© 2018 SE NNEGC Energoatom

All rights reserved

INVESTING IN THE ENERGY FUTURE

TETIANA AMOSOVA
Director for investment and Future Growth SE NNEGC Energoatom

As a fundamental sector of Ukrainian economy, the energy industry drives the growth of people’s wellbeing and social stability in the country. Energoatom is a recognised leader in the electric power industry in terms of its contribution to GDP, taxes and jobs. We produce every second Ukrainian kilowatt. For us, the leading position means first and foremost our responsibility. Therefore, we build our investment operations on three pillars:


First, safety is our utmost priority. Minimising our environmental footprint and reducing accidents are key issues for the Company. Investment projects are necessary to bring the safety of power units to the highest standards. This is an overarching concept of such initiatives as the Complex (Consolidated) Safety Upgrade Programme of Power Units of Ukrainian NPPs, Constructing the Central Spent Fuel Storage Facility and projects for building complex lines for radioactive waste treatment.


Second, electricity is the engine of the economy. When planning investments, we care about the energy balance of the future. Today we are working to build capacities, rolling out such projects as "Development of South-Ukraine electric power generating complex" and "Completion of power units No. 3 and 4 at Khmelnytska NPP".


Third, we must bring money for the nation. The investment programmes should cut costs and generate new profits, as the Ukraine-EU Energy Bridge project does.


All three pillars work organically together and underlie every investment we make at Energoatom. In 2017, the Company financed investment projects to a total of UAH 6,946.3 million, incl. VAT, up by 15% year on year (UAH 6,049.4 million, incl. VAT). Of these, UAH 5,999.5 million, incl. VAT, were used, up by 6% compared with 2016 (UAH 5,642.5 million). Next year, we will continue to implement our priority investment projects, as they are a driving force of the strategic development of the nuclear energy sector.

KEY INVESTMENT PROJECTS

Energoatom is one of the largest Ukrainian businesses in terms of the capital investments. We invest in development of the production, extension of the lifecycle of power units, improvement of safety, and reduction of environmental footprint.


    Priorities of the Company’s investment operations:
  • safe operations of NPPs and extension of power unit lifecycle
  • an enabling environment for Ukraine’s energy independence
  • higher electric power generation driven by more efficient use of capacities in place
  • higher export potential of the Company
  • focus on projects with the implementation period of three to five years

In 2017, the Company was rolling out ten major investment projects with a total approved value of UAH 102,559 million. Because of inflation processes, the total cost of the ten projects has been adjusted to make UAH 150,473 million according to expert estimates.

TEN KEY INVESTMENT PROJECTS TO A TOTAL OF UAH 0 BILLION WERE BEING ROLLED OUT IN 2017.

ENERGOATOM’S INVESTMENT PROGRAMME COVERS THE FOLLOWING INITIATIVES:

COMPLEX (CONSOLIDATED) SAFETY UPGRADE PROGRAMME OF POWER UNITS OF UKRAINIAN NPPS

RECONSTRUCTING A SERVICE WATER SUPPLY SYSTEM AT SOUTH-UKRAINE NPP

BUILDING COMPLEX LINES FOR SOLID RADIOACTIVE WASTE TREATMENT AT NPP SITES

CREATING BUILDING G TRAINING CENTRE AT ZAPORIZHZHYA NPP

COMPLETING POWER UNITS NO. 3 AND NO. 4 AT KHMELNYTSKA NPP

CONSTRUCTING THE CENTRAL SPENT FUEL STORAGE FACILITY

UKRAINE-EU ENERGY BRIDGE

COMPLETING TASHLYK HYDROELECTRIC PUMPED STORAGE POWER PLANT

RECONSTRUCTING 750 KV OUTDOOR SWITCHGEARS AT ZAPORIZHZHYA NPP

IN 2017, THE COMPANY IDENTIFIED FIVE PRIORITY PROJECTS:

CONSTRUCTING THE CENTRAL SPENT FUEL STORAGE FACILITY

BUILDING COMPLEX LINES FOR SOLID RADIOACTIVE WASTE TREATMENT AT KHMELNYTSKA NPP

BUILDING COMPLEX LINES FOR SOLID RADIOACTIVE WASTE TREATMENT AT ZAPORIZHZHYA NPP RECONSTRUCTION (ADJUSTMENTS)

RECONSTRUCTING 750 KV OUTDOOR SWITCHGEARS AT ZAPORIZHZHYA NPP TO CONNECT A 750 KV ZAPORIZHZHYA NPP – KAKHOVKA OVERHEAD LINE. ADJUSTMENTS

CREATING BUILDING G TRAINING CENTRE AT ZAPORIZHZHYA NPP



Moreover, in 2017 seven capital construction projects with a total cost of UAH 41,064 million were approved at the legislative level, including five initiatives approved by the Cabinet of Ministers of Ukraine and two, by the Ministry of Energy and Coal Industry. Energoatom’s top five most important investment projects were put into pilot operation in 2017. Zaporizhzhya NPP: Building G Training Centre, a gas building, a complex line for radioactive waste treatment, and 750 kV switchgears; Rivne NPP: a complex line for radioactive waste treatment.


