Chernobyl has often been described as a gun that Ukraine has held to the heads of Western powers in an effort to squeeze funding from them to complete two other nuclear reactors.
But letters signed by President Leonid Kuchma and former Environment Minister Yury Kostenko suggest an entirely different scenario: that Western countries are trying to dump nuclear-power technology that they consider too risky for themselves on Ukraine.
According to the letters, which Kuchma signed in May 1998 and Kostenko signed in May 1997, Ukraine initially preferred to build a new thermal power plant, but Western powers insisted instead on completing old Soviet-designed nuclear reactors.
But since the West has been reluctant to fully finance the nuclear-power project, the letters said, Ukraine could be forced to keep the half-destroyed Chernobyl nuclear power plant running past the year 2000.
Both of the letters were published soon after they were written but didn’t draw much attention at the time. Kostenko’s letter was written to the editors of The Economist magazine; Kuchma’s letter was written to British Prime Minister Tony Blair and appeared in a Financial Times energy supplement in June 1998.
Anti-nuclear activists eventually put two and two together and took their story to the English newspaper The Guardian, which ran an article pointing out the implications of the letters on Feb. 23.
The activists argued that Western producers of nuclear-power technology, no longer able to sell their wares at home, were pressuring their governments to help them find new markets in Eastern Europe.
Kuchma’s letter asked Blair, then chairman of the Group of Seven industrialized nations, to encourage G-7 countries to secure funding for completing the nuclear reactors, which ‘was proposed by Western partners as an alternative to the Ukrainian bid to build a steam-gas power plant near Slavutych.’ Kostenko’s letter was more specific.
‘That [Ukrainian] proposal was rejected in favor of a strong recommendation from the EBRD [European Bank for Reconstruction and Development] that we complete the construction of the Rivne-4 and Khmelnytsky-2 nuclear plants,’ Kostenko wrote.
However, an EBRD spokeswoman denied that the bank made any recommendation concerning either project in 1995, and in a March 3 telephone interview, Kostenko said the recommendation came from the G-7.
The reactors at Rivne and Khmelnytsky, known as K2R4, are Soviet-designe VVER 1000s, a type deemed safer than those at Chernobyl but still far from Western safety standards.
The project has been adopted by Ukraine as part of the Memorandum of Understanding agreed between Ukraine and the G-7 in 1995, in which the G-7 pledged to help Ukraine compensate for lost power in return for closing down Chernobyl in 2000.
The G-7 has pressured the EBRD to finance the project, but the bank has been reluctant, saying Ukraine’s practically bankrupt nuclear power company likely wouldn’t be able to repay the loan.
Meanwhile many economists, environmentalists and energy experts, as well as the Austrian government, have slammed the project. But the Ukrainian government has long been thought to support it.
Ukraine has largely kept public silence about the rejected gas-steam plant proposal. Kuchma’s letter was described by Blair’s office to the Guardian as a private correspondence between heads of government. Kostenko’s letter appeared in the Economist in response to an article claiming that Ukraine was ‘black-mailing’ the West with Chernobyl.
Kostenko, who now chairs the parliamentary committee for nuclear safety, confirmed that Ukraine put forward the gas-steam plant proposal during negotiations with the G-7 in 1995.
‘But experts from the G-7 said it would be cheaper to build these two [reactor] blocks [at Khmelnytsky and Rivne]’ he said.
The gas plant was estimated to cost $4.5 billion, including ten years supply of gas, Kostenko said.
K2R4, using Western technology, is budgeted at $1.72 billion. So far its biggest financier is Euroatom, the EU-funded nuclear organization, which would provide $400 million. The EBRD has said it could loan $190 million, which could also open the door to more private loans. The G-7 has pledged support in the form of export guarantees.
Kostenko said that another reason the G-7 favored K2R4 is that it would be quicker, as the reactors are already 80 percent completed. Building was halted after Ukraine, in one of its earliest independent decisions, put a moratorium on the construction of new nuclear power facilities.
