JSC Atomenergoprom Annual Report

JSC ATOMENERGOPROM / ANNUAL REPORT / 42 Entering new nuclear fuel markets In 2022, the Company continued to take steps towards entering the market for fuel for Western-design power reactors, and fuel and components for Western-design research reactors. A separate promising area is the manufacture of fuel for fast neutron reactors. In 2022, the Company continued the transition to the use of uranium/plutonium MOX fuel in the BN-800 reactor at power unit No. 4 of Beloyarsk NPP. The formation of a core fully loaded with MOX fuel at the power unit will be completed in 2023. In addition, fuel for start-up core loading and for the first reloading of CFR-600, the first high-power fast neutron reactor currently under construction in China, was manufactured and shipped to the customer. The Company continues to implement the Proryv (Breakthrough) Project. It involves building a fuel fabrication/refabrication module, which will produce mixed nitride uranium/plutonium fuel. In 2022, fuel assemblies with removable containers were loaded into the BN-600 reactor at Beloyarsk NPP. They will enable the testing of nitride fuel up to design limits and materials testing using assemblies containing samples for advanced fast reactor cores. In addition, in 2022, the first MNUP fuel assemblies with BN-1200-sized fuel elements were produced, to be loaded for testing into the BN-600 reactor. For details, see the section 'Research and Innovations'. Power machine engineering market Power machine engineering helps to ensure reliable electricity supply and thus meets a basic need of the modern economy. In 2022, the Russian market saw a relative decline in industrial output across all segments of mechanical engineering. The Russian power machine engineering industry demonstrated a mixed performance across key product groups. In the steam turbine equipment segment, a downward trend continues, with production declining by 33.2% 25 in 2022 following a 67% decrease in 2021. In the steam generation equipment segment, a 207% rise in production in 2021 was followed by a 68.6% decline in 2022. In the gas turbine equipment segment, output increased by 43.9% in 2022 following a 60% decrease in 2021. This was driven by the adaptation of the power machine engineering market after foreign producers had left Russia and unfriendly countries had imposed sanctions. The Mechanical Engineering Division of JSC Atomenergoprom is one of the largest power machine engineering companies in Russia. In 2022, JSC Atomenergoprom increased its share on the Russian power machine engineering market in terms of revenue from 42% to 43.2%. The core competence of the Mechanical Engineering Division is the supply of full sets of reactor and turbine island equipment for nuclear power plants. In 2022, equipment produced by the Division was used at 19% of power units globally. Enterprises forming part of the Mechanical Engineering Division produce reactor equipment for 39% of large power units under construction globally. Given that foreign suppliers have left the Russian market, this provides JSC Atomenergoprom with additional opportunities to actively develop new businesses. NPP construction and operation market In recent years, key trends in the development of the global electricity market include heightened scrutiny of environmental aspects of the electric power industry and an increase in the share of zero-carbon power generation in the global energy mix. Countries seek to reduce the share of power plants using fossil fuels, such as coal and gas, and to develop renewable energy sources, such as solar and wind power plants, etc. Despite a surge in renewable power generation, its stability in the absence of expensive energy storage systems remains an unresolved issue. As a result, nuclear power generation is currently one of the most reliable, cheapest and most environmentally friendly sources of electricity. The International Energy Agency forecasts that by 2030, the global installed capacity of NPPs will reach 471 GW26, which reflects steady growth of nuclear power generation. In 2022, nuclear power accounted for about 10% of global electricity generation. According to the IAEA, in 13 states, more than a quarter of electricity demand is met by nuclear power generation. Countries with the largest share of nuclear power generation include France (69%), Slovakia (52%) and Belgium (47%). Leading countries by the number of operating NPP power units in 2021 and 2022, at year end 93 92 US 2021 56 56 53 56 35 35 33 33 France China 2022 17 10 Russia* Japan Temporarily shut down Excluding the floating thermal nuclear power plant. According to the IAEA27, as at 31 December 2022, 439 power reactors with a total capacity of 393.8 GW were in operation (including the suspended Japanese reactors). Another 57 reactors were under construction. In 2022, 35 power units of 10 NPPs and the floating thermal nuclear power plant were in operation in Russia, with their installed capacity totalling 29.6 GW. In 2022, JSC Atomenergoprom ranked second among nuclear power generation companies globally in terms of installed NPP capacity, surpassed only by the French EDF. Russia ranks fourth in the world in terms of the number of NPP power units in operation. Light-water reactors (VVER, PWR, BWR, LWGR) are the main type of reactors currently in operation in the world. They make up 92% of the global market (as a percentage of the total installed capacity). According to the IAEA, new nuclear power generation capacities connected to the grid globally in 2022 totalled 6.1 GW. At present, demand for NPP construction comes primarily from Asian countries, which is due to rapidly growing electricity consumption in this region. JSC Atomenergoprom is taking active steps to expand its footprint on the overseas market as a leader in terms of the number of NPP construction projects. BUSINESS STRATEGY 25. Estimates based on data from the Federal State Statistics Service. 26. IEA World Energy Outlook 2022 (Stated Policies Scenario). 27. Power Reactor Information System (PRIS) developed by the IAEA (https://pris.iaea.org). BUSINESS STRATEGY JSC ATOMENERGOPROM / ANNUAL REPORT / 43

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