In 2017, the Company obtained a license from of the State Nuclear Regulatory Inspectorate of Ukraine to build and commission the Central Spent Fuel Storage Facility. We started construction works onsite. Holtec International started supplying the main equipment (containers) to Ukraine.


Energoatom carried out a significant share of construction works under the project “Reconstructing a service water supply system at South-Ukraine NPP”. In 2017, we completed construction and installation works for two spray pools, built a foundation pit and a concrete foundation for a pumping station. The project was adjusted because of changes in the design and layout solutions for the pumping station. They resulted from the installation of new major pumping units, additional design solutions (based on the results of updated engineering and geological surveys at the construction site) and an increase in the cost of building materials and equipment.

INTERNATIONAL COOPERATION IN INVESTMENT PROJECTS

The Company places a high value on international cooperation for many reasons. They include raising investment and credit funds, the technology exchange, and the introduction of international safety standards. Our partners make a great contribution to almost all projects implemented by Energoatom.


Energoatom rolls out many investment projects in the nuclear power industry in cooperation with international partners. The advantage of such cooperation lies not only in fundraising. The Company strives to receive R&D assistance and facilitates adoption of the world’s best practices across its units.


    In 2017, Energoatom continued close cooperation with such international organisations as:
  • International Agency of Atomic Energy (IAEA);
  • European Bank for Reconstruction and Development (EBRD);
  • European Commission;
  • Euratom;
  • European Utility Requirements international group (EUR).

Energoatom cooperates on an ongoing basis with leading companies from countries that have developed nuclear potential. For example, in the project for completion of power units No. 3 and 4 at Khmelnytska NPP, we updated a feasibility study to use VVER-1000 reactors by Skoda JS and install additional safety systems based on data provided by Skoda JS and UJV Rez a.s. We completed many works, cooperating with CNNC (China) and KHNP (South Korea). An international consortium was established with Polenergia International S.àr.l, EDF Trading Limited and Westinghouse Electric Sweden AB to implement the Ukraine-EU Energy Bridge initiative.


Investment projects for creating Building G Training Centre at Zaporizhzhya NPP and building complex lines for radioactive waste treatment at Zaporizhzhya NPP and Rivne NPP were implemented in cooperation with international partners.

COMPLEX (CONSOLIDATED) SAFETY UPGRADE PROGRAMME OF POWER UNITS OF UKRAINIAN NPPS


ABOUT THE PROGRAMME

An increased attention is being paid to safety globally, spurred by the accident at Fukusima-Daiichi Nuclear Power Plant in Japan. The accident was caused by a powerful earthquake followed by tsunami in 2011. This challenged the global atomic energy companies to improve nuclear and radiation safety at operating nuclear power plants. In response, our country adopted the Complex (Consolidated) Safety Upgrade Programme of Power Units of Ukrainian NPPs. Post-Fukushima measures developed on the basis of stress tests were added to a principal safety enhancement programme developed by Energoatom and presented in a nuclear safety report (version 2 dd. 11 November 2011). The programme also took into account the recommendations of the Final Task Report developed jointly by the European Commission, IAEA and Ukraine and released in February 2010. The Complex (Consolidated) Safety Upgrade Programme of Power Units of Ukrainian NPPs is being implemented jointly with international organisations, the EBRD and Euratom.

GOAL

  • increase the safety level at Ukrainian nuclear power units in accordance with the new international standards of the IAEA and the EU;
  • reduce risks of damage to the reactor core and accidental releases of radioactive substances, including severe accidents;
  • reduce the number of equipment failures and unplanned shutdowns at nuclear power plants.

EXPECTED EFFECT

Increased safety of power units at Ukrainian NPPs to the highest European standards.

ACCOMPLISHMENTS BY THE END OF 2017

The Company financed capital investments of UAH 3,418.6 million (incl. VAT) in 2017. Of these funds, Energoatom’s own investment made UAH 1,711.8 million. Additional UAH 1,706.8 million were loans from the EBRD and Euratom16.

THE COMPANY MADE CAPITAL INVESTMENT UAH 0 , 0 .6 MILLION IN THE COMPLEX (CONSOLIDATED) SAFETY UPGRADE PROGRAMME OF POWER UNITS OF UKRAINIAN NPPS IN 2017.

The updated Complex (Consolidated) Safety Upgrade Programme of Power Units of Ukrainian NPPs provides for 1,295 measures (1,082 designed measures and 213 additional measures). By the end of 2017, the Company completed 731 measures (663 designed measures and 688 additional measures). In addition, another important achievement of 2017 was the completion of a regular (second) Environmental Impact Assessment of the programme (For more on this, please see respective sections of this Report).

