Transcript of the meeting:

Vladimir Putin: Mr Kiriyenko, six months have passed. Let us review the industry’s performance. Our nuclear industry produces the cheapest kind of energy, is it not? In this way it fulfills not only a key economic role, but a social role as well. What are the results?

Sergei Kiriyenko: Mr Putin, we have met all goals. The autumn and winter period is always a key season for us, because nuclear plants operate at their base load and generate the most electricity. During the previous season, which ended in April, we produced 2.3 billion Kw/hour more than the targeted amount. We not only coped with our given task, but with the understanding that the winter was very cold, we also generated more electricity. The six-month period is not yet over, yet we are 2 billion kW/hour ahead of the planned target.

Vladimir Putin: Consumption is growing.

Sergei Kiriyenko: Yes, consumption is starting to grow. As the economy recovers, consumption is starting to rise. We naturally cover this requirement. Mr Putin, there is one important thing I would like to bring up: you recently chaired a meeting on machine building. For us, machine building is very important, not only in terms of our set targets but also in terms of the large amount of money that the state has allocated for the development of nuclear power …

Vladimir Putin: Mr Kiriyenko, excuse me for interrupting, but I would like to return to the question of cost. What is the difference between electricity generated by nuclear plants and, for example, thermal plants powered by gas, oil or coal?

Sergei Kiriyenko: It varies, depending on tariff regulation. Tariffs are set for each plant individually. This year, because you recommended keeping down electricity tariffs, a great deal was done at the expense of nuclear plants because… Here is a diagram, Mr Putin (shows the diagram). Look, this year you set limits on tariffs not to grow more than 15%. That means 12% to 13% on average for electricity generation. The nuclear industry was the only sector that, rather than growing, actually declined this year.

Vladimir Putin: You mean in terms of cost?

Sergei Kiriyenko: In terms of cost, in total revenue. Rather than growing, it fell by more than 2%. This in large part helped us to maintain the general tariff situation. In principle, this is how it needs to be – a state-owned industry made it possible by technology. When tariffs were growing too high, it was possible to keep them down thanks to cheaper energy generated by the nuclear industry. It also helped with what I began reporting to you regarding equipment and machine building. Here is a full picture with all key figures – we are spending heavily, as is evident from a yearly breakdown. From the time you endorsed the start of the re-engineering of the nuclear industry…

Vladimir Putin: In 2007.

Sergei Kiriyenko: Yes, the investments we began with totaled 22 billion, while this year we are already investing 220 billion in Russian engineering. That is the accumulated volume of orders. More importantly, the vast majority of the orders were to go to Russia, to Russian enterprises. Our target was no less than 95%. I report to you, Mr Putin, that we have been exceeding this amount for several years now. Last year, we ordered 96.4% of equipment in Russia. In other words, only 3.6% of equipment that is not currently produced in Russia was ordered from other countries. 

Vladimir Putin: Good. This is respectable growth, of course. Essentially, you simply added a zero to the overall figure – from 22 billion to 220 billion.

Sergei Kiriyenko: Moreover, if look at 2005 or 2006, this figure is 100 times higher; we were spending mere kopecks then.

Vladimir Putin: A ten-fold increase is quite impressive.

Sergei Kiriyenko: Over a few years.

Vladimir Putin: Good. Now, concerning the tragedy at Fukushima-1. I asked you and your colleagues, along with international experts, to take a closer look at safety standards in all our nuclear power plants. It is time for you to report.

Sergei Kiriyenko: Certainly, Mr Putin, we have finished the work and I am ready to report. The first objective you set was to monitor risks for Russia. We immediately made a prediction, and to this day it has been fully confirmed. On your instruction, a Russian Geographical Society vessel sailed through the entire Far East. The prediction that Russian specialists made early on that the Russian Far East will experience no effect has been confirmed by research findings. The continued monitoring of the Far Eastern area reveals no increased radiation, neither in the water, air, fish, nor sea food. These are data supplied by the Academy of Sciences. We also sent our experts to the Russian Geographical Society… We have scheduled a second expedition for this autumn. In this sense, the prediction was accurate.

Vladimir Putin: Did they take their samples from the surface as well as the depths? 

Sergei Kiriyenko: Yes, they sampled water, air, and sea food all along the Kuril Range. They found small traces in the water only when they sailed beyond Japan – 300 kilometres east of the Fukushima plant. They found nothing in the Russian area. They are now continuing their search. The main thing is that the forecast for the safety of the Russian Far East has been confirmed.

Now regarding Russian plants. We performed the following comprehensive checks. First, before addressing our own facilities, and with the understanding that nuclear power has no national boundaries, we surveyed all of our neighbours. We requested data from the European Union, what they plan to look into, we requested American data and included in our checks all the requirements that they include.

