The price of the issue: how much will MMR construction cost Armenia

ArmInfo.In the next year and a half, Armenia will have to make a number of important decisions  regarding its r political, geostrategic and economic development.  In  economic terms, and perhaps in a broader sense, Armenia will have to  determine what kind of country it wants, can and should be.

The most significant decision that Yerevan will have to work out and make is  to determine the future of Armenia's nuclear energy, and therefore  the future socio-economic character of the republic. This decision  will determine whether the republic will be a "service" country, for  example, with a developed tourism and restaurant business, an  extensive and diverse service sector, and minimal economic  complexity, or a high-tech industrial country, with a complex  economy, a high share of added value of labor and production, and  readiness to accept the challenges of the time.

 The decisions that need to be made will greatly impact the type of  country our children and grandchildren will live in, and whether they  will be able to live there at all. In a conversation with an ArmInfo  correspondent regarding the government's decision to allow an  American company to research the construction of a small modular  nuclear power plant in Armenia using American technology, UN national  energy expert Ara Marjanyan noted that the country currently only has  three potential partners: Russia, the USA and France.

Marjanyan emphasized that discussions about American-made low-power  "modular" nuclear power plants are a significant part of today's  public discourse on this topic. The expert also noted that the United  States ranks first in the world in terms of installed capacity for  nuclear electricity generation, As of July 2024, the country has 94  power reactors with a total installed capacity of almost 97,000 MW,  accounting for nearly 26% of the world's total installed nuclear  power capacity. France ranks second (with 56 reactors and 61.4  thousand MW, 16.4%), followed by China (with 56 reactors and 54.2  thousand MW, 14.5%) and the Russian Federation (with 36 reactors and  26.8 thousand MW, 7.24%). South Korea rounds out the top five with 26  reactors and 25.8 thousand MW, (6.3%). 

However, as Marjanyan noted, the last NPP in the US (Watts Bar) was  built a quarter of a century ago, The last two US nuclear units,  units No. 3 and 4 of the Vogtle NPP were connected to the grid on  March 31, 2023 and March 6, 2024, respectively. However, they did so  only 11 years after the start of their construction following a  significant temporary pause in the construction of new nuclear  generating capacities. Out of the 135 units in the US, 94 are  currently in operation, while 41 have been decommissioned and are in  a state of "permanent shutdown". Between 1970 and 1985, 86 nuclear  power units were commissioned in the US, i.e. averaging approximately  6 units per year during this period. 

However, over the next 15-year period, from 1985 to 1990, only 30  units were commissioned in the US.  This marked a significant  decrease in the rate of commissioning, almost 3 times lower than  before. From 1990 to 2005, only 4 new nuclear power units were  commissioned, averaging to approximately one unit every 4 years. In  other words, compared to the 1970s, the rate of commissioning new  nuclear generating capacity in the US fell by 24 times.  According to  the analyst, with the end of the "modern" era in the early 1980s,  scientific and technological development in the Western world slowed  down, particularly in the energy industry. The focus of development  shifted towards computer technology, information technology and  renewable energy sources. 

Additionally, natural gas low prices, the rapid deployment of  modern  gas turbine units, their affordability and flexibility created an  appealing alternative to costly and time-consuming nuclear power  plants.  It is also important to mention the significant efforts of  the "coal lobby", especially in the USA and several other countries,  which contributed to a noticeable slowdown in the global development  of nuclear energy.  Additionally, three major accidents - March 28,  1978 at the Three Mile Island Nuclear Power Plant in the USA, April  26, 1986 at the Chernobyl Nuclear Power Plant in the USSR, and March  11, 2011 at the Fukushima-1 Nuclear Power Plant in Japan, had a  significant impact on the delay of new nuclear power units being  commissioned in the USA and globally. This led to increased  complexity and of the procedures for licensing  new nuclear power reactor projects and issuing licenses for their  construction and operation. 

From a legal perspective, as emphasized by the expert, the  construction of nuclear units in the USA can only begin after  completing certain mandatory procedures. The first step is obtaining  a license for the project of the reactor. Currently, licensing small  modular reactors in the USA is a time-consuming and costly process. A  project license is also required for constructing units outside the  USA. Despite efforts to streamline these complex procedures, only a  low-power reactor of the American company NuScale has completed the  licensing process. However, the initial model of the reactor (50 MW)  received a license with significant safety concerns, prompting the  company to undergo a repeat licensing procedure for a high- power  reactor. In 2023, NuScale canceled a pilot project with 6 modules in  the United States due to exceeding projected commercial indicators.  This decision resulted in a decline in the company's shares, staff  reductions and a fine imposed on the project customer.

As for France, the expert emphasized that the country plans to begin  construction of six new EPR-type nuclear units starting in 2027. The  EPR (European Pressurized Reactor) model developed in France, is  a  type of pressurized water reactor (VVER) of the   generation. It was designed to revive nuclear energy after the  Chernobyl disaster and provide increased power with enhanced safety  features. Three such reactors have already been commissioned - one in  Finland and two in China. Two EPR reactors have been under  construction in the UK since December 2018. However, there have been  regular delays, missed deadlines and budget violations were observed  during the construction of these nuclear reactors not only in  Finland, but also in France and the UK. 

The first EPR reactor in France, located at the Flamanville Nuclear  Power Plant in Normandy, according to the French state-owned concern  EDF, was automatically shut down a few days after the initial attempt  to start a nuclear reaction in September of this year. Its  construction lasted 17 years, which was 12 years behind schedule, and  costs exceeded ?13.2 billion, four times higher than the original  estimate. The construction of two units at the Hinkley Point C  nuclear power plant in the UK, according to a new statement from EDF,  is unlikely to be completed before 2030. The company has been  constantly increasing the projected cost of the project. Meanwhile,  in France, the development of small modular reactors  is currently in  the conceptual design stage.

In general, as Marjanyan noted, when considering SMRs, one should  take into account the project's cost.  According to calculations  conducted by DIW experts in 2021, the cost of constructing modular  reactors was about $7,000 per kilowatt of capacity. Thus, the  projected cost of a 300 MW reactor alone would exceed two billion US  dollars. However, this estimate is approximate and does not include  the expenses of loans obtained for the construction of SMRs.

According to experts' calculations, SMRs will initially be more  expensive than the current large nuclear reactors. Their cost will  only decrease once production of individual modules reaches a large  industrial scale. Against this background, as the expert noted, the  Russian Federation continues to actively develop nuclear energy,  including in the SMR sector not only domestically but  internationally. The construction of modern and reliable nuclear  power units in countries like Iran, Egypt, India serves as evidence  of this commitment. Additionally, Moscow has already started  construction of SMRs in Yakutia and has signed contracts for their  construction in Uzbekistan, where six reactors with a total installed  capacity of 330 MW will be built. "However, even in this case, the  cost remains a significant factor to consider in these projects," the  expert concluded.