produced
by Energoatom’s NPPs
is Energoatom’s share in Ukraine’s total electricity output
is the installed capacity of 15 nuclear power units
in taxes paid to national and local budgets, including insurance payments
2
PRACTICING EFFECTIVE
GOVERNANCE
NON-FINANCIAL REPORT 2019

Message from our representative

It is a well-known fact in the developed countries that the sustainable development of the nuclear power generation guarantees the energy security and stability of the global economy in the future. Therefore, the countries that have nuclear power plants ensure the development of national energy generating companies. As the operator of Ukrainian NPPs, Energoatom strives to secure the future that generates clean, accessible, and affordable electricity. We understand that we must act today to create the tomorrow of our dreams.

Presently, we have several key strategic longterm initiatives and ambitious projects that ensure not only the development and financial stability of the Company, but also the energy security of the nation.

First, it is the completion of power units No. 3 and No. 4 at Khmelnytska NPP. The initiative is quite literally strategic for Ukraine, as it helps increase the electricity output and thus keep affordable rates for consumers , as well as ensures the balance and resilience of the country’s energy grid. Moreover, this large-scale project will create thousands of jobs across the country during the construction and launch of power units, as well as will place enough orders with domestic industrial manufacturers, as 70% of the production is located in Ukraine.

In addition, the completion of power units No. 3 and No. 4 at Khmelnytska NPP is answer No. 1 to the question of how to replace power units with expiring life cycles.

Uninterrupted export of high-quality electricity generated by Ukrainian NPPs to Europe is another ambitious objective for Energoatom. With the sale of electricity to Belarus that started on 22 July 2020, the Company has successfully begun achieving the goal. Why is it so important for Ukraine?

Firstly, it is because the entry into foreign markets and strong competitiveness there are sensible solutions to addressing the issue of insufficient domestic electricity consumption. Secondly, the export of high-quality, safe, and cheap nuclear energy, the trade that creates the added value, and the opportunity for the state-owned enterprise to enter into international contracts will generate additional foreign currency revenues for the Company and, consequently, for the national budget.

This year, Energoatom has launched another innovative forward-looking project. Long before the crises broke out in the Ukrainian energy sector, the Company’s specialists began to explore the opportunities to build sustainable data centres to meet a wide range of objectives. The data centres located in the vicinity to the NPPs will be regular electricity consumers and allow nuclear power plants to generate power in line with dispatch constraints and thus have a guaranteed load. In the future, data centres will help implement the public digitalisation policy currently put in place by the Ministry of Digital Transformation.

On 20 August 2020, Energoatom signed a memorandum to build one of Europe’s biggest data centres near Zaporizhzhya NPP. The planned investment in this project will reach $700 million.

The data centre – NPP projects will help raise private investment for satellite towns, create thousands of jobs, and generate more revenues for the national and local budgets. That is why Energoatom has developed a pilot project to connect data centre consumers of up to 1,000 MW to the grid in Enerhodar, the satellite town of Zaporizhzhya NPP. The initiative will build a new infrastructure for a 750 kV outdoor switchgear to ensure the long-term electricity supply. We are not complacent with our achievements.

Today Energoatom specialists are exploring the opportunity to build a 50MW data centre with a further increase to 200 MW near Rivne NPP.

Moreover, we plan to complete the Central Spent Fuel Storage Facility in the near future, and Ukraine will stop transferring spent fuel for storage and processing to Russia from 2021, thus saving about $200 million annually.

After the successful launch and completion of all these projects, Energoatom specialists are not going to rest on their oars, as the nuclear industry in the modern world is one of the most knowledge-intensive sectors requiring ongoing tests and innovative technologies. The production of marketable hydrogen at Ukrainian nuclear power plants is among such innovations. The nuclear power industry can offer clean hydrogen production technology. The project currently developed by Energoatom will provide a cost-benefit analysis to show the rationale for the hydrogen production at operating NPPs using electrolysis facilities. Presently, these facilities are used only internally by the NPPs.

First, it will increase the efficiency of the installed capacity utilisation at NPPs and enable them to operate at a constant capacity. Second, it will help the Company diversify its product line and allow enter the domestic and foreign markets with this product. Third, the hydrogen technologies deployed on the megawatt hydrogen production facilities will give impetus to the development of high technologies and engage highly skilled specialists of the Ukrainian nuclear energy industry. Finally, alongside Energoatom’s improved business performance and higher profits, the hydrogen production will enable even more confident decarbonisation and ensure the country’s energy security in the long run.

We must act today to create the tomorrow of our dreams — affordable, accessible, safe, and clean energy.

HERMAN HALUSCHENKO,

Vice President of Energoatom

Company’s Development Strategy

Energoatom is the major power producer in Ukraine and one of the leaders in the national energy sector in terms of environmental initiatives, social programmes, and contribution to the energy independence and sustainable development of the country. Over the past five years, the Company has accounted for more than half of the country’s total electricity output, with the share reaching more than 65% in some periods.


Energoatom Mission: Safe Power Generation safe electricity production to secure sustainable development of Ukraine’s economy and the welfare of our employees and fellow citizens.