SOURCES OF FUNDING

The approved amount of financing is UAH 20.1 billion. Funded predominantly by Energoatom, the programme has been co-financed with credit funds from EBRD/Euratom (since 2015).




IMPLEMENTATION PERIOD

2012 – 2020

DESIGNING AND CONSTRUCTING POWER UNITS NO. 3 AND NO. 4 AT KHMELNYTSKA NPP


ABOUT THE PROJECT

Launched in 1986, the construction of power units No. 3 and No. 4 at Khmelnytska NPP (with a capacity of 1,000 MW each) was suspended in 1990 by a nuclear power plant construction moratorium. At present, the operational readiness of power unit No. 3 is estimated at 75% and that of power unit No. 4 is 28%.


We are set to engage companies that have an extensive expertise in the manufacture and maintenance of power units with VVER-1000 type reactors. We consider Skoda J.S., Korea Hydro & Nuclear Power, Westinghouse, AREVA and others.

GOAL

Increasing production capacity of the nuclear power industry.

EXPECTED EFFECT

Completion of the power units at Khmelnytska NPP will help preserve the production potential in the nuclear power sector, which accounts for more than 50% of the electricity consumed in Ukraine.

ACCOMPLISHMENTS BY THE END OF 2017

In 2017, the Company completed updates of the feasibility study for construction of power units No. 3 and 4 at Khmelnytska nuclear power plant. In February 2017, the Nuclear Energy unit of the R&D Council under the Ministry of Energy and Coal Industry held a meeting to discuss the updated feasibility study. Following approval of the document by the Council, Energoatom obtained a positive expert opinion from the State Construction Expert Agency of Ukraine in May 2017 for the design documentation of the project.

IN 2017, THE STATE CONSTRUCTION EXPERT AGENCY OF UKRAINE ISSUED A POSITIVE OPINION ON THE DESIGN DOCUMENTATION FOR CONSTRUCTION OF POWER UNITS NO. 3 AND NO. 4 AT KHMELNYTSKA NPP.

The updated feasibility study was submitted to the Ministry of Ecology and Natural Resources of Ukraine for the project to undergo an environmental impact assessment. At the same time, we launched a procedure to approve the feasibility study at the legislative level.

COSTS

Total adjusted costs of construction of power units No. 3 and No. 4 at Khmelnytska NPP make UAH 72,437.5 million.




IMPLEMENTATION PERIOD

Expected deadline for putting power unit No. 3 into operation – 2025.

BUILDING COMPLEX LINES FOR RADIOACTIVE WASTE TREATMENT


ABOUT THE PROJECT

Building complex lines for radioactive waste treatment (RAW) is a key measure to improve the RAW management at nuclear power plants. The complex lines will use the state-of-the-art equipment and proven technologies such as incineration, high-pressure compaction, and decontamination. The programme provides for the complex lines at all operating NPPs in Ukraine.

GOAL

Introduce RAW management technologies to prepare radioactive waste for the long-term storage and disposal.

EXPECTED EFFECT

Complex lines for radioactive waste treatment at Ukrainian NPPs will make it possible to prepare RAW for the transfer to state ownership for a long-term storage and disposal, significantly reduce the amount of RAW at industrial sites, prudently use the RAW storage facilities, reduce loading doses for maintenance personnel, and enhance the safety culture in RAW management.

ACCOMPLISHMENTS BY THE END OF 2017

ZAPORIZHZHYA NPP: The government reapproved the project for building complex lines for radioactive waste treatment at Zaporizhzhya NPP (Order No. 239-r dd. 5 April 2017). In December 2017, the Company pretested the RAW treatment facilities and started the first stage of pilot operation (RAW simulations).

RIVNE NPP: The Ministry of Energy and Coal Industry of Ukraine approved the adjusted project for building complex lines for radioactive waste treatment at Rivne NPP (Order No. 294 dd. 4 May 2016). Construction works were 100% completed, and the facility was put into pilot testing. In December 2017, the Company carried out the first stage of testing with RAW simulators on facilities for extraction, fragmentation, cementing, compacting and activity measurement.

KHMELNYTSKA NPP: The Cabinet of Ministers of Ukraine approved the project for building complex lines for radioactive waste treatment at Khmelnytska NPP (Order No. 240-r dd. 5 April 2017). The Company is preparing for procurements of the equipment with a long production time.

SOUTH-UKRAINE NPP: The Ministry of Energy and Coal Industry of Ukraine approved the project for building the first stage of complex lines for radioactive waste treatment at South-Ukraine NPP (Order No. 93 dd. 2 February 2017). In 2017, the plant made an agreement for the supply of a radioactivity measurement unit for RAW.

UAH 0 , 0 .4 MILLION IS A TOTAL ESTIMATED COST TO BUILD COMPLEX LINES FOR RADIOACTIVE WASTE TREATMENT AT UKRAINIAN NPPS.

