Platts - Friday, September 05, 2003 http://www.platts.com ------------ Washington (Nuclear News Flashes)--04Sep2003 U.S. likely to join in international reactor program The U.S. is likely to participate in the international development of five of the six Generation IV advanced reactor technologies targeted for possible deployment, DOE's William Magwood said Sept. 3. Initial U.S. participation would be focused on two or three of those technologies, which include a supercritical water cooled reactor, lead cooled fast reactor, and very high temperature reactor (VHTR), Magwood told Platts. The other two technologies--the gas-cooled fast reactor and sodium cooled fast reactor--were seen as being further out on the horizon, he said. The only Gen IV technology the U.S. won't help develop is the molten salt reactor, he said. Magwood told the National Academy of Sciences Board on Radioactive Waste Management that the 10 participating countries--the U.S., U.K., Switzerland, South Korea, South Africa, Japan, France, Canada, Brazil, and Argentina--are currently weighing which Gen IV projects to participate in as they evaluate their future reactor needs. The international partnerships are expected to be firmed up next year, he said. ------------ Stockholm (Nuclear News Flashes)--04Sep2003 Analysis planned to support Oskarshamn uprate Oskarshamn staff will prepare an in-depth environmental impact assessment this fall, in anticipation of power uprates at units two and three. The intention is to uprate the 1,150-MW Oskarshamn-3 by 18% within the next few years. Longer term, a 33% uprate of the 600-MW Oskarshamn-2 is planned. Management said Sept. 4 that a combination of a strong electricity market and improved technology are the main factors in the decision to uprate, coupled with the fact that it expects uprates to have a minimal environmental affect. Under Sweden's new environmental law, however, an impact assessment is required. ------------ Washington (Nuclear News Flashes)--03Sept2003 NEI says nuclear was cheapest power source in 2002 Nuclear power cost less to produce than other energy sources in 2002, the Nuclear Energy Institute (NEI) said Sept. 3. In a press release, NEI said nuclear's production costs averaged 1.71 cents per kilowatt-hour (KWH), compared with 1.85 cents/KWH for coal, 4.06 cents/KWH for natural gas, and 4.41 cents/KWH for oil. The production costs comprise fuel and operations & maintenance costs. NEI did not release the supporting data for the press release, but Brad Eccles, NEI's manager of economic analysis, said the information was drawn from submittals to the Federal Energy Regulatory Commission and from the Electric Utility Cost Group, a private data source. ------------ Washington (Nuclear News Flashes)--03Sept2003 NRC says work on security requirements continues NRC has continued to refine security requirements for NRC-licensed facilities over the past five months, NRC Chairman Nils Diaz told Department of Homeland Security Director Tom Ridge and members of Congress. In an Aug. 29 letter, released by NRC Sept. 3, Diaz gave an overview of NRC activities since the agency's last update on post-Sept. 11, 2001 work to strengthen facilities' defenses against a possible range of threats. He noted that three orders were issued in April--two on security force personnel matters and a third revising the design basis threat on radiological sabotage and theft or diversion of nuclear material. Also, a program staging mock attacks at nuclear plants resumed, with exercises now completed at nine sites and two more per month scheduled through September 2004. Diaz said the NRC has lobbied for the passage of legislative proposals to increase security at nuclear facilities and is supporting several provisions in the House version of a comprehensive energy bill. ------------ Nuclear Fuel August 18, 2003 Vol. 28, No. 17; Pg. 1 U3O8 supply said to be tight, but UF6 available Michael Knapik, Washington Although Cameco is said to have paid about $ 11.30 a pound for the last piece of its recent purchase of 1- million lb U3O8, there are some sources suggesting that several off-market deals were done within the past several weeks at prices below $ 11.20/lb U3O8. However, it is unclear how many of those deals are available as ''demand now is chasing supply,'' as one analyst put it. Last week, TradeTech's U3O8 price was $ 11.20/lb, while the Ux Consulting's price was $ 11.30/lb U3O8. Some analysts said that if Cameco continues buying in the spot market -- as the company said it would -- and in the absence of additional utility demand, the spot price could jump to $ 11.60/lb over the next several months. But