Mr Putin, we carried out more than a hundred checks. Fukushima has shown that the reliability of auxiliary equipment that provides electricity and water is essential in these cases. Of course, our plants cannot be hit by a nine-point earthquake or a tsunami. All of our plants are based in an area that would experience only a six-point earthquake, or seven at the most. That is the upper limit. Still, we logically reasoned that this cannot be an extenuating circumstance. We must be ready for a similar situation.

That was why we inspected all our emergency systems and diesel generators. We have 112 emergency diesel generators at the plants and we have checked them all for operation. They were all fully functional. A further 520 emergency pumps for delivering water also went through tests and are fully reliable. That is the first point. The second is that following these checks, we undertook a review of all operating organisations. In fact, each nuclear power plant in Russia went through four checks. Now Rostekhnadzor is conducting its own checks and analysing the data we supplied to them. They also conducted their own scheduled tests.

In effect, following Fukushima, we were the only country in the world that performed these checks – we also invited experts from the World Association of Nuclear Operators (this is an international organisation of professionals) for partner checks. A nine-member team led by the main technical director of France’s EDF (Electricite de France) came to Russia. The team also included Americans and IAEA experts. They toured eight of our 10 plants, inspected their safety facilities and found our measures to be adequate and in compliance with both Russian and international standards.

In conclusion, Mr Putin, we also held open days at all our plants, because this is an issue of public concern. We invited representatives from the media, the local public, municipal authorities and environmental agencies to all the plants. And we reported back on our checks of the security systems.

What conclusions can we draw from this? The main one is that all Russian plants meet existing Russian and international standards. And you know that our standards are often stricter than international ones. They are never lower and are often more rigorous. The existing plants meet the current requirements. It is a different matter if we realise that international standards should be stricter and that this is the right thing to do. If we only follow current Russian and international standards, then nothing more needs to be done, everything meets the requirements. But if we look at the standards that will emerge following Fukushima – our new projected nuclear plants will fulfill these post-Fukushima requirements as well. We have made a model (shows) to demonstrate how our plant would behave in the Fukushima area. It says here that it could easily withstand a nine-point earthquake and a tsunami. Incidentally, ours are the only plants that could withstand the impact of a heavy aircraft. Currently, many countries which undertake stress-tests are abandoning this requirement.

Vladimir Putin: But we have this requirement.

Sergei Kiriyenko: Our new power plants can withstand the impact of a fully loaded Boeing aircraft with full fuel tanks. This is an extreme impact. As I mentioned, all stations are located in normal six-point earthquake zones with an estimated maximum of seven-point quakes. In the interest of safety, we have now instructed specialists to remap their areas taking into account all new data in order to recheck the seismicity of our power plants. They analysed extreme scenarios, such as tornados sucking out all the water from reactor cooling ponds. Although the probability of this happening is miniscule, we must consider even this for the sake of safety.

Regarding new power plants, and considering the stipulations, our new plants have several systems that meet post-Fukushima requirements. First, they feature double protective enclosures which can withstand the impact of a heavy-duty aircraft, as well as any explosion, tsunami or anything else. Second, they are fitted with passive heat removal systems. This is probably the most important Russian know-how. This system will remove heat by means of an air stream, even if no water is available. A station contains air at all times. We ran an analysis to assess how our modern plant would operate in the Fukushima scenario without electricity and water… Under current IAEA requirements – previously, a station was required to be able to endure for 24 hours before help arrived …

Vladimir Putin: A reserve source …

Sergei Kiriyenko: This will now be 72 hours. It turns out that without water, electricity and with all personnel abandoning the plant for some reason, it could survive perpetually. A meltdown and all other negative aftereffects of the Fukushima disaster would also be prevented. These new power plants meet all post-Fukushima requirements.

As far as operational plants are concerned, we have conducted an additional survey and have decided to buy additional equipment. What does this mean? We believe that it will be better not to call attention to the fact that these earthquakes and tsunamis don’t happen in Russia. We need to bring our old power plants up to the modern post-Fukushima standards. Mr Putin, we have found the required funding for this. In all, we will spend five billion roubles on equipment. We are setting aside over 15 billion roubles for the purchase of additional equipment during this year and the next. The Ministry of Civil Defence, Emergencies and Disaster Relief and Rosatom have looked at the most advanced equipment. In effect, we have once again… Each reactor has three emergency diesel generators, but we are buying additional diesel generators and motor pumps. In fact, in the near future we will provide all our plants with the necessary safety systems.

Vladimir Putin: This implies another level.

Sergei Kiriyenko: Yes, this is another level. This is already fifth- and sixth-level protection. More, Mr Putin, we have agreed … International conferences have now taken place, and we have told all of our colleagues that rather than suspending exchanges, we are ready to send our experts to conduct stress tests in the European Union and other countries, and that we are ready to invite their experts. They are just beginning – the European Union is just starting to conduct these stress tests, which have already been conducted in Russia. We told them honestly that if they find something that we have not yet assessed by us during their checks, or if any additional questions arise, then we will conduct repeat checks. If necessary, we will conduct checks a third time. Although we have finished our work, we are maintaining that this is the first stage. If necessary, the Federal Service for Ecological, Technological and Nuclear Supervision (Rostekhnadzor) and Rosatom will make a decision this fall and will conduct as many repeat checks as necessary.