Energoatom has set the goal to maximise its contribution to the development of society, taking into account all economic, social and environmental aspects of its operations. The focus areas of the Company’s operations are: safe operation of NPPs and improvement of their efficiency, meeting the country’s needs in electricity and thermal power, building responsible attitude to production, society, and the environment, creating decent working conditions for its employees and caring for future generations.

In 2019, the Company approved Energoatom Strategic Development Plan 2020–2024. The Plan is fully harmonised with the Ukraine Energy Strategy 2035 “Safety, Energy Efficiency, Competitiveness”2 and complies with the national legislation, regulations, and the Sustainable Development Goals. The key strategic goals and key performance indicators (KPIs) of the Company focus on sustainable development both of the Company and the entire Ukrainian society.

Our Contribution to Achieving SDGs in 2019

Meeting the country’s needs in electricity and thermal power

Energoatom continued taking actions to strengthen the energy independence of Ukraine. In 2019, Energoatom produced 83.2 billion kWh, accounting for 54.1% of total electricity output in the country. The Company hit its electricity production target, delivering 101.8% on it.

All nuclear power plants demonstrated strong performance results: Zaporizhzhya NPP – 102%,

Reactor core of power unit No. 5 at Zaporizhzhya NPP was completely charged with Westinghouse fuel.

Rivne NPP – 102%, South-Ukraine NPP – 100.6%, and Khmelnytska NPP – 102.6%. Energoatom is the only company in the world that has managed to diversify nuclear fuel supplies for Sovietdesigned VVER-1000 reactors.

In 2019, the Company received a permit to operate power unit No. 3 at South-Ukraine NPP using Westinghouse fuel. The respective document was signed by the State Nuclear Regulatory Inspectorate of Ukraine following the results of field trial conducted at the power unit.

For more information, please see Enhancing the Safety Culture section.

Safe operation and higher efficiency of NPPs

As a nuclear operator, Energoatom sees safe and reliable operation of nuclear power units as its top priority. In 2019, the Company operated 15 nuclear power units with the installed capacity of 13,835 MW, 2 hydraulic power units at Tashlyk Hydroelectric Pumped Storage Power Plant with the installed capacity of 302 MW, and 2 hydraulic power units at Olexandrivska Hydro Power Plant with the installed capacity of 11.5 MW.

The Company increased the thermal capacity of power unit No. 2 at Zaporizhzhya NPP, power unit No. 2 at South-Ukraine NPP and power unit No. 4 at Rivne NPP.

The power units at NPPs are operated in strict compliance with domestic and international safety standards.

For more information, please see Enhancing the Safety Culture section.

Extension of lifecycle of power units is one of Energoatom’s priority objectives and aims at improving safety and maintaining the generating capacity. Implementation of measures improving the power unit safety and reliability is a necessary condition for the continuous operation of the existing NPP units. In the reporting period, Energoatom completed the works on extension of power unit lifecycle, received the respective licenses and terms of licenses for the operation of power units No. 1 at Khmelnytska NPP and No. 3 at South-Ukraine NPP. The lifecycle was extended for 10 years. Decisions on extended operation will be made at the end of this period following the periodic safety review.

Investment development

Stable operation of Energoatom is ensured through the implementation of investment projects that are necessary for enhancing the safety of power units in line with the highest standards. In 2019, the Company continued to invest in the development of production, extension of lifecycle of power units, and safety improvement. The construction of the first complex of the Central Spent Fuel Storage Facility entered into the final stage.

Social development

Effective social policy that pursues improvement of the standards of life in the regions of presence and develop a sustainable labour market is key to successful development. Being aware of this fact, Energoatom increased its investment in social development by UAH 82.66 million, and the payroll fund by UAH 2,954 million year on year.

Corporate Governance System and Structure

Energoatom is a legal entity established in accordance with the Cabinet of Ministers’ Resolution No. 1268 “On the Establishment of Energoatom National Nuclear Energy Generating Company” dated 17 October 1996 (in pursuance of the Law of Ukraine On the Use of Nuclear Energy and Radiation Safety). According to the Law, Energoatom is an operating organisation (operator) of nuclear power plants in Ukraine. The president is the senior executive of the nuclear operator. The Company reports to the Ministry of Energy and Environmental Protection of Ukraine.3

The objectives, functions, and authorities of the National Nuclear Energy Generating Company are determined by the Company’s Charter and the Regulations on the Operating Organisation based on the requirements of the legislation, regulations and rules in the area of economic activity and use of nuclear energy, licenses, and other permits.

Energoatom is included in the list of companies of strategic importance for Ukraine’s economy and security. In addition, the Company is a business entity that owns and uses high-risk facilities.

Energoatom consists of four nuclear power plants (Zaporizhzhya NPP, Rivne NPP, South-Ukraine NPP, and Khmelnytska NPP), the Company’s Head Office and service subdivisions, all established in compliance with the requirements of the law and in accordance with the powers granted in order to ensure more effective management of operations and resources in the areas unique to nuclear energy.

The Company has implemented and works constantly to improve the integrated management system (IMS) based on the requirements of national regulations and rules on nuclear and radiation safety. In particular, these are General Safety Provisions for NPPs, Requirements for the Management System of the Operating Organisation (Operator), and General Requirements for the Nuclear Energy Use Management System.

