Siemens Eyes Russian Nuclear Revival

More than 20 years after Chernobyl, Russia is racing back into nuclear energy. Germany's Siemens hopes to profit from helping build dozens of new reactors

By Philip Bethge, Dinah Deckstein, Wladimir Pyljow and Matthias Schepp

Olga Kurochkina can hardly hide her delight at making her German guests squirm. She has just served them caviar and pirogies and is now triumphantly waving a document in their faces. "Our students recently debated whether Germany needs nuclear energy," says Kurochkina, a teacher at an elite Moscow high school. "The arguments, of course, favor electricity from nuclear energy."

Kurochkina insists that there are "significant disadvantages" to all other energy sources. Wind turbines? "They produce infrasound, which causes depression." Solar cells? "They cause local cooling of the air."

It is hard to believe, but German energy policy is up for debate in Russian classrooms. The students at Kuochkina's school pay rapt attention to a multimedia show in which a virtual professor praises the electricity generated by nuclear power. At the end of the film, a growing orange tree appears on the screen, symbolizing the growth of the Russian nuclear industry. The message is clear: Things are going uphill fast.

Nuclear power is back in vogue in Russia, as if the meltdown at the Chernobyl nuclear power plant had never happened. The giant country has plans to build 26 new domestic reactors by 2030, and 20 more abroad

Major Nuclear Projects

In India and Bulgaria, Russian nuclear engineers are currently erecting turbine buildings and reactor shells, and there are plans to build more reactors in China, the Middle East, Southeast Asia and North Africa. Russia will even start the series production of floating nuclear power plants designed to desalinate seawater in remote corners of the earth.

The Russians are now confident enough to embark on major nuclear projects, and are doing so under the aegis of a company called Rosatom. Sergei Kiriyenko, the head of Rosatom and briefly a prime minister under former President Boris Yeltsin, is considered one of the country's most competent managers. This year alone, he has €3.4 billion ($4.6 billion) at his disposal for new nuclear power plants. He intends to invest about €35 billion ($47 billion) by 2015, of which the government will contribute 40 percent.

Russia's nuclear energy czar is backed by solid political support. Prime Minister Vladimir Putin, in particular, is an avowed proponent of nuclear energy. He has announced that 25 to 30 percent of Russia's electricity will be generated by nuclear power within 20 years. Today nuclear power satisfies 16 percent of the country's electricity needs.

Kiriyenko scored his biggest coup to date in March, when he and Peter Löscher, the CEO of German electronics giant Siemens (SI), agreed to enter into a "strategic partnership." The two companies envision the construction of a nuclear power plant in the Russian enclave of Kaliningrad as their first joint project.

The duo believes that there will be demand for about 400 nuclear power plants worldwide by 2030. "We want to be the global market leader," says Kiriyenko, "and one third of the market is a respectable target." Löscher anticipates "a market potential of €1 trillion ($1.35 trillion)" and "close cooperation for many years."

Siemens Market

Both sides have high expectations of the deal. Rosatom wants to benefit from German know-how in the fields of control technology, steam turbines and generators, and has high hopes for the "psychological" effect of the joint venture, as Kiriyenko calls it. In other words, nuclear power plants with a German seal of quality are more marketable. The Russians also hope to enter new markets. "Latin America, for example, is a traditional Siemens market," says Kiriyenko.

Siemens, for its part, which only recently ended a hapless joint venture with the French nuclear power company Areva, wants the Russians to help it quickly find its way back into the nuclear power business, an attractive field once again. Besides, an alliance with Rosatom would provide Siemens customers with reliable access to fuel rods for decades. Russia has more than 40 percent of worldwide uranium enrichment capacity.

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