Rosatom Report: Great Progress Despite Sanctions

Meeting with Head of Rosatom State Corporation Alexei Likhachev

As you see from the above graphic, Rosatom doesn’t just operate Russia’s nuclear power complex, which is typical of all Russia’s public utility corporations. I note one missing area is education, which is discussed in the meeting between Putin and Alexei Likhachev along with its significant progress. As usual, the reader will discover more about Russia’s economy and its advancement as Rosatom’s accomplishments don’t occur in a vacuum. Russia has a number of organizations related to education and personal promotion that are aimed at the development of Russia’s human capital which in turn strengthens Russia. Three of these are noted, [ANO] "Russia is a land of opportunities", "Sirius" and the National Center for Physics and Mathematics, all of which are connected to the Agency for Strategic Initiatives that I’ll be writing about this week. At Rosatom’s website, I find more info is available via the Russian language pages than English, although you can choose the latter language easily if you lack translation software. This page has an A-Z listing of its current projects and activities some of which are mentioned in the talk. From there, you can navigate Rosatom’s website. One very important area of Rosatom’s activities is its development of the Northern Sea Route, which can be read about here. At the top of the page is a menu behind an icon having three horizontal lines that displays the website’s index for further surfing. The ITER project is mentioned and Putin asked about Russia’s own Tokamak. Here’s a schematic of the ITER Tokamak

And now for the meeting:

Vladimir Putin: How's the corporation doing?

Likhachev: Mr President, the results of the year have been finally approved by the Supervisory Board. Despite external pressure, we passed the first half of the year with confidence, and all the positive trends remain. We can now talk about the forecast until the end of the year and on economic indicators, on the main projects, the state defense order will be completed by 100 percent, and all federal projects are also being implemented on time.

I would like to draw your attention to some special economic indicators and certain projects in Russia and abroad, with your permission.

Vladimir Putin: Of course, let's do it.

A. Likhachev: We analyzed the results for the last six years. We have no doubt that this year we will exceed our open-source revenue by only two trillion rubles ‒ an increase of almost two times in six years. The Government is helping us a little ‒ a 60 percent increase in budget investments, but, Mr Putin, they are covered three times by our tax deductions. This is our participation in the co-financing of the national project.

It is with great pleasure that I report to you that for the second year our own investments exceed one trillion rubles, and this year we will continue to do so, which is a multiple of more than eight times the growth over the past six years.

Regarding social indicators: the average salary growth is eight percent, and labor productivity growth is almost nine.

Vladimir Putin: This is a very good indicator.

A. Likhachev: That's right.

We rarely talk about this: over the past six years, the number of state corporations has grown by more than 100 thousand people, of which 60 thousand are high ‒ tech jobs. We also have 60,000 employees abroad, 50-50 of them Rosatom employees, Russian citizens and citizens of our partners and friendly states.

On international projects: First of all, I would like to thank you for your support in acquiring the Budenovskoye field in Kazakhstan. We have confidently reached the second place in terms of reserves and are among the top three in terms of all processing operations in the nuclear fuel cycle.

We have stayed and even slightly increased supplies to all our countries, but supplies to friendly countries are growing especially noticeably. These are the countries of Asia, the People's Republic of China, the Middle East, and Africa. There we have up to 60-70 percent growth in various types of nuclear fuel supplies.

Vladimir Putin: People behave responsibly, because changing suppliers is technologically very difficult.

Alexander Likhachev: It's not easy, yes. We know and understand that they are under enormous pressure, both politically and economically. Of course, being at the current point, Mr Putin, we do not see much growth prospects in the European market, and not only because there is an unfriendly attitude towards us, but because there is no growth potential there.

Of course, the potential for growth in the energy sector in general, and especially in nuclear power, [is] in Asia, in the Middle East, and there they want both our technologies and our supplies. In this sense, of course, we are increasing production and will continue to consolidate our leadership.

We continue to be a leader in the export of nuclear power plants. An unusual figure ‒ 22 projects are now being implemented. Belorusskaya power station in pilot operation. In the fall, we will finally hand over the second block. It is very interesting to note that as a result of the work of the first block last year, Belarus entered the top twenty nuclear powers ‒ more than 14 percent of nuclear power generation. Belarus has pushed past Great Britain and followed Canada in only one of our nuclear power plants. It is clear that the second one will double the nuclear energy potential of the Republic of Belarus.

Vladimir Putin: Our colleagues will also acquire relevant competencies.

A. Likhachev: That's right. They are also very eager to expand in non-energy nuclear areas: in medicine, in scientific research, and in materials science. On the instructions of Alexander Grigoryevich [Lukashenko] we are preparing a corresponding project together with the Government of Belarus.

There will be a fourth "first concrete" in Egypt. This will be the largest construction project ‒ four blocks are being created simultaneously. I would like to draw your attention to Bangladesh. We are also delivering fuel to the plant in the fall, and there will be more nuclear power on the planet. In this sense, we have very comfortable relations with our Bangladeshi partners.

The basis of our leadership in the global market is our scientific developments. On behalf of the entire industry, I would like to thank you for extending our national project for the development of engineering, technology and research until the 30th year. We are implementing it together with the Kurchatov Institute. This is also an improvement in the performance of our bestsellers-VVER [water-water power reactor], these are small plants, these are fast industrial reactors, this is the closure of the fuel cycle. In general, we see serious support from the Government and the Ministry of Finance, despite the difficulties, and we continue to offer the market promising areas. In this sense, the national project will determine the technological landscape for at least 40-50 years, I speak responsibly.

Vladimir Putin: How is Tokamak feeling?