as the U3O8 price moves higher, suppliers will make more of an effort to make U3O8 available, said an analyst. U3O8 supply is tight, an analyst said, and that is what Cameco has been buying. However, there are also reports that UF6 supply is more plentiful. A utility able to buy UF6 today could do so at a price below that of the individual U3O8 and conversion components. One problem with the UF6 supply, however, is that most of it right now is sitting at USEC's Paducah, Ky. plant,, and that may not be the preferred location for some buyers. Expected in the market this week is PPL, which has been telling some market participants that it intends to buy either about 230,000 kilograms U as UF6 in 2004 and about 115,000 kgU as UF6 in 2005-2007 or equivalent U3O8 and conversion services. In NuclearFuel's judgment significant open-market transactions over the next two weeks could be concluded within the range of $ 10.90-$ 11/35/lb, the same range reported two weeks ago. In other market news, Heathgate Resources produced about 322 metric tons U3O8 at its Beverley in situ mine in South Australia in the first six months of 2003. Over the same period last year, the company produced 368 MT U3O8. For all of 2002, Heathgate produced 746 MT U3O8 at Beverley. The mine's annual capacity is about 1,180 MT U3O8. RSB Logistics Services of Paducah, Ky. was granted an NRC license Aug. 5 to ship 2.8-million kgU as UF6 from USEC's Paducah plant, ConverDyn's Metropolis, Ill. plant, and Cameco's Port Hope facility to Europe for enrichment and ultimate use in Euratom reactors. The origin of the uranium is U.S. and Russian, although uranium from other countries may be named at a later date, RSB told NRC. NRC to meet with USEC, DOE on lead cascade project NRC will meet with USEC Inc. and DOE Aug. 27 in a closed meeting to discuss details of how and where the company intends to install lead cascade centrifuge machines in the old DOE building at Portsmouth, Ohio referred to as the gas centrifuge enrichment plant (GECP). There are still 1,381 DOE-built centrifuges in that building. Those centrifuges will have to be removed before the USEC-built centrifuges can be installed. How NRC and DOE will coordinate oversight of those operations will also be discussed at the meeting. USEC would like DOE to dismantle the old centrifuge machines so that USEC could use some of the parts in building up to 240 machines for its lead cascade project. Separately, DOE Under Secretary Robert Card has apparently un-recused himself from involvement in matters affecting USEC. Card toured the GCEP building and met with USEC officials several weeks ago, according to a source. In a presentation last month to NRC at USEC's Oak Ridge, Tenn. centrifuge manufacturing and test facilities, the company said it is seeking manufacturing partners to deliver the 12,000 or so commercial plant centrifuges and associated tooling and equipment. In addition, USEC said it is seeking an architect/engineering/construction partner to deliver the commercial plant process equipment and balance-of- plant systems (e.g., pipes, valves, electrical, feed, and withdrawal equipment). USEC said it is also seeking to get long-term sales commitments from utilities for up to the initial capacity of the commercial plant (about 3.5-million SWU). USEC President/CEO William Timbers just returned from a visit to USEC's customers in Japan. Among other matters, Timbers is said to have again sought support for the commercial centrifuge plant either through new contracts or through a more direct investment. In its latest 10-Q report filed with the U.S. Securities & Exchange Commission, USEC said that the temporary shutdown of Tokyo Electric Power Co.'s reactors will not affect revenue in 2003, but is expected to have an impact in 2004 and possibly 2005 because of delays in refueling. In the filing, USEC indicated that for the first six months of 2003, the average SWU price it billed to customers in Asia declined about 3% compared to the price of SWU billed those customers in the first six months of 2002. In the 10-Q, USEC also disclosed that its purchases of 3-million SWU from Russia through June 30 of this year under its new market-based contract with Techsnabexport (Tenex) amounted to $ 238-million, or a little over $ 79/SWU. In 2002, USEC paid Tenex $ 90.42/SWU. USEC said that through June 30 of this year it has purchase 35- million SWU from Russia that were derived from the downblending of Russian weapons high-enriched uranium. Separately, Standard & Poor's said that USEC's improved second quarter operating income (NF, 4 Aug., 2) will have no effect on S&P's current ratings or