Teodor Chirica is a member of the ROEC Advisory Board and Executive Officer at FORATOM. A nuclear engineer with a rich experience (40+ years) in Romanian nuclear industry, he was instrumental in setting up ROMATOM in 2000 and in its affiliation to FORATOM. Actively involved in development of the CANDU project in Romania since early ‘70s, Dr. Chirica worked for ISPE, CITON and RENEL, as well as for CANDU Owner Groups, before serving in different managerial positions at Nuclearelectrica (1998-2009) which he lead as CEO between March 2005 and January 2009. He acted also as Managing Director of AMEC Nucleare Romania (2009-2013), before being appointed CEO of EnergoNuclear – SPV for Cernavoda Units 3&4 – in November 2013. He holds a PhD in nuclear science from the Politehnica University in Bucharest.
by Teodor Chirica, August 10, 2015
European energy security
European institutions have been concerned for some time with this topic. If we go back in time to the 1970s oil crisis, the nuclear energy boom that followed it, made Europe the biggest concentration of nuclear power plants (NPPs) in the world, with a well defined horizontal industry, covering the entire nuclear fuel cycle (from mining uranium in politically secure geographic areas, to nuclear fuel production and use in reactors, storage of spent fuel, and, in some cases, its reprocessing). Compared to those years, Russia’s occupation of the Crimean pensinsula and the undeclared war in Eastern Ukraine have obvious military conotations that require adequate response-solutions, not only on a military level. Consequently, the European Council requested the European Commission in March 2014 to undertake an analysis of the Union’s energy security and produce by June 2014 a comprehensive plan to reduce its energy dependency. Shortly, the Commission publishes the Communication „European Energy Security Strategy”. The document stresses the volume of European Union energy imports (53% of total consumption), its high dependency for oil imports (almost 90%), natural gas (66%), and to a lesser extent for coal (42%) and nuclear fuel (40%). The most pressing issue for energy security relates to natural gas and electricity: „Six Member States depend from Russia as single external supplier for their entire gas imports”, and “three Member States (Estonia, Latvia and Lithuania) are dependent on one external operator for the operation and balancing of their electricity network”. At the same time, the document states that „in 2013 energy supplies from Russia accounted for 39% of EU natural gas imports”.
Is Energy Union an adequate response?
Among Jean-Claude Juncker’s ten priorities, set forth when he took over his mandate as Presdient of European Commission, the third stands out: „I (…) want to reform and reorganize Europe’s energy policy into a new European Energy Union. We need to pool our resources, combine our infrastructures and unite our negotiating power vis-à-vis third countries. We need to diversify our energy sources, and reduce the high energy dependency of several of our Member States”, concluding towards the end of this priority with „I therefore want Europe’s Energy Union to become the world number one in renewable energies”.
In this context, in February 2015, the European Commission publishes its energy priorities (the Energy Package), made up of three communications:
Thus, the Energy Union is, on one hand, a first rapid reaction of the European Commission to recent developments in the Black Sea area, but, on the other hand, a good opportunity to speed up the transfer of sovereignity from Member States to European instititions in the energy field, as part of a vision for a Europe, number one in the world at renewable energy. But, having too many targets may lead to loosing the initial purpose of this policy, specifically – strenghtening European energy security, while the almost exclusive focus on renewable energy may become a vulnerability!
Unfortunately, with respect to nuclear energy, Energy Union is more reserved, Commission officials saying that it is rather well reflected within the „European Energy Security Strategy”.
Nuclear energy and European energy security
The nuclear vulnerability vis-a-vis Russia cannot be compared with the one in natural gas: there are only 18 VVER type nuclear units operating in Europe, while uranium imports from Russia were 18% of Europe’s total uranium imports in 2014 (including for non-VVER units), down 14.1% compared to 2013. The new projects in Hungary and Finland target two, respectively one VVER 1200 type unit.
Sub-chapter 7.2 of the 2014 Communication„European Energy Security Strategy” is dedicated to uranium and nuclear fuel, stating that “electricity produced from nuclear power plants constitutes a reliable base-load electricity supply of emission free supply and plays an important role in energy security”, but recognizes that “Russia is a key competitor in nuclear fuel production, and offers integrated packages for investments in the whole nuclear chain”.
The nuclear projects from Finland and Hungary (which use Russian technology), the dependency of the European reactor fleet on maintenance and spare parts services, as well as on the nuclear fuel produced by TVEL in Russia – all these are vulnerability factors for countries with VVER-440 and VVER-1000 nuclear reactors or, for those looking to develop the more advanced version, VVER-1200.
The European supply chain has little chance to join Russian nuclear deals, manily due to noncompetitive prices. So far, Westinghouse’s efforts to enter the nuclear fuel market for VVER-1000 reactors were not particularly successful.
In reply to the EC „European Energy Security Strategy” Communication, the European nuclear industry, through its voice, the European Atomic Forum (FORATOM) underlined the role of nuclear energy in the EU, where „there are 131 operating nuclear power plants” which „currently provide 27% of its electricity”, thus contributing to energy security by „reducing dependence upon imported fossil fuels”. The European nuclear industry is a global leader in this field: mining, conversion, enrichment, nuclear fuel fabrication, reactors, reprocessing, strong R&D basis, engineering, updated technologies, experience and large investment know-how, and, if we are serious about climate change and want to keep the increase in global warming under 2°C, we must have 80% of energy carbon free: there is no other way without the participation of nuclear!
