Baltic NPP Project
Specifics and Current Status
2 June 2011
By courtesy of SC Rosatom
Baltic NPP Project
Project Overview

2 x 1194 MW Units (AES-2006 series)

Location in Kaliningrad region of the
Russian Federation

Operation dates
 Unit 1 – Oct 2016
 Unit 2 – Apr 2018
Site preparatory works ongoing

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Unique Project
 First NPP project in the Russian Federation
providing opportunity for participation of foreign
investors
 Foreign investors may acquire up to 49% share
 Cross-border transmission lines developed under
separate project with participation of foreign
investors
Baltic NPP Project
Major Stakeholders and Participants
 State Corporation “Rosatom” – PRINCIPAL
 OJSC “Concern Rosenergoatom” – DEVELOPER
 OJSC “SPbAEP” – GENERAL DESIGNER
 OJSC “Inter RAO UES” – ORGANIZATION OF FINANCING AND ENERGY
SALES
 WorleyParsons – TECHNICAL CONSULTANT
 Societe Generale – INVESTMENT CONSULTANT
 Norton Rose – LEGAL CONSULTANT
Baltic NPP Project
Consultant’s Roles

Acting as the Agent of OJSC “Concern Rosenergoatom”, OJSC “Inter RAO UES” have
assigned professional consultants for the development of Bankable Feasibility Study
 Technical Consultant – WorleyParsons
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Analysis of Baltic NPP technical aspects
Analysis of Baltic NPP design compliance to IAEA and EUR requirements
CAPEX, OPEX, Basic Financial Model
Power Output Scheme
 Investment Consultant - Societe Generale
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DCF model preparation
Financing sources and structure development
Marketing activities
Due diligence
 Legal Consultant - Norton Rose
 Analysis of the current legal status of the project
 Integrated legal assessment of the project
 Risks identification and mitigation strategy development
Baltic NPP Project
Current Status
 The project has started in 2008 when a cooperation agreement was signed
between State Corporation “Rosatom” and the local government of the
Kaliningrad region
 A site permit for the project was issued in February 2010
 At present site preparatory works are ongoing
 The design documentation have been developed, and a positive opinion of
state review body (Glavgosexpertiza) was obtained on 30 Mar 2011
 Application for construction license for Unit 1 was submitted
 Bankable Feasibility Study is under development
Baltic NPP Project
Current Main Activities on Site

Construction and rehabilitation of auto
roads

Construction of concrete batch plant

Construction of reinforcing factory

Construction of water intake facilities

Construction of temporary electricity
supply networks

Development of the pit of the main
building (soil removal and
management, vertical leveling)

Arrangement of drainage systems,
concrete basement and waterproofing

Construction of housing for the
construction workforce
Baltic NPP Project
Project Implementation Schedule
Commissioning
Unit 1
Construction Unit 1
Commissioning
Unit 2
Construction Unit 2
Design and construction of Power Output Scheme Facilities
Bankable
Feasibility Study
Negotiation and Execution of
Agreements with Investors
Power Purchase
Agreements (PPA)
Trade Negotiations
2010
7
2011
2012
2013
2014
2015
2016
2017
2018
Baltic NPP Project
Negotiations with Potential Investors’ Schedule
Sending a teaser
Preliminary negotiations with potential investors and
conclusion of confidentiality agreements
BFS submission
Receiving first signs of the
potential investors’ interest
Potential investors’
shortlist preparation
Data room opening and
conducting due diligence
Management presentations
and negotiations
Selection of investors for
final negotiations
May 2011
8
Jun 2011
Jul 2011
Aug 2011
Sep 2011
Oct 2011
Nov 2011
Dec 2011
Baltic NPP Project
Strategy of Project Implementation
Project Organization Structure during Preparation Phase


According to the Russian legislation
and other statutory documents, the
process of NPP construction is
divided into two main phases:
preparation phase and construction
phase
The Operating organization
“Concern Rosenergoatom” has
established a structural subdivision
to perform the functions of
Owner/Developer – a branch of
«Concern Rosenergoatom», Baltic
NPP Construction Directorate.
State Customer
SC “Rosatom”
Owner-Developer
OJSC “Concern
Rosenergoatom”
General Designer
“SPBAEP” JSC
Preliminary Works
Contractor OJSC “Northern
Construction Management”
Baltic NPP Project
Strategy of Project Implementation
 In order to attract foreign
investments, “Concern
Rosenergoatom” is the
founder and sole
shareholder (at present) of
OJSC “Baltic NPP”
Planned Organization Structure during construction and
commissioning phase
Owner/Developer
OJSC”Baltic NPP”
(Joint stock company
with participation of
foreign capital)
 A principle decision was
made on the readiness to
give the foreign investors a
stake in the plant up to 49%
 OJSC “Baltic NPP” shall be
Owner/Developer during the
construction and
commissioning phase
General Contractor
(selected by tender)
General Designer
Equipment suppliers
Construction &
Installation
Contractors
Start-up &
Commissioning
Contractors
Baltic NPP Project
Technical Consultant Feasibility Study Objectives and Content


Support the development of BFS substantiating the Project feasibility for potential
investors and financial institutions
Present Baltic NPP Project
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Independent analysis for compliance with
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Technical aspects and solutions
Socio-economical aspects
Environmental aspects
Organization and implementation strategy
Financial and economical aspects
Grid infrastructure
Russian standards and regulations
IAEA Safety Standards
EUR, Part II requirements
Financial and economic evaluation
Risks Identification
Development of possible power output schemes
Baltic NPP Project
Feasibility Study Phase 1 Outcomes
Baltic NPP Feasibility Study Phase I
Technological Process
 Baltic NPP consists of two reactor units in an AES-2006 standard design
configuration, intended to operate under base operational conditions with ICUF
above 90% and under transient operation conditions
 NPP reactor unit has a two-circuit design:
 The primary circuit is radioactive entailed by Reactor Coolant Piping System. This circuit
includes pressurized water reactor of VVER-1200 type, four main circulation loops, one
pressurizer, safety systems and primary-related auxiliary systems
 Secondary circuit is non-radioactive. It entails steam generating portion of SG, steam pipework,
steam turbine, condenser units, main condensate system with condensate pumps and low
pressure heaters, deaerator, feedwater system with electric feedwater pumps and feedwater
high pressure heaters. Turbine condensers are cooled down by circulating water system with
heat discharged through wet cooling towers into atmosphere
Baltic NPP Feasibility Study Phase I
AES-2006 Sectional View
Baltic NPP Feasibility Study Phase I
Reactor Plant – General Layout
Baltic NPP Feasibility Study Phase I
High Safety and Performance Indicators
COMPARATIVE TABLE OF MAIN TECHNICAL CHARACTERISTICS OF WWER/PWR NUCLEAR TECHNOLOGIES
AS-91 (В-428)
Tianwan
AS-92
Kudankulam
AES-2006
BaNPP
AP1000
Westinghouse
3000
3000
3200
3415
1060 / 995
1060 / 995
1181 / 1096.5
1154 / 1117
Specific Efficiency
Coefficient, net, %
33.5
33.5
34.2
32.7
Availability factor, %
≥90
≥90.4
92
93
≤ 10 -6 per year
≤ 10 -6 per year
≤ 10 -6 per year
≤ 10 -7 per year
≤ 10 -7 per year
≤ 10 -7 per year
Characteristic
Thermal power, MWth
Electrical power,
gross/net, MWe
Probability indices of:
1) cumulative frequency of
core damage
2) frequency of limiting
emergency release
16
≤ 5·10 -7 per year
≤ 6·10 -8 per year
Baltic NPP Feasibility Study Phase I
New Safety Features for DBA and BDBA
 Active and passive safety systems for prevention
and mitigation of Design Basis Accidents and
Beyond Design Basis Accidents.
 A four channels safety systems design is
incorporated into the plant design:


The active component-based four channel’s safety
system design provides the ability to respond to any
DBAs scenario and provides a safe status of the reactor
plant
Design allows a single safety channel to be out of
service for maintenance or any other reasons for
unlimited period of time during Unit operation.
 The systems to mitigate BDBAs are designed for
long-term heat removal from the containment
during beyond design-basis accidents (off-line
mode is at least 24 hours without operator’s
actions)
17
Baltic NPP Feasibility Study Phase I
Protection Against External Impacts
Seismic loads
NPP is developed with
stability to earthquake
Aircraft
Protection from the fall
of an aircraft
Wind loads
Whirlwind and tornado
protection
Snow and ice load
Extreme snow and ice
protection
External explosion
NPP components
responsible for the safety
are developed with
ensuring the security of
percussion coursed by
the external explosion.
Baltic NPP Feasibility Study Phase I
Environmental Impact Assessment
 The Environmental Impact Assessment (EIA) was developed in 2009
 There have been public hearings of EIA report – passed successfully
 Results and Conclusions
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Presence of high anthropogenic pressure on the region
The hydrological regime of the rivers and lakes in the region will not undergo any changes
Non-radioactive releases to the surface waters with concentrations, exceeding the permissible for fishing
basins, are prevented by technical solutions
Electromagnetic radiation, noise and harmful releases from the NPP facilities are in the range of permissible
values and have insignificant off-site impact
Non-radioactive industrial and domestic waste will be treated and landfill disposed
The liquid radioactive waste are subject of conditioning (solidification). The amount of waste is minimized by
the design
During normal operation of Baltic NPP the airborne radioactive and chemical releases will have an
insignificant impact on the atmospheric air, public and environment.
The radiological impact on the public and environment for design basis accidents does not exceed the defined
exposure doses for the public and is mitigated during BDBAs
The risk of Baltic NPP operation is estimated to be significantly lower than the existing anthropogenic
background
Baltic NPP Feasibility Study Phase I
Analysis of the NPP Design
 Compliance to the Russian Standards and Regulations
 All necessary reviews have been performed in accordance with the Russian Legislation
 Comparative Analysis of Russian Standards and Regulations to IAEA Safety Standards
 The analysis results indicate that the Russian rules and norms contain appropriate
requirements. The observed differences are due mainly to the formulation and terminology
being in use
 Russian documents are significantly more specific than IAEA safety standards, which have
mainly conceptual character
 Analysis of the design against EUR, Part II requirements
 A preliminary conclusion is that the Design in general will to a great extent comply with the
EUR requirements, based on the following:
 The main target indicators for safety, reliability and efficiency are directly incorporated in the design
 This is an evolutionary design utilizing the same conceptual approaches, practices and design standards as in the EUR
certificated AS-92 design
 The expected differences will be related to those EUR requirements which differ from the
Russian rules and standards
Baltic NPP Feasibility Study Phase I
Analysis of the NPP Design
 Spent Fuel Management Strategy Basis
 Initial storing for a few years in the spent fuel pool; Further transportation out of
Kaliningrad Region without using the territory of other states
 Radioactive Releases and Waste Management Strategy Basis
 Radioactive releases into the atmosphere - annual effective dose for the public less
than 0.01 mSv for Normal Operation (NO)
 Liquid Radioactive releases – activity of liquid releases is lower than the drinking water
