Alexander Ignatyuk, analyst of Energocapital IC

– Nizhniy Novgorod NPP is thousands of jobs with high and stable wages

Public hearings on the preliminary environmental impact assessment of the construction and operation of the 1st and 2nd units of Nizhniy Novgorod Nuclear Power Plant took place in Navashino, Nizhniy Novgorod region on Sept 4 2009.

Deviating from the information chain investment analysts traditionally use when analyzing investment projects (first — macroeconomics, second — economics and, finally, social sector), I would like to first mention the social aspect of the Nizhniy Novgorod NPP project. This plant will give the region thousands of jobs with high and stable wages and necessary social infrastructure. It is not a secret that besides 700–800 operator and manager positions, there will be 5,000–7,000 jobs in the field of social security. That is, for 50 years (the service life of the plant) 8,000 Russian citizens, residents of Nizhniy Novgorod region will have comfortable life and work conditions and confidence in their future. Let’s not forget that the satellites of nuclear power plants are among the 10% of the cities that suffered from the crisis the least. The construction of the plant and its infrastructure will involve 8,000 more people. Those people will represent construction, the most crisis-ridden sector. They will get well-paid jobs for the whole period of the crisis, at shortest. The money to be given for the project will keep the local construction business afloat.   

Rosatom State Nuclear Energy Corporation gives a chance to some Russian citizens to live happily for a certain period. And what will the state and the other residents of the region get from this project? Let’s look at the budgetary aspect of this project. The plant will pay up to $3bln in taxes with over half of this money to be transferred to the regional and local budgets. This is already pure economics: the money the government will spend on its citizens.

The key objective of my analysis was to understand if Russia and Nizhniy Novgorod region, in particular, need a new nuclear power plant. The arguments I have adduced are enough for us to see that they need it.

And finally let’s point out the key goal of the project: to cover the shortage of power generating capacities. In 2007 the shortage was 2,000MW. By 2020 this index is expected to reach 4,000MW provided that no additional capacities are built. Nizhniy Novgorod NPP will consist of two reactors with a total capacity of no less than 2,300MW. In other words, the 1s reactor will cover the present shortage while the 2nd one – the gap forecasted for 2020.

Nizhniy Novgorod NPP is a serial project. A similar project is presently being implemented at Novovoronezh NPP-2. The general designer is Nizhniy Novgorod Atomenergoproekt (part of Atomenergoprom), the owner is Energoatom Concern OJSC (100% subsidiary of Atomenergoprom OJSC).

The plant will have two 1,170MW reactors and will generate over 17bln KWh a year and employ as many as 1,000 people. At the peak time the construction will involve as many as 8,000 people. The 1st reactor is supposed to be launched in 2017. The plant will be situated in Navashino district of Nizhniy Novgorod region.

The analysis of the power and capacity balance in Nizhniy Novgorod region has shown that in 2007 the region was short of 1,800MW while in 2020 it will need as much as 4,000MW.

This is a socially significant project: it will give the region 40bln RUR in profit tax, 50bln RUR in property tax, 1bln RUR in land tax and 50bln RUR in transport tax.