Address by Energoatom by Energoatom Address ENERGOATOM president TODAY Energoatom today Energoatom

Over 20 years of its existence, SE NNEGC Energoatom Ever since its inception, SE NNEGC Energoatom has: ARSMS1 in the supervised areas of NPPs, and started the upgrade has improved production performance and generated of the physical protection at nuclear facilities, using innovative 1.7 trillion kWh of electricity. The Company has become • completed and put into operation two new power units technologies. a source of environmentally friendly low-carbon power with VVER-1000 reactors and two hydroelectric units of the for every second consumer in the country and raised hydroelectric pumped storage power plant; However, all these achievements have become possible thanks the largest loan in the history of from European to the Company's great asset, our employees who are real institutions in the energy sector. SE NNEGC Energoatom • created a national staff training system for professionals committed to the cause. Their work is the key to

also started the implementation of a pilot project, plants and the network of staff training centres; put into safe and reliable electricity production and the implementation of governance Corporate and sustainability Ukraine – EU Energy Bridge. operation full-scale training simulators at all existing ambitious plans for SE NNEGC Energoatom’s development. nuclear power plants; We still have much to do. We will keep on working to improve • settled the treatment issues at NPPs, safety of nuclear power plants, complete the construction of put into operation a storage facility for spent power units No. 3 and 4 at Khmelnytska NPP, extend the life (SF) at Zaporizhzhya NPP, as well as started preparing for cycle of power units, build the Central Spent Fuel Storage Facility, the construction of the Central Spent Fuel Storage Facility and implement many other investment projects to generate the (CSFSF) for three other nuclear power plants; most environmentally friendly electricity for the nation, boost Investment projects Investment Ukraine's export potential and strengthen the country’s energy • established a unified system of R&D support for NPPs and independence. an in-house industrial base for the provision of nuclear power plants with materials, equipment and services. We are looking into the future with confidence thanks to the expertise we have gained during these 20 years in implementing We have joined efforts with government agencies to create a the most complicated large-scale projects and the unity of

national emergency alert and response system, implemented nuclear engineers in addressing every challenge. culture Safety Environmental Environmental responsibility Olexandr Shavlakov,

First Vice President –Technical Director, SE NNEGC Energoatom Our employees and Our employees local communities local 1 АСКРО – автоматизована система контролю радіаційної обстановки.

6 SE NNEGC Energoatom Non-Financial Report 2016 Non-Financial Report 2016 SE NNEGC Energoatom 7 Appendices Appendices YEARS. Energoatom ranks seventh worldwide in installed nuclear SAFE. RELIABLE. PROMISING 1 capacity 4 nuclear power plants: Zaporizhzhya, Rivne, SE NNEGC ENERGOATOM 2016 2 South-Ukraine and Khmelnytska Energoatom is one of world’s leading nuclear companies due to its high level of technological Zaporizhzhya NPP of the total capacity advancement and safety of nuclear power plants of 6,000 MW is the largest nuclear operation, as well as due to high qualification of 3 power plant not only in Ukraine, but NPP staff. also in Europe Being one of the leaders of the Ukrainian economy, Energoatom contributes to the social and economic development of Ukraine. Over these 20 years, the Company has proved it with actions, not just words.

15 power units with a total 4 capacity of 13,835 MW

8 research-and-production and service subdivisions that develop and produce equipment for NPPs in 5 Ukraine, carry out repairs and refurbishment, and provide R&D support 1.7 trillion kWh of 80-90 billion kWh is the annual electricity generated by contribution of the Company to 7 Energoatom nuclear power 9 electricity generation in Ukraine plants over 20 years of operation The Company covers 55% of Ukraine’s 8 electricity needs (both households and industrial consumers) Over these 20 years, Energoatom has paid a total 10 of UAH 51.036 billion in taxes €600 million — Energoatom has raised the largest loan in the history of Ukraine from European institutions (European Bank for Reconstruction and 15 separate subdivisions and 11 Development and the European Atomic Energy 6 more than 34,000 employees 11 investment projects worth over Community) to implement the project Complex UAH 66 billion were being (Consolidated) Safety Upgrade Programme of Power 12 implemented by the Company as of Units of Ukrainian NPPs (CCSUP) the beginning of 2017