outlook for USEC. S&P, a division of the McGraw-Hill Cos., currently rates USEC's corporate credit as below investment grade (BB/Stable). S&P said that the benefits of increasing SWU prices and lower costs of Russian SWU purchases have already been factored into the ratings. And S&P said that USEC's announcement that it was accelerating its centrifuge development program will also have no effect on S&P's ratings. Westinghouse signs new fuel deal with OKG Westinghouse said it will supply Sweden's OKG with all its fuel fabrication from 2005 to 2008 for the utility's three Oskarshamn BWRs. In a press release today, Westinghouse said that the order encompasses 12 reloads. Separately, Westinghouse representatives met with NRC staffers July 10 to discuss, among other things, Westinghouse's development of a new control rod (CR-99). The company told NRC that deliveries of the control rod have already taken place to utilities outside the U.S. Westinghouse said it plans to submit a topical report to support CR-99 insertion in U.S. plants by spring 2005. LES has a new president. And a new site? Jim Ferland is LES' new president, making his public debut recently in a series of appearances in Lea County, N.M. The Urenco- led consortium has been considering several locations in Lea County as a possible site for its U.S. enrichment plant. LES has all but officially given up its pursuit of a site in Hartsville, Tenn. LES has not yet made an official announcement about Ferland's appointment, but one is expected shortly. An LES spokesman could not be reached for comment, despite multiple attempts. Ferland has worked for the past months as Westinghouse's representative in the LES consortium. He is the son of PSEG Chairman, President, and CEO E. James Ferland. Although not yet complete, a partnership agreement between the LES companies (Urenco, Westinghouse, Entergy, Exelon, and Duke Energy) is said to be close to being signed, with only a few issues remaining to be resolved as of last week. Lea County, in southeastern New Mexico, appears eager to host the LES plant. County officials there voted recently to issue up to $ 1.8-billion in Industrial Revenue Bonds to support the LES project. The bonds would be a way of giving the LES consortium a tax break if they located the facility in the county. But LES is not going to get a free ride if it decides to pick a site in New Mexico. Opponents, which will include long-time nuclear critics at the Southwest Research & Information Center in Albuquerque, are already starting to marshal arguments against the facility. The center's Don Hancock said that there would be ''a significant amount of opposition'' to the project, with water use and transportation issues looming large. Opponents were also likely to raise questions about LES's tails disposal plans and the need for the facility, Hancock said. Silex, USEC still trying to resolve termination issues USEC said it is still discussing issues related to its termination in April of an agreement with Australia's Silex Systems Ltd., which was developing a laser enrichment technology for USEC. USEC has said that the Silex technology ''faces numerous technological hurdles that must be overcome.'' Consequently, USEC said it wanted to concentrate all its advanced technology efforts on deploying centrifuge technology. But Silex says it still intends to pursue the uranium enrichment project without USEC's involvement. However, a number of issues remain to be resolved, Silex said. In a statement in June, Silex noted that USEC claims it owns certain equipment acquired as part of the Silex project. Silex said that USEC has demanded a return of the equipment but has also offered to sell it to Silex. Silex said that despite its willingness to be ''realistic and commercial,'' it is unclear whether an agreement can be reached with USEC that is acceptable to Silex. The Australian company said that if no acceptable solution is found, the company is ''fully prepared to defend Silex's rights against USEC and to take all action which is necessary to enforce those rights even though this may involve significant expenditure.'' Silex reassured investors that its process works and that the company ''remains confident'' that the technology can be commercialized. Depending on the outcome of discussions with USEC, Silex is still hoping to attract a partner to the project sometime within the next year, to build a pilot plant within the next three years, and to have a commercial plant up and running, possibly as early as 2009. URL: http://www.platts.com Copyright 2003 The McGraw-Hill Companies, Inc. www.mcgraw-hill.com All rights reserved ------------