COSTS

ZAPORIZHZHYA NPP: The estimated cost is UAH 662.2 million (including equipment totalling to UAH 168 million received under the TACIS programme).

RIVNE NPP: The estimated cost is UAH 341.7 million (including equipment of UAH 104 million received under the TACIS programme).

KHMELNYTSKA NPP: Project costs make UAH 1,164.4 million.

SOUTH-UKRAINE NPP: The construction cost amounts to UAH 287.7 million.

IMPLEMENTATION PERIOD

ZAPORIZHZHYA NPP: Pilot operation on real RAW will start in August 2018. Full operation of the complex lines for radioactive waste treatment is scheduled for December 2018.

RIVNE NPP: The 2nd stage of integrated tests with hot RAW is scheduled for May 2018, with the full operating starting in June 2018.

KHMELNYTSKA NPP: 2017-2023.

SOUTH-UKRAINE NPP: The project will begin in 2019, after all construction works are completed at Zaporizhzhya NPP and Rivne NPP.

CREATING TRAINING CENTRE BUILDING G AT ZAPORIZHZHYA NPP


ABOUT THE PROJECT

Funded by the Government of Ukraine in cooperation with the European Commission, the facility is a modern base for training VVER-1000 equipment operation, repair and maintenance personnel. The Training Centre Building G at Zaporizhzhya NPP is an international project to train repair crews and the Company’s managers. It is a one-of-akind initiative operating specialist laboratories, simulators, mechanical and electric stands, automation and control systems, including a full-featured simulator of a reactor loop consisting of a reactor, steam generator, main circulator, pressuriser, hydraulic accumulator and primary piping. The Training Centre will provide training in line with the best global practices, focusing on real maintenance and repair procedures on real equipment of VVER-1000 power units. The European Commission’s assistance has also been used to provide modern teaching materials, special-purpose training facilities and class equipment to the Centre.

GOAL

Training and upskilling NPP personnel to reduce the influence of human factors on the safe operation of power units, training staff in a simulated environment of power unit operation and emergency modelling.

EXPECTED EFFECT

The Training Centre will be the core facility of the sectoral system for training maintenance, repair and operation crews and the Company’s managers at different levels. The Centre will offer great opportunities for sharing international practices among leading nuclear operators from all over the world and for training professionals for entry-level countries.

ACCOMPLISHMENTS BY THE END OF 2017

On 1 September 2017, the Training Centre was unveiled and started pilot operation. The Company has installed and is commissioning the core equipment that helps mantle and dismantle a reactor, reset fuel assembly simulators and make other repairs conducted typically as part of scheduled repairs of power units. Validation classes are in place to update teaching and learning aids, training programmes and instructor internship. The Centre continues preparations to host foreign professionals for studies and experience sharing.

BUILDING G TRAINING CENTRE WILL HAVE 0 LABORATORIES AND 0 SIMULATORS.

    The Training Centre will help:
  • train and maintain skills of repair and emergency personnel of national and foreign NPPs with VVER-1000 reactors (V-320);
  • use the full-featured simulators of the Centre as a testing ground for streamlining existing repair technologies and developing new ones in the course of certification by manufacturing plants of new equipment, devices and protective equipment and provide further training for the relevant categories of personnel.

SOURCES OF FUNDING

The European Commission delivered four additional simulators, industrial and office furniture, computer and projection equipment, as well as other devices for 22 training laboratories to a total amount of € 12.87 million. Ukraine estimates its own contribution to the project at UAH 0.5 billion.




IMPLEMENTATION PERIOD

The planned period for commissioning is the first half of 2018. The Company’s additional investment projects include Construction of the Central Spent Fuel Storage Facility, Development of South-Ukraine electric power generating complex, Completing Tashlyk Hydroelectric Pumped Storage Power Plant. Commissioning hydroelectric units No. 3-6, and Ukraine-EU Energy Bridge. For more about these initiatives, please see further sections in our Report.

CONSTRUCTING THE CENTRAL SPENT FUEL STORAGE FACILITY (CSFSF)

ABOUT THE PROJECT

The Central Spent Fuel Storage Facility (CSFSF) will give the Company its own capacities for long-term and safe storage of TVEL and Westinghouse spent fuel in Ukraine. Since the project inception in 2005 up to the present, Ukraine has spent about US$ 2 billion on spent fuel exports for temporary storage to the Russian Federation.


The facility will be located in the Chernobyl Exclusion Zone. The Company is set to allocate 10% of the project’s total costs to the infrastructure development in localities adjacent to the Chernobyl Exclusion Zone, Ivankiv and Polisky districts in Kyiv Oblast. Making UAH 3.7 billion, these allocations will help upgrade the infrastructure, create new jobs and gradually start bringing the exclusion zone back to the general economic use.

CSFSF WILL USE DOUBLE-WALLED STAINLESS STEEL CANISTERS BY HOLTEC INTERNATIONAL.