The level of safety at Ukrainian NPPs Energoatom has established cooperation with Energoatom has started building the Central Energoatom has opened a representative meets the IAEA nuclear safety international organisations: World Association of Spent Fuel Storage Facility, using technologies office in Brussels to attract new partners and 13 requirements according to the results of 15 Nuclear Operators (WANO) International Atomic Energy 17 of US-based Holtec International5 19 pursue the European vector of the Company's the IAEA and EU experts' assessment3 Agency (IAEA6), European Bank for Reconstruction and development Development (EBRD7), European Commission8, European Atomic Energy Community (Euratom9), International Group EUR10 and many others The Company has developed the Ukraine-EU Energoatom ranks 1st in the transparency No radiation accident, no event that would The Company has established cooperation with the Energy Bridge project4, which will provide the ranking by Transparency International mean a low level of nuclear safety at the US-Japan company Westinghouse, diversifying 18 opportunity to supply electricity from Khmelnytska 20 Ukraine among the largest Ukrainian 14 Company's facilities in 20 years 16 nuclear fuel supplies to Ukraine NPP to Poland and other EU countries and will companies2 strengthen the energy independence of Ukraine

8 9 ENERGOATOM TODAY Address by Energoatom by Energoatom Address president ABOUT THE COMPANY Energoatom today

2015 2016 State Enterprise “National Nuclear Energy Generating Company “Energoatom” is the operator of all running nuclear power plants in Ukraine, as well as Olexandrivska Hydro Power Plant and Number of employees, 35,186 34,950 Tashlyk Hydroelectric Pumped Storage Power Plant. persons

Company's goal today Energoatom

Energoatom is in the list of companies of strategic importance Electricity generation, safe and efficient for the economy and security of Ukraine11. operation of nuclear power plants, uninterrupted Staff training 24.2 37.2 power supply to economic entities and the expenses, million UAH population, as well as within its competence, Energoatom is a leader in the national energy actions to ensure Ukraine's readiness for rapid market. and effective response in the event of accidents at nuclear power plants and radiation accidents

Payroll fund, million UAH 4,224.1 5,309.6 governance Corporate in the industry. and sustainability Energoatom is a reliable electricity provider for millions of Ukrainian citizens. Allocations to a special state The key mission of Energoatom is the safe budget fund for social and electricity production. economic payments,12 million UAH 314 349 Energoatom covers approximately 55% of the electricity needs in Ukraine. In autumn-winter Investment projects Investment period, this figure reaches 70%. H&S expenses, million UAH 232.1 272.1

Environmental expenses, 160.6 182.5 culture Safety million UAH

Investment in development (financing capital investments), 3,840.2 6,049.4 million UAH Environmental Environmental responsibility

Taxes paid to the budgets of all 7.268 8.612 levels and insurance settlements, billion UAH including UAH 5.371 billion paid including UAH 7.190 billion paid to the budgets of all levels, of to the budgets of all levels, of which UAH 710.3 million in which UAH 778.7 million in environmental taxes environmental taxes Our employees and Our employees local communities local

10 SE NNEGC Energoatom Non-Financial Report 2016 Non-Financial Report 2016 SE NNEGC Energoatom 11 Appendices Appendices ENERGOATOM TODAY

Energoatom structure REPRESENTATIVE OFFICE Address by Energoatom by Energoatom Address IN BRUSSELS president

DONUZLAVSKAYA VES13 Energoatom today Energoatom

UPRAVLINNIA SPRAVAMY ATOMREMONTSERVICE Corporate governance governance Corporate and sustainability

ZAPORIZHZHYA NPP RIVNE NPP ATOMPRYLAD ATOMENERGOMASH ENERGOATOM’S Investment projects Investment HEAD OFFICE SCIENTIFIC AND TECHNICAL CENTER ATOMKOMPLEKT Safety culture Safety

KHMELNYTSKA NPP SOUTHUKRAINE NPP SKLADSKE GOSPODARSTVO ATOMPROJECTENGINEERING Environmental Environmental responsibility Our employees and Our employees local communities local AUTOMATION & ENGINEERING EMERGENCY AND TECHNICAL CENTER

12 SE NNEGC Energoatom Non-Financial Report 2016 Non-Financial Report 2016 SE NNEGC Energoatom 13 Appendices Appendices ENERGOATOM TODAY Address by Energoatom by Energoatom Address COMPANY'S STRUCTURE president

