Russian nuclear energy diplomacy in Finland and Hungary

Abstract

We compare Russian nuclear energy diplomacy towards Finland and Hungary, where the Russian state corporation Rosatom intends to build nuclear power plants by the 2020s. Russian nuclear energy diplomacy features Rosatom working with other state institutions, its own subsidiaries and an extensive network of companies and R&D actors to support Russian nuclear power projects abroad. Using the structuration approach, we find three interests driving such diplomacy: energy business and associated profits; modernization of the Russian economy, including the diversification of its export structure; while foreign policy interests are also involved, considering the constraints emerging in EU-Russia energy diplomacy in the oil and gas sectors, including the sanctions since 2014. Some domestic actors in Finland and Hungary make the linkage between nuclear energy and foreign policy as explicit as do some western commentators. Seeking to pursue these interests, Russian actors must accommodate their considerable assets to the structural constraints they encounter in the target countries. We identify four structural dimensions The Russian actors are well endowed as regards the resources, technology, and infrastructure dimension; and the dimension of finance, business models, and markets. However, on the institutional dimension they face a less controllable environment. Regarding the ecological dimension, they must conform to local safety requirements. In both cases, Russian actors were able to strengthen perceptions of joint interests with actors in the target country facilitating the nuclear power plant projects, thereby paving the way for the use of soft power.

Finland’s Dependence on Russian Energy—Mutually Beneficial Trade Relations or an Energy Security Threat?

“…This has also partially led to an analytical bias, as Russian state-owned or controlled companies make energy contracts not with the EU, but with individual member states and their respective energy companies under national ownership or control [54,57]. In contrast, the argument this paper aims to develop is that energy trade relations in the context of Russia's influence on Western countries are best understood through the analysis of threat perceptions and the ability to substitute current incomes from other energy forms [17,24,26]. Although Russia may not behave as a liberal actor as the EU [58], it may still operate through spheres of trade.…”

“…Nuclear power is expected to become a more significant source of revenue, but also to replace domestic natural gas consumption for export [88]. Russia aims to double its nuclear energy production by 2030 [85] and to turn nuclear power into a major export industry [17,88].…”

“…On the one hand, the debate has thus been about security in general and whether Russia could reach its foreign and security policy goals via energy trade. On the other hand, there has also been liberal consideration that free trade enables positive interdependence and cooperation in Russia [17,57]. The latter is more dominant in the Finnish energy strategy and related documents [5,65], but also in diplomatic meetings with the Russian president [100, 101].…”

“…Valkila and Saari [11] and Ruostetsaari [12] have studied Finnish energy elites and decision-making. In terms of specific energy forms, inter alia Teräväinen et al [13], Ylönen et al [14], Vehkalahti [15], Laihonen [16] and Aalto et al [17] assessed the public debate and political processes concerning nuclear power. Similarly, Huttunen [18] and Kivimaa and Mickwitz [19] have studied the debate on bioenergy.…”

“…Pilpola and Lund [26] used a national energy system model to assess policy risks related to nuclear power and biomass. Excluding the studies of Aalto et al [17] and Ochoa and Gore [27], the analysis of Finnish-Russian energy relations is typically based on historical analysis focusing on oil (e.g., References [25,28]) and nuclear power (e.g., References [29,30]). Compared to previous research, this article concentrates on the current system and on future trends relating to Finnish-Russian energy relations and Finland's resilience against external shocks.…”