But K2R4 has not turned out to be much of a time-saver, as Ukraine is still waiting on the EBRD’s decision to grant a loan. Chernobyl’s last working reactor was scheduled to go online on March 6 after lengthy repairs and safety upgrades.
Some experts say R2K4 would not necessarily be much cheaper than a gas-powered plant. Completion of the Czech Republic’s Temelin power plant using technology from the U.S. company Westinghouse has run into long delays and huge cost overruns. Slovakia’s project to complete its Soviet-designed Mochovce nuclear power plant has also gone more slowly and expensively than expected.
‘Temelin and Mochovce [in Slovakia] have shown that completing reactors of the Soviet type has proved to be very much more difficult than anyone had thought,’ said John Surrey, a professor from the University of Sussex who has worked on two reports on K2R4.
Both Temelin and Mochovce use VVER 1000 reactors. Slovakia initially hoped to get EBRD funding for Mochovce, but grew tired of the bank’s vacillations and decided to go ahead with the project with Russian help and German and French export guarantees.
Kuchma’s letter to Blair complains of similar procrastination by the bank, which has commissioned three analyses of the reactor-completion project in an effort to determine whether it meets the bank’s ‘least cost’ criterion – in other words, that no cheaper alternative exists.
The first least-cost report was never publicly released. The second, an independent study by experts headed by Surrey, concluded that K2R4 did not make economic sense as Ukraine already had too much energy generating capacity. The report recommended that the West instead support Ukraine in overhauling its existing coal- and gas-fired plants. Environmentalists back that option.
The EBRD then commissioned a third report, by U.S. contractors Stone and Webster, which concluded that the project meets the least-cost criterion. The analysis based its conclusion, however, on dubious predictions of rising world gas and oil prices and increased energy demand in Ukraine.
EBRD spokeswoman Julia Zilberman was surprised by Kostenko’s 1997 allegation that the recommendation to build K2R4 came from the EBRD.
‘We had not made any commitments or recommendations [in 1995],’ she said. ‘For us to make a recommendation implies that we believe this to a viable project. But we have not made a decision yet.’
She said the EBRD is committed to making a decision on the loan by mid-1999. She declined to comment on Kuchma’s letter.
Critics of the K2R4 have long said that its Ukrainian and Western supporters are disregarding environmental dangers and economic flaws in the interest of the nuclear industry and geopolitics.
‘K2R4 has always been a highly political project looking for economic justification that has never existed,’ Surrey said.
One reason put forward for Western support for K2R4 is that that an expanded nuclear industry will wean Ukraine of its dependence on Russian gas, for which Ukraine has already incurred vast debts.
Tobias Muenchmeyer, a nuclear expert from Greenpeace International, countered that the project would increase Ukraine’s dependence on Russia for nuclear fuel, waste disposal and much of the technology required to maintain reactors.
Another explanation often given for Western interest is that countries that have halted their own nuclear programs are now helping their nuclear industries look for new markets. Nuclear giants Electricite De France, Tractabel (Belgium) and IVO International (Finland) are already acting as consultants for K2R4.
‘The participation of Western companies is beyond doubt’ if Ukraine gets Western funding for the project, said Samuil Benison, an official in the nuclear facility licensing department of Ukraine’s Nuclear Regulatory Authority.
Benison, however, said the idea of a gas-powered plant was put forward in the 1995 negotiations, but by the G-7, not Ukraine.
‘The proposal to build a gas-electric station was not Ukrainian, it was a Western proposal,’ he said. ‘The decision to build the reactor blocks was Ukrainian.’
Ukraine has already drawn up plans to build the reactors on its own resources and Russian aid if the EBRD loan does not materialize, Benison said.
Kuchma has often said he will go ahead with that variant if the West fails to provide financing, saying that finishing the plants with Russian help would bring costs down by over a half. However, it would also likely mean lower safety standards, and there are doubts about Russia’s readiness to help.