For the CSFSF project, the Company has chosen an unparalled technology with double-walled containers (canisters) developed by US-based Holtec International specially for Ukraine in accordance with the latest national regulations on the spent fuel storage. Holtec International is a global leader in spent fuel storage technologies. Under a contract with Energoatom, the US company supplies special equipment for dry SF storage and transportation and offers respective technologies to be used by NPPs during transportation of spent nuclear fuel from nuclear power plants to the CSFSF and in the storage facility itself.

GOAL

Improving the spent fuel treatment system for domestic nuclear power plants to strengthen the energy independence of Ukraine by way of building domestic facilities for long-term SF storage in line with a deferred decision concept.

EXPECTED EFFECT


    The project will help:
  • save funds of the state-owned company (thanks to refusal from SF storage and processing services provided by the Russian Federation);
  • create new jobs (about 164 people, including the staff member who were made redundant at Chernobyl nuclear power plant);
  • raise extra-budgetary funds for the construction of social facilities (due to allocation of 10% of the project’s estimated cost);
  • bring the Chernobyl Exclusion Zone back for business purposes.

ACCOMPLISHMENTS BY THE END OF 2017


    In 2017:
  • The Cabinet of Ministers of Ukraine adopted Resolution No. 721-r dd. 5 October 2016 “On reclaiming and providing land plots for permanent use subject to change in land utilisation purposes”.
  • The Cabinet of Ministers adopted Resolution No. 380-r dd. 7 June 2017 “On approval of the project for construction of the Central Spent Fuel Storage Facility for spent fuel of VVER reactors at domestic nuclear power plants”.
  • The Company obtained a positive environmental review opinion for the CSFSF construction (opinion No. 7-03/12-98/10-17 dd. 20 May 2017). The review was based on findings of the Environmental Impact Assessment conducted by the Ministry of Natural Resources of Ukraine.
  • The State Nuclear Regulatory Inspectorate of Ukraine granted license No. EO 000106 on 29 June 2017 for the construction and commissioning of the CSFSF.
  • Major construction works started on 10 November 2017.
  • The Ministry of Finance of Ukraine, Energoatom, the Overseas Private Investment Corporation (OPIC) and the Central Storage Safety Project Trust signed agreements to raise $250 million for the construction of the Central Spent Fuel Storage Facility on 21 December 2017.
  • Construction of a railway line to approach the CSFSF was underway.
  • Construction works were underway on the facility site.

    The project milestones 2017:
  • Major construction works started on 10 November 2017.
  • The Ministry of Finance of Ukraine, Energoatom, the Overseas Private Investment Corporation (OPIC) and the Central Storage Safety Project Trust signed agreements to raise $250 million for the construction of the Central Spent Fuel Storage Facility on 21 December 2017.
  • Construction of a railway line to approach the CSFSF was underway.
  • Construction works were underway on the facility site.


COSTS AND SOURCES OF FUNDING

The project cost of UAH 37.22 billion is indicated in the CSFSF design documentation approved by Resolution No. 380-p issued by the Cabinet of Ministers of Ukraine on 7 June 2017. Of these funds, UAH 4.76 billion is needed to construct and commission the first start-up facility that will make the CSFSF operational. The sources of financing are the electricity supply tariff and credit funds. The Company is working on mechanisms to raise funds from the US stock market to finance the CSFSF construction under the government guarantees.

IMPLEMENTATION PERIOD

The facility is planned to be fully operational before 2065. The first start-up facility including all necessary infrastructure and four storage systems should be completed in 2019.

PROJECT PLANS


    2018
  • completing and launching the railway line to approach the CSFSF;
  • manufacturing and supplying pilot storage systems by Holtec International to Ukraine;
  • precommissioning the CSFSF equipment at NPP sites.

    2019-2020
  • completing major construction works;
  • integrated testing and commissioning the facilities;
  • installing pilot SF storage systems on the site of the Central Spent Fuel Storage Facility;
  • CSFSF pilot testing;
  • putting the Central Spent Fuel Storage Facility into operation in accordance with the applicable laws of Ukraine.

DEVELOPING SOUTH-UKRAINE ELECTRIC POWER PRODUCING COMPLEX

South-Ukraine electric power producing complex includes South-Ukraine NPP (three VVER-1000 reactors), Tashlyk Hydroelectric Pumped Storage Power Plant (two commissioned hydroelectric units with a designed capacity of 151 MW each in generator mode, other four units are under construction) and Olexandrivska Hydro Power Plant (two hydroelectric units with an installed capacity of 11.5 MW each).


