Platts - Wednesday, June 29, 2005 http://www.platts.com ------------ Senate approves energy bill authorizing new reactor at Idaho lab Washington (Platts)--28Jun2005 The Senate approved today an energy bill containing a $1.25-billion authorization for construction of an advanced nuclear cogeneration power reactor at the Idaho National Laboratory. In addition, there are loan guarantees and production tax credits for up to 6,000 MW of new nuclear capacity for the first eight years in service. There is also authorization for research and development on nuclear fuel recycling and transmutation technologies and money earmarked for scholarships, fellowships, and university research. Senate Energy & Natural Resources Committee Chairman Pete Domenici (R-N.M.) said conferees would be named soon to begin working on a compromise bill with House members. President Bush has said he wants Congress to present him with a bill by August. ------------ New UK nuclear only viable with government assistance: Oxera London (Platts)--28Jun2005 New nuclear build in the UK would only be economically viable with government assistance, according to Oxford-based consultants Oxera. If eight 1,000MW reactors were built, by 2025 nuclear power would be able to generate around 22% of UK electricity needs, about the same as it produced in 2003, says Oxera. But, say the consultants, the return on equity would only be around 11%. "These figures don't indicate there would be enough of an incentive for industry to finance a new nuclear program," says Derek Holt, Oxera director. "Recent analysis for the Department of Trade and Industry on the cost of onshore wind farms assumes a required equity return rate of 18%. So even taking a more conservative view of a 15% required return, our projected rates of return fall short of what most would consider a worthwhile investment." Oxera says government capital grants or debt guarantees could make the investment viable. Oxera says that the new nuclear build program it has considered would need equity capital financing of GBP3.0-bil ($5.5-bil). Cumulative capital grants of GBP1.6-bil for the fleet of eight reactors would boost the rates of return to 17.5%. A program of GBP3.2-bil of debt guarantees, meanwhile, could result in up to 14.5% returns, and up to 16.5% if the guarantees are doubled. Oxera says, meanwhile, that European Union emissions trading alone is not enough to support new nuclear build. Said Derek Holt: "Government would have to consider the prospect of providing further support if a decision is made to invest in nuclear power." If the current UK decommissioning program continues as planned, by 2020 nuclear will make up only 7% of total UK electricity generated, leaving the UK heavily reliant on imported gas and gas-fired power plants. This story was originally published in Platts European Power Alert http://europeanpoweralert.platts.com ------------ Negotiations over Iran's enrichment program to continue Paris (Platts)--27Jun2005 Iranians and Europeans will continue negotiating over uranium enrichment despite the election Sunday of an ultra-conservative, Mahmoud Ahmadinejad, as Iranian president, both sides said. Ahmadinejad was quoted as telling his first press conference that talks with the "EU 3"--the U.K., France and Germany--on Iran's contested uranium enrichment program would continue. Javier Solana, the European Union's (EU) foreign policy representative, said the governments would present new proposals to the Iranian government at the end of July as planned. The two sides reached agreement with Iran's chief negotiator Hassan Rohani in May on a suspension of the enrichment program, and the Europeans have offered economic and political incentives if Tehran terminates that program. But a European diplomat familiar with the talks told Platts the Iranian negotiating team would likely have to be changed, because Rohani and his colleagues were more "in phase" with the losing presidential candidate, Akbar Hashemi Rafsanjani. ------------ German opposition party corrects new nuclear plant statement Freiburg (Platts)--27Jun2005 Germany's main opposition party, the Christian Democratic Union, was forced to issue a statement Monday correcting comments last week by one of its state leaders that it would build a new nuclear power plant. The CDU in the state of Saxony said last Thursday it wanted to build a reactor on the river Neisse. This appeared to contradict the party's official line that, should it win the general election expected in September, it would extend the life of existing reactors but not build new plant. "It is not planned to build a new nuclear unit in the state of Saxony," said the state's minister for the environment and agriculture Stanislaw Tillich. He said the suggestion by the head of the CDU in Saxony, Heinz Lehmann, was against current laws, which state that no new nuclear units could be built. Additionally, Tillich said the state's energy program of 2004 focused on local lignite use and higher energy efficiency. The junior coalition partner of the current government, the Green Party, claimed Lehmann's statement revealed the CDU's true policy. This story was originally published in Platts European Power Alert http://europeanpoweralert.platts.com ------------