SE NNEGC ENERGOATOM

Ukrainian Energy Forum of Adam Smith InstituteKyivMarch 2nd, 2017

Yuriy Nedashkovskyi, President

2

SS «Administrative Department»

SS “DO “AtomPrylad “

SS “Scientific &Technical Center”

SS “Warehouse”

SS ”Automation & Mechanical Engineering”

Representative Office in Brussels

SS ZNPP

SS RNPPSS KhNPP

SS SUNPP

STRUCTURE OF SE NNEGC “ENERGOATOM”

HEAD OFFICE SE NNEGC ENERGOATOM

2

Total installed capacity of NPPs of SE NNEGC Energoatom

13 835 МW

RNPP

ВВЕР-1000

ВВЕР-1000 ВВЕР-

1000 ВВЕР-1000

SUNPPSouth Ukraine Complex

KhNPPZNPP

ВВЕР-1000 ВВЕР -

1000 ВВЕР-1000

ВВЕР-1000

ВВЕР-1000 ВВЕР-

1000

ВВЕР-440 ВВЕР-

440ВВЕР-1000 ВВЕР-

1000

ВВЕР-1000 ВВЕР-

1000ВВЕР-1000

Ol HPP

2835 MW6000 MW

2000 MW

302 MW

GENERATING FACILITIES OF SE NNEGC “ENERGOATOM”

3000

MW

3

THPSPP

11.5 MW

Total installed capacity of Ukrainian NPPs reached 13.8 GW(e) that makes 25 % of the installed capacity of the Integrated Power System of Ukraine. The NPP’s share in the energy generation balance in Ukraine rises continuously and in 2017 it exceeded 60 %.

SE NNEGC ENERGOATOM – AN ONLY NPP OPERATING COMPANY IN UKRAINE

4

Main objectives of NNEGC Energoatom:1. Safe electricity generation2. NPP safety enhancement 3. Nuclear new builds and life time extension of operating power units4. Establishing national infrastructure on management of nuclear fuel and radioactive waste5. Physical protection of nuclear installations 6. Continuing education of the staff

Electricity production by the types of generation, in TWh

Світ ВАО МЦ Енергоатом0

0.1

0.2

0.3

0.4

0.5

0.6

0.70.66

0.33

0.14

Current indicator of scrams per 7000 hours of reactor operation under critical state at Ukrainian NPPs (0,14) is almost 2.4 times lower than the average in WANO-MC and 4.7 lower than that worldwide.

NNEGC Energoatom is safe, reliable, advanced energy utility, having significant development capability and plans for the future

By 2020 NNEGC Energoatom will complete implementation of the measures of NPP complex consolidated safety upgrade program, resulting in :

• Enhancement of safety level of all Ukraine’s NPP up to the level compliant with international and national safety requirements.;

• Implementation of current obligations on implementation of safety upgrades to international organizations;

• Replacement of safety related equipment whose life time ended with the modern one;• Implementation of post-Fukushima corrective measures; • Creation of conditions for extension of a power unit design lifetime.

By 2020 the design lifetime of all power units of Energoatom’s NPPs will be extended (except for the newest two power units, Khmelnitskyi-2 and Rivne -4, whose design life expires in 2034).

NNEGC Energoatom will step into 2021 as a modern company that operates NPP with extended lifetime, upgraded on the basis of state –of –the –art technologies and safety level meeting the best international standards.

Electric power produced by NNEGC Energoatom is environmentally clean, free of СO2 emissions and competitive at the local and international markets.

Operation Safety and Reliability at SE NNEGC ENERGOATOM

5

Ukrainian NPPs are compliant with the International Safety Standards Based on the FSAR - safety criteria (CDF, LRF) meet the safety standard requirements

Proper safety level of Ukrainian NPPs has been confirmed by international experts During regular meetings at the IAEA addressing the compliance with provisions of the

Nuclear Safety Convention; During continuous monitoring performed by international experts in the framework of

international cooperation projects, including WANO’s activities; Based on the results of a comprehensive safety assessment of Ukrainian nuclear power

units, conducted under the Joint Projects EC-IAEA-Ukraine on the safety evaluation of Ukrainian NPP between 2007 and 2010In recent years the five WANO peer review missions (WANO PRM) were conducted to check the operational safety at SE NNEGC Energoatom, specifically:

• SUNPP - 2014;• KhNPP- 2015;• ZNPP -2015• Corporate peer review of SE NNEGC Energoatom – 2015• RNPP -2016

Operational safety of NPP is the top priority to SE NNEGC Energoatom

66

Pilot Project Energy Bridge: Ukraine –European Union - first step towards full strategic synchronization between the Ukrainian and European energy grids, safe and smooth gradual approach to a fully synchronized mode of operations;

- potential for securing the export of up to 2.55 TW to the EU countries even in near future;

- financial instrument to finance construction of Khmelnitsky Units 3 and 4

Khmelnitsky NPP, Ukraine750 kV Overhead Transmission Line

Rzeszow, Poland

Background of the Project

3

Ukraine and Poland possess a mutual energy potential which may be deployed for developing Ukraine’s and Poland’s energy sectors, fostering integration and cooperation between European countries. That potential is a 750 kV overhead transmission which is 450 km long and rated up to 2000 MW, connecting Khmelnitsky NPP (Ukraine) with 750/400 kV Videlka Substation (near Rzeszow, Poland) .

