What we recommend to nuclear
newcomer countries is to engage
with vendors after establishing that
national vision of what precisely the
country is trying to achieve. It is in
these conversations that keeping the
mindset focused on the larger goal,
rather than purely technology, is the
key to a successful nuclear power
project. These conversations should
focus on how that vendor can help
achieve the specic national objec-
tive, what can they offer in addition
to the specic technology and
whether they would be a good part-
ner to travel that long and challeng-
ing path of a new national power
programme. Approach to project
management, resolution of disputes
and capacity building to localise a
newcomer country’s ability to oper-
ate and maintain the nuclear power
plant are among the variables that
must be considered in determining
whether to form the partnership.
Second, in the industry vernacular,
contracts for large energy projects
are described in terms of the amounts,
i.e., a “$20 billion contract”. Fre-
quently, a country allocates a certain
amount to “pay for a contract”.
However, referring to the “cost of a
contract” is misleading. The “cost of
a contract” means very little without
the precise allocation of risks be-
tween the newcomer country/owner
of the new nuclear project and the
vendor/contractor. The contract is
like a roadmap that foresees various
eventualities and suggests ap-
proaches to deal with them, dividing
the responsibilities (and nancial li-
abilities). Without such allocation of
responsibilities and liabilities to
specic parties for eventualities –
like change in local laws, unexpected
site conditions, high-turnover of
personnel – the cost of the project for
the owner may increase drastically
and, indeed, the overall “cost of a
contract” may be unpredictable.
Engaging vendors/contractors in
advance of procurement can give
T
he direction of the conversation
about “nuclear” varies greatly
depending on the interlocutor.
If we are talking to the general popu-
lation, the discussion may range from
concern about nuclear accidents and
spent fuel management to optimism
about nuclear being the key to miti-
gating climate change. With nancial
institutions, the conversation about
investment into a new national nucle-
ar power programme or an innovative
technology evolves into evaluation of
potential reputational, construction,
project management and other risks.
At the various international confer-
ences, whether those hosted by the
International Atomic Energy Agency
(IAEA) or the World Nuclear Asso-
ciation (WNA), nuclear echoes from
the stage, corridors and coffee tables
as the policy solution to the climate
change and energy security chal-
lenges. The advanced reactor tech-
nology companies mention concerns
about both nancing and regulatory
approvals. When we sit across the
table – or now increasingly across the
screen and several time zones – from
so-called newcomer countries, the
conversation usually revolves around
technology choices.
Technology is the rst issue raised
by the decision makers that are con-
sidering introducing nuclear power
as part of their national energy mix.
As a starting point, technology selec-
tion can point out the path to meeting
a specic energy demand, estimating
associated costs and selecting a po-
tential vendor. Technology can be
analysed from the perspective of
safety features, built-in security
measures and safeguards against
proliferation. The operating experi-
ence of a reference plant can be ana-
lysed, learned from and, ultimately,
adapted to the local site and national
context. It may be possible, even, to
visit a reference plant. Technology is
tangible.
But the tangibility of technology
frequently obscures the other less
tangible variables essential for a
successful new nuclear power pro-
gramme. Whether the country is es-
tablishing a new nuclear power pro-
gramme utilising a conventional
nuclear power reactor or deploying
small modular reactor technology,
the IAEA advises a newcomer coun-
try to consider 19 infrastructure is-
sues as it moves across three devel-
opmental phases and crosses three
milestones. The IAEA Milestone
Approach is an invaluable tool,
which helps organise the many
complex national processes, activi-
ties and decisions. The IAEA Mile-
stone Approach expands the national
nuclear “to-do” list. Starting from
formulation of a national position to
development of a comprehensive
nuclear law, to stakeholder engage-
ment and coordination and human
resource development, the IAEA
Milestone Approach highlights the
less tangible considerations in a
comprehensive and sequential man-
ner; and goes beyond the selection of
technology. By following the IAEA
Milestone Approach a newcomer
country would establish a solid
foundation for a successful national
nuclear power programme.
While the infrastructure foundation
is an essential requirement for a na-
tional nuclear power programme, it
is not sufcient for the success of a
new nuclear power project. From a
commercial perspective, the success
of a new nuclear power project re-
quires a mindset shift. The ultimate
goal of the selection of technology,
the expenditure of certain funds and
of the overall improvement of the
national nuclear infrastructure in the
19 areas identied by the IAEA, is
electricity!
It seems obvious to state that the
ultimate goal of a national nuclear
power programme or new project is
electricity (or high-temperature
steam, hydrogen or whatever other
output may be desired from a nuclear
reactor). However, shifting perspec-
tive toward the ultimate goal of
electricity through powerlines, shifts
the approach to the commercial pro-
cess of obtaining it. Now, the conver-
sation is less about the specic and
tangible aspects of technology, but
rather about all these other factors
that successfully electrify the grid.
First, when a country is developing
a national nuclear power programme
and procuring its rst nuclear power
project, the consideration that is of-
ten overlooked is that of a relation-
ship with a vendor. Establishing a
new nuclear power programme and
commissioning a rst nuclear power
plant can take over a decade. Opera-
tion and maintenance, as well as
eventual decommissioning of the
plant, extend the timeline of the rela-
tionship to approximately 100 years.
The most successful nuclear power
project is built on a partnership be-
tween a newcomer country/owner
and a vendor that can endure for that
time period.
newcomer countries a glimpse into
what the “cost of a contract” actually
includes, and what the less tangible
benets of this long-term partnership
may be. Again, it is in these conver-
sations and cost negotiations that
focusing on the larger goal of the
entire nuclear power project, i.e.,
electricity to the grid (or high-tem-
perature steam, etc.) is necessary.
Keeping in mind that the goal of the
project is more than a power reactor
structure of a particular design for a
certain amount of money, can help
the newcomer country/owner trade
off various desired, intangible bene-
ts and necessary costs in a more
optimal manner.
The process of establishing a new
nuclear power programme ripples
through the economic and social
fabric of a country. A national nucle-
ar power programme and a new nu-
clear power project allow sustainable
and clean electricity to reach remote
communities and industrial facili-
ties, which may be key to economic
and social development. The im-
provement of physical infrastructure
around a country, strengthening of
legal and regulatory frameworks,
increasing education and capacity
building in the sciences, policy,
economics, administrative manage-
ment and law, are also outputs of a
national nuclear power programme.
Reducing a nuclear power pro-
gramme to a choice of technology
undermines the success of the pro-
curement process for the new nuclear
power project, just as reducing the
conversation about “nuclear” to a
specic set of issues obscures its
many benets. The beauty of a na-
tional nuclear power programme and
a rst nuclear power project is their
potential to transform an entire
country and society.
George Borovas is Head of Hunton
Andrew Kurth LLP Nuclear practice;
Inna Pletukhina is Associate on the
Energy and Infrastructure team.
THE ENERGY INDUSTRY TIMES - NOVEMBER 2023
Energy Outlook
14
Both developed and
developing countries
have taken an
interest in expanding
their energy sources
to include nuclear
power. George
Borovas and Inna
Pletukhina of law
rm Hunton Andrews
Kurth LLP share
their insights on the
key things countries
newly setting out on
the nuclear power
pathway should
consider.
Nuclear is not just technology
Borovas: As a starting point, technology selection can point
out the path to meeting a specic energy demand, estimating
associated costs and selecting a potential vendor
Pletukhina: Engaging vendors/contractors in advance of
procurement can give newcomer countries a glimpse into what
the “cost of a contract” actually includes
