How Russia’s nuclear empire lost its grip on Ukraine, and helped spark the rush to war

Losing control of Ukraine’s nuclear plants and the billions of dollars they represent, led Russia to an assault on the country’s power stations, as part of its real aim of bringing Ukraine back into its nuclear empire

On the first day of the invasion of Ukraine, one of the Russia’s first actions was to capture the decommissioned nuclear power station at Chernobyl, a name known across the globe. A few days later Russian troops seized the active plant at Zaporizhzhia in the south. While Vladimir Putin’s forces have so far failed to capture Ukraine’s three remaining nuclear power stations, analysts agree that taking them would represent a vital strategic victory.

However, Russia’s assault on the power stations is also part of its very real aim of bringing Ukraine back into its nuclear empire – from which the country, for nearly two decades, had been trying to break free.

In any war, capturing a country’s power sources is a logical objective for the invader. This makes particular sense in Russia’s war because of the importance of nuclear energy to Ukraine, which generates about 52 per cent of its electricity from its 15 nuclear reactors.

“The Russians understand that energy is a massive tool of power,” according to R Scott Kemp, a professor of nuclear science at the Massachusetts Institute of Technology. It is one which “can essentially cause the whole country to lose its clean water, the pumping of gas, the refrigeration of food and electrical power needed for the communications of the military and the government,” he said. “It’s a point of tremendous leverage.”

This month Ukraine said it had averted a serious cyberattack on its power grid, believed to have been perpetrated by Russia, while another attack against the grid in 2015 resulted in power outages for thousands of people for hours.

Zaporizhzhia nuclear power station, Ukraine’s biggest and the one captured as Russian forces advanced
(Photo: Dmytro Smolyenko/Future Publishing via Getty Images)

The Ukrainian government still controls three nuclear power stations, including the South Ukraine nuclear power plant (NPP) in Yuzhnoukrainsk, about 200 miles from Zaporizhzhia, as well as Rivne and Khmelnitsky in the north-west. Zaporizhzhia alone generates more than 20 per cent of the total energy produced in Ukraine. If Russian forces took the South Ukraine plant, which is of strategic importance for electricity generation tserving about five million people in the Nikolaev, Odesa and Kherson regions, they would control about 60 per cent of the country’s nuclear capacity.

Jeff Merrifield, a former commissioner of the US Nuclear Regulatory Commission, and global energy section leader at Pillsbury Law, told i: “To the extent that Putin’s aim is to dominate the country, having access to control these plants is going to be an important means of achieving that end. If they have that control and they are able to turn the power on and off and if part of their strategy is to wear down the Ukrainian people and government, that is certainly a way to effectuate it.”

The global strategy

However, nuclear power is key to a far larger strategy than immediate military objectives. It also represents a powerful economic motivator for Russia, as part of the Kremlin’s wider nuclear empire-building.

Since the 2011 Fukushima disaster, as other countries abandoned nuclear power, Russia brought a counterintuitive strategy into play, serving countries which still want the benefits of this form of power generation, such as security of supply amid an increasingly volatile fossil-fuel market.

“Russia is an aggressive exporter of nuclear power,” according to the 2021 World Nuclear report. However: “The relative success of Russia’s export drive in a niche market of state-funded projects is not primarily the technology but the access to cheap financing that accompanies the deals.”

Japanese people amid the detritus of the Fukushima disaster in Japan in 2011, which offered Russia an opportunity as it continued to serve countries wanting the benefits of this form of power generation, such as security of supply (Photo: Getty)

As of last year, Russia had 35 foreign nuclear projects in different stages of development, in countries including Bangladesh, Belarus, China, Egypt, Finland, Hungary, India and Turkey. Alexey Likhachev, head of Rosatom, Russia’s state-owned nuclear body, claimed that its order book was worth $190bn, and that by 2030 up to 70 per cent of the company’s revenue would come from outside the Russia. It has also signed nuclear agreements with numerous African countries including Burundi, Rwanda, Ethiopia, Sudan, Uganda, Nigeria and Zambia.

Nuclear projects are notoriously expensive, and construction often drags on for years which, for many countries, means they are tied into long-term loans that later need to be repaid with interest. As Hartmut Winkler, professor of physics at the University of Johannesburg, puts it: “The complexity of the technology and supply of processed nuclear fuel also effectively ties the client country into a dependence relationship with the country developing and servicing the nuclear plant. This can mean agreements typically stretch over 40 years.”

As with China’s Belt and Road strategy, which builds infrastructure in other countries as a means of increasing its economic and political influence, Russia’s strategy builds dependent relationships and by extension political influence. Among countries who abstained from the UN vote condemning Russia’s invasion of Ukraine were China, India, Belarus, Zimbabwe, Burundi, Bangladesh, Sudan and Uganda.

Within Russia’s nuclear empire-building, Ukraine, as the largest export market for Russian nuclear fuel and equipment, is a cornerstone. All 15 nuclear reactors were designed and built by the USSR or Russian Federation, and Russia has traditionally held a dominant position in Ukraine’s nuclear industry, including nuclear fuel supply and treating spent nuclear fuel.

