Platts - Thursday, March 02, 2006 http://www.platts.com ------------ India, US agree on key part of nuclear deal Washington (Platts)--2Mar2006 India and the US have agreed on a key part of their nuclear deal, the countries said today. In a joint statement issued in New Delhi by Prime Minister Manmohan Singh and President George W. Bush, the two sides announced "successful completion of discussions on India's separation plan." The leaders were referring to a commitment, made during Singh's July visit to Washington, to separate India's civilian facilities from military ones so that the civilian ones could be placed under IAEA safeguards. In a joint press appearance with Bush today, Singh said his country would work with the IAEA on "fashioning an appropriate India-specific safeguards agreement." In the July statement, Bush said that in return for India's nonproliferation steps, he would work to "adjust" US and international rules that now prohibit India from receiving most nuclear exports. ------------ Nuclear subs in NW Russia expected to be dismantled by 2010 Stockholm (Platts)--2Mar2006 Nuclear submarines in northwest Russia will likely be dismantled by 2010, a Norwegian official familiar with the work told Nucleonics Week. There are 71 nuclear submarines with 130 reactor cores still to be dismantled in the region. Thirty-two have been dismantled. Robert Kvile, director of the section for northern and polar issues and nuclear safety, said one reason work is progressing well is the amount of international aid that is being provided to dismantle both strategic and non-strategic subs. He pointed to Canada, the UK and Germany as examples. Kvile said that dismantling nuclear submarines in the Pacific is going more slowly because there isn't the same level of financing. There aer 56 submarines with 101 cores still to be dismantled in the Pacific. Four have been dismantled already. Late last year, contracts were signed for dismantling of the ship Lepse. The ship is loaded with spent nuclear fuel as well as liquid and solid nuclear waste. It is still in the water, about 2 kilometers (about 1.2 miles) from the city of Murmansk, and is in very poor condition. A project management committee headed by Magnus Rystedt, who represents the Nordic Environment Finance Corp. (Nefco), is currently evaluating the best dismantling options and how the ship can be moved. That is expected to take about 18 months and work will then be put out for tender. The whole project is estimated to cost US $30 million and will be financed under the European Commission's Tacis program. Norway allocated a record 110-million kroner (US$16.3 million) for all types of nuclear cleanup work in northwest Russia this year. One of the high priority projects is to continue replacing strontium batteries in Russian lighthouses with solar batteries. Kvile said that project is expected to be finished by 2009. For more information, take a trial to Platts Nucleonics Week at http://nucweek.platts.com. ------------ US nuclear refueling outages show effects of aging maintenance London (Platts)--2Mar2006 US nuclear operators ran the median refueling outage in a record time of 735 hours in the last six months of 2005, seven hours better than the previous best in fall 2002, but the average time offline, at 934 hours, was well above the 752-hour average three years before, according to utility data. That meant virtually no change in the overall pattern of US refueling outages in the last three years. Longer outages were attributed largely to steam generator and reactor pressure vessel head replacements, which help ready power reactors to operate for extended lives. With only 23 of the 103 operating US nuclear units refueling in the last six months of 2005, outage times ranged from 17 to 79 days. Outages in the first half of 2005 ran 17 to 99 days for the 43 units that refueled then. In the first half, 81% of units refueled in less than 40 days of outage, while in the second half, only 65% did, the data showed. Two world records were claimed in the last half of 2005: one by AmerenUE for a four-loop steam generator replacement in under 64 days at Callaway, and one by PSEG Nuclear for a 25-day outage that included a vessel head replacement. Five of the seven shortest outages were turned in at units operated by Exelon Nuclear or, in the Salem-1 case, an outage co-managed by Exelon. Shortest was Byron-2, at less than 17 days. The longest outage was Arkansas Nuclear One-1's replacement of its steam generators, at just under 79 days. Entergy said that outage included vessel head replacement as well, according to the data. ---Margaret Ryan, margaret_ryan@platts.com A full version of this story was published in Platts Nucleonics Week. Request a free trial at http://www.platts.com/Request%20More%20Information/ ------------ Dead birds at Sweden's