The Integrated Management System (IMS) takes into account the IAEA requirements and meets international standards:

  • ISO 9001:2015 Quality Management Systems
  • ISO 14001:2015 Environmental Management Systems
  • OHSAS 18001:2007 Occupational Health and Safety.

The Company’s management annually analyses the integrated management system to ensure its adequacy, as well as continued efficiency and effectiveness. In addition, this analysis helps see the “gaps” and decide what and how to improve.

The Integrated Management System is designed to help the Company meet the requirements and expectations of the stakeholders, comply with international standards and applicable laws, ensure continuous improvements of all processes, products, and operations of the Company, manage environmental, social and related risks effectively.
Governing Bodies

Energoatom’s highest governing body is the Management Board. Energoatom’s President is responsible for operational management of the Company. The rights and obligations of the President are established by the Charter and the Regulations on Energoatom as the Nuclear Operating Organisation (Operator) for Nuclear Power Plants, and a contract concluded with the Ministry of Energy and Environmental Protection of Ukraine. The President of Energoatom determines the organisational structure and membership of the Company’s Management Board to ensure that the Company can perform its functions.

Energoatom’s senior management includes the President, the First Vice-President – Technical Director, vice presidents, General Inspector – Safety Director, CEOs of NPPs (deputy heads of the operating organisation at NPP sites), and Directors of the Company’s separate subdivisions.

The Charter and the Regulations on Energoatom as the Operating Organisation (Operator) establish the responsibilities and powers of the Company’s management.

Our current organisational structure includes management verticals set up to manage production, finance, human resources, procurement, departmental supervision, and physical protection of nuclear facilities


Company’s Senior Management
Petro B. Kotin

Acting President of Energoatom
In office since March 2020

Employment history:

1985 – he started his career as a reactor hall operator at Zaporizhzhya NPP. He went through all the stages of operational management and was engaged in international activities. In Energoatom’s Head Office, Petro Kotin headed a production unit and participated in international projects.
Since 2014 – in charge of a strategic project, Ukraine-EU Energy Bridge.
2019–2020 – General Director of Zaporizhzhya NPP.
Petro Kotin has been appointed acting President of Energoatom by Resolution No. 361-p of the Cabinet of Ministers of Ukraine dated 29 March 2020, the Order of the Ministry of Energy and Environmental Protection of Ukraine, and the Order of Energoatom.

Educational background:

In 1985, Petro Kotin graduated from Moscow Engineering Physics Institute with a degree in Nuclear Power Plants and Installations. He holds the second university degree in Business Management from Zaporizhia Institute of Public and Municipal Administration (2003).

Awards:

Pin badges "Honorary Worker of Nuclear Power Industry", "For Excellence in Nuclear Energy" and a certificate of merit "For significant contribution to the development of nuclear energy in Ukraine", and a certificate of merit for construction of power unit No. 2 at Khmelnytska NPP.

Yuri Sheiko

Acting First Vice President – Technical Director of Energoatom
In office since June 2020

Employment history:

From August 1985 to September 2008, Mr Sheiko worked at Zaporizhzhya NPP, rising through the ranks from a reactor department operator to a chief specialist responsible for power units and the head of power unit No. 2.
From September 2008, he held senior roles in the Executive Directorate for Production at Energoatom: he headed the Production and Technical Department until January 2010 and then was the Deputy Director for Lifecycle Extension and Modernisation until May 2012.
May 2012 – November 2018 — Production Director – Deputy Executive Director for Production at Energoatom.
From November 2018 to June 2020 — CEO of Atomprojectengineering.
Since June 2020 — Acting First Vice President – Technical Director of Energoatom.

Educational background:

He graduated from Odessa Polytechnic Institute in 1985, majoring in Nuclear Power Plants and Installations.

Awards:

Award pin badges “For Excellence in Nuclear Energy” and “Honorary Worker of Nuclear Power Industry”.

Herman Haluschenko

Vice President of Energoatom
In office since 12 May 2020

Employment history:

Herman Haluschenko worked in the Public Prosecutor’s Office and the Ministry of Foreign Affairs of Ukraine. His employment records include management positions in the central executive bodies. In different periods, he held positions of the deputy head of department of the Secretariat (Administration) of the President of Ukraine and director of department on court proceedings of the Ministry of Justice of Ukraine.
Since 2012, he has been teaching private international law in the Institute of International Relations of Taras Shevchenko Kyiv National University (associate professor, private international law department).
2013–2014 – Executive Director for Legal Support at Energoatom.

Educational background:

In 1995, Herman Haluschenko graduated from Lviv State University with a degree in law science (with honours). He also holds a master’s degree in international management from Ukrainian Academy of Foreign Trade.

Awards:

He is a Distinguished Lawyer of Ukraine and a companion of the Order of Danylo Halytsky.

Hartmut Jacob

Vice President of Energoatom
In office since 12 May 2020

Employment history

Mr. Jacob’s professional records include employment in the World Bank and leading investment banks of Eastern Europe. He worked as a power research director in London Office of the Austrian investment bank, Creditanstalt and chaired the Board of Directors at Renaissance Capital Ukraine.

Educational background:

In 1995, he graduated from Johns Hopkins University (United States) with a master’s degree in international economics and finance. He also holds a master’s degree in political studies from Free University of Berlin. Hartmut Jacob did an internship at the UN Headquarters in New York.

Awards:

He has a recommendation from the world-renowned Oxford Institute of Energy Studies.

Danko V. Biley

General Inspector – Safety Director
In office since December 2003

Employment history:

1973-1976 — Mr Biley served in the Navy on an atomic submarine. He worked at Zaporizhzhya NPP, rising from an engineer in a setting and testing shop to the General Director.
1996-2000 — General Director of Zaporizhzhya NPP.
2000-2002 — Quality Director of Energoatom.
2002-January 2003 — Production Director – Deputy Head of Energoatom.
2003 — Technical Director and Deputy Head, Energoatom
Since December 2003 — General Inspector – Safety Director, Energoatom.

Educational background:

In 1982, he graduated with honours from Odessa Polytechnic Institute, majoring in Nuclear Power Plants and Facilities and qualifying as a thermal engineer.

Awards:

Award pin badges “For Excellence in Nuclear Energy ”, “Honorary Worker of Nuclear Power Industry”, and “Distinguished Nuclear Energy Worker”; awarded the National Prize of Ukraine in the field of science and technology in 2014 for his work “Measures ensuring safe op-eration and efficiency of Ukrainian NPPs”.

Nataliya V. Vashetina

Chief Accountant of Energoatom
In office since 2005

Employment history:

She held senior positions in government-owned and commercial enterprises.
1999–2003 – Chief Accountant, Energoatom.
2003–2005 – Chief Accountant, Valensye, Ltd. and Finansovi Investytsii, Ltd.
In February 2005, Nataliya Vashetina was appointed the Chief Accountant of Energoatom.

Education:

In 1981, Mrs Vashetina graduated from Ukrainian Agricultural Academy, majoring in Accounting in Agriculture.

Awards:

Award pin badges “For Excellence in Nuclear Energy”, “Honorary Worker of Nuclear Power Industry”.

In 2019, Vice President Aidyn Aisin was responsible for economic issues, Executive Director for Nuclear and Radiation Safety and R&D Natalia Shumkova dealt with environmental aspects, and Executive Director for Human Resources Oleksandr Ostapovets addressed social issues.

Compliance and Corporate Ethics

Energoatom operates in line with the principles of transparency, openness, and ethical conduct. The Company successfully implements measures to prevent and combat corruption and always makes every effort to improve the actions. We protect human rights in all situations and highly value our reputation. Strict compliance with anti-corruption legislation and all regulatory requirements is key to sustainable development of Energoatom.

The Company is governed by the Anti-Corruption Programme5, the Code of Corporate Ethics6, and the Compliance Policy7 of Energoatom.

To organise and oversee the implementation of the anti-corruption measure, the Company has the Directorate for Corruption Prevention and Counteraction in place.


Code of Corporate Ethics

In 2019, we introduced a new Code of Corporate Ethics. It is designed to ensure that employees adhere to the high standards of personal and professional conduct required in the area of nuclear energy, as well as help the Company clearly understand their role in achieving the strategic goals of Energoatom. Compliance with the requirements of the Code is a must for our employees. A failure to comply with the Code of Ethics is a violation of labour laws. The provisions of the Code apply to all employees of the Company, regardless of their position, and each of them is personally responsible for compliance with the Code and has the right to make proposals to change, clarify or expand the provisions of this document.

In their professional activities, all our employees must adhere to the corporate values specified in the Code:

  • Ensure that safety is the overriding priority in the performance of any works;
  • Improve the safety culture at all levels of the Company’s Head Office and subdivisions;
  • Ensure reliability, high quality, competence, responsibility and expertise in the performance of works;

  • Improve and share knowledge in the field of nuclear energy use;
  • Show respect for the personal rights and interests of the Company’s employees;
  • Comply with the engagement terms proposed by business partners;
  • Provide the conditions for professional succession;
  • Provide for the continuous development of employee potential and equal conditions for professional growth;
  • Prevent and combat corruption;
  • Promote corporate social responsibility;
  • Promote transparency, openness, and efficiency of the Company’s operations;
  • Provide for the continuous development of all areas of the Company’s operations, encourage constructive changes;
  • Develop leadership in the safety-related issues and all other types of activities.

The Code states that people are the highest-value asset of the Company and all the Company’s operations, as well as the Company’s activities in general depend on the skills and knowledge of employees.

The issue of corporate ethics is always in the limelight during any training sessions on anticorruption laws that are held regularly for the Company’s employees.


Anti-corruption Training

Anti-corruption training is provided within the general system of compliance training. Energoatom employees regularly participate in internal and external anti-corruption training programmes and conferences.

All Energoatom employees are informed about the Company’s anti-corruption policies.

Managing Procurements

In its procurements, Energoatom seeks to satisfy the Company’s needs in products, services and works in a timely manner and with the right quality and reliability. Creating a sustainable procurement system is one of Energoatom’s priorities. Procurement transparency, competitiveness, and equal access of market participants to the Company’s tenders are ensured through appropriate procedures via ProZorro electronic procurement system. In addition, the Company contributes to better transparency by providing open access to publications regarding annual procurement plans on its official website and in other platforms.

