Platts - Wednesday, January 25, 2006 http://www.platts.com ------------ US' Iran concerns should tip hand on ANWR, OCS drilling: Domenici Washington (Platts)--25Jan2006 US Senate Energy and Natural Resources Committee Chairman Pete Domenici (Republican-New Mexico) said instability related to Iran should push US policymakers to address domestic energy supply constraints. Speaking to an audience of energy specialists in Washington, Domenici said potential cuts in Iranian oil exports could create an energy crisis in the US. "Its easy to say we're just going to boycott [Iranian oil]...but you've got to figure out the results and I don't know if the world could accommodate" the loss of Iran's oil exports, he said. He said the threat that Iran will withdraw its oil from the market or that the world would embargo Iranian oil because of nuclear weapons concerns should motivate lawmakers to pass legislation approving drilling in the Arctic National Wildlife Refuge and open portions of the US Outer Continental Shelf currently off-limits to natural gas developments. For more information, take a trial to Platts Global Alert at http://globalalert.platts.com. ------------ Toshiba highest bidder for Westinghouse London (Platts)--24Jan2006 Westinghouse's sale to Toshiba will ensure its continued leadership in the commercial nuclear industry, British Nuclear Fuels plc (BNFL) said today. BNFL said it selected Toshiba Corp., the highest bidder, as the preferred bidder for the sale of Westinghouse Electric Company because it is "a win-win" opportunity. "We have achieved our dual objectives of doing the best for our employees and the British taxpayers," said BNFL CEO Mike Parker. "Toshiba is a strong company with a long record of business success, and will ensure that the decades-long contributions of Westinghouse to the nuclear industry--and to the U.S. and global economies--continue to grow," he said. BNFL said today's announcement followed "multiple rounds of bidding that began in the autumn." The sales contract is expected to be signed "in the near future," it said in a press statement. Toshiba's bid will be recommended for approval by BNFL Group's board of directors later this week, it noted. ------------ Susquehanna site set generation record in 2005 Washington (Platts)--23Jan2006 The Susquehanna site set a generation record in 2005, operator PPL Corp. said today. The two BWRs combined to produce 18.967-million (gross) megawatt-hours (MWH) last year, breaking the record of 18.699-million MWH set in 2004, PPL said. The 1,142-MW unit 1 generated 9.769-million MWH; the 1,147-MW unit 2 produced 9.198-million MWH, PPL said. ------------ Progress picks Harris site as possible location for new nuke unit Washington (Platts)--23Jan2006 Progress Energy Monday said its Progress Energy Carolinas subsidiary has selected the Harris Nuclear Plant site near New Hill, North Carolina, as a possible site for a new nuclear plant. The Raleigh, North Carolina-based company also said it had selected Westinghouse Electric Co to supply the reactors for the potential future expansion of its nuclear fleet in the Carolinas. The company informed the US Nuclear Regulatory Commission in August of its plans to submit a combined operating license (COL) application for a nuclear power plant. It updated those plans in November to include a second COL, one for Florida and one for the Carolinas. Each COL covers up to two reactors at each site. Progress said its application for the COL could be filed in late 2007 or early 2008. If approved by the NRC -- and if the decision to build is made -- construction could begin as early as 2010, and a new plant could be online around 2016. The licensing process, once completed, gives the permit holder the option to construct and operate units on a specific site, but does not obligate the company to build. Progress said a final decision to build another nuclear plant is still several years away and will be based on a number of factors, including public and political support, regulatory approval and forecasts for energy demand and economic conditions later this decade. Progress said it chose the Harris site, after evaluating several sites in the Carolinas, based on its available transmission lines and proximity to cooling water and to Progress Energy Carolinas' largest area of customer concentration. The Harris Plant site was originally planned for four nuclear reactors, but due to changing economic conditions in the 1970s and 1980s, only one reactor was built. The Harris site offers a large amount of available land -- approximately 35 square miles -- and has an ample water supply. The Cape Fear River and Harris Lake provide a reliable and sustainable water supply. The Harris site also has transmission capacity that can accommodate the additional electricity generated. This capability reduces the need to build more transmission lines for a single new unit and would ultimately reduce the overall project costs. Progress said it has selected Westinghouse to supply the reactors for possible future expansion of its nuclear generating fleet in the Carolinas. The AP1000 is an advanced 