The idea of such a hydroelectric facility belongs to Kharkivbased R&D institute, Ukrhidroproekt. The goal is to ensure the rational use of the existing hydroelectric resources of the Southern Buh River during a day. The process flow scheme is based on reversible hydroelectric turbines and powerful pumps. Tashlyk Hydroelectric Pumped Storage Power Plant has the leading role in the facility, working like a water battery. The water raised to its upper reservoir can be used at any time to produce electricity during peak consumption. During lower electricity consumption, the hydroelectric units raise water to the upper reservoir, using the excess energy from the grid.


The combination of three power plants makes it possible to use efficiently the installed capacity during a day and regulate daily fluctuations between electricity production and consumption.

RECONSTRUCTING THE SERVICE WATER SUPPLY SYSTEM AT SOUTH-UKRAINE NPP17



ABOUT THE PROJECT

Construction of five spray pools and a pumping station at Tashlyk cooling reservoir to operate power units No. 1-3 at South-Ukraine NPP.



GOAL

Integrated reconstruction of the service water supply system at South-Ukraine NPP is an effort to remove electricity production restrictions at South-Ukraine NPP imposed because of high water temperature in cooling systems in summer and boost electricity supply.

EXPECTED EFFECT

A 700 million kWh rise in the average annual electricity production without any need to build new generating capacities.

ACCOMPLISHMENTS BY THE END OF 2017

Because of additional works and changes in the estimated cost, Kharkiv R&D Institute “Energoproekt” adjusted the design documentation. The project was submitted to the State Expert Organisation for an expert review. The Company completed construction and assembly works on two spray pools (No. 1, 2) and built a foundation pit and a concrete foundation for the pumping station.



COSTS

The approved estimated cost of the project is UAH 986.4 million (incl. VAT). In 2017, financing amounted to UAH 510.1 million, with UAH 454.5 million utilised.

SOURCES OF FUNDING

Energoatom’s electricity supply tariff.

IMPLEMENTATION PERIOD

The project implementation period is 2005-2020 (provided that the first startup facility is commissioned in December 2018).

PLANS FOR 2018

  • Obtain a positive opinion on the adjusted project from the State Expert Organisation;
  • Obtain re-approval on the adjusted project (by the Cabinet of Ministers of Ukraine);
  • Complete construction and assembly of the first startup facility.

COMPLETING TASHLYK HYDROELECTRIC PUMPED STORAGE POWER PLANT. COMMISSIONING HYDROELECTRIC UNITS NO. 3-6


ABOUT THE PROJECT

Tashlyk Hydroelectric Pumped Storage Power Plant18 is designed to cover peak loads in the southwestern part of Ukraine’s United Energy System (UES), as well as to ensure a reliable base-load operation of South-Ukraine NPP. Triggered by higher electricity consumption, the shortage of load following generating capacities becomes more pressing every year. Ukraine’s unbalanced structure of the electricity generating capacities, where the baseload capacities (nuclear power plants) significantly prevail and there are no load following power plants, makes it extremely difficult to regulate daily load patterns and overnight power outages, ensure emergency and frequency-response reserves, and maintain the stability and reliability of Ukraine’s UES in general.


    Key technical arguments for putting Tashlyk Hydroelectric Pumped Storage Power Plant into operation:
  • Electricity production to cover electricity consumption peaks (evening and morning), using cheaper excess night-time electricity;
  • Substitution of the thermal power capacities in the course of load regulation, which helps operate TPPs at a maximum capacity and save fuel costs;
  • Consumption of excessive power at night, alignment of the load pattern;
  • Reduction of maintenance costs for thermal power plants operated at a continuous load, higher reliability of TPP operation.

GOAL

The project seeks to cover peak loads, bridge night "gaps" in Ukraine’s United Energy System and create emergency reserves of quick-response capacities in the southern region of Ukraine, in particular for South-Ukraine NPP, which faces a significant imbalance in the daily load pattern.

EXPECTED EFFECT

The project provides for a phased launch of six hydroelectric units with a total installed capacity of 906 MW at Tashlyk Hydroelectric Pumped Storage Power Plant. After the launch of hydroelectric units No. 4-6 (with the capacity of 453 MW in the turbine mode and 648 MW in the pump mode), the power plant will generate additionally about 585 million kWh a year or about 800 million kWh in case of excess electricity consumption in the night-time valley. Moreover, the project will create an additional emergency power reserve for the inhouse needs of South-Ukraine NPP.



ACCOMPLISHMENTS BY THE END OF 2017

Energoatom drafted a statement of intent to raise the full reservoir level of Olexandrivske reservoir on the Southern Buh River to 20.7 m and got the statement approved.


Focused on raising the level of Olexandrivske reservoir to 20.7 m, an Environmental Impact Assessment was developed according to the current norms, regulations and standards of Ukraine. The Company developed and agreed with the general designer its statement of environmental consequences of works to raise the full reservoir level of Olexandrivske reservoir to 20.7 m as part of the project for completion of Tashlyk Hydroelectric Pumped Storage Power Plant.


Public discussions were held in localities of the "affected area" to discuss works to raise the level of Olexandrivske reservoir and findings of the Environmental Impact Assessment19.