Procurement of goods, works, and services is in compliance with the basic principles of public procurement defined by Article 3 of the Law of Ukraine On Public Procurements and the Anti- Corruption Programme of Energoatom.

To ensure sustainable procurements, the Company adheres to the principles of:

  • Non-discrimination of participants
  • Fair competition among participants
  • Objective and impartial evaluation of bids
  • Openness and transparency at all stages of procurements
  • Maximum cost effectiveness and efficiency
  • Prevention of corruption and abuse.

The Company’s procurement management system operates on a differentiated basis and applies a classification approach as to the allocation of appropriate resources, taking into account:

  • legal requirements;
  • significance of the activity and its performance for the safety and complexity;
  • hazards and magnitudes of potential impacts associated with the activity and its performance;

  • possible consequences of improper performance of works or poor performance.

The Company has established a tender committee, which organises and conducts procurements to satisfy the needs of Energoatom. The divisions initiating procurements include structural units of the Head Office, Atomkomplekt, Energoatom- Trading, and Scientific and Technical Center. Other separate subdivisions of the Company have the respective tender committees in place. In addition, there are electronic below-threshold procurement commissions for electronic below-threshold procurements.

Energoatom ensures transparency and accessibility of information on procurements by publishing it on the web portal of the competent authority in accordance with the Law of Ukraine On Openness of Public Spending.

Energoatom purchases goods, works, and services through ProZorro e-procurement system, which promotes openness and transparency of the Company. In 2019, Energoatom announced 5,055 procurement procedures via ProZorro to the total amount of UAH 18,287,300,000. Of these, 4,638 were open tenders (92% of total procurement procedures) and 417 were negotiation procedures (8% of total procurement procedures).

In 2019, 721 procurement procedures were announced via ProZorro, with the total value not exceeding the limits established by law (up to UAH 1 million for goods and services and UAH 5 million for works).

Following procurement procedures in 2019, the Company made 4,329 contracts through the e-procurement system, including 3,323 contracts made in competitive open tendering, 398 under negotiation procedures, and 608 below-threshold agreements.

Total sums and the number of contracts concluded through procurement procedures via ProZorro in 2019
Procedure UAH Number of contracts
Negotiations 4,263,400,000 398
Open tender procedures 10,276,400,000 3,323
Below-threshold agreements 389,300,000 608

The total cost of the concluded contracts for the procurement of goods, works, and services in 2019 amounted to UAH 14,929,200,000.

Thanks to the procurements via ProZorro, the Company saved UAH 1,086,100,000 in 2019.

The Company managed to save money through regular engagement of a wider range of potential suppliers in tender procedures.


Sums saved by Energoatom thanks to procurements via ProZorro in 2017-2019, UAH

The Company supports national producers: 97% of tender winners are domestic businesses, 3% are foreign suppliers. Working actively with potential suppliers, Energoatom can engage European manufacturers of nuclear equipment. It also continues cooperating with those who have already participated in the Company’s procurement procedures.

Strong competition between market players is an important factor helping to lower prices and make significant savings. Energoatom supports competition. In case of detecting any elements of anti-competitive actions on the side of procurement participants, the Company informs the Anti-Monopoly Committee of Ukraine.

Breakdown of ProZorro procurements by type, 2019

The average competitiveness of procurement (average number of proposals per procurement) is 2.8 in Ukraine. In 2019, the level of competitiveness of Energoatom’s procurements increased by 8.5% year on year to reach 2.5.

A more detailed analysis of the procurement procedures is available on ProZorro’s website at prozorro.gov.ua and its business intelligence module, bi.prozorro.org.

Training for Energoatom public procurement specialists

On 4 July 2019, at the initiative of the Executive Directorate for Legal Issues and Procurement Support, Energoatom conducted training for employees engaged in the Company’s procurement process: public procurement specialists of respective units of the Head Office and separate subdivisions of the Company, members of tender committees, and authorised officers of separate subdivisions of the Company.

The participants discussed the most pressing issues of public procurement:

  • Modern regulatory framework for public procurement
  • Procurement of goods and services under a framework agreement
  • State regulation and control in public procurement
  • Appeals
  • Case law on contracts in public procurement, etc.

These measures constitute an important part of the Company’s procurements. Communication with the leading public procurement consultants, exchange of hands-on experience with colleagues and discussion of problems and challenges in the area of procurement help build professional knowledge and enhance the competences of the Company’s specialists in each area. After all, success in procurement procedures depends on the professionalism and practical skills of employees.

Disposal of illiquid assets

Throughout 2019, Energoatom used Prozorro. Sale e-trading to sell secondary raw materials (scrap metal, used batteries, spent oil, etc.) and illiquid inventories. The total book value of the sold property amounted to UAH 37.102 million, while the proceeds made UAH 49.415 million, incl. VAT. In 2019, the financial result of these sales through Prozorro.Sale was UAH 8.609 million.



