The U.S. is going after Russian nukes in Europe. And they’re counting on just one company to do it. Oddly enough, it’s Japanese.
If you thought the energy security issue the U.S. has been selling to Europe was only about American liquefied natural gas, look closer. It’s also about Russian nuclear energy behind the old Iron Curtain.
Energy security in Eastern Europe is a thermo-nuclear reactor war that mainly pits Westinghouse Electric (WEC) against Russian Rosatom. It’s a drawn-out and extremely costly energy game the U.S. is trying desperately to win. State Department chief Hillary Clinton even “lobbied” for Westinghouse in Prague in 2012.
It’s not a secret.
Westinghouse Chief Executive Danny Roderick says Clinton’s showing made a big impression on the Czechs. “I was proud that she was in the trenches with me,” he reportedly said.
The unstated goal: lessen Russian control of the nuclear power market in Eastern Europe, even if that does not translate into an immediate market share for Westinghouse. Historically, for some of those countries Rosatom and its fuel assembly maker TVEL are the only game in town.
“The Russians and Americans are fighting for tenders in East Europe,” says Martin Jirusek, an analyst from the Energy Security Studies Program at Masaryk University in the Czech Republic. “Areva has no money. Siemens lost a lot of know-how when Germany shut its nuclear power program down. So you’ve got the Americans, and now the Chinese are slowly coming in. The Russians support Rosatom, and the U.S. supports Westinghouse. We never hear about the Japanese.”
Westinghouse used to be 100% American. Now it is 90% Japanese – and 10% Kazakh. The company got its start in manufacturing back in the 1880s. In the 1990s, it became the short-term owner of broadcaster CBS and in 2007 sold to Toshiba of Japan. Toshiba owns 87% of Westinghouse, and together they are marketing the AP1000 pressurized water reactor power plants with 8 reactors now under construction: 4 in China and 4 in the U.S. The two here — in Georgia and South Carolina — are still behind schedule.
It’s been a tough slog in Europe against the Russians. On new contracts, they’re winning on points. Washington is moonlighting as their sales rep in the name of energy security.
“U.S. foreign affairs officials have repeatedly shown their support to Westinghouse and urged Europeans to choose that company as a nuclear fuel supplier on the pretext of reducing energy dependency on Russia,” says Rosatom spokesman Vladislav Bochkov in Moscow.
Washingtonhouse Electric Company
It began in earnest in 2012, when then-Secretary Clinton took a trip to the Czech Republic and promoted Westinghouse as a potential builder and operator of two new reactors at the existing Temelin nuclear power plant. It quietly went reported by the newswires.
Clinton met with Prime Minister Petr Nečas at the time, using the energy security argument to promote Westinghouse. The only remaining bidder for the new Temelin units was a Russian-Czech consortium led by Rosatom. The Russians got nervous and Nečas flew to Moscow six months later to assure Rosatom that the bidding process would be fair and transparent.
Rosatom reactors were already operating for years at Temelin 1 and Temelin 2. Plus the Russian deal came with a sweetener: up to two-thirds of the project’s supply chain was going to Czech companies.
Then a sort-of “miracle” happened. Nečas was caught in a political scandal. He had to resign. His political allies were arrested.
And in 2014, the Czech authorities called off the tender because its state-owned utility CEZ Group had no money to pay for it. Now no one has the deal to build the two reactors, but the U.S. got its point across. Diversity was worth the price.
CEZ Group, the plant’s operator, said Russian TVEL is currently the supplier for Temelin 1 and 2 until 2020, but this year they signed an agreement with Westinghouse to develop testing of fuel assemblies that will fit in those Rosatom reactors.
“The point is to have two suppliers,” company spokesman Marek Svitak says.
Westinghouse is no stranger to Rosatom tech, or to Czech nuclear power. Westinghouse supplied fuel rods for Temelin power plants in the early 2000s.
Jiri Paroubek, a Czech politician who was briefly Prime Minister from April 2005 to August 2006, said U.S. officials have been promoting Westinghouse for years.
“In the 90s, American diplomats pushed for cooperation with Westinghouse. At that time, technologically advanced Westinghouse was supposed to help Russian-designed nuclear facilities to meet western standards,” says Paroubek. “However, the opposite proved to be true. Fuel assemblies delivered by Westinghouse were of inferior quality and higher price compared with than Russian fuel and caused frequent outages of Temelin reactors.”
In 2006, Rosatom won a tender for a new 10-year fuel contract to supply Temelin from 2010 till 2020. In the interim the plan was to operate a so-called “mixed core” where fuel rods made by TVEL and Westinghouse would be working side by side, American and Russian tech together. It’s a wonderful thing. Westinghouse is a power house in Russian-style fuel supply, with around 20% share back then and 30% market share today. But CEZ said that Westingouse’s fuel was leaking and the rods were bending. CEZ then decided to remove all the Westinghouse fuel from the core and reload it with TVEL fuel only.
CEZ’s decision serves as a testament to the fact that the Russian fuel assembly was safer and that Washington was selling a product that did not quite work at the time, potentially putting nuclear power plants in danger.
Westinghouse has since gone back to the drawing board. And with Washington’s soft persuasion, are going after the Russian market fast and furious.
On April 28 this year, Westinghouse’s nuclear fuel factory in Västerås, Sweden,announced it was revving up production for Russian reactors in Eastern Europe. Nuclear fuel supply diversification is now part of the energy security argument in Europe, the company’s top management admits.
“I think Westinghouse is trying to get contracts for at least a half of the nuclear fuel supplies market through political pressure,” says Paroubek.
New fears of the Russian boogey man are helping things along. Slowly, but surely.
For those like Clinton, it’s about geopolitics. For Toshiba, it’s about money. And boy, could they use it………. http://www.forbes.com/sites/kenrapoza/2016/05/17/washingtons-european-energy-security-boondoggle/#4247a5f362ef