The Company raised the level of Olexandrivske reservoir to 16.0 m for the startup facility of hydroelectric unit No. 3, installed a hydraulic turbine and received a motor-generator. The operational readiness of the startup facility was about 43%.


Ukrhidroproekt R&D Institute adjusted the project “Completing Tashlyk Hydroelectric Pumped Storage Power Plant. Commissioning hydroelectric units No. 3-6". The project obtained a positive opinion of the state expert review. Approval by the Cabinet of Ministers of Ukraine is expected in the first half of 2018.

COSTS

The approved estimated cost of the project is UAH 3,377.3 million (incl. VAT), while the adjusted estimated cost makes UAH 14,254.4 million (incl. VAT). In 2017, financing made UAH 144.3 million, of which UAH 82.2 million was utilised.

IMPLEMENTATION PERIOD

The project implementation period is 2005-2023. The construction period is 60 months (including three months of preparations).

MEDIUM-TERM PLANS

  • 2018: project re-approval, procurements of services and equipment
  • 2020: launch of hydroelectric unit No. 3
  • 2021: relocation of a cutoff dam
  • 2022: launch of hydroelectric unit No. 4
  • 2023: launch of hydroelectric units No. 5-6.

UKRAINE-EU ENERGY BRIDGE

ABOUT THE PROJECT

This is a pilot project for the strategic synchronisation of Ukrainian and EU energy systems. This is the country’s significant step towards the European energy grid integration. It is planned to raise funds for the completion of power units No. 3 and 4 at Khmelnytska NPP thanks to exports of electricity generated by NPP’s power unit No. 2 to the EU countries. Power unit No. 2 at Khmelnytska NPP is meant to be disconnected from the United Energy System of Ukraine and then to export electricity in two directions: through a reconstructed 750 kV transmission line to Rzeszow (Poland) and through an existing line to Albertirsa Substation (Hungary) following the upgrade of Zakhidnoukrainska Substation.



GOAL

Exporting Ukrainian electricity. Ensuring the energy independence of Ukraine. Creating an enabling environment for Ukraine to integrate into the ENTSO-E20 through exports of electricity generated by power unit No. 2 at Khmelnytska NPP to the EU countries and thus establishing a mechanism of financial support to nuclear power generating capacities.

EXPECTED EFFECT

With this project, Energoatom can enter the EU energy market, which will be the first step towards integration of Ukraine’s United Energy System into ENTSO-E, the European Network of Transmission System Operators for Electricity.


A long-term contract for electricity exports from Khmelnytska NPP’s power unit No. 2 will become a financial instrument (pledge) to raise credit funds without sovereign guarantees and, as a result, a resource for completion of power units No. 3 and No. 4. The project will make it possible to add 1,000 MW of nuclear power to the existing export potential of Burshtyn Energy Island, which is currently supported exclusively by thermal power (550 MW).


The project is based on a technical solution to prevent blackouts. As Khmelnytska NPP’s power unit is isolated to expert electricity for the ENTSO-E system, Ukraine-EU Energy Bridge will provide a backup power source for the national grid, with unprecedented power and capacity in the European energy system. The availability of such an independent source of electricity significantly increases the security for Khmelnytska NPP (in case of loss of its own electricity supply), Ukrainian energy system and EU energy system as a whole (in case of a special accident).

ACCOMPLISHMENTS BY THE END OF 2017

Energoatom is responsible for the upgrade of power unit No. 2 at Khmelnytska NPP and re-connection of the power unit to Burshtyn Energy Island, as well as for providing a backup power source to cover in-house electricity needs at power unit No. 2 while working for the ENTSO-E power system. On 31 August 2017, a session of the Electric Power unit of the R&D Council under the Ministry of Energy and Coal Industry agreed on a principle scheme for connecting power unit No. 2 to the European energy system within the framework of Ukraine-EU Energy Bridge project.

A SCHEME TO CONNECT KHMELNYTSKA NPP’S POWER UNIT NO. 2 TO ENTSO-E WAS APPROVED IN 2017.

Energoatom works to build an energy hub on the border with the European Union. In particular, the Company drafted a project brief and coordinated organisational issues for the reconstruction of a 750 kV general-purpose switchgear at Khmelnytska NPP.

An international consortium has been set up to implement the project, consisting, among others, of Westinghouse Electric Sweden AB, Polenergia International S.àr.l. and EDF Trading Limited. The Ministry of Energy and Coal Industry of Ukraine received proposals on publicprivate partnership for this project. The next step will be a tender to be held in accordance with Ukrainian laws to select a private partner and make a contract (expected in 2018). The public-private partnership mechanism applies to the expansion of Burshtyn Energy Island by connecting Khmelnytska NPP’s power unit No. 2, Zakhidnoukrainska Substation of 750/330 kV and a 750 kV intercountry powerline of Khmelnytska NPP — Rzeszow (Poland). Therefore, at least two state-owned enterprises, Energoatom and Ukrenergo, will be involved in the project.