Russia’s nuclear history

1954 – First nuclear power plant in the world opened in Obninsk, near Moscow

1960s-1970s – Nuclear energy capacity increases dramatically in the Soviet Union

1986 – Chernobyl reactor disaster in what is now northern Ukraine

1991 – Break-up of Soviet Union

2007 – Rosatom, the Russian state atomic energy agency, combines the functions of various government departments. By 2021, its portfolio of foreign orders reached $190bn

2022 – Rosatom participates in the seizing of Zaporizhzhia, the largest power plant in Ukraine, during Russia’s invasion

Ukraine sends its uranium concentrate and zirconium alloy to TVEL, part of Rosatom, for fuel fabrication, which is then sent back to Ukraine for use in nuclear power stations. Ukraine also sends its uranium for enrichment at Russian plants. Furthermore, while Ukraine has its own radioactive waste storage facilities, much spent fuel is sent to Russia for storage, at a cost of about $200m a year, according to the World Nuclear Association.

Energy independence

However, before the invasion, Ukraine was prising itself away from Russia’s grip and turning to the West for its nuclear needs – eroding Russia’s market share and the likely tens of billions it it represents to the Kremlin, according to Mr Merrifield. After Ukraine’s 2004 Orange revolution, when there were widespread protests against the rigged victory of the Kremlin-backed candidate, Viktor Yanokovych, it looked to diversify its nuclear fuel supply.

In December of that year Ukraine signed a deal with the EU on energy co-operation, linking the country more strongly to western Europe in respect to both nuclear energy and electricity supply. From 2005 the American company Westinghouse Electric Company emerged as a competitor to the Russian nuclear supplier, Atomstroyexport, owned by Rosatom. In 2008 Ukraine signed a contract with Westinghouse to supply 630 fuel assemblies to the South Ukraine NPP.

After Russia’s invasion of Crimea and the Donbas in the east in 2014 in response to Ukraine’s next major anti-Russia protest, the Revolution of Dignity, it became even more urgent to decrease its dependence. Since most of Ukraine’s coal mines are in the Donbas, it was forced to import coal for its thermal plants. Meanwhile, the Kremlin spiked natural gas prices.

That year Ukraine signed an additional deal with Westinghouse to supply nuclear fuel until 2020. The next year Energoatom, Ukraine’s state nuclear agency, ordered fuel from Westinghouse for Zaporizhzhia as well as the South Ukraine NPP. The company said: “We expect that … Westinghouse will grow its share of the Ukrainian nuclear fuel market.”

Ukraine was edging ever closer to weaning itself off dependence on Russia.

Russian President Vladimir Putin and the Kremlin-backed President of Ukraine Viktor Yanukovych in 2013. After Yanukovych was ousted, Ukraine pursued an independent energy policy (Photo: Getty)

In 2015 Ukraine’s Ukrenergo distribution company signed an agreement with Polenergia, its Polish counterpart, to export electricity as part of a Ukraine-EU ‘energy bridge’.

The Russian market share has been dropping significantly. In 2015 Energoatom bought 5 per cent of its fuel from Westinghouse, worth $32m (£25m), out of a total of $644m. By 2017 it bought 31 per cent of fuel by value from Westinghouse, worth $164.4m.

As of July 2021, six of Ukraine’s 15 nuclear reactors were operating using Westinghouse fuel: two units at South Ukraine and four at Zaporizhzhia, and the country was still moving further from Russia’s grasp. Furthermore, before the war, a long-awaited dry storage facility for nuclear fuel at Chernobyl, designed by the US-based company Holtec, was set to receive its first shipments this month.

The last straw

On 31 August last year Herman Halushchenko, the Ukrainian Energy Minister, signed a strategic co-operation agreement with the US to advance energy co-operation. Petro Kotin, chief executive of Energoatom, also signed a memorandum of co-operation with Patrick Fragman, chief executive of Westinghouse, to build five Westinghouse AP1000 nuclear reactors with a value, according to the World Nuclear Association, of more than $30bn. Then, only three months before the war, on 22 November, Mr Kotin and Mr Fragman signed a contract to build the first two of these reactors at Khmelnitsky NPP, where two Russian-built reactors currently operate.

“The timing is telling,” says Mr Merrifield. “Clearly, the government of Ukraine prior to the war wanted to build additional nuclear generation on top of the 50 per cent that they have of their power supply right now, and they not only contracted with Westinghouse to provide that but with substantial US government financial support behind it and clearly a desire not to buy Russian.

“As nuclear power equipment and technologies are a major Russian export from a manufacturing standpoint I think that clearly irritated the Russians. Its value is tens or more of billions of dollars. And Ukraine clearly intended that Russia receive none of that business.

“That motivation was one of a series of background reasons of why they wanted to go into Ukraine. It was certainly an important motivation because there is a huge financial benefit to Russia having control of the plants. And by seizing the nuclear plants, Russia is able to retake the market for Ukrainian nuclear fuel.”

Nuclear reactors in Ukraine

Zaporizhzhia (under Russian control): six

Khmelnitsky: two

Rivne: four

South Ukraine (Yuzhnoukrainsk): three

However, in invading Ukraine, Russia may have overreached itself. On the ground, it handed back control of Chernobyl along with much of the territory it captured in northern Ukraine as it moved to focus on Donbas, and apart from Zaporizhzhia, any nuclear strategy has taken a back seat.

Overseas, the Hanhikivi 1 nuclear project in Finland looks increasingly in doubt, and Western sanctions have raised questions about the completion of the El Dabaa nuclear plant in Egypt, 85 per cent of which was to be financed by a $25bn Russian loan.

As the consequences of the war begin to bite, there is only so much money Russia will be able to spare for foreign nuclear plants. Isolated internationally, with an economy stuttering under the weight of sanctions, and a disastrous war it continues to plough money into, Russia’s expensive gamble in Ukraine may have just doomed its nuclear ambitions for good.