering studies and design work. This kind of preparatory work isn’t that big a deal in terms of costs which could lead to Energoatom actually paying NuScale for it.

In August 2020, NuScale made history as the first and only SMR to receive design approval from the U.S. Nuclear Regulatory Commission in August 2020 and in July of 2021, the Commission published the proposed rule that would certify the NuScale design – a crucial step towards the construction and deployment of this SMR technology.

The company maintains strong program momentum toward commercialization of its SMR technology, including supply chain development, standard plant design, planning of plant delivery activities, and startup and commissioning plans.

In summary, if Ukraine winds up licensing American SMR technology, it might take longer building SMRs  to attain the same amount of electrical generation at four large reactors. However, in terms of cash flow over time to cover the costs, the country might be able to self-finance.

The US still wins in terms of “buy American” and might even be favorably inclined to help with some of the financing at a smaller scale.

What’s Actually in the Ukraine / U.S. Ministerial Agreement?

The bilateral agreement signed in Washington DC signaled “a new chapter of climate and energy cooperation with Ukraine,” US Energy Secretary Jennifer Granholm said.

Her counterpart, the energy minister of Ukraine Herman Halushchenko, who is brand new in the job,, said, “We have common goals, among which the key is the decarbonization of the energy sector and the achievement of a high level of energy security and stability in Eastern Europe.”

The countries signed a joint statement on enhancing bilateral energy and climate cooperation during a visit to the USA by Ukraine’s President Volodymyr Zelensky.

It states: “The participants intend to work to decarbonize Ukraine’s economy and ensure its energy security and export potential by developing and implementing a comprehensive energy sector plan, one that provides for mutually beneficial cooperation in nuclear energy, solar and wind energy, hydrogen, energy storage, carbon capture utilization and storage, cyber and physical security, and other supply and demand-side technologies.”

In the separate commercial agreement Westinghouse said the projects would “provide Energoatom and Ukraine with procurement, construction, licensing, operation, maintenance and localization benefits.”

Halushchenko said, “Deepening Energoatom’s partnership with Westinghouse will help strengthen our country’s energy security. We will expand cooperation with the American company with a focus on energy security and independence of our state.”

AP1000 units have a capacity of 1150 MWe and five of them would take Ukraine’s nuclear generation capacity from today’s 13,100 MWe to 17,700 MWe. International Energy Agency figures for 2018 indicate that expansion on this scale could see nuclear providing as much as 72% of Ukraine’s electricity and giving it the option to reduce the 31% it currently gets from coal or the 7% it gets from natural gas most of which comes from Russia.

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Nuclear Energy is an ESG Investable Asset Class: GEN IV Forum Report

gen iv logoThe GEN IV Nuclear Forum has published a comprehensive report on the nuclear industry’s ability to report against Environmental, Social and Governance data collection and accounting metrics (ESG).  Full Report (large PDF file)

This report has been produced by a finance industry taskforce, the Economic Modelling Work Group (EMWG),  set up in 2020 by the Economic Modelling Work Group (EMWG) of the Generation IV International Forum (GIF).

Written by the finance community for the finance community, this report demonstrates nuclear energy’s ability to report well against a full range of ESG and why it stands as is an investable asset class, if projects and companies are established and managed well.

It is a bellwhether report which is expected to have far reaching influence in the nuclear energy industry and among investors who may now look at the firms working in the industry in a new light. The scope is not just for nuclear utilities which are often conflicted due to also owning and operating coal fired power plants. It also encompasses suppliers, service providers, and developers of new advanced reactors that have fundamentally different methods of producing heat and power than the current fleet of light water reactors.

As part of this analysis, the report considers the international policy framework and background around climate finance including the UN-supported Principles for Responsible Investment, (PRI),  the rise of ESG reporting and its role in accessing climate finance and the role of taxonomies and how they fit (or rather do not fit) with ESG reporting. It also provides an very high-level overview of how other low-carbon energy companies and/or projects could report against ESG.  The PRI is an investor initiative in partnership with UNEP Finance Initiative and UN Global Compact.

Reporting well against ESG criteria allows nuclear energy to be considered as an investable asset class; thereby allowing nuclear companies and projects to access climate finance. The report has been produced by the finance community for the finance community.

The report establishes how nuclear energy, as an asset class, has the potential to report well against a wide range of ESG. It highlights the importance of wide ranging, consistent and standardized ESG reporting to determine the credentials of all energy companies across their lifecycles and throughout their supply chains.

The report discusses how ESG fit within international frameworks, including the UN Framework Convention on Climate Change (1992), the Kyoto Protocol (1997) and the Paris Agreement (2015).

It also documents how ESG are linked to the Green Bond Principles, while examining the relationship between ESG and the various taxonomies and other policy documents being developed around the world.

What’s in the GEN IV ESG Report on Nuclear Energy?

Climate Financing and Responsible Investment: Sets out the international policy framework and background around climate finance including the UN’s Principles of Responsible Investment, the rise of ESG reporting and its role in accessing climate finance and the role of taxonomies and how they fit, or rather do not fit, with ESG reporting;

Low Carbon ESG Reporting: Provides a very high-level overview of how low carbon energy companies and/or projects could report against ESG;

Nuclear Disclosures Against ESG: Demonstrates the nuclear industry’s ability to report against ESG and why it is an investable asset class, if projects and companies are established and managed well;

Appendix I Standard Metrics: The Taskforce mapped the WEF ESG against relevant SASB and TCFD ESG to create a consolidated list of ESG, which are used in this report; and

• Appendix II Consistent and Transparent Reporting: Provides significantly more details and cross references for the finance community and wider stakeholders to use when considering nuclear companies and projects reporting together with some analysis where other energy companies could follow the nuclear industry’s lead in their ability to report against ESG.

It is hoped, and intended, that this report develops into a living document that is used by the finance industry as a reference and guide to use when considering nuclear companies and their assets.

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