Energoatom runs four operating NPPs of Ukraine, with 15 power The main purpose of Energoatom's activity is to safely increase According to the Law of Ukraine On the Use of Nuclear Energy functions of an operating organisation that is responsible for units in total, including 13 VVER-1000 power units and two electricity generation and the installed capacity utilization factor and Radiation Safety, Energoatom is entrusted with the safe electricity generation. VVER-440 power units with a total installed capacity of 13,835 MW, of the nuclear power plant, subject to continued improvement of two hydroelectric units with the installed capacity of 302 MW operational safety. at Tashlyk HPSPP, and two hydropower units with the installed Key objectives of Energoatom Energoatom today Energoatom capacity of 11.5 MW at Olexandrivska Hydro Power Plant. • Safe electricity generation • Purchase of fresh and disposal of spent fuel • Improvement of safety at NPPs on the basis • Development of the national infrastructure of introduction of modern technologies, for the management of spent nuclear fuel and improvement of security systems radioactive waste characteristics • Physical protection of nuclear power facilities • Construction of new and renewal of the • Retraining and advanced training of staff current energy facilities Corporate governance governance Corporate and sustainability

Total installed electric capacity of the power generation equipment of Energoatom Investment projects Investment

Rivne NPP Zaporizhzhya NPP Khmelnytska NPP 2,835 MW 6,000 MW 2,000 MW Safety culture Safety

14,148.5 MW

total installed electric capacity of the power generation equipment of Energoatom

South-Ukrainian Energy Complex Environmental Environmental responsibility

Tashlyk HPSPP South-Ukraine NPP Olexandrivska HPP

302 MW 3,000 MW 11.5 MW and Our employees local communities local

14 SE NNEGC Energoatom Non-Financial Report 2016 Non-Financial Report 2016 SE NNEGC Energoatom 15 Appendices Appendices ENERGOATOM TODAY Address by Energoatom by Energoatom Address GEOGRAPHY SPAN president Energoatom today Energoatom

RIVNE NPP Corporate governance governance Corporate HEAD OFFICE OF and sustainability NNEGC “ENERGOATOM”

KHMELNYTSKA NPP Investment projects Investment

SOUTHURAINE NPP Safety culture Safety ZAPORIZHZHYA NPP

Type of reactors Environmental Environmental VVER440 responsibility

VVER1000 Our employees and Our employees local communities local

16 SE NNEGC Energoatom Non-Financial Report 2016 Non-Financial Report 2016 SE NNEGC Energoatom 17 Appendices Appendices ENERGOATOM TODAY Address by Energoatom by Energoatom Address president

1996 1999 2000 2001 On 17 October 1996, Resolution of the Cabinet of Ministers of Olexandrivska HPP was put into operation (with the • Executive agreement for US-Ukraine Fuel Qualification • Zaporizhzhya NPP was the first company in Ukraine that had Ukraine No 1268 established State Enterprise “National total capacity of two hydro units of 11.5 MW). Programme was signed between the obtained the license from the Ministry of Ecology and Natural

Nuclear Energy Generating Company “Energoatom”. and the Government of the United States. Resources of Ukraine for training operational staff. today Energoatom • Resolution of the Cabinet of Ministers of Ukraine No 1713 • The license of the State Nuclear Regulatory Inspectorate of approved the proposal of the Ministry of Fuel and Energy to Ukraine was granted to Zaporizhzhya NPP to launch dry spent bring into operation two gas turbines at Tashlyk HPSPP with fuel storage facility in test mode. The first container with spent History of Energoatom's the installed capacity of 302 MW. nuclear fuel was installed at the dry storage facility of Zaporizhzhya NPP. development • A separate subdivision, AtomRemontService, was created. Corporate governance governance Corporate and sustainability