In 1979 five countries of CMEA (USSR, Poland, Czechoslovakia, GDR and Hungary) had signed an agreement on construction of a new electricity transmission line to export the electricity from the Soviet Union to Poland, Czechoslovakia and Hungary (GDR had entered the system only with the purpose of stabilization, but without specific electricity supplies). The line was put into operation in 1985 and linked the Ukrainian SSR to Poland. Nowadays, in the current circumstances , constructing such a line “from scratch” would cost up to half a billion Euros.

Actually, the electric power was exported to Poland though that line until 1991, while a planned scope of supply of 6000 GW*h/year was accomplished only in 1988. But in 1992 the electricity supplies were halted, and immediately after that stoppage the supplies became technically unrealizable because Poland together with Czechoslovakia and Hungary separated from their eastern neighbor and synchronized their domestic electrical networks with European energy grid. Since then, despite several significant economic benefits for Poland and Ukraine, which could be obtained from that line, if operated, that line remain disconnected and is not utilized.

Potential of that line allow exporting a part of electricity generated by Khmelnitsky NPP, which has two VVER-1000 units in operation. SE NNEGC Energoatom ’s experts performed an initial survey (using the satellite data) of the total line length, and determined that the line has not any visible interruptions or damages. It is necessary to conduct an inspection and restoring repairs of the line itself and its infeeds to 750 kV OSG of Khmelnitsky NPP. Also, it is necessary to clear the territory of a sanitary zone under the line: that territory (especially, the Ukrainian territory) is treed in various parts. According to the analysis, the renewal and re-commissioning of 750 кV OTL will take about 18 months.

750/400 kV Videlka Substation 750 kV OTL from Khmelnitsky NPP to the Videlka Substation (Poland)

Ukraine is Closely Connected with Neighboring European Countries with Transmission Lines

Diagram of interconnection of Ukraine and European countries

• In view of current changes in geopolitical situation in Ukraine, there is no alternative option to full synchronization between Ukraine and ENTSO-E

• It is assumed that starting 2025 Ukraine will be able to export up to 15-25 TWh(e) to ENTSO-E countries, provided there are no political restraints, and subject to full synchronization.

• Pilot project “Ukraine–European Union: Power Bridge” is the first step towards full synchronization with the EU

Comments

* There is a 750kV transnational OTL Khmelnitsky NPP-Rzeszow between Ukraine and Poland. However, is has not been operated since 1993. According to the assessment of national grid operators of Ukraine and Poland, technical condition of the OTL is satisfactory and does not require significant funding and time to resume its operation..

According to market forecasts and estimates, in the next 20 years electricity price in the EC countries will grow by 1% on average, in the range from 36 to 50 EUR/МWh.

Taking into account the current level of Ukraine’s NPP electricity price, which is Euro 16.3 per 1MW, it is obviously competitive at the EU market, even if increased by the investment constituent.

Організація експорту електроенергії з Хмельницької АЕС (Період 2017-2019 рр.)

Area of responsibility of NEC Ukrenergo :

1. Restoring the operability and improving the operational efficiency of the three 750 kV OTL:

KhNPP (Ukraine) – Videlka substation (Rzeszow, Poland)

KhNPP (Ukraine) –Zakhidnoukrainska substation (Ukraine) – operable

Zakhidnoukrainska substation (Ukraine) –Albertirsa substation (Hungary) – operable, (10% loaded)

2. Disconnection of the part of Zakhidnoukrainska substation from the Ukrainian energy grid and its connection to the Burshtyn island

Estimated cost - EUR 8 million

Area of responsibility of SE NNEGC Energoatom:

1). Modernization of Khmelnitsky Unit 2 and its re-connection to the Burshtyn island

Estimated cost– EUR 16 million

2). Ensuring of in-house load reserves of KhNPP Unit 2 during the operation with ENTSO-E by performing the advance installation of KhNPP Unit 3 transformer

Estimated cost - 31 млн євро Export of electricity from KhNPP Unit 2 to the EU is expected to start in 2019

Pilot Project “Ukraine – European Union: Power Bridge”Implementation Logic

Revitalization of the existing 750 kV OTL Khmelnitsky NPP – Rzeszow.

Radial connection of the two existing 750 kV OTL operated within the Energy System of Ukraine, specifically, (1) Khmelnitsky NPP – Rzeszow and (2) Khmelnitsky NPP – SS Zakhidnoukrainska – SS Albertirsa, to the Burshtyn Island will allow an increase of the Grid’s transmission capacity;

Synchronous operation of Khmelnitsky NPP Unit 2 (1000MW) within the extended Burshtyn Island allows to increase the system’s generating capacity;

Power plants within the extended system: Khmelnitsky NPP Unit 2 (1000MW), Burshtyn TPP, Kalush TPP.

