Head of Samruk Kazyna reveals obstacles for first nuclear power plant in Kazakhstan

According to Nurlan Zhakupov, head of the Samruk Kazyna holding, there are going to be a lot of obstacles in the way of the nuclear power plant (NPP) project in Kazakhstan. Also, even though there are four potential contractors for the project, the official mentioned just one, the Russian Rosatom.

«There are some issues with the location of an NPP. We have to examine everything carefully and make a final decision on the location because if you are going to build an NPP you want a source of water nearby and no risk for the environment,» he said during a press briefing on the occasion of being in office for 100 days.

As the official noted, the problem is the shallowing of both the Caspian Sea and Lake Balkhash and the necessity to negotiate the usage of transboundary rivers. For instance, Zhakupov warned that the water level in the aforementioned water reservoirs may drop by more than ten meters in ten years. This is why the project participants must think about those risks now. Another factor is public opinion which is not solid when it comes to the idea of nuclear energy on Kazakh soil.

Even though some officials previously said that the NNP will be built in the settlement of Ulken on the bank of Lake Balkhash, Zhakupov highlighted that the decision on the location of the project has yet to be made.

«In order to decide whether there will be an NPP or not, we should talk to a vendor whether it be Rosatom or another company,» he said.

Zhakupov also underlined the high price tag for the project, which is going to cost billions of dollars. The only way these investments can be returned is to embrace appropriate tariffs for electricity for all walks of consumers.

“We have to decide what kind of tariff we should embrace to make the project sustainable. Will this tariff be suitable for us as a society and a state? We all turn on lights, charge our cell phones, go online and watch TV. What will be the cost of electricity if we have an NPP? We have to take into account everything. We have to be sure that we can afford such a project, the official stated.

He also noted that Samruk Kazyna is going to allocate for the project 30% of its total cost, while the remaining 70% will be borrowed. As a result, consumers of the grid will be the ones who are going to pay the banking interest. At the same time, Zhakupov admitted that the NPP will help to solve the problem of the deficit of electricity in the country.

In March, Yernat Berdigulov, managing director for strategy and asset management in Samruk Kazyna met with foreign partners to discuss the range of issues related to the energy sector, including nuclear energy. Proposals submitted by four foreign companies showed that the cost of one kilowatt generated by an NPP in Kazakhstan would be eight cents, according to Timur Zhantikin, head of the Kazakhstani Nuclear Power Plants (KAES), a subsidiary of the Samruk Kazyna holding.

The decision on what company Kazakhstan is going to be partnering with was supposed to be made in December 2022. However, as Aset Makhambetov, a senior project manager in KAES told Kursiv at the time, the deadline was moved to 2023. The country’s government still hasn’t chosen a vendor. Perhaps, authorities would postpone the final decision because the win of Rosatom is highly probable. At the same time, the EU wants to put the Russian nuclear sector in the 11th package of anti-Russian sanctions. If this happens, it would have devastating consequences for any joint project between Kazakhstan and Rosatom.

Kazakhstan has been thinking about the NPP for several years now. To meet the forecast for energy consumption, the country is planning to expand its energy capacity at the expense of a 2.4-gigawatt NPP by 2035. The decision about the NPP project is expected to be made this year. Preliminary estimates say that each of two 1.2 gigawatts power reactors will cost $5 billion while the construction of a nuclear plant may take 10 years.

The main candidate for the location of an NPP is Ulken near Lake Balkhash in the Almaty region. The town of Kurchatov on the Irtysh River in the Abay region is considered a potential site for the second NPP. President Kassym-Jomart Tokayev believes that Kazakhstan risks losing its economy without nuclear energy. He instructed the cabinet to more actively promote the idea of an NPP among Kazakhstanis to ensure they fully understand the benefits of the project. So far, Kazakhstan has received offers from four foreign nuclear companies: EDF (France), CNNC (China), Rosatom (Russia) and KHNP (South Korea).