2005 2004 2003 2002 • Launch of commercial operation of the dry spent fuel • Information and Measuring System Koltso (Ring) of Zaporizhzhya • For the first time in Ukraine, six TVS-W fuel assemblies Company’s separate subdivisions Scientific and Technical projects Investment NPP was put into commercial operation for the first time in the CIS. manufactured by Westinghouse (USA) were placed along storage facility at Zaporizhzhya NPP Center, Emergency and technical center and The system was designed to provide constant monitoring of the with Russian fuel assemblies in the reactor core of power Atomenergomash were created. • Power unit No. 2 at Khmelnytska NPP and power unit radiation in the observation zone around the nuclear power plant. unit No. 3 at South-Ukraine NPP. No. 4 at Rivne NPP were finally built and connected to the • Atomkomplekt, a separate subdivision, was set up. • The company signed the contract for the design and power grid system. construction of the CSFSF with Holtec International. • Energoatom closed the tender for the design and • Order of Cabinet of Ministers of Ukraine No. 504 introduced construction of a central storage facility for spent nuclear Complex (Consolidated) Safety Upgrade Programme of Power Units fuel from VVER type reactors. American company Holtec of Ukrainian NPPs (CCSUP). International became the winner in the tender. Safety culture Safety Environmental Environmental 2006 2007 2008 2009 responsibility Hydro unit No. 1 of Tashlyk HPSPP was put into commercial Hydro unit No. 2 of Tashlyk HPSPP was put into commercial • A Company’s separate subdivision Skladske Gospodarstvo was created. • The Cabinet of Ministers of Ukraine adopted Resolution operation. operation. The Cabinet of Ministers of Ukraine approved the • The Ministry of Fuel and Energy of Ukraine made the decision to put No. 118 On Priority Measures for the Construction of project and the deadline for Tashlyk HPSPP completion. State Enterprise Donuzlavskaya VES under the umbrella of Energoatom. Power Units No.3 and No.4 at Khmelnytska NPP. • Atomprojectengineering, a Company’s separate subdivision, was set up. • The Cabinet of Ministers of Ukraine approved the feasibility study for investment (TEOI) in the construction • The Government of Ukraine and the European Commission signed the of the Central Spent Fuel Storage Facility (CSFSF). agreement for financing the annual Nuclear Safety Programme Our employees and Our employees (Instrument Nuclear Safety Cooperation (NSCI)), which had been in effect communities local since 2007.

18 SE NNEGC Energoatom Non-Financial Report 2016 Non-Financial Report 2016 SE NNEGC Energoatom 19 Appendices Appendices ENERGOATOM TODAY Address by Energoatom by Energoatom Address president

2010 2011 2012 2013 • For the first time in Ukraine, the life cycle of operating power units • The first commercial consignment of TVS-W fuel • adopted the Law of Ukraine No. 4384-VI On the • The meeting of the Board of State Nuclear Regulatory No. 1 and No. 2 at Rivne NPP was extended for 20 years following assemblies made by Westinghouse was loaded in the reactor spent fuel management involving the allocation, design and Inspectorate of Ukraine made the decision to continue exploiting their reconstruction and upgrade. core of Unit No. 3 at South-Ukraine NPP.14 construction of a central storage facility for spent fuel of VVER-1000 power unit No 1 at South-Ukraine NPP for a period of ten years today Energoatom type reactors operated by domestic NPPs and the Law of Ukraine (until 2 December 2023). • The joint project of the European Commission - IAEA-Ukraine on • Due to the events at Fukushima NPP in Japan, inspections On Priority Measures for the Construction of Power Units No.3 and • Decree of the Collegium of State Nuclear Regulatory Inspectorate assessing the safety of Ukrainian NPPs was completed. of safety and physical protection of nuclear power plants No.4 at Khmelnytska NPP. of Ukraine No. 8 approved the National Action Plan for Enhancing (stress tests) took place at all nuclear power plants of • Joint Decree of the Ministry of Fuel and Energy of Ukraine and State the Safety of NPP on the basis of the results of "stress tests", Ukraine with engagement of international experts. Once • Energoatom adopted the Programme for Radioactive Waste Nuclear Regulatory Inspectorate of Ukraine No.517/172 enacted the operational inspections of safety and physical protection of NPPs in again, they confirmed the reliability of the operation of Management 2012-2016. Ukraine that were carried out in connection with the events at Complex (Consolidated) Safety Upgrade Programme of Power Units nuclear power plants15. Fukushima nuclear power plant in Japan. of Ukrainian NPPs (CCSUP). • Order of the Cabinet of Ministers of Ukraine No. 1270 • Loan and guarantee agreements worth €300 million were signed between Energoatom and the European Bank for Reconstruction approved the Complex (Consolidated) Safety Upgrade and Development, as well as to the amount of €300 million Programme of Power Units of Ukrainian NPPs (CCSUP). between Energoatom and the European Atomic Energy Community Corporate governance governance Corporate • The State Inspectorate for Nuclear and Radiation Safety of in order to implement the Complex (Consolidated) Safety Upgrade and sustainability Ukraine issued permission for the commissioning of the Programme of Power Units of Ukrainian NPPs (CCSUP). second phase of the dry storage for spent nuclear fuel at the • The final results of the European Commission's review of the Zaporizhzhya NPP. National Report on the results of the "stress tests" conducted for the nuclear power plant of Ukraine were approved in Brussels. • The Integrated Management System was certified according to ISO 9001:2008 and ISO 14001:2006 by TÜV NORD CERT (Germany, Essen).