COSTS

The provisional cost of the above works is 47 million, including 16 million for the upgrade of power unit No. 2 and 31 million for reconnection of the power unit to Burshtyn Energy Island (roughly estimated). A total estimated cost of the project is UAH 1.4 billion.

0 MILLION IS A PROVISION COST OF UKRAINE-EU ENERGY BRIDGE.

ENERGOATOM’S KEY OBJECTIVES FOR 2018

ENERGOATOM’S KEY OBJECTIVES FOR 2018 INCLUDE:

TAKE ACTIONS PLANNED FOR 2018 UNDER THE COMPLEX (CONSOLIDATED) SAFETY UPGRADE PROGRAMME OF POWER UNITS OF UKRAINIAN NPPS.

TAKE ACTIONS PLANNED FOR 2018 TO UPGRADE AND EXTEND THE LIFECYCLE OF POWER UNIT NO. 4 AT ZAPORIZHZHYA NPP, POWER UNIT NO. 3 AT RIVNE NPP, POWER UNIT NO. 1 AND KHMELNYTSKA NPP, AND POWER UNIT NO. 3 AT SOUTH-UKRAINE NPP.

TAKE ACTIONS PLANNED FOR 2018 UNDER THE UKRAINE-EU ENERGY BRIDGE PROJECT.

SEE TO REGULATE LEGISLATIVELY THE DESIGN AND CONSTRUCTION OF POWER UNITS NO. 3 AND 4 AT KHMELNYTSKA NPP.

GET APPROVAL AND IMPLEMENT SONECHKO-1, A PILOT SOLAR POWER PLANT PROJECT IN THE AREA OF A COOLING POND AT ZAPORIZHZHYA NPP, AND DESIGN SIMILAR SOLAR POWER PLANTS AT SOUTH-UKRAINE NPP AND KHMELNYTSKA NPP.

COMPLETE THE PILOT TESTING OF COMPLEX LINES FOR SOLID RADIOACTIVE WASTE TREATMENT AT ZAPORIZHZHYA NPP AND RIVNE NPP AND PUT THE FACILITIES INTO OPERATION.

CONNECT THE 750 KV OUTDOOR SWITCHGEARS AT ZAPORIZHZHYA NPP TO A 750 KV ZAPORIZHZHYA NPP – KAKHOVKA OVERHEAD LINE AND PUT THE FACILITY INTO OPERATION.

PUT TWO FACILITIES AT ZAPORIZHZHYA NPP INTO OPERATION: BUILDING G TRAINING CENTRE AND A GAS BUILDING.

MOREOVER, THE COMPANY WILL CONTINUE THE CONSTRUCTION OF THE CENTRAL SPENT FUEL STORAGE FACILITY. IN PARTICULAR, THE COUNTRY WILL PROCURE AND RECEIVE PILOT SF STORAGE SYSTEMS BY HOLTEC INTERNATIONAL, COMPLETE AND COMMISSION A RAILWAY LINE CONNECTING THE CONSTRUCTION SITE TO VILCHAYANIV LINE AND PRECOMMISSION CSFSF EQUIPMENT AT NUCLEAR POWER PLANT SITES.

    PLANS UNDER THE INITIATIVE FOR DEVELOPMENT OF SOUTH-UKRAINE ELECTION POWER GENERATING COMPLEX:
  • OBTAIN A POSITIVE OPINION FOLLOWING THE STATE EXPERT REVIEW OF THE ADJUSTED PROJECT “RECONSTRUCTION OF THE SERVICE WATER SUPPLY SYSTEM. OPERATION OF POWER UNITS 1-3 AT TASHLYK HYDROELECTRIC PUMPED STORAGE POWER PLANT AND SPRAY POOLS AT SOUTH-UKRAINE NPP”.
  • OBTAIN RE-APPROVAL BY THE CABINET OF MINISTERS FOR ADJUSTED PROJECTS “COMPLETING TASHLYK HYDROELECTRIC PUMPED STORAGE POWER PLANT. COMMISSIONING HYDROELECTRIC UNITS NO. 3-6” AND “RECONSTRUCTION OF THE SERVICE WATER SUPPLY SYSTEM. OPERATION OF POWER UNITS 1-3 AT TASHLYK HYDROELECTRIC PUMPED STORAGE POWER PLANT AND SPRAY POOLS AT SOUTH-UKRAINE NPP”
  • COMPLETE THE ASSEMBLY OF THE MOTOR-GENERATOR FOR HYDROELECTRIC UNIT NO. 3 AT TASHLYK HYDROELECTRIC PUMPED STORAGE POWER PLANT;
  • BUILD THE PUMPING STATION AND COMPLETE CONSTRUCTION AND ASSEMBLY WORKS ON THE FIRST STARTUP FACILITY.