The export potential of the Burshtyn Island will be increased up to approximately 1550 MW (potentially, maximum up to 2550 MW);

The electricity export under the project can be launched starting 2019

The PURPOSE of the project is to increase Ukraine’s export potential at the cost of electricity supply to the European Union countries through extension of the Burshtyn Island. The project includes revitalization of the 750 kV OTL Khmelnitsky NPP – Rzeszow, its radial connection to the Burshtyn Island, and synchronous operation of Khmelnitsky NPP Unit 2 within the extended Burshtyn Island, thus allowing for and increase of Ukraine’s generating capacity, which is synchronized with the European Union, and of electricity export to EU up to 1550 MW (potentially, maximum up to 2550 MW).11

Benefits from the use of energy potential of the pilot project “Energy Bridge: Ukraine – European Union”

4

Option 1Owing to the revitalization of the existing 750 kV OTL Khmelnitsky NPP – Rzeszow, an “energy ring: Rzeszow- KhNPP-Albertirsa” is to be established to allow performing the transit of electricity (1300 MW) between various regions of Europe (from Germany, Poland to Hungary, Romania and Balkan countries across Ukraine).

Option 2The connection of KhNPP Unit 2 to the Burshtyn island will provide the potential for exporting 1550 MW up to 2550 MW (in future) from the Burshtyn island to Europe.

Option 3Full synchronization of UES of Ukraine with ENTSO-E will enable Ukraine to increase the export to the EU up to 4000 MW. At the same time, tangible benefits will be obtained by all participating countries : Open access to electricity markets;Mutual security and redundancy of energy systems;Political and economical benefits

750 kV buses system of Khmelnitsky NPP Unit 2 is to be connected directly to ENTSO-E through the KhNPP – Rzeszow line

Безпека роботи АЕС та енергосистеми в цілому є безумовним пріоритетом організації Проекту

Feasibility study of “Connection of Khmelnitsky NPP Unit 2 to the Burshtyn island” (PJSC KIEP) has identified 4 possible options of power supply from KhNPP Unit 2 to the ЕNTSO-Е system, each of them fully complies with the safety requirements at the design level , including the in-house power circuit of KhNPP.

Safe disconnection of KhNPP Unit 2 (for operating separately from the Ukrainian energy system) is secured by means of initial designed scheme of power supply by Khmelnitsky NPP, where power unit 2 supplies power to its own 750 kV buses system , which is separated from other KhNPP units in view of its voltage class.

When completed, KhNPP Units 3 and 4 will allow improving the security of in-house supplies for operating power units, under separated operation mode, by means of back-up electricity supply from power units, which are under construction, using an advanced commissioning of their supply systems

.

Owing to the dedication of KhNPP Unit 2 to operation in the ENTSO-Е system, the Project “Energy Bridge: Ukraine-European Union” will provide the source of back-up electric power supply directly on Khmelnitsky site, with unprecedented power and opportunities provided by ENTSO-Е. When made available, that independent source of electricity supply will significantly improve the safety of KhNPP in case of loss of power on site, as well as the safety of the Ukrainian energy system or the European energy system as a whole in case of an “exceptional” accident in the system.

Ukraine’s OTLs are closely linked to the western neighbouring countries, however it is only a limited capacity of Burshtyn Island that is synchronously connected to the ENTSO-E. The full synchronization requires political will, coordinated efforts of design and power sector organizations of Ukraine and the EU, and significant time

The project “Ukraine-European Union: Power Bridge” is a pilot project and the first step towards the strategic synchronization of Ukraine’s power system with that of the EU. The start of electricity export in the amount of 1,55 GW (potentially up to 2,55GW) is planned for as early as 2019. The project is designed to ensure safe smooth and seamless transition to the mode of full synchronous operation (preliminary start of full synchronization - 2025)

The project is fully investment-driven: it doesn’t produce any additional load on the budget of Ukraine. The project will be duly implemented in the form of the Public Private Partnership (PPP) in accordance with the laws of Ukraine. The return on investments will be effected through electricity sales in the European market

The project establishes a mechanism to arrange for commercial funding, which SE NNEGC Energoatom is in need for to support modernization of nuclear power units. It is planned that the proceeds from the electricity export from Khmelnitsky NPP Unit 2 can be used as a necessary funding source for construction of Khmelnitsky NPP Units 3 and 4 through a long-term power purchase agreement (PPA) between investors and Ukrainian partners.

14

Conclusions

NNEGC “Energoatom” and the Universe 1`

According to the present-day theories, the age of the Universe, between its inception with the Big Bang and nowadays,

is 13,8 bln. years. The installed electric capacity of all operating Ukrainian NPPs

is 13,8 bln W, which is 1W per each year of existence of the Universe!

Thank you for your attention !