2016 2015 2014 projects Investment • The Board of the State Nuclear Regulatory Inspectorate of • The Action Plan for the Implementation of Pilot Project "Energy • Energoatom anticorruption programme was approved and enacted. • Order of the Ministry of Energy of Ukraine dd. 04 April 2014 Ukraine decided to extend the operation of power unit No.1 of Bridge: “Ukraine-European Union" was approved at the level of the No. 284 authorized Energoatom to perform the functions of the Zaporizhzhya NPP for 10 years beyond the project deadline — until • The international (European) part of the project for the creation of 23 December 2025 and power unit No.2 of Zaporizhzhya NPP for Ministry of Energy and Coal. The Cabinet of Ministers issued the National Centre for the Training of Repair and Management Staff organisation for operating the Central Spent Fuel Storage Facility. Resolution No. 671-р On the Launch of the Pilot Project 10 years beyond the project deadline — until 19 February 2025. at Zaporizhzhya NPP was completed, the project was extended at • Energoatom established the Academy of Nuclear Industry "Ukraine-EU Energy Bridge". • Order of the Cabinet of Ministers of Ukraine No. 49-r approved the cost of the Company. Executives training centre and a representative office in Brussels 16 the revised draſt project of the reconstruction of the technical water • WANO's mission conducted the first corporate audit of • Energoatom ranked first in the 2015 anti-corruption programme (Kingdom of Belgium); Energoefektyvnist was transformed into culture Safety supply system at South-Ukraine NPP; construction works started Energoatom to study the status of corporate governance and ranking of Transparency International Ukraine among state-owned Atomprylad construction bureau. Also, the Company was joined by within the framework of the project. management, analyse interaction between the management of the companies. Automation and Engineering, a government-owned scientific and • Order of the Ministry of Energy and Coal Industry No. 294 Company and its separate divisions. production complex (Zhovti Vody). approved the design of the facility for processing radioactive waste • The meeting of the Board of the State Nuclear Regulatory • According to the results of experimental research of nuclear fuel • The Company started works on the Zaporizhzhya NPP project, a of Rivne NPP. Inspectorate of Ukraine decided to extend the operation of power unit produced by Westinghouse, it was decided to use it at other units No. 2 at South-Ukraine NPP for 10 years (until 31 December 2025) reconstruction of a 750 kV outdoor switchgear for connection of • 42 TVS-WR fuel assemblies by Westinghouse started operating of Ukrainian NPPs. beyond the project time. 750 kV overhead line Zaporizhzhya-Kakhovka that was approved at power unit No. 5 at Zaporizhzhya NPP. by Cabinet’s Order No. 734-р dd. 13 August 2014. • Energoatom is the first state-run company in Ukraine that has • Energoatom became a co-founder of STEM Education Coalition, • The project for reconstruction of a 750 kV open switchgear at conducted a tender through ProZorro electronic procurement whose goal is to improve the quality of technical education in • Energoatom signed a memorandum with NGO Transparent

Khmelnytska NPP was completed. The station was connected via system. The system of electronic before-threshold procurement of Environmental the overhead power transmission line with Kyivska substation to Ukraine. Procurement to build a transparent and efficient public responsibility goods, works and services was introduced in all separate units of procurement system in Ukraine. allow for reliable diversification of energy in the Central region of the Company. • The project for the reconstruction of an open distribution facility Ukraine. 750 kV at Rivne NPP was completed. The station was connected via • Conceptual decision No. КР.46.001-14 Construction of the 3rd and • Energoatom concluded a side agreement with Holtec • Development of the project for construction of Central Spent Fuel the overhead power transmission line with Kyivska substation, 4th Power Units of Khmelnytska NPP that was developed by Storage Facility (CSFSF).was completed and submitted for state International for the design and construction of a Central Spent which allowed Rivne NPP to remove generation restrictions on the Energoatom and approved by the Ministry of Energy and Coal examination. The first preparatory works for the construction Fuel Storage Facility (CSFSF). issue and reach the installed capacity of 2,835 MW. Industry, SNRIU and the Ministry of Regional Development was began on the CSFSF site. • Design works on CSFSF and the approaching railway were • Zaporizhzhya NPP had produced 1 trillion kWh of electricity since it registered. • The experts of the WANO Paris Centre carried out the first partner started. started operations. inspection in the history of WANO of nuclear plants with the • The project for preparatory works on the site of Central Spent Russian type of reactors. The results of the inspection confirmed high level of safety at Rivne NPP and the commitment to improve Fuel Storage Facility (CSFSF).was approved. Our employees and Our employees professionalism. communities local

20 SE NNEGC Energoatom Non-Financial Report 2016 Non-Financial Report 2016 SE NNEGC Energoatom 21 Appendices Appendices ENERGOATOM TODAY Address by Energoatom by Energoatom Address KEY PRODUCTION AND FINANCIAL president PERFORMANCE INDICATORS

PRODUCTION PERFORMANCE INDICATORS FINANCIAL PERFORMANCE INDICATORS Energoatom today Energoatom In 2016, Energoatom generated 81.2 billion kWh of electricity. Key financial performance indicators of Energoatom, 2015-2016

Indicator 2015 2016 Energoatom eletricity generation, Income17, million UAH 40,221.9 39,229.6 2012-2016, billion kWh Electricity production in Ukraine, 2016, billion kWh

8.2 Including

100 9.1 from products sold, million UAH 32,903.9 36,067.9 90.3 88.6 87.8

90 83.4 governance Corporate

81.2 and sustainability 80 70 other operational income, million UAH 4,789.3 2,167.6 60 50 other financial expenses, million UAH 4.5 3.2 81.2 40 30 20 other incomes, million UAH 2,524.2 990.9 10 0 Expenses, million UAH 39,094.8 39,042.5 2012 2013 2014 2015 2016 56.6

NPPs TPPs + CHPPs including projects Investment HPPs + PSPPs "green tariff" companies cost of sold goods (items, works and services), million UAH 25,503.0 30,343.9

In 2016, Energoatom accounted for 52.4% of the total electricity production in Ukraine. administrative expenses, million UAH 660.0 717.8

other operational expenses, million UAH 6,134.4 4,129.6

Energoatom share in total electricity production Electricity supplies to Ukrainian wholesale market, culture Safety in Ukraine, 2012–2016, % by power generation segment, billion kWh, 2016 financial expenses, million UAH 1,292.5 1,738.3

8.6 bn kWh 1.8 bn kWh other expenses, million UAH 5,223.5 2,062.1 60 55.7 48.7 52.4 6.1% 1.3% 45.6 50 43.1 income tax expenses, million UAH 281.5 50.9 40 30 Net profit, million UAH 833.8 187.1 20

76.2 bn kWh Environmental 44.9 bn kWh responsibility 10 31.8% 53.9% Operational expenses, million UAH 29,934.6 34,230.6 0 2012 2013 2014 2015 2016 Assets, million UAH 201,795.8 206,279.9

In 2016, its share in the total electricity sales in Ukraine made 53.9%. Capital investment, million UAH 3,007.5 5,298.6 9,9 bn kWh 7%

Energoatom (NPPs, HPPs-PSPPs) TPPs HPPs Our employees and Our employees CHPPs and others "green tariff" companies communities local For more details about financial reporting of the Company, please go to the Company's website at www.atom.gov.ua

22 SE NNEGC Energoatom Non-Financial Report 2016 Non-Financial Report 2016 SE NNEGC Energoatom 23 Appendices Appendices ENERGOATOM TODAY Address by Energoatom by Energoatom Address ENSURING ENERGY EFFICIENCY

Energy consumption in the world keeps TPPs before the heating season. In this and fuel complex of Ukraine in modern, Priority areas of nuclear The Energy Strategy 2035 is divided into must be adopted as soon as possible, growing. Experts expect that the world's situation, Ukrainian nuclear energy competitive and effective sector of three stages, each of which defines the given the time needed for the design and energy sector development today Energoatom nuclear capacities will grow at least sector remains the only sustainable economy. The document addresses priority tasks. During the first stage (up construction of new capacities. specified in Energy Strategy twofold by 2050. Nuclear energy is not only source of electricity. the climate challenges and focuses to 2020) it is planned to commission an important element of energy supply on reduction of carbon intensity of the of Ukraine 2035: nuclear facilities of the total capacity The projections for further development in any country of the world but also the It is important for Ukraine to declare Ukrainian energy sector, in particular • Raise the capacity utilisation 1 GW. The document emphasizes of the nuclear energy sector for the period most developed and high-tech sector of how it is going to pursue its energy at the expense of stable production of of nuclear power plants the fact that by 2035 Ukraine will up to 2035 are based on the assumption economy. independence in a national document, an nuclear energy, which is the largest (CUF). have decommissioned the facilities that the share of nuclear generation in Energy Strategy Paper. After joining the source of low carbon . • Extend the life of NPP power that currently account for 80% of the the total volume of electricity production Energy Community and signing the EU- units and replace NPP nuclear energy generation. Therefore, will keep growing.