Vladimir Putin: Good. How is your cooperation with foreign partners proceeding? How are construction projects being implemented in those countries?

Sergei Kiriyenko: Mr Putin, here is an important point that I would like to mention. First of all, I would like to tell you that we constantly monitor the attitude of key nations to the development of the nuclear power industry. It is important that all our main partners have not changed anything in their development programmes. Here (shows the chart), we have indicated those countries which have stopped. Frankly speaking, these are countries, including Germany, Italy and Switzerland, that have never developed nuclear power.

Vladimir Putin: Germany is still fairly well-developed…

Sergei Kiriyenko: Mr Putin, what I mean when I say that they have not developed is that these countries built their nuclear power plants long ago. Germany has not built any new plants for the past 15 years or more. They studied the possibility of resuming construction and decided against it.

Vladimir Putin: Nuclear power plants generate 34% of their electricity.

Sergei Kiriyenko: That’s right.

Vladimir Putin: More than in Russia.

Sergei Kiriyenko: Twice as much.

Vladimir Putin: Twice as much: 16% in Russia and 34% in those countries.

Sergei Kiriyenko: What I mean is that they haven't build anything in a long time. Frankly, they have missed their opportunity to do so. Neither Germany, nor Italy can build a nuclear power plant today. They would either have to borrow technology or hire somebody – they have lost a part of their competence.

None of our partner countries has refused to cooperate with us. Of course, the main contributions to the development of the nuclear power industry come from China and India. They don’t modify their programmes, including the programmes involved in their cooperation with Russia. By the way, Mr Putin, China has just commissioned a fast neutron research reactor, which Russia has helped build. This June, we commissioned a uranium enrichment plant in China, nine months ahead of schedule.

Turkey, Vietnam, Jordan and Armenia are our new partners. We now operate in all these countries, which are determined to expand the nuclear power industry. Mr Putin, we are gaining the following advantages. Considering post-Fukushima requirements, tangible practical achievements are more important than purely theoretical projects that meet new safety standards. 

Vladimir Putin: Yes, when operational technology is available.

Sergei Kiriyenko: And this technology is tangible. For instance, the Kudankulam nuclear power plant in India has already been equipped with these post-Fukushima systems. The same is true of Russia’s Novovoronezh nuclear power plant. There is also the Tianwan nuclear power plant, which has everything except a passive heat removal system. These are not just our projects. We can say that Russia has built the required reactors, which you can reach out and touch. And this, of course, provides additional competitive opportunities. Consequently, we and our partners are moving ahead.

This is an eventful year, Mr Putin, because four key facilities are going to be commissioned. Notably, we will commission the Bushehr power plant. Technically speaking, the project is in its final stage – the reactor has been commissioned successfully, and we are moving to adjust the engine room and the turbine. We'll have to see how long it will take us to adjust the equipment because safety is our absolute priority. But we hope to be able to put the reactor on stream quite soon.

Moreover, we are commissioning the fourth reactor at the Kalinin nuclear power plant in the Tver Region. You were there when it was under construction. We will complete everything this year. We need to commission the reactor and put in on stream this year. The reactor should start generating electricity in 2011.

We are going to commission the first reactor at the Kudankulam nuclear power plant this year. And a uranium enrichment plant in China is our fourth facility, also due to be launched. In fact, this has essentially taken place already, and experimental commercial operation has begun. Commercial operation should get underway by the fall of 2011.

So, this is an eventful year…

Vladimir Putin: …in the end.

Sergei Kiriyenko: Yes. This hasn’t happened for a long time. We haven’t commissioned so many nuclear power plants since the 1980s.

Vladimir Putin: I hope all this will be completed on time, and with the proper quality. I also ask you to pay attention to the subsequent improvement of all safety systems. And, of course, I hope that the sector will be at its very best this year. I want to repeat once again that it will fulfill its economic and social objectives, that is, the relatively low cost of generation, as compared to other power-generating facilities.

Sergei Kiriyenko: Thank you for your support, Mr Putin. 

Vladimir Putin: What are the average wages and salaries in your sector?

Sergei Kiriyenko: The average wages in the sector exceed 30,000 roubles – 31,000-32,000 roubles, to be precise.

Vladimir Putin: Good.

Sergei Kiriyenko: Our wages and salaries soared thanks to state programmes when the sector started developing. They grew especially as a result of your decision regarding the nuclear weapons sector. This is a subsidy especially for people directly involved in the nuclear weapons programme, which has been our weak spot in the past.

Vladimir Putin: On the contrary. They must be supported, and they must be slightly ahead. Please note this.

Sergei Kiriyenko: Good.