Alexey Likhachev: Tokamak works at the Kurchatov Institute. We are working together on the next generation of tokamak with reactor technology. And this is also part of our national project.

Vladimir Putin: Plasma engines?

A. Likhachev: And the plasma engines, so exactly, are loaded in the same national project.

What else is interesting? We continue to actively participate in the ITER project, an international project, in France, in Cadarache. The project management demonstrates the high demand for our technologies, in terms of supplies, and the work of specialists. In general, despite all the difficulties, this international project is being implemented, of course.

Vladimir Vladimirovich, your assignment is that the transition from 20 to 25 percent [of the share of nuclear power in the total energy balance of the country] is being implemented. The government has approved the general scheme, and we are currently working on extending the general scheme beyond the 35th year to the 42nd.

Vladimir Putin: Will we reach this figure of 25 percent?

Alexander Likhachev: That is your task. All the relevant instructions of the Government are available, and we are making a general scheme for it.

What will be the main "salt"? Increase generation only slightly in the center, significantly increase it in the Urals, and come to Siberia and the Far East.

Both the Chelyabinsk Region and Khabarovsk Krai are very supportive of the development of nuclear competencies. In general, the governors understand that this is an impetus for the development of the region - both during construction and, most importantly, during operation: cheap and sustainable electricity, the indicators of which can be calculated for decades.

Vladimir Putin: Of course.

Alexey Likhachev: In addition to the second point, which is related to nuclear power, there is another impetus for the development of new products – we regularly report to you... Mr President, just one example: these figures are the 2030 targets set out in our strategy. We wrote them without knowing about the pandemic or the huge number of sanctions, but this year we are getting closer to them. This pressure, these conditions have given us an explosive growth in our supply of new products. Last year we came close to 800 billion ‒ we couldn't even dream of such a figure, but now it has become a reality.

We are moving forward, but we do not forget other directions. Our nuclear order, $ 15 trillion for the next 10 years, is mostly for Russian enterprises.

Vladimir Vladimirovich, let me conclude with two more very interesting projects.

These are electric motion accumulators. As I told you, we are building a plant in Kaliningrad, and we have agreed with Moscow ‒ thanks to Sergey [Sobyanin] ‒ to set up a similar plant. But we are going seriously into electric propulsion and are thinking about the target supply of a complete electric drive, including an electric motor, gearbox and inverter.

In this case, we are very hospitable, as they say, all residents of the Russian automobile market: GAZ, VAZ, and UAZ.

Vladimir Vladimirovich, thanks to your solutions, the country's largest power engineering cluster has been created. You have made decisions about Atomenergomash, Izhora, and OMZ Spetsstal. Now we are fully covering our needs, breaking the records of the Soviet Union: this year we will produce five reactor buildings and 18 steam generators. But we actively entered both LNG equipment and special steel. In general, the issue of creating the largest machine-building energy cluster in Russia is closed thanks to your support.

Mikhail Murashko told you about our projects in nuclear medicine. I confirm everything: the equipment is ready for mass production; we continue to maintain, despite all the difficulties, 30 percent of the global isotope market; we have completed construction and commissioning work in the nuclear medicine building at the Dmitry Rogachev Center. I hope that in the fall he will see the first patients, because many of the works were completed ahead of schedule.

Vladimir Putin: Good.

Alexey Likhachev: This is a very responsible job.

Vladimir Vladimirovich, just a moment.

It is clear that our technologies and equipment do not work without people. Every year we employ up to two thousand young professionals, of whom a third are "gold" graduates.

Of course, it is very important to conduct personnel training. We do not make a difference and build our work both in the state corporation and in the cities of our presence. I would like to inform you that our competencies are also in high demand at the federal level.

In [ANO] "Russia is a land of opportunities", in "Sirius" we conduct very large programs. And the National Center for Physics and Mathematics, which you approved, has released the first specialists-42 people, 40 remained in the industry.

Vladimir Putin: Together with MSU, right?

Alexander Likhachev: Yes, MSU is doing a great job. In general, two years have passed ‒ the first specialists have left. A similar project, a large cluster, in Snezhinsk ‒ "New Snezhinsk", for Ural universities.

I would ask for your approval, if possible. We have such a place, figuratively speaking, that we need ‒ Obninsk, where the first nuclear power plant was, and a very strong branch of MEPhI. We would like to start working there to create a large cluster of international nuclear education. It is very conveniently located relative to Moscow and airports. Our institutes are there…

Vladimir Putin: I think this is in demand, of course, we have a lot of partners.

Alexander Likhachev: There are many partners. We will hold a big conference there in the autumn, and it will become part of the Forum of Youth and Students, which will be held in February-about 50 countries send their young representatives to us through the nuclear line. A very important task is to work with them, to influence the processes in the world, but no less important is to educate our own people. And we are very pleased that in the whole chain ‒ kindergarten, school, university, production ‒ we not only give people competencies, but also form a civic position. This allows us to move forward ahead of schedule.

Vladimir Putin: Thank you. So let's do it.

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Yes, the illegal sanctions did present a hindrance, but the EU’s lack of interest in nuclear power preceded those laid in 2022 and Rosatom had already directed its international marketing elsewhere as its many projects proves. At some point prior to 2030, Rosatom will likely become independent of Russian government financing as was hinted at above. As with Rostec, Rosatom is a massive conglomerate with many subsidiaries and is a public utility since it’s state owned. These major, massive public utilities are somewhat Soviet-like in their nature but are organized differently within the government and nation. One thing I’ve noted after monitoring so many similar meetings is there’s never a computer playing a series of power-point slides; instead, there’re always hard copies of figures and projects.

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