Platts - Thursday, April 20, 2006 http://www.platts.com ------------ Ontario market make-up makes new capacity investment unprofitable Toronto (Platts)--19Apr2006 The current Ontario power market make-up does not support investment in new capacity by generators, said David Butters, president of the Association of Power Producers of Ontario. Speaking Wednesday at Enerdata's Gasfair Powerfair conference in Toronto, Butters said that the amount of capacity required by the province for reliability would keep power prices below any level where investment was profitable. In December, the Ontario Power Authority said some 9,000 MW of nuclear plant capacity would need to refurbished or built over the next 20 years. It is hard to predict how much new nuclear capacity would be built, but some will be built, Butters said. The question of how much is a work in progress, he said, and the conundrum of what type of generation technology will be used also needs to be answered. That said, renewables resources and demand-side management could meet all of Ontario's power needs, if it weren't for the problem of renewable resources' unpredictability, OPA CEO Jan Carr told conference attendees over lunch. So the province needs at least the option of fossil fuel or nuclear generation, he said. Based on the group's calculations, some 24,000 MW of new capacity would be needed over the next 20 years to meet a 1% a year growth in peak demand in the province, said Jason Chee-Aloy, OPA's head of generation development. And given that it was "not prudent" to rely on gas-fired generation, which would rely on a fuel commodity that was expensive and whose pricing was highly volatile, Ontario must at least retain the option of building nuclear generation, Carr said. On the sidelines of the conference, he also told Platts that clean-coal generation should be ruled out of the mix, at least for the short term, while it remained an unproven technology. Industry must take the lead, though, in the move to build new generation, he said in his speech, because they cannot rely on provincial government. There is no upside and huge downside for politicians if they stick their necks out and get involved in this process should prices rise, he said. The public would not let the politician who brought in changes that led to a jump in power prices forget the consequences of what he or she had done, he added. ---Keiron Greenhalgh, keiron_greenhalