Platts - Thursday, May 26, 2005 http://www.platts.com ------------ European CO2 market could be critical by 2015: McKinsey Budapest (Platts)--26May2005 The shortfall between CO2 emissions reductions targets in Europe and forecast actual emissions in 2005-2007 is around 80-mil mt/yr, said Ron Bloemers, consultant at McKinsey & Company, at Synergy's Energy Trading in Central & Eastern Europe conference in Budapest Wednesday. According to McKinsey calculations, this corresponds to a price of some Eur 16/mt in the period--roughly in line with current market prices. McKinsey believes that emission quota prices could rise to Eur 20/mt by 2010, assuming oil at $40/bbl and a relatively tight emissions target of 1,185-mil mt for the EU's power sector. But by 2015, maintaining constant emissions could become prohibitively expensive. "In a tight scenario, the price goes off the scale at Eur 50," said Bloemers, even assuming oil at $30/bbl. A relatively lax target of 1,265-mil mt could mean a quota price of Eur 30/mt. Europe will therefore have to find "relief valves" if it wants its economy to still grow while not softening Kyoto targets, according to Bloemers. A key move could be maintaining high levels of nuclear generation in Germany. "If the nuclear phase-out goes away, you have a lot of emissions-free terawatt-hours on the market," he said. Other choices include shutting down emitting industries are not a feasible option, he noted. McKinsey predicts "massive replacement" of coal-fired with gas-fired capacity after 2010, as European generators scramble to meet emissions targets. As a result, coal-fired generation could drop off by as much as 50% in 2010-2015, said Bloemers. This story was originally published in Platts European Power Alert http://www.europeanpoweralert.platts.com ------------ UK hopes for marine energy could be dashed by nuclear revival Aberdeen (Platts)--25May2005 Renewed discussions about the deployment of a new generation of nuclear power plants means that there is a very small window of opportunity for new renewable technologies like wave and tidal power to take off, John Griffiths of the UK Renewable Power Association said Wednesday. Speaking at an RPA conference on marine energy at that the All Energy Exhibition in Aberdeen, Griffiths expressed an aspiration that the UK could deploy 50-100MW of marine energy by 2010 and even 1GW by 2020. "But the timeframe is now limited by the open debate on nuclear, which could push marine energy out of the picture," said Griffiths. Other speakers highlighted the many hurdles that must be overcome for marine energy to develop as a commercially viable form of generation, competitive with wind power which accounts for the lion's share of the UK's expanding renewable power portfolio. Several UK companies are at the forefront of developing competing technologies to harness energy from the sea, drawing on expertise from the offshore oil and gas industry. These include AWS Ocean Energy, a UK company that has the rights to commercialize a wave energy generation technology using a submerged telescopic device developed originally in the Netherlands with the support of Dutch utility Nuon. AWS Ocean Energy Director Simon Grey told delegates that the company had completed trials of a full scale pilot of its generator off northern Portugal in 2004. Portugal offers an incentive tariff of Eur0.30/kWh for marine energy, whereas in the UK marine energy has to compete with cheaper and more established technologies like wind and biomass, which are given equal treatment under the country's renewables obligation. When asked where AWS expected to deploy its first commercial machines Grey said: "unless things change significantly in the UK, this is highly likely to be in Portugal." Another UK marine energy developer, Ocean Power Delivery announced last week it would deploy its first commercial 'wave farm' offshore Portugal. This story was originally published in Platts European Power Alert http://www.europeanpoweralert.platts.com ------------ KEDO executive director stepping down Washington (Platts)--25May2005 Korean Peninsula Energy Development Organization (KEDO) Executive Director Charles Kartman is leaving his post but "has agreed to remain" with the organization "through a transitional period as the [Executive] Board considers his successor," KEDO spokesman Brian Kremer said today. He said the decision was made yesterday at a meeting in New York of the board, which includes Japan, South Korea, the U.S., and the European Union. Kartman has been executive director of the organization since May 2001; his most recent contract expired at the end of April, Kremer said. KEDO was formed in 1995 to build two LWRs in North Korea in return for Pyongyang's renunciation of its indigenous nuclear program. The LWR project now is officially suspended. ------------ PFS wins licensing proceeding for spent fuel storage facility Washington (Platts)--24May2005 Private Fuel Storage LLC (PFS) won a victory today in a protracted licensing proceeding to construct an away-from-reactor spent fuel facility in Utah. In a split decision, an Atomic Safety & Licensing Board (ASLB) ruled in favor of PFS, saying it believed there was less than a one-in-a-million per year likelihood of an F-16 military jet accidentally crashing into a cask at the facility and causing a radiological release of materials. The ASLB reaffirmed the conclusion it reached Feb. 24 in a 2-1 decision. The state of Utah has until June 13 to file a final appeal to the commission, which will make the ultimate decision as to whether to issue PFS a license. Jay Silberg, an attorney for PFS, called the decision "very good news." ------------ Trojan's license terminated, site released for unrestricted use Washington (Platts)--23May2005 NRC has terminated Trojan's license, releasing the plant site for unrestricted use, the agency said today. The Portland General Electric (PGE) reactor outside Portland, Ore. was closed in November 1992 after operating roughly 16 years. NRC said it has conducted several on-site inspections of PGE's decommissioning activities to verify that plant decommissioning and cleanup work met conditions of Trojan's license termination plan ------------ US Senate energy bill omits nuclear energy, hydropower provisions Washington (Platts)--20May2005 Senators Pete Domenici (Republican-New Mexico) and Jeff Bingaman (Democrat-New Mexico) have elected to leave out of energy legislation for now a multi-billion-dollar nuclear energy demonstration project in Idaho and hydropower relicensing provisions that have long divided the senators. The US Senate Energy and Natural Resources Committee on Friday released the nuclear and renewable energy sections of the bill, which the panel plans to debate next week. The nuclear energy section includes no funding for a demonstration of an advanced reactor proposed for the Idaho National Laboratory that would produce both nuclear power and hydrogen. The project was authorized in energy legislation that failed in the last Congress. But the project has come under fire from Energy Secretary Samuel Bodman, who estimates it will cost the government $2-bil. During testimony before House appropriators in March, Bodman said he would "call into question whether we are going to meet any schedule" for building the Generation IV reactor. In addition to taking out the Gen IV reactor provisions from last Congress' bill, the senators kept out of the bill proposals for a reactor decommissioning pilot program and a requirement that the US Dept of Energy report to Congress on the feasibility of siting nuclear plants at DOE sites. The hydropower language was left out of the renewable energy title, which also lacks a renewable portfolio standard. Republicans in recent congresses have sought to streamline the federal dam licensing process by limiting the ability of groups to challenge a project. Such language is in HR 6, the House's energy bill that passed last month. The renewable portfolio standard also divided Domenici and Bingaman, who is expected to win a Senate floor vote including the provision mandating power companies use renewables to generate 10% of their electricity. The Bush administration and most House and Senate Republicans oppose a renewable portfolio standard. This story was originally published in Platts Electricity Alert http://www.electricityalert.platts.com ------------ NRC plans normal oversight of Davis-Besse Washington (Platts)--20May2005 Davis-Besse is ready to return to NRC's normal oversight process, the agency said today. In a press release, NRC said the reactor, which is operated by FirstEnergy Nuclear Operating Co., would move from the heightened oversight of a special panel to the NRC's "reactor oversight process" (ROP) but that the plant would continue to be subject to extra inspections. NRC Region III spokeswoman Viktoria Mitlyng said the move to the ROP would take place July 1. The special panel was established three years ago, after the discovery of severe reactor head degradation at the Ohio plant in March 2002. ------------ European CO2 market could be critical by 2015: McKinsey