intervention level; annual effective dose for the public far bellow 0.01 mSv for NO
 Liquid Radioactive waste – solidification; Solid waste – Conditioning
 The RAW storage capacity is calculated for 10 years of operation; Further
transportation out of Kaliningrad Region without using the territory of other states
 Emergency Planning Management Strategy Basis
 In case of severe accident the radiation impact does not exceed the intervention levels
for the population in a distance more than 3 km from the NPP. That is why emergency
planning is envisaged only for the NPP personnel
Baltic NPP Feasibility Study Phase I
Project Implementation – Contractual Approach
 Contractual approach and possible NPP construction schemes
 Standard Form of Contract of OJSC "Concern Rosenergoatom" for construction of NPP
units is the basis for development of Feasibility Study Phase I
 Comparative analysis
 The Standard Form of Contract of OJSC "Concern Rosenergoatom" has been compared with
the following internationally recognized contractual approaches:
• EPC Lump Sum Turn Key with firm and fixed price
• EPC Lump Sum Turn Key with fixed price (subject to escalation)
• Split Package (Island) Approach
• Multiple Package Approach
 Comparative Analysis Results
 Generally, the Standard Form of Contract of OJSC "Concern Rosenergoatom" is comparable
with the EPC Lump Sum Turn Key with fixed price (subject to escalation) contractual
approach, with some differences, conditioned by the Russian legislation and the established
NPP construction practice
Baltic NPP Feasibility Study Phase I
Project Key Milestones
 Achieved Milestones
 “Declaration of Intent” to Invest in the Construction of Power Units 1 & 2 of the Baltic NPP – approved
by State Corporation “Rosatom” on 11-Sep-2008;
 The enactment of the Kaliningrad Region Duma about approval of the “Declaration of Intent to Invest in
the construction of NPP 1&2 of the Baltic NPP” on 28-Oct-2008;
 “AES-2006. Justification of investments in the construction of Baltic NPP”. Prepared by OJSC
“SPbAEP” - approved by the Customer (OJSC “Rosenergoatom”) on 14-Dec-2009;
 The Order No.169-r of the Russian Federation Government of 20-Feb-2010 about location of the Baltic
nuclear power plant on the territory of the Neman municipal district of the Kaliningrad region;
 Development of Design Documentation ongoing. Unit 1 Technical Design Package obtained positive
State Examination conclusion on 31-March-2011;
 Planned Milestones
 Unit 1 First Concrete (Reactor Building) – 30-Oct-2011;
 Unit 2 First Concrete (Reactor Building) – 30-Oct-2013;
 Unit 1 Commercial Operation – Y 2016;
 Unit 2 Commercial Operation – Y 2018;
23
Baltic NPP Feasibility Study Phase I
Power Output
Kaliningrad Region Power Sector
 Diagram of Baltic NPP connection
to the network after second unit
commissioning
Клайпеда
Битенай
Юрбаркас
#
Title
Voltage/kV/
Length
/km/
Crosssection
/mm2/
1
BaNPP-Sovetsk
330
18
2×600
2
BaNPP-Bitenai
330
19
2×300
3
BaNPP-Sovetsk
330
77
2×600
4
BaNPP-Kruoni
330
160
2×300
5
BaNPP-Sovetsk
330
34
2×600
6
BaNPP-PS PT
Mamonovo
330
190
2×600
7
BaNPPYurbakas
330
40
2×600
8
BaNPP-Central
О-1
330
135
2×600
Круонио ГАЭС
Советск-330
Северная-330
Калининградская ГРЭС-2
Балтийская
АЭС
2 блока
Центральная О-1
Мамоново
Baltic NPP Feasibility Study Phase I
Power Output
Internal Forecasted Demand and Export Potential
 After the launch of Unit 1 in 2016 and Unit 2 in 2018, a substantial export
capacity will arise
 The excess capacity after meeting initial demand in Kaliningrad Region can
be exported to the energy deficit countries of the Baltic Region.
Internal Demand & Export Potential
3500
Year
3000
MW
2500
2000
1500
1000
500
0
2011
2017
2020
Year
Available Capacity (MW)
Optimistic Internal Demand (MW)
Minimum Export Potential (MW)
2011
2017
2020
Available Capacity
(MW)
950
2050
3280
Optimistic Internal
Demand (MW)
660
1000
1400
Minimum Export
Potential (MW)
200
1050
1880
Baltic NPP Feasibility Study Phase I
Power Output
Baltic Region Energy Balance