Public Procurement Plans for 2020 and a Medium Term:

  • Streamline the procurement process through centralisation of procurement procedures and various measures aimed at consolidating the procurement needs within one procurement procedure;
  • Conduct preliminary market consultations for market analysis through open meetings with representatives of potential suppliers (this helps plan purchases and prepare for them) and provide coverage of the meeting results in information resources;
  • Engage national and foreign manufacturers of equipment for NPPs in the procurement procedures;
  • Carry out procurements under regular framework agreements, in particular for chemical products, fuels, lubricants, oils, etc.;
  • Introduce effective practices and methods that ensure high efficiency of the Company’s procurements, in particular ensure compliance with the principles of categorical management in procurement, interaction with suppliers, etc.;
  • Develop unified technical specifications for the procurements.

Supply Chain

Energoatom’s supply chain management is designed to ensure smooth operation of the Company, high product quality, and reliability of its supplies. By implementing best practices and standards, Energoatom seeks to increase the efficiency of supply chains. We focus on transparency, responsibility, and cooperation to manage social, environmental and economic elements effectively in the chain.

Energoatom conducts regular evaluation of suppliers to obtain objective information about the supplier’s management system and available resources (infrastructure, human resources, documentation, etc.) for the manufacture and supply of products for nuclear power plants according to the requirements established in the nuclear energy industry for products and suppliers. The supplier must provide evidence and documents confirming its expertise and capacity and keep the process under control. Suppliers who have successfully passed the evaluation (with a positive decision adopted according to the established procedure (Decision on Approval of Supplier) are included in the List of Suppliers.

To modernise and increase the NPP safety, the Company purchases a variety of industrial, electrical and other equipment.

Energoatom’s suppliers are leading global companies: Westinghouse, Holtec International, Electricite de France, Skoda JS, Orano, General Electric, Toshiba, Siemens, ABB, NUKEM, Iberdrola, Tractebel, ÚJV Řež, and others.

The Company also cooperates with Ukrainian companies, including Turboatom, Impuls R&D Centre, Radiy R&D Centre, Westron, Hartron-Energo Ltd, Sumy Machine Building Science and Production Association, PivdenTeploEnergoMontazh, Kyiv-based Energoproekt R&D Institute, Kharkiv-based Energoproekt R&D Institute, etc.

In 2019, Energoatom concluded agreements with 1,432 contractors.

The Company pays great attention to the diversification of nuclear fuel supplies. This is not only key to Ukraine’s energy independence, but also important for complying with IAEA recommendations to have at least two sources of fuel supply.

Two power units (No. 3 at South-Ukraine NPP and No. 5 at Zaporizhzhya NPP) operate exclusively on Westinghouse fuel, another four power units have mixed fuel assemblies, by Russia-based TVEL and US-based Westinghouse.

VVER reactors use fuel assemblies containing a fuel element (tvel). Fuel elements contain enriched uranium in the form of pellets. Energoatom purchases ready-made fuel assemblies, although it has a role in some production stages as well.

Nuclear Fuel Cycle

  • Uranium ore extraction and processing, uranium concentrate production
  • Conversion of uranium concentrate into uranium hexafluoride, UF6 enrichment
  • Production of fuel assemblies
  • Storage or treatment of spent nuclear fuel
  • Storage of radioactive waste

Skhidny Ore Mining and Processing Plant extracts uranium ore and produces the uranium concentrate. Domestic nuclear power plants need about 2,200-2,400 tonnes of uranium annually. Meanwhile, Skhidny produces about 1,000 tonnes of uranium. The uranium concentrate produced by the enterprise is fully used for production of nuclear fuel. Energoatom receives the remaining raw materials in the international market to ensure that fuel assemblies are produced and supplied under the contracts with Westinghouse and TVEL.

Procurements of the raw materials used in the nuclear fuel production follow transparent and strict competition procedures among potential bidders, primarily among the world’s major nuclear material producers and service providers in the nuclear fuel cycle.

The next step is the production of fuel assemblies at specialised industrial enterprises. Uranium dioxide powder is compacted into uranium pellets and then packed into special zirconium rods assembled into fuel assemblies. Atomenergomash produces separate elements of fuel assemblies, namely top and bottom nozzles.

Spent fuel treatment and storage is the last stage of the nuclear fuel cycle. To date, only Zaporizhzhya NPP has a dry spent fuel storage facility on its site. Spent fuel from Rivne NPP, Khmelnytska NPP, and South-Ukraine NPP is sent for temporary storage to Russia that must return to Ukraine the vitrified high-level radioactive waste produced as a result of spent fuel treatment. Cooperation with the Russian side is economically unprofitable, because at present and in the near term there are no plans for large-scale reuse of reprocessed products (uranium, plutonium), as it is not cost efficient.

However, spent fuel is a strategic nuclear fuel resource that can be used in future generations of nuclear reactors. Realising the prospects of the spent nuclear fuel, countries with the advanced nuclear power sector are developing technologies for the spent fuel recovery and reactors that will operate on the recycled materials.

Considering the situation faced by Ukraine now and the global trends, the construction of the Central Spent Fuel Storage Facility is the most economically feasible option for the country. After the launch, the facility will save Ukraine the trouble of moving the spent fuel to the Russian Federation and make Ukraine energy independent in the spent fuel management.

This approach has been reinforced through the respective regulatory documents:

  • the State Economic Programme 2024 for Management of Spent Fuel from National NPPs;
  • Strategic Guidelines for Treatment of Spent Fuel from Ukrainian NPPs with VVERtype reactors up to 2030.