Nuclear power accounts Ukraine Association Agreement, Ukraine The document highlights the challenges the decision to replace these facilities governance Corporate power plants that will be and sustainability for about 60% of the total has committed itself to developing the faced by the nuclear energy sector of decommissioned after 2030. electricity generation of energy policy based on the principles and Ukraine as well as gives proposals on • Select reactor technologies Ukraine. practices of the European law. By joining the actions needed to ensure sustainable for the construction of new Projected electricity generation by 2035, billion kWh the Paris Climate Agreement, Ukraine development of the nuclear area. In nuclear power units to Elements of electricity committed itself to taking certain climate particular, the document demands replace power plants subject generation (basic 2015 2020 2025 2030 2035 Independence of a state rests primarily actions and including them in sector- the extension of the lifecycle of power to decommissioning. scenario) on energy security and economic specific policies and programmes. plants and replacement the facilities Electricity generation in • Develop and approve 157 164 178 185 195 independence. Thus, enhancing energy that will be decommissioned. In addition, total, including long-term Nuclear Energy projects Investment independence of Ukraine is one of the key In June 2017, the Ministry of Energy and it provides for a better use of installed Development Programme of NPPs 88 85 91 93 94 challenges for Ukraine today. Because Coal of Ukraine presented the reviewed capacity of nuclear power plants (CUF) Ukraine. of the military aggression of Russia Energy Strategy of Ukraine 2035 “Safety, and construction of the Central Storage • Establish an effective 18 TPP/CHPP 61 60 64 63 63 in Donbas, coal production decreased Efficiency and Competitiveness” . Its Facility for spent nuclear fuel and high- mechanism for the twofold that caused deficit of coal at main goal is to transform the energy level waste from its processing. accumulation of resources by the nuclear operator to Hydro 7 10 12 13 13

finance the decommissioning culture Safety of nuclear power units. Renewables 2 9 12 18 25 Environmental Environmental responsibility Our employees and Our employees local communities local

24 SE NNEGC Energoatom Non-Financial Report 2016 Non-Financial Report 2016 SE NNEGC Energoatom 25 Appendices Appendices ENERGOATOM TODAY Address by Energoatom by Energoatom Address president One of the strategic tasks facing Japan Westinghouse. As a result, One more step in this direction is construction and operation of CSFSF is European Union and the integration of Ukraine-EU Energy Bridge is one more Energoatom as the largest electricity Energoatom managed to start real cooperation with Holtec International, four times less than the total costs that Ukraine's United Energy System into strategic project that meets all these producer in Ukraine is to reduce the diversification of nuclear fuel supplies which continues to implement a project are paid today for the export of SF to the European Network of Transmission goals. It was created for the strategic country's dependence on the nuclear for Ukrainian nuclear power plants. The for the construction of Central Spent Russia. It is expected that Energoatom's System Operators (ENTSO-E)20. The synchronization of the Ukrainian energy fuel supplies from Russia. Therefore, fuel for the Ukrainian NPP is produced by Fuel Storage Facility (CSFSF) with investments in the CSFSF will be paid agenda includes issues related to system with the EU system. The project the Company keeps taking strategic, Westinghouse at its production facilities Energoatom19. The CSFSF is designed back in four years of operation. the reform of the electricity market, is an integral part of the Baltic Energy consistent steps to strengthen the energy in Vesteros, Sweden. In 2016, Ukraine to strengthen energy independence of modernization of the electricity Market Integration Plan (BEMIP22), which independence of Ukraine and meet the used Westinghouse fuel at two NPP units Ukraine through refusal from export of Nuclear generation is to develop in the infrastructure, the implementation of was initiated by the European Council in Energoatom today Energoatom needs of the Ukrainian nuclear power with 15 employees. In 2016, Ukraine spent fuel to the Russian Federation. Now new market conditions. Strategic goal of the EU Third Energy Package21 and 2008. Read more about the project in the plants. imported a total of about 40% of the our country exports more than half of its Ukraine is to ensure the implementation completion of power units No.3 and No.4 Investment Projects section. nuclear fuel elements for the operation SF to Russia for technological storage of the Association Agreement with the at Khmelnytska NPP. In particular, Energoatom is implementing of nuclear reactors (fuel elements) from and subsequent processing, paying for a joint successful project "Qualification Sweden and 60% from Russia. it about $200 million a year. According of Nuclear Fuel for Ukraine" with US- to preliminary estimates, the cost of Corporate governance governance Corporate and sustainability Investment projects Investment Safety culture Safety Environmental Environmental responsibility Our employees and Our employees local communities local