The energy analyses shows
a negative balance for the
Baltic countries.
Baltic NPP Feasibility Study Phase I
Financial and Economic Evaluation
Capital Cost Estimate
 Basis of the capital cost estimate
 Capital Cost Estimate developed by the General Designer (Chapter 11 of TD)
• Developed on the basis of Methodology for determination of the cost of construction production in
Russian Federation (МДС 81-35.2004)
• Reference plant – Leningrad NPP 2
 2 x 1194 MW Units
 Base date
4th
Total Installed Costs
Quarter of 2010
 Currency – Euro
 Unit 1 COD – 30 October 2016
Base Costs
Supplementar
y Costs
 Unit 2 COD – 30 April 2018
 Exchange Rate – 40 Russian Ruble / 1 Euro
 Expected accuracy – ±25%
 Breakdown as per IAEA accounting system
27
Direct Costs
Indirect Costs
Owner’s
Costs
Financial
Costs
Baltic NPP Feasibility Study Phase I
Financial and Economic Evaluation
Capital Cost Estimate
 General Approach to Capital Cost Estimate
 Analysis of the estimate developed by the General Designer
 Communications with the Client to clarify unclear items
 Verification of buildings, structures, systems, etc. against the General Plant Layout (phase
B, sheet 2/2)
 Identify capital costs that are not included in the General Designer estimate on the basis
of proprietary check list
 Add the costs excluded from the General Designer estimate on the basis of in-house
database, after appropriate adjustment to reflect the project time, location and specifics
for Kaliningrad region
 Cost distribution by IAEA major account codes
 Develop Cost Risk Analysis and capital costs possible ranges were identified
 Contingency Analysis based on the Cost Risk Analysis
28
 Develop cash flows on the basis of the project implementation schedule and the standard
EPC Contract payment conditions
Baltic NPP Feasibility Study Phase I
Financial and Economic Evaluation
Capital Cost Estimate
 Analysis of the estimate developed by the General Designer
 Factoring approach utilized at this stage (Technical Design) of the project
 Estimating is iterative process – per project phases
 General Designer experience indicates that increase of the capital costs is expected for
the next iteration of the estimate (Detail Design phase of the project)
 Contingency allowance of approx. 3% is applied on the base estimate on the basis of the
adopted methodology (МДС 81-35.2004)
 The international practice for contingency allowance at this phase of projects and level of
project definition recommends over 10% (AACE International)
29
 The following costs are not included in the General Designer estimate
• First fills and special materials
• Utilities during construction (water, electricity, etc.)
• First core fuel
• Operating personnel (during construction)
• Licenses (nuclear regulator)
• Escalation
• Financial costs
Baltic NPP Feasibility Study Phase I
Financial and Economic Evaluation
Capital Cost Estimate / Results
 In 90% of the cases the construction of Baltic NPP will require capital costs
in the range from € 6.63 Billion to € 8.15 Billion
30
Baltic NPP Feasibility Study Phase I
Financial and Economic Evaluation
Operating Costs
 O&M Cost Methodology:
 O&M costs are determined applying the IAEA accounting system and are presented as
personnel and non-personnel expenses
 Basis for the estimation is client’s data from Balakovo NPP
 Adjustments of the basic costs were made to reflect the specific conditions of the Baltic NPP
 Contributions to 3 funds (Decommissioning, Nuclear Safety & Physical protection) have been
added to the O&M costs
 Decommissioning costs
 Based on the current Rosenergoatom rules (1.3% of revenue);
 Calculated as annual payments in the Decommissioning fund
 Fuel costs
 Fresh fuel costs are estimated based on the prices on the international market
 Spent fuel costs are based on Balakovo NPP data
Baltic NPP Feasibility Study Phase I
Financial and Economic Evaluation
Operating Costs / Risk Analysis
O&M cost risk
Reason
Range of
Consequences
Likelihood
Ability to
influence
Fuel costs. International
market of energy resources
Price of natural uranium could increase,
following price increase of other energy
resources
Low
High
Low
O&M costs for personnel
Personnel costs might increase following the
inflation processes and approximation of
salaries in Russia to EU levels
Low
High
Low
O&M costs for repair and
maintenance
O&M costs for repair and maintenance could
be higher than predicted
Low
Low
Low
O&M costs for nuclear liability
insurance
Nuclear liability insurance might become
more expensive due to either increased
limits or increased premiums
Very Low
Mid
Low
CONCLUSIONS
• Increase of O&M costs will be mainly due to the inflation and escalation processes.
• Risk analysis demonstrates that the risk of O&M and fuel costs increase is low,
with low expected impact on LCOE.
• There is no significant risk for the plant in terms of operation costs, if it is managed safely and reliably.
Baltic NPP Feasibility Study Phase I
Financial and Economic Evaluation
Basic Financial Model / Technical Inputs
 Gross Power
 1194 MW
 Nominal Power
 1181 MW
 Net Power
 1097 MW
 Average Availability
 92%
 Lifetime
 50 years
 Construction schedule
 Unit 1 – commissioning on the 30th October 2016
 Unit 2 – commissioning on the 30th April 2018
Baltic NPP Feasibility Study Phase I
Financial and Economic Evaluation
Basic Financial Model / Major Assumptions
 Ownership structure
 51% Rosenergoatom
 49% Strategic Investor
 Financing structure
 Base Case – 100% equity (balance sheet financing)
 Second option – 50% equity & 50% debt financing
 Discount rate – 6%
 Electricity sales
 Russia – 300 MW
 Baltic region (Lithuania) – 1000 MW
 Germany and Poland – 1000 MW
 Electricity Tariff in target markets
 Presented by the Client
Baltic NPP Feasibility Study Phase I
Financial and Economic Evaluation
Conclusions
 CAPEX is within international publicly announced price
levels
 At the selected set of assumptions, the project is financially
feasible in all scenarios
Thank you