Oskarshamn test positive for avian flu Stockholm (Platts)--1Mar2006 Two dead birds found at the Oskarshamn plant tested positive for avian flu, prompting Swedish authorities today to restrict a 10-kilometer (6.2-mile) area around the two-unit plant. The birds were found at the mouth of a cooling water outlet pipe. Under the Swedish Board of Agriculture's order, only plant workers and those living in the area will be allowed in and out. An additional 15 dead birds have been sent for testing. Authorities said they believe other Swedish nuclear plants could also be affected, since birds are drawn to the warm water coming from outlet pipes and there are considerable bird populations at all three of the country's plants. ------------ NSG, US won't accommodate new Pakistan-China commerce Bonn (Platts)--1Mar2006 Neither the US government nor the Nuclear Suppliers Group (NSG) will in the near future grant Pakistan an exception to NSG trade rules that currently prevent Pakistan from importing additional power reactors from China, the US, or other vendor countries, NSG country officials said Feb 28. US President George W. Bush will visit Pakistan on Mar 3, following a two-day state visit to India. Pakistani officials have said Pakistan's president, Gen. Pervez Musharraf, will urge Bush to support US investment in nuclear power projects in Pakistan. However, Bush will not announce at that time or thereafter that the US is prepared to do so, officials said. Bush will likewise also not say that the US is willing to honor additional Pakistani nuclear trade with China or otherwise open the field toward Pakistani commerce with other NSG members, the officials suggested. According to the officials, Pakistan since last fall has pressed the US hard to argue before the NSG later this year that Pakistan, like India, should be exempted from NSG rules. The rules ban nearly all nuclear commerce between NSG members and states outside the Nuclear Nonproliferation Treaty (NPT) that do not have full-scope IAEA safeguards over their nuclear programs. Since a bilateral nuclear plan for intensified nuclear cooperation was set forth last July, the U.S. has signaled that it is willing to make an exception for India. News reports from Pakistan last week, during a state visit by Musharraf to China Feb. 19-23, said that China and Pakistan had lined up sales by China to Pakistan of additional PWRs beyond the two Chashma-II units. A joint statement issued Feb. 23 said that both sides "agreed to enhance cooperation in the peaceful use of nuclear energy." During the visit China and Pakistan signed a wide-ranging "Framework Agreement on Energy Cooperation." Details of that agreement have not been made public. But according to a senior Pakistani official, China agreed in principle to supply two more 325-MW PWRs to Pakistan, and is willing to supply more reactors if Pakistan successfully negotiates with the US, France, and other countries to obtain an exception to NSG trade rules. Thus far, however, US and European NSG member state officials said, there is no inclination by either the US or France to grant Pakistan such an exception, and other NSG members are not considering such a step. "We know Pakistan wants this to happen, but it is not on our agenda," a European NSG representative said. Serious difficulties have emerged during bilateral negotiation over the U.S.-India deal, and reservations have been expressed internally by some critical NSG members about some aspects of the planned US-India arrangement. Last week, for example, officials said that both Australia and Canada do not thus far favor proposed changes in NSG rules that would allow India to import uranium. Access to NSG countries' uranium supplies is a major reason why India would agree in principle to put large parts of its nuclear program under IAEA safeguards, according to US and Indian sources. Said one official, under these circumstances "Bush will be fortunate if he can convince NSG that India should be granted an exception" to nuclear trade rules. Given Pakistan's failure to prevent proliferation of its uranium enrichment know-how to Iran, Libya, and North Korea since the late 1980s, "an exception for Pakistan would be just too much, it wouldn't be politically acceptable to India," the official said. That's particularly true if India had to forfeit important benefits from the US deal such as unrestricted future uranium supply or if India must agree to IAEA safeguards on any plutonium production or breeder reactors, the official said. How fragile NSG support may be for an unrestricted Indian exemption outside of states with politically influential nuclear vendors -- such as France and Russia -- may be seen in Germany, sources suggested. There, the Asian country desks in the Foreign Ministry support the US-Indian negotiation. But Germany's arms control bureaucracy does not favor it thus far. "If the US were to add Pakistan to this," one German official said, "that would not be possible." France, Russia, and the UK thus far firmly support the US-Indian diplomacy that may result in an NSG exemption for India. Officials in the US and Europe said that this was possible in large part because vendors in these countries want to sell equipment to India. Were France or the US to favor providing a similar exemption to Pakistan, one Western vendor political representative said, "that would happen only if they concluded that Pakistan's next reactors would be imported from Areva or Westinghouse, not from Shanghai Boiler Works." But the market for additional nuclear power plants in Pakistan "isn't big enough to be worth the political risk," he said. "And certainly not" if including Pakistan in the NSG discussion now might torpedo the US deal with India, he said. The Pakistan official said that Pakistan has held discussions with the US, France, and some other Western countries for supply of nuclear power plants, and said the matter would be raised again during Musharraf-Bush talks in Islamabad on Mar 4. Pakistan would urge Bush to allow US investment in designated nuclear power parks in Pakistan that would be under IAEA safeguards, he said. US sources said on the eve of the Bush trip that Pakistan has proposed such a scheme more than once since 2003, when the extent of Pakistani proliferation to other countries' uranium enrichment programs became known. There is no support in the US nonproliferation bureaucracy for accommodating such a scheme now, the sources suggested, particularly given that the US-India deal is in the balance. Since China joined NSG in 2004, one Western NSG official said, "China has clearly understood that it could grandfather" supply of the Chashma-2 nuclear power plant to Pakistan under current NSG rules. "But it also knows that any additional reactor sales to Pakistan under these rules would put China off the reservation," he said. For more information, take a trial to Platts Nucleonics Week at http://nucweek.platts.com. ------------ US House Democrats rip White House's international nuclear plan Washington (Platts)--1Mar2006 Democratic staffers on the US House Energy and Commerce Committee are ripping the Bush administration for endorsing a controversial international nuclear waste proposal without adequate scrutiny. The Democrat's views and estimates document, which was obtained by Platts Tuesday and was written in response to the president's fiscal year 2007 energy budget proposal, said Bush's multi-billion-dollar, multi-decade Global Nuclear Energy Partnership "raises several concerns." And it questioned the wisdom of GNEP given the Dept of Energy's "mixed" track record in managing large-scale projects. The document said that GNEP "is likely to divert managerial attention" from the Yucca Mountain nuclear waste repository, could take money from the Nuclear Waste Fund, and does not give adequate consideration to the "highly controversial and complex" matter of nuclear waste reprocessing. The document also criticizes the administration for proposing small funding increases for renewable energy, despite pledges to emphasize new clean energy technologies and for failing to ensure that the Nevada repository gets intended money from the Nuclear Waste Fund. The document said that the nuclear waste would get $660-mil from ratepayers in 2007, of which only $156-mil would go toward Yucca Mountain. The notice also said the president's clean energy proposals "sound impressive" but amount to less than a 1% increase in renewable energy spending, which is "achieved through shifting funds from various accounts." For more information, take a trial to Platts Nucleonics Week at http://www.platts.com/Request%20More%20Information/ ------------ State: Inspections at five PA. plants find no security lapses Washington (Platts)--28Feb2006 Surprise inspections at five Pennsylvania nuclear plants by the state's Department of Environmental Protection found "no instances of inattentiveness on the part of control room operators or plant security," DEP said today in a press release. "At least one inspection has been completed" at FirstEnergy Nuclear Operating's Beaver Valley, PPL Susquehanna's Susquehanna, and Exelon's Limerick, Peach Bottom and Three Mile Island-1 plants. The inspections were ordered by Gov. Edward Rendell after press reports of inattentive operators at Three Mile Island-1, and will continue through 2006 "with at least two unannounced inspections planned each month at the plants," the DEP said. ------------ Russian nuclear power operator welcomes private investment plans Moscow (Platts)--28Feb2006 Russia's nuclear power operator Rosenergoatom is ready to attract outside investors such as gas giant Gazprom to build nuclear power plants in Russia, Rosenergoatom's top officials told reporters Tuesday. The result could be more gas exports as more power comes from nuclear energy. Rosenergoatom, as a state unitary entity, cannot seek external financing, but as it strives to become a joint stock company within a year, opportunities for private investors should arise, Rosenergoatom's executive director Sergei Ivanov said. "There should be no problems with investments in new conditions," he said. "We are interested in attracting investors; it is super profitable for the state," Rosenergoatom head Stanislav Antipov added. Rosenergoatom has learnt about Gazprom's plans to invest in Russia's nuclear power generation from recent media reports but welcomed the initiative which would help Gazprom export more gas, Antipov said. A 1GW power unit can help save 2-bil to 2.5-bil cu m of natural gas, which could be exported...while the construction of the unit breaks even in four years, he said. However, Antipov said Gazprom's possible financing of the nuclear power projects is still only a political decision. "They have not submitted any economic reasons yet," he said. Ivanov echoed his words, saying it was crucial to assess "the economics of this process." Gazprom was not available for comments. Besides the gas monopoly, major metallurgical companies such as Severstal, are also interested in investing in the nuclear power sector, Antipov said. Russia's President Vladimir Putin in late January said nuclear power should account for 25% total power generation by 2030, up from 16-175 now. To reach the target, Russia will have to commission two power units each year, and external investors such as Gazprom and metallurgical companies may help, Antipov said. The power tariff is the major source of financing the new construction now, but its current level only allows building one unit in three years, he said. Rosenergoatom operates 31 power units with total capacity of 23,242MW at the country's 10 nuclear power plants. ---Anna Shiryaevskaya, anna_shiryaevskaya@platts.com For more information, take a trial to Platts Nucleonics Week at http://nucweek.platts.com. ------------ Former US energy secretary Abraham joins Areva Inc New York (Platts)--28Feb2006 Spencer Abraham, a former energy secretary in the Bush administration, was named non-executive chairman of the board of Areva Inc, the Maryland-based US subsidiary of French nuclear technology vendor Areva, the company said Tuesday. Areva said Abraham "will be supporting [its] business expansion in North America, and will bring to the group his excellent knowledge of the world energy market and international decision-makers." Abraham's appointment is effective March 1. Areva has 5,300 employees and had 2005 revenues of $1.8-bil. The company operates in 20 states and, in addition to its nuclear energy business, is involved in the electricity transmission and distribution sector. ---Robert Dinardo, robert_dinardo@platts.com For more information, take a trial to Platts Nucleonics Week at http://nucweek.platts.com. ------------ Industry's legislative wish list seeks Yucca Mt. revamping Washington (Platts)--27Feb2006 Congress should remove an artificial limit placed on the disposal capacity of a DOE repository at Yucca Mountain, Nev. and allow the technical aspects of the site, as well as what's needed to support the country's reactors, determine how much nuclear waste can be emplaced there, according to a senior Nuclear Energy Institute (NEI) official. It should be a technical decision, Steve Kraft said of the repository's disposal capacity. Kraft, who is NEI's director of used fuel management, called the elimination of the current 70,000 metric ton uranium (MTU) disposal limit one of the nuclear industry's top five priorities for nuclear waste legislation. He cited the need to move spent fuel to a federal facility as soon as possible as a leading priority, indicating that could be accomplished by siting federal interim storage facilities at DOE sites. Kraft noted in response to a question that the energy secretary has authority under the Atomic Energy Act to site such a facility at a DOE site, something that Rep. David Hobson (R-Ohio) proposed last year as part of the House's fiscal 2006 energy and water funding bill. The storage facility would not have to be licensed by NRC if it were a "purely DOE facility, under a purely DOE order," Kraft said. However, a senior NRC official indicated earlier the agency didn't agree. "They [DOE] have our money, we have their fuel; it's time to close the deal," said Kraft, who presented the NEI legislative wish list during a media briefing Feb 23. Nuclear utility customers collectively pay an estimated $750-million a year into the Nuclear Waste Fund to bankroll the DOE waste program. In return, standard contracts DOE signed with nuclear utilities in 1983 require DOE to dispose of that waste. DOE failed to meet the original 1998 contract date for the start of disposal operations. Other target dates have since gone unheeded, and DOE may have a new target date by this summer. NEI unveiled its priorities, which also include legislative action to eliminate the need for an NRC waste confidence rule, as industry and congressional officials awaited draft waste legislation from DOE. Department officials have disclosed few details of the proposal, saying only that the draft bill would transfer federal land around Yucca Mountain that's now held by different agencies to DOE and would give the repository program greater access to money paid into the waste fund. As of Feb. 23, the department didn't know when it would send its legislative proposal to Congress, DOE spokesman Craig Stevens said. Some DOE officials noted earlier that the draft bill was under review at the White House Office of Management & Budget. Regarding action on waste confidence, Kraft said the rule has grown beyond the original narrow legal concept involved in the first waste confidence rule NRC issued in 1977. The existing rule, which NRC is scheduled to reconsider in 2009, states NRC is confident a repository will be operating by the end of 2025 and that spent fuel can be safely stored on the reactor sites in casks for at least 100 years. That confidence allows NRC to license new reactors and to renew the licenses of existing ones. Actions already taken by Congress show that waste confidence exists, Kraft said. He pointed to congressional approval in 2002 of the administration's recommendation that Yucca Mountain be developed as a high-level waste repository. Last year, he added, comprehensive energy legislation was enacted that contains financial incentives for the construction of new reactors. The concern industry has, Kraft said, is that NRC soon will be hit with another round of applications for combined construction permit-operating licenses for new reactors. He said the agency "needs to concern itself with the licensing and safety of plants. Waste confidence would be a distraction." The industry also wants to see so-called funding reform, this time including action to ensure the entire multibillion-dollar waste fund is used only for its intended purpose. Kraft said industry also thinks it appropriate that Congress freeze the waste fee at its current level of 1 mill for every kilowatt-hour of nuclear-generated electricity sold. Under existing law, the fee would increase if the energy secretary told Congress an increase were needed and Congress failed to pass legislation prohibiting an increase, Kraft said. Inclusion of the fund's unspent balance in funding reform could bolster support for that action in the House, where Rep. John Dingell (D-Mich.) has historically opposed funding reform legislation on the grounds that the entire fund should be included. However, some budget watchers have countered in the past that such action would significantly increase the federal budget deficit. The federal government must maintain a strong commitment to the Yucca Mountain project, Kraft said of another industry priority. There are roughly 55,000 MTU of spent utility fuel in storage today in the U.S., and the inventory grows at a rate of 2,000 MTU a year. Under the existing disposal cap at Yucca Mountain, spent fuel from the existing fleet of nuclear reactors alone, without license renewal, would more than fill the facility. Though NEI discussed its legislative priorities with DOE, Kraft said the industry group did not receive any feedback from DOE. Kraft added that NEI does not know if any of its legislative priorities are included in DOE's draft bill. For more information, take a trial to Nuclear Fuel at http://www.platts.com/Request%20More%20Information/ ------------ Suez, Gaz de France approve merger Moscow (Platts)--27Feb2006 Franco-Belgian Suez and Gaz de France approved a friendly merger, in a bid to deflect a hostile takeover attempt by Italy's Enel. The two utilities' boards of directors met over the weekend to consider the proposed merger, which would create a company with revenues of 64-billion euros (about U.S.$75.9-billion) in energy and environmental services. French Prime Minister Dominique de Villepin said late last week that the government would ask parliament to amend the 2004 French law changing GDF's legal status, to allow the state to decrease its GDF holding below 70%. GDF had a successful initial public offering last year and is now 30% in private hands. The merger is scheduled to be completed in second-half 2006. Suez recently acquired full ownership of Electrabel, which operates seven PWRs in Belgium, and has expressed interest in building nuclear plants in France. GDF was France's monopoly natural gas provider, but has no domestic production of its own. ------------