International Cooperation

Energoatom’s international cooperation is based on the principles of partnership and mutually beneficial cooperation with international organisations, financial institutions, and the world’s leading nuclear energy companies. It is aimed at increasing the safety of NPP power units, improve economic performance of NPPs, elaborate plans for nuclear energy development, and ensure integration into

European energy institutions. Energoatom’s international cooperation in the nuclear industry rests on bilateral and multilateral intergovernmental agreements, cooperation agreements in the field of peaceful uses of nuclear energy, bilateral partnership agreements, international programmes and projects, memoranda, and commercial contracts.

Membership in organisations:

  • since 1994 – Ukrainian Nuclear Society;
  • since 1997 – World Association of Nuclear Power Plant Operators (WANO);
  • since 2006 – World Nuclear Association (WNA);
  • since 2007 – European Utility Requirement EUR;
  • since 2011 – FORATOM (through membership in the Ukrainian Nuclear Forum);
  • since 2014 – Centre for CSR Development;
  • since 2015 – European Nuclear Installations Safety Standards Initiative (ENISS);
  • since 2017 – Holtec Users Group (HUG);
  • since 2019 – Energoatom has been preparing for joining the Plant Engineering Program of US-based Electric Power Research Institute.


International agreements concluded by Energoatom in 2019:

  • Partnership Agreement between Energoatom, State Scientific and Technical Center for Nuclear and Radiation Safety, and Holtec International dated 10 June 2019. The trilateral agreement was concluded to establish Ukrainian Module international consortium, which should facilitate the introduction of small modular reactors SMR- 160 in Ukraine.
  • Memorandum of Understanding and Cooperation in the Nuclear Energy Sector between Energoatom and France’s Technetics Group dated 19 June 2019.
  • Memorandum of Understanding between Energoatom and Canadian Cameco Corporation dated 21 August 2019. The parties will agree on potential cooperation in the supply and production of uranium products and nuclear fuel using Cameco technologies.
  • Trilateral Memorandum of Understanding and Cooperation between Energoatom, WANO Paris Centre, and WANO Moscow Centre dated 20 October 2019. According to the document, WANO Paris Centre will organise and conduct peer reviews and follow-up peer reviews of operational safety performance experience at Ukrainian NPPs within the framework of the Peer Reviews Programme from 2022.


Energoatom’s participation in international events in 2019:

  • 63rd Annual Regular Session of the IAEA General Conference (Vienna, Austria);

  • IAEA Ministerial Conference on small modular reactors and advanced reactors (12- 14 November 2019, Washington DC, United States).


International cooperation highlights in 2019:

  • In 2019, with the support of the Norwegian Radiation and Nuclear Safety Authority (DSA), Energoatom completed the international technical assistance project ”Supply of Modern Equipment for Nondestructive Testing of Systems Important for the Safety of Rivne NPP”.
  • The latest operator support project, Creation of a Monitoring System for NPP Building Structures, Buildings and Facilities Based on Modern Diagnostic Methods, was completed within the framework of the INSC programme. Energoatom continues to implement a radioactive waste management project under the INSC programme. The project is titled Identification of Waste Forms that Ensure Safe Processing, Storage and Disposal of Problematic Radioactive Waste Stored at Ukrainian NPPs.
  • In December 2019, with the support of the US Government and partially the Canadian Government, the Company completed the project "Physical Protection of South-Ukraine NPP". The project provided equipment for the modernisation of the operating system of physical protection of power units No. 1 and No. 2 and the central control panel.
  • Energoatom received equipment as part of an international technical assistance project, Physical Protection of Khmelnytska NPP, implemented by the governments of Norway (through DSA) and Sweden (through SSM). This was a significant contribution to the launch of central control panel of physical protection at Khmelnytska NPP.
  • Energoatom continued the implementation of a number of projects launched earlier within the G7-led International Initiative “The Global Partnership Against the Spread of Weapons and Materials of Mass Destruction”. In particular, in November 2019, access control point No. 3 was opened at South-Ukraine NPP with the support of the Government of Germany (via GRS). In addition, the NPP received equipment for access control points No. 5 and No. 6 and some equipment for NPP enclosing perimeter. Rivne NPP received armoured access control doors, equipment for the video surveillance and armoured cabins to help it modernise the physical protection system of power unit No. 3.
  • In 2019, European Utility Requirement decided to explore the possibility of extending the EUR requirements to projects for lightwater small modular reactors. To this end, they organised the Technical Working Group for Small and Medium-sized or Modular Reactor (TWG-SMR), which includes a representative of the Company.

Cooperation of Energoatom with International Associations and Organisations in 2019

Energoatom’s international cooperation policy primarily focuses on engagement with international associations and organisations that seek to improve the nuclear safety. The Company cooperates with the International Atomic Energy Agency (IAEA), the World Association of Nuclear Operators (WANO), the World Nuclear Association (WNA), European Utility Requirement, etc.


