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Global Insight
November 25, 2011
Inter-RAO UES Reportedly Seeking to Get Out of Contract for Armenia's
Metsamor NPP
Russia's Inter-RAO UES is reportedly unhappy with the terms of its
management contract for Armenia's Metsamor nuclear power plant (NPP)
and is looking for an early termination of the contract, according to
Russian business dailyKommersant. The report, citing sources close to
the majority state-owned Russian power company, said that Inter-RAO
UES was not specialised in running nuclear energy facilities with
"increasing risks" and that the company wanted to potentially transfer
the current management contract for the Armenian NPP to Rosatom, the
Russian state nuclear concern that operates Russia's own NPPs.
Rosatom, however, is more interested in building a new 1-GW NPP in
Armenia rather than taking over management of the ageing Metsamor NPP,
which has just one 400-MW operational reactor. Inter-RAO UES took over
financial management of the Metsamor NPP in an agreement with the
Armenian government in 2003. The management contract is set to expire
in 2013.
Significance:The international community has lobbied Armenia for an
early shutdown to the Soviet-era Metsamor NPP, citing the safety risks
of continuing to operate the plant in an active seismic zone. Indeed,
the plant was powered down following a devastating earthquake in
December 1988 in Armenia, but under an energy blockade against Armenia
by both Azerbaijan and Turkey, the Armenian government restarted one
reactor at the NPP in 1995. Metsamor continues to provide around 40%
of Armenia's total power supplies, and the government has said it will
not decommission the NPP until a new one is built, allowing the
country to replace lost power generation capacity. Inter-RAO UES is
perhaps wary that it lacks the necessary expertise to handle a crisis
at Metsamor, particularly as there is increased focus on the seismic
risks to the Armenian NPP following recent earthquakes in nearby
eastern Turkey and the Fukushima nuclear disaster earlier this year in
Japan (seeCIS: 18 March 2011:). Metsamorenergoatom, a joint venture
between Rosatom's Atomstroiexport and Armenia's Ministry of Energy and
Natural Resources, is planning to build a new NPP in Armenia, but the
first unit at the new plant is not expected to be operational until at
least 2017.
November 25, 2011
Inter-RAO UES Reportedly Seeking to Get Out of Contract for Armenia's
Metsamor NPP
Russia's Inter-RAO UES is reportedly unhappy with the terms of its
management contract for Armenia's Metsamor nuclear power plant (NPP)
and is looking for an early termination of the contract, according to
Russian business dailyKommersant. The report, citing sources close to
the majority state-owned Russian power company, said that Inter-RAO
UES was not specialised in running nuclear energy facilities with
"increasing risks" and that the company wanted to potentially transfer
the current management contract for the Armenian NPP to Rosatom, the
Russian state nuclear concern that operates Russia's own NPPs.
Rosatom, however, is more interested in building a new 1-GW NPP in
Armenia rather than taking over management of the ageing Metsamor NPP,
which has just one 400-MW operational reactor. Inter-RAO UES took over
financial management of the Metsamor NPP in an agreement with the
Armenian government in 2003. The management contract is set to expire
in 2013.
Significance:The international community has lobbied Armenia for an
early shutdown to the Soviet-era Metsamor NPP, citing the safety risks
of continuing to operate the plant in an active seismic zone. Indeed,
the plant was powered down following a devastating earthquake in
December 1988 in Armenia, but under an energy blockade against Armenia
by both Azerbaijan and Turkey, the Armenian government restarted one
reactor at the NPP in 1995. Metsamor continues to provide around 40%
of Armenia's total power supplies, and the government has said it will
not decommission the NPP until a new one is built, allowing the
country to replace lost power generation capacity. Inter-RAO UES is
perhaps wary that it lacks the necessary expertise to handle a crisis
at Metsamor, particularly as there is increased focus on the seismic
risks to the Armenian NPP following recent earthquakes in nearby
eastern Turkey and the Fukushima nuclear disaster earlier this year in
Japan (seeCIS: 18 March 2011:). Metsamorenergoatom, a joint venture
between Rosatom's Atomstroiexport and Armenia's Ministry of Energy and
Natural Resources, is planning to build a new NPP in Armenia, but the
first unit at the new plant is not expected to be operational until at
least 2017.