1,100-MW nuclear power plant that uses passive safety system designs and engineering simplicity to enhance plant reliability and reduce construction costs. For more information, take a trial to Platts Electricity Alert at http://electricityalert.platts.com. ------------ Gas supply worry spur Lithuania to boost efforts for new nuclear London (Platts)--23Jan2006 Led by Lithuanian President Valdas Adamkus, top Lithuanian politicians are stepping up efforts to build a new nuclear power unit at Ignalina, citing renewed concerns about natural gas supply from Russia. Before the end of the month, the Ministry of Economic Affairs is expected to formally invite 25 selected investors to participate in financing a reactor of about 1,600 megawatts. But Economy Minister Kestutis Dauksys said the government should maintain at least a 34% stake in any new reactor project. Prime Minister Algirdas Brazaukas has also called for continued operation of Ignalina-2 beyond Dec. 31, 2009, the deadline by which Lithuania has promised the European Union the unit would be shut down. Meeting with journalists in the city of Kaunas earlier this month, Adamkus said that Russia's decision earlier this month to cut off gas supply to Ukraine?an action that also affected western Europe?shows that "those who possess the gas and oil 'weapons' can not only (theoretically) blackmail one state, but can also paralyze half a continent. "I said back in 2002 that Lithuania's only choice was to have an independent source of energy, which should be a third, modern nuclear reactor." In addition, in a statement on behalf of the government last week, Brazauskas said that because Lithuania and Poland are unable to agree on a plan to connect their power grids, closure of Ignalina-2 would "isolate" Lithuania from western Europe's electricity grid. Power from Ignalina is exported to neighboring Latvia and Estonia, but power from fossil-fired plants is only partly exported and imported because of interconnection limitations. As part of its EU accession treaty, Lithuania agreed to shut both 1,500-MW-class Ignalina RBMKs, units that the EU says can never be brought up to modern, Western safety standards. The first unit was shut at the end of 2004 and the second is scheduled to be closed at the end of 2009. Unlike Brazauskas, Adamkus has repeatedly said Lithuania must honor its shutdown commitment and not violate its EU membership agreement. Although Lithuania has sufficient conventional generating capacity via gas, oil and hydro power plants to meet domestic demand, the plants are old and need major renovation. In addition, Lithuanian officials have repeatedly said they want to reduce dependency on Russian oil and gas, their only source of supply. Following the disagreement between Russia and Ukraine over natural gas prices at the beginning of the month, Russian state-owned gas vendor Gazprom on Jan. 1 abruptly cut off Ukraine's gas supply (NW, 5 Jan., 1). That led to a reduction in daily supply for European customers for two days and raised concerns about Russian reliability to deliver gas as contracted. Citing the Russia-Ukraine disagreement, Adamkus said that, in addition to a new reactor, Lithuania needs to build gas storage facilities to maintain energy independence. Talks are going on with the Latvians about storage, since they have salt domes that are well-suited to store liquefied natural gas. But many see a new reactor as the best way to ensure security of electricity supply and produce export power. Dauksys has said that the government should make a decision this year to build a new unit, so that it could be on line by 2013. However, a study done by the Lithuanian Energy Institute and Kaunas Technical University concludes that, given the cost of a new reactor, Lithuanian prices for export power would not be competitive in the nearby Nordic and Russian markets. Domestically, the study suggests that importing electricity is a better alternative than building a new reactor. This story was originally published in Platts Nucleonics Week. Request a free trial at http://www.platts.com/Request%20More%20Information/ UK launches review of national energy policy ------------ London (Platts)--23Jan2006 The UK launched a review of its energy policy Monday seeking views on how it could meet its long-term goal of reducing carbon emissions, developing reliable energy supplies and the possibility of a new generation of nuclear power stations. Trade and Industry Secretary Alan Johnson called for "the widest possible engagement in this vital debate", adding the UK needed to "look at the risks to our security supply". The government wants to hear views on the long-term potential of energy efficiency measures in the transport, residential, business and public sectors; opportunities for working with other countries on energy policy goals; implications in the medium and long term for the transmission and distribution networks of significant new build in gas and electricity generation infrastructure; and measures to bring forward technologies to replace fossil fuels in transport and heat generation, in the medium and long-term. The three month consultation will investigate all the possible mixes of power sources, including renewables, Johnson said. "Global fossil fuel prices are on the rise and we're becoming a net importer of oil and gas, like many other leading economies, as production from the North Sea declines," Johnson said at a launch event. "In a world of heightened concerns about energy security, highlighted by the recent dispute between Russia and the Ukraine, we need to look carefully at the risks of this new situation. The energy review follows the White Paper of 2003, which set out four goals for energy policy, including a 60% cut in carbon dioxide emissions by 2050; maintaining the reliability of energy supplies; promoting competition in energy supplies; and ensuring adequate and affordable domestic heating. Since then, record long-term gas and power prices and disruptions of energy supplies in east and west Europe have brought the issues into sharp focus, especially the question of the desirability of nuclear new-build. More news about the UK energy industry is published in Platts Power UK. Request a free trial at http://www.platts.com/Request%20More%20Information/ ------------ Chamber hails India's progress on separating nuclear operations Washington (Platts)--20Jan2006 Progress in U.S.-India negotiations on separating India's civilian nuclear facilities from its strategic facilities was hailed by the U.S. Chamber of Commerce today as being a key step toward the U.S. sharing of civilian nuclear technology with that country. Lt. Gen. Dan Christman (Ret.), the chamber's senior vice president of international affairs, said that such a separations agreement could lead to a U.S.-India civilian nuclear cooperation agreement that would address proliferation risks and provide U.S. companies with $100-billion in new business opportunities in India. The chamber is hosting a Coalition for Partnership with India (CPI) that will lobby Congress and will wage a public education campaign aimed at increasing awareness of the benefits from the agreement. ------------ Sweden expected to lift limits on nuclear technology research Stockholm (Platts)--20Jan2006 Restrictions on Swedish nuclear research would be lifted and changes made to improve nuclear security as of July 1, if, as expected, the government's proposed amendments to the nuclear technology, radiation protection and security laws are approved by the Riksdag (parliament). The amendments were sent out for final legal review Dec 21. The Riksdag is expected to vote on them in first-half 2006. The nuclear technology law was previously changed in 1987, after heated debate about the future of Sweden's commercial nuclear program. At that time, antinuclear forces succeed in getting through the research ban, which prohibits research that would lead to development of new reactors. The government said it wants to revise the law because it has been misinterpreted and research that has been forbidden is necessary to improve nuclear safeguards and security, as well as allow better research into final waste repository technology. The government added that "these questions are going to be current in Sweden for a long time, which is why it is important to keep up competence in these areas." But officials said the change does not mean new reactors will be allowed. The Swedish government is officially committed to phasing out nuclear power. Swedish nuclear authorities have several times suggested the law should be changed to improve repository research and also strengthen safeguards. Nuclear researchers have also been critical of the ban. The Social Democratic minority government's move also forestalls the political opposition, which has repeatedly brought motions in the Riksdag to abolish the research ban. The proposed amendments would also further restrict public access to information about handling of radioactive material and about Sweden's nuclear plants. Such restrictions have been controversial in Sweden, which has very strong public information laws. But since the Sep 11, 2001 terrorist attacks in the US, nuclear authorities have been calling for tightened information access rules. For more information, take a trial to Platts Nucleonics Week at http://nucweek.platts.com. ------------ Fortum affiliate to increase output at Oskarshamn nuclear plant London (Platts)--20Jan2006 Fortum's affiliate OKG is to increase the power of the third unit of the Oskarshamn nuclear power plant from 1,200MW to 1,450MW, the Finnish utility said Friday. The increase will be completed in 2008 and will be implemented and funded by OKG. Fortum's share of ownership of Oskarshamn gives it a share of over 43% of the plant's production, which Fortum buys at cost price, it said. Fortum's share of the power increase of the plant's third unit is just above 100MW. "The investment is important to Fortum, because it increases our carbon dioxide-free production capacity that we can offer to the Nordic electricity market," Fortum's senior vice president, Tapio Kuula, said. For more information, take a trial to European Gas Daily at http://www.platts.com/Request%20More%20Information/ ------------