Cooperation with IAEA

  • The preparatory works for the implementation of IAEA project, Increasing Operational Safety at Ukrainian NPPs, ended. Project implementation period: 2020–2021. The main goal is to improve operational safety of Ukrainian NPPs with the help of international expert missions, including OSART mission at Zaporizhzhya NPP and SALTO mission at South-Ukraine NPP, as well as workshops and fact-finding visits aimed at studying the world’s practices in the area of NPP use and operational experience. Preparations are currently underway for OSART mission at Zaporizhzhya NPP (from 26 September to 14 October 2021) and SALTO mission at South- Ukraine NPP (8-17 September 2020).
  • As part of preparation for SALTO mission, Energoatom conducted a kick-off meeting and two workshops in Kyiv. In addition, a training workshop under IAEA Programme on International Generic Ageing Lessons Learned (IGALL) for Nuclear Power Plants was held at Rivne NPP.
  • The Company’s specialists were engaged in the IAEA international events (workshops, training courses, technical meetings, conferences, etc.) as well as helped organise and hold them in Ukraine. In 2019, 45 Energoatom’s specialists attended the IAEA events and activities.
  • The IAEA completed its research project, Assessment of the Potential Role of Ukraine’s Nuclear Energy in the Strategies for Climate Change Mitigation. The project pursued the goal to determine the prospects for the development of Ukraine’s nuclear energy in the context of the Paris Agreement ratification.

Cooperation with WANO

In 2019, the technical support mission of the World Association of Nuclear Operators continued its work. Established to increase the safety and reliability of NPPs around the world, these voluntary missions are performed at the request of NPPs.


Cooperation with NEA/OECD

On 24-29 June 2019, the Company’s specialists participated in the meetings of the NEA OECD Committee on Nuclear Legislation, as well as in meetings of its working groups, which took place in Paris (France). The main achievement of this committee since previous times was publication of a report on the legal aspects of long-term operation of NPPs. Energoatom specialists were engaged in the preparation of a section dedicated to the extension of lifecycle of nuclear power units in Ukraine.


Cooperation with WNA

One of the areas of Energoatom’s cooperation with WNA is the participation of the Company’s specialists in WNA working groups (WG). On 2-6 September 2019, a representative of Energoatom attended the meetings of CORDEL WG on small modular reactors and licensing and in WNA WG meetings on long-term operation of NPPs, cooperation between customers and suppliers, and economic issues of the nuclear power industry.

Cooperation with Foreign Companies in 2019
Westinghouse

  • On 16 January 2019, a meeting was held with Westinghouse representatives to discuss possible application of practices and technologies of the American company for the implementation of Energoatom’s radioactive waste management projects.
  • On 12 June 2019, Energoatom held a meeting with Westinghouse regarding the instrumentation and control systems for the project of construction of power units No. 3 and No. 4 at Khmelnytska NPP.
  • On 7-8 August 2019, negotiations were held with Westinghouse Sweden to discuss possible extension of cooperation and prepare for the conclusion of a Non-Disclosure Agreement and Memorandum of Cooperation.

General Electric Power

A number of meetings were held to discuss cooperation in a project for increasing the capacity of power unit No. 3 at South-Ukraine NPP and issues regarding repair, operation, and modernisation of turbine generators. On 10 April 2019, GE Power experts paid a visit to South-Ukraine NPP.

EPRI Programme for NPP Engineering Support

Date of signing: 13 December 2019

Duration: 2020–2022

Goal: Introduce the world’s best practices and the most advanced methods of NPP engineering support at Ukrainian NPPs to enhance safety and efficiency of nuclear power plants and reduce operating and maintenance costs.

Short description: As part of EPRI Plant Engineering Programme, Energoatom will have access to research results and recommendations on the following issues: technical condition assessment, development and implementation of reliability programmes, resource assessment and extension, long-term planning and optimisation of assets, diagnostic methods, approaches to mitigation of degradation effects, methods of equipment repair and replacement, development of professional skills and advanced training. In addition, the Company’s specialists will be able to participate in meetings and training courses that will cover such issues as circuit breakers, locking relays, transformers and switchgears, technical maintenance, erosive and corrosive wear, cathodic protection, heat exchanger performance, underground pipelines, etc.

Company’s investment: US$ 434,656 per year.

Expected results: higher level of safety and efficiency at NPPs, extension of power unit lifecycle, reduction in the operating and maintenance costs.

Neil Wilmshurst, Vice President at EPRI:

“Operators from Slovakia, Hungary, and the Czech Republic that operate VVER-type reactors have already become EPRI members. About 80% of all NPPs in the world enjoy EPRI’s support, which proves that it is a truly global R&D organisation. This agreement with Energoatom means that there will be a lot more attention and efforts placed on VVER reactors operated by your company. I believe that this is the first step in this long-term partnership.”

International Cooperation Plans for 2020 and a Medium Term:

  • Start preparations for participation in a new cooperation programme with the European Commission, European Instrument for Nuclear Safety, scheduled for 2021;
  • Implement international technical assistance projects;
  • Implement in 2020–2021 a national project, Increasing the Operational Safety at Ukrainian NPPs, within the IAEA Technical Cooperation Programme;
  • Implement measures specified by the Action Plan for Implementation of EPRI Methodology and Practice;

  • Take a number of measures in 2020–2021 that are to be completed prior to joining WANO Paris Centre;
  • Complete the assessment of compliance of the EU HPR1000 project (advanced pressurised water reactor with active and passive safety) of Chinabased CGN with EUR Revision E. The results are expected to be published in late 2020 – early 2021.