26 SE NNEGC Energoatom Non-Financial Report 2016 Non-Financial Report 2016 SE NNEGC Energoatom 27 Appendices Appendices ENERGOATOM TODAY Address by Energoatom by Energoatom Address president THE COMPANY’S STRATEGIC Strategic areas of Energoatom DEVELOPMENT PLAN Meeting the country's Safe operation and needs in electric and improvement of NPPs' thermal power operational efficeincy Since the 1980's, a number of programmes have been implemented • Law of Ukraine On the Use of Nuclear Energy and Radiation at existing NPPs in Ukraine to improve their level of operational Safety dd. 8 February 1995, No. 39/95-VR. Energoatom today Energoatom safety. According to the State Nuclear Regulatory Inspectorate and Energoatom international experts, the current level of safety at Ukrainian NPPs • Law of Ukraine On Regulation of Issues Related to Strategic Areas corresponds to the world's level of safety of nuclear power plants Ensuring Nuclear Safety of June 24, 2006, No. 1868-IV. of the same generation. Today the activities in this area are carried out within the framework of the Complex (Consolidated) Safety • Law of Ukraine On Physical Protection of Ukraine's Investment Social 23 Upgrade Programme of Power Units of Ukrainian NPPs (CCSUP) Nuclear Facilities, Nuclear Material, Radioactive development development approved by Decree of the Cabinet of Ministers of Ukraine dated Waste and Other Sources of Ionizing Radiat ion dd. 7 December 2011 No. 1270. Also, there is some additional activity 19 October 2000, No. 2064-III.

going on as recommended under the National Report of Ukraine governance Corporate and sustainability following the results of the target review of the safety of nuclear • Energy Strategy of Ukraine to 2030 approved by Decree facilities located at the sites of the nuclear power plant ("stress of the Cabinet of Minister of Ukraine dd. 24 July 2013, Energoatom’s strategic goals have been developed in line with strategic areas of the Company. tests"). The aforementioned measures for the Ukrainian NPPs take No.1071-р. into account the lessons learned from the accident at Fukushima Daiichi NPP in Japan in March 2011. • The Complex (Consolidated) Safety Upgrade Programme Energoatom strategic goals of Power Units of Ukrainian NPPs (CCSUP) approved However, the potential for further improvement of the level of safety by Decree of the Cabinet of Ministers of Ukraine dd. at the national nuclear power plants is far from being exhausted. 7 December 2011, No. 1270. Safe generation of Providing fresh nuclear fuel Increasing safety of the Investment projects Investment Understanding its role in enhancement of the safety of Ukrainian eletricity and thermal and spent fuel disposal operating NPPs and power services to Ukrainian NPPs extending their life cycle NPPs, in early 2017 the Company approved the Strategic Plan for • Energoatom's Plan for the Implementation of Decree of Energoatom Development 2017-2021 (the Company’s Strategic the President of Ukraine On the Decision of the National Development Plan24). Security and Defence Council of Ukraine dd. 16 October Ensuring proper quality 2012 On a Restated Version of the Design Basis Threat Ensuring proper level of and volume of repair The Company's Strategic Development Plan was compiled on the to Nuclear Facilities, Nuclear Material, Radioactive Physcial protection of emergency readiness works at NPPs within the NPPs basis of strategic goals and priorities of development of Ukraine Waste and Other Sources of Ionizing Radiation dd. projected timeframe culture Safety and the energy sector that are specified in a number of documents: 16 October 2012, No. 600.

• Law of Ukraine On Ratification of the Convention on • Sectoral Agreement between the Ministry of Energy and Ensuring safe working Nuclear Safety dd. 17 December 1997, No. 736/97-VR. Coal of Ukraine and the Trade Union of Nuclear Power and Improving performance New construction Industry Workers of Ukraine. conditions efficiency • Law of Ukraine On Ratification of Joint Convention on the Safety of Spent Fuel Management and Safety of Radioactive Environmental Environmental Waste dd. 20 April 2000 No. 1688-III. Ensuring coordination responsibility between social Other areas of Improving labour development actions of capital investment efficiency and retaining jobs the Company and state social policy

For more about the implementation of the Company’s Strategic Development Plan, see our next reports and and Our employees local communities local visit our website at www.atom.gov.ua

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