Can the Chinese nuclear industry be a supplier of security in Europe?
Concerned about the issues regarding the implementation of the III+ generation reactor, the European Pressurized Reactor (EPR) developed by AREVA France and currently under construction, with significant cost and time overruns at Olkiluoto (Finland) and Flamanville (France), power utilities that continue their nuclear projects seem to be attracted by nuclear technologies outside Europe, from Japan, or by cheaper concepts that respect European nuclear safety and performance standards, especially from China, Korea and Russia.
For years now, the United Kingdom has been committed to reform its energy market, since the current model is unable to secure the building of new generation capacity that would replace older units, sustain economic growth rates, reduce carbon emissions and, last but not least, guarantee energy security. Nuclear energy is part of this concept, which is being implemented through three big nuclear projects: Hinkley Point C, Horizon and Wylfa. In all these projects we can find European and Asian investors: EdF Energy together with China General Nuclear Power Group (CGN) – China National Nuclear Corporation (CNNC) consortium for Hinkley Point; Hitachi for Horizon; and Toshiba with ENGIE (former Gas de France) for Wylfa.
Against the background of above mentioned aspects regarding budget and schedule overruns in the case of EPR nuclear units, sources from the British industry claim that „it may be that they [EDF Energy and Areva] will have to accept that the only EPRs [in the UK] will be at Hinkley Point C”, given that negotiations between the British government, EdF Energy and Chinese companies for cooperation in Great Britain are progressing. In fact, the agreements signed by PMs Li Keqiang and David Cameron in June 2014 prepare the entry of China’s nuclear technology on the British market, enabling „Chinese companies to own and operate a Chinese-designed nuclear power plant in the UK, provided they meet UK regulatory requirements”. It is thus obvious that the UK is not reluctant towards a partnership with China for its ambitious nuclear program, as „more than two thirds of the upfront investment cost for the controversial project [Hinkley point C] will be provided by the two Cinese companies [CGN and CNNC]. Beijing is keen to secure a greater stake in further nuclear poawer plants”. Other European countries are following closely these developments.
What about Romania? Cernavoda 3 & 4 in the new regional context
Our country offers a good example of energy security, but we should not forget that an entire economy was sacrificed for this, even if, a part of it was „a pile of old iron scrap”, as a distinguished Romanian PM once said in the 1990s. Therefore, to assume a position of energy sufficiency would be an attitude worth condemning by future generations, a security vulnerability that will worsen, among others, the ‚brain drain’ – a phenomennon already being felt. The acute lack of financing for new projects can be solved by attracting capital from Asian markets, in complete compliance with the EU aquis, alongside financing from developped allied countries, many of whom themselves indebted to the same Asian markets. For this, one requires committment, confidence, and persistance in strategic approach of large projects under different governments and, last but not least, a strong negotiating power to find the ballance that can satisfy all parties involved.
On the topic of China and Chinese-Romanian relations in the new Black Sea context, the November 2013 visit of China’s PM Li Keqiang to Romania comes to mind. Then, president Traian Băsescu declared on public television that China’s presence in a region confronted with traditional pressures from Russia „is not the worst thing”, recalling during the meeting with the Chinese PM that, Romania and China have „an excellent traditional political relationship” and emphasizing that „We will never forget the position of the Chinese government in 1968 nor the fact that China has always supported Romania, in the UN Security Council, as well as in any international organization”, reference to the 1968 occupation of Chechosolvakia by the Warsaw Treaty troups and to Romania as the only communist block country who criticized this intervention.
On the same occasion, Emil Hurezeanau stated: „When the Chinese PM stays three days in Bucharest, without looking at his watch and being in a hurry, it is beyond our understanding” talking about China’s subtlty in sending messages to Russia, and quoting Traian Băsescu: „where there is a strong Chinese footprint there seems to be a lesser Russian footprint”. In that context, Emil Hurezeanu also said: „With an American [missile] shield at Deveselu and two Chinese reactors at Cernavodă, I don’t think the wind gust from Russia’s steppes will strike Romania with the same intensity”.
It is true that the topic of China’s economic presence in Romania is a controversial one, having been used, sometimes excessively, as a political weapon, without well-grounded geopolitical analysis, shallowly evoking the threat of a return to communism in Romania. Personally, I incline to agree with Mr. Hurezeanu’s statements made on DiGi 24 TC channel, on November 27, 2013.
Here, one probably should remember that the first discussions with Chinese companies regarding energy projects in Romania, including their participation in Cernavoda Units 3 and 4, started in 2011, under a government of different political colour then the one we have today!
Coming back to the analysis of nuclear project development in Europe and worldwide, a careful look shows that developers are motivated to finance their own nuclear technologies, different from the one applicable to Cernavoda Units 3 and 4 – which is CANDU. Unlike EdF, ENGIE, Toshiba, Hitachi, Rosatom, the Chinese companies have focused, in parallel with developing their own nuclear technologies (mainly in cooperation with the French industry), also on niche technologies such as CANDU, targeting Romania and Argentina. They did so by concluding binding and exclusive agreements with the Canadian company that holds the rights to use this technology, while Canada can no longer afford the effort to invest in new NPPs. Similarly, one should not forget that, the most modern CANDU type nuclear units are in operation at Qinshan power plant, in China. As far as the relation with China is concerned, at a recent conference in Washington (July 21-22, 2015) on the topic „United States and others with mature technologies”, the representative of American company Fraser Energy Consulting said that, despite China’s fast expansion of the nuclear program, in order to export nuclear technology, China would need to „have partners like the United States and others with mature technologies to be their backstop”. American-Chinese joint ventures would allow the access of American companies to China-led projects, bringing with it some control over IP rights. This is the exact approach of the Chinese industry to nuclear projects in Argentina and Romania: via associations with the Canadian company holding the IP rights for CANDU technology!
As regards the topic of other possible investors for Cernavoda, Replubic of Korea has, aside from its own nuclear technology, experience building CANDU power plants, as it operates four such units at Wolsong. However, the involvment in a vast national effort to increase the installed nuclear capacity, as well as in the Baraka NPP project in the United Arab Emirates, has limited its resources and ability to participate in another big international project.
Eliza Gheorghe’s analysis approach professionally, with solid documentation, the aspects of a possible Romanian-Chinese relation in the field of nuclear energy, describing the avatars of Cernavoda 3-4 project after the six investors selected in 2008 pulled out, as well as the failed 2011-2012 attempts to attract investors from China and Replubic of Korea, to finally conclude „if not China, then who?”.
Energy, the backbone of a performing economy, sums up nuclear, hydro, renewables, coal (in a reasonable proportion), and, of course, natural gas – all being essential to a well diversified energy mix. Given national and European emissions reduction targets and, provided a strategic partnership with an expanding industry form a big country like China, nuclear energy can also bring geopolitical added value to this EU frontier area. Agreements with our partners and allies are a must. However, here too, the same commandments mentioned before apply: committment, professionalism and negotiating power.
 COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL, COM (2014) 330 final, Bruxelles, 28.5.2014.
 http://www.europarl.europa.eu/meetdocs/2014_2019/documents/com/com_com(2014)0330_/com_com(2014)0330_en.pdf , p. 2.
 A New Start for Europe: My Agenda for Jobs, Growth, Fairness and Democratic Change. Political Guidelines
for the next European Commission. Opening Statement in the European Parliament Plenary Session, Jean-Claude Juncker, Candidate for President of the European Commission, Strasbourg, 15 July 2014 http://www.eesc.europa.eu/resources/docs/jean-claude-juncker—political-guidelines.pdf, p. 5.
 Ibidem, p. 6.
 Euratom Supply Agency, Annual Report 2014
 Ibidem 2, p. 16.
 Водо-водяной энергетический реактор
 FORATOM Position Paper “„Ensuring Europe’s security of energy supply: the role of nuclear”, Brussels, 24 June 2014, available at:
 Electricity Market Reform (EMR) – Contract for Difference: Contract and Allocation Overview, DECC, August 2013, version 1.0.
 EdF Energy is the British electricity company owned by EdF in UK, following the privatization of British Energy.
 Hitachi won the competition to take over project Horizon from the German consortium EON-RWE, beating the Chinese consortium CGN-CNNC.
 Nucleonics Week, Volume 56 / Number 14 / April 2, 2015, “AREVA equity, other issues could delay Hinkley Point C decision: sources”.
 The Telegraph, “Hinkley Point new nuclear plant faces further delays”, 12 February 2015.
 World Nuclear News (WNN), “UK government paves way for Chinese nuclear plant”, 18 June 2014, available at: http://www.world-nuclear-news.org/NP-UK-government-paves-way-for-Chinese-nuclear-plant-18061401.html
 Rajeev Syal, „Deal to build UK nuclear plant should finalized within weeks”, The Guardian, August 4, 2015, available at: http://www.theguardian.com/environment/2015/aug/04/deal-to-build-uk-nuclear-plant-should-be-finalised-within-weeks
 Traian Băsescu: China defends us from Russia’s pressures, DiGi 24, November 27, 2013,available at:
 China’s Prime Minister was received at Cotroceni, DiGi 24, November 27, 2013, available at:
 E. Hurezeanu: Când premierul Chinei stă trei zile la Bucureşti, nu se uită la ceas, nu se grăbeşte, e peste înţelegerile economice, Jurnalul de seara, 27 Noiembrie 2013.
 CANada Deuterium Uranium – nuclear reactor trademark developed by the Canada.
 Nucleonics Week, Volume 56 / Number 31 / July 30, 2015, “Opportunities for US nuclear firms in China, India, UK: speakers”.
 Eliza Gheorghe, “The Chinese-Romania Nuclear Cooperation”, ROEC, Policy Brief No. 6, September 10, 2014, https://www.roec.biz/analysis/