Since Russia invaded Ukraine in February 2022 we’ve heard a lot of chatter about US and European resolve to sanction or otherwise deter cooperation between the West and Russia’s nuclear industry. A small number of vendors in Europe and the US have acknowledged since the invasion that they aim to capture market share for nuclear fuel, spent fuel, and waste management services and for new nuclear power plants, from their Russian competitor Rosatom. But many firms in the global nuclear marketplace, perhaps most, have remained silent throughout the course of the war; they appear to be awaiting a negotiated halt to the armed conflict that would permit them to return to antebellum business-as-usual with Russian industry.
Nonetheless, Russia’s invasion of Ukraine has compelled governments in the US and Europe to decide in some cases whether to permit significant lucrative transactions, contracted for by Western nuclear firms with Russian industry before the war began, to be completed. The apparent political sensitivity in one such case involving Russia and Turkey has now raised questions about which supplier will in fact deliver turbine equipment essential to finish construction and then operate a Russian nuclear power plant on the territory of a NATO member state.
Macron’s Nuclear Reversal
In 2014, Emmanuel Macron, then-economy minister in the Socialist-led government of President François Hollande, took a decision that beginning eight years later would have unforeseen bearing upon the project risk associated with as many as a dozen Rosatom nuclear power plants under construction outside Russia, including a bilateral deal by Ankara and Moscow that will give Russia unprecedented leverage over Turkey’s deployment of nuclear power technology. Macron approved the sale of most of the energy business of power equipment-maker Alstom to General Electric in the US for 13 billion Euros. This was a lock-step move in tandem with a policy course set by Hollande and Macron, in the shadow of the Fukushima accident in Japan, to cut back the nuclear share of power generation in France by 2025 from 75% to 50%. In taking over Alstom’s assets, GE bested MHI of Japan and Germany’s Siemens, which likewise had been interested in scooping up the French firm’s turbine business.
Siemens’ backers in the competition over Alstom had urged Hollande and Macron to impose restrictive conditions for a foreign takeover of Alstom to protect what they asserted to be strategic French interests–including Alstom’s advanced nuclear turbine technology upon which France’s nuclear power plants rely. Accordingly, the final deal in 2014 called for GE and Alstom to set up joint ventures in designated technology businesses. These included one JV called GE Alstom Nuclear Systems (GEAST), responsible for French-design so-called “Arabelle” nuclear turbines which were deemed by French pundits “the most powerful in the world.” By 2018, this JV had become an enterprise 80% owned by GE and 20% owned by the French government.
In the meantime, a huge share of the market for these advanced French turbines was rapidly emerging in Russia. Rosatom, Russia’s state-owned nuclear industry giant, was encountering serious technical problems with the Russian-designed turbines for Rosatom’s latest and biggest nuclear power plant model, the VVER-1200. As a consequence, most of Rosatom’s foreign partners for these new reactors–in Egypt, Finland, Hungary, and Turkey–opted to install French-made Arabelle turbines instead of Russian ones. In parallel with the US firm’s acquired French turbine business, GE and a Rosatom subsidiary, Atomenergomash, had also set up a JV partnership, AAEM, to supply nuclear turbine equipment for Russian-design nuclear power plant projects in Bulgaria, Egypt, Finland, and Hungary on the basis of their cooperation for supply of turbines for the VVER project in Turkey.
In 2010 Russia and Turkey had agreed that the Rosatom empire would build, own, and operate a nuclear power plant in Turkey equipped with four VVER-1200 reactors. It was also agreed that the plant would be outfitted with Arabelle turbines, not Russian equipment. Construction at the Akkuyu site began in 2015. The first of the French-made turbines, for Akkuyu-1, was delivered from the GE-led venture to the plant site for installation in 2021.
After Macron was elected French President in 2017, his views on nuclear energy began to change. By the end of 2021, Macron in fact had reversed his and Hollande’s nuclear energy policy, calling for a massive new investment in power reactors in France and a re-investment in France’s nuclear sector to bolster its capacity. As in 2014, Macron in this case also took decisions on the industrial front concerning France’s nuclear turbine prowess that dovetailed with his overall nuclear energy outlook. But this time, Macron backpedalled his 2014 steps: In January 2022, he scoped out a deal according to which the state-owned power company, Électricité de France (EDF), would repatriate to France the nuclear turbine business that eight years before had been sold off to GE.
US, French Green Lights for Rosatom?
One month after the scheme had been hatched for France to reacquire GE’s foreign turbine business, Russia invaded Ukraine. According to French business media, because Rosatom had become the prime customer for the Arabelle turbines, the US government put the return sale of the GE-held assets to France on hold in view of US sanctions against Russia. For EDF to supply these turbines under contract for Rosatom projects, “the situation could be resolved [in EDF’s favor] provided GE obtains an authorization from the US Department of the Treasury.” Arabelle turbines were sought for a dozen Russian power reactors in construction projects outside of Russia. That included the three turbine sets for Akkuyu that remain to be delivered.
Last week, the Frankfurter Allgemeine Zeitung reported on issues standing in the way of timely completion of construction of the four VVER-1200 nuclear power plants at the Akkuyu site. It cited Turkish project officials as expressing frustration with Siemens for failure to deliver equipment, compelling Turkey to seek replacement equipment from a vendor in China. According to Turkish reports, at issue in outstanding Siemens transfers is the lion’s share of the switchgear equipment for the power plant. Turkish President Recep Tayyip Erdoğan however indicated to media that Germany–not France or the US–was holding up delivery of the turbines. Following up one day later from the German media account, Turkish media cited Siemens as blaming the German government for delays in awarding export authorizations for Siemens’ deliveries of equipment to the Russian project, but without clarifying what specific equipment Siemens had been contracted to provide.
Who Will Supply?
On September 2 and September 4, respectively, I sent e-mail queries to officially-designated points of contact at both General Electric and at the US Embassy in Ankara, to learn whether GE or the US government had applied any restrictions, as a condition of transfer of the turbine business from GE to EDF, concerning sale or delivery of nuclear turbines to Rosatom. Neither GE nor the US Embassy in Ankara replied to my queries.
Including with respect to a complex legal and regulatory situation following from GE’s control over supply of nuclear turbines to Rosatom projects spearheaded by a Russia unleashing war in Europe, the conclusion of the sale of GE’s turbine business to EDF was delayed for two and a half years, until May 31, 2024. On that day, EDF announced that it had acquired this business from GE and had christened the business Arabelle Solutions.
Barring any yet-undisclosed restrictions that would be applied by GE, France, the European Union, the US, or other participants in the turbine supply chain, as of the date of EDF’s acquisition of GE’s foreign turbine business, EDF presumably has an open road to deliver turbine equipment to these Russian projects (except in Finland, which cancelled its plans for VVER investments shortly after Russia’s invasion of Ukraine.)
If not, then in principle Turkey and Russia (or for that matter other clients outside Russia expecting Arabelle turbines for their VVERs) could find a replacement turbine supplier (including Rosatom, which is supplying Russian-made turbines for VVER-1200 units in Bangladesh and Belarus, or a Chinese vendor, which will make turbines for VVER-1200 reactors built in China), but that remedial action would entail significant costs and delays. In 2023, Agnès Pannier-Runacher, then Macron’s minister for nuclear power affairs, claimed to media (without explicitly referring to the re-acquisition of the GE nuclear turbine business at that time still on hold) that France would not aggressively cut business ties with Rosatom, because the legal penalties incurred by France following from failure to fulfill terms of contracts would cost France more–and provide Russia’s war machine greater cash revenue–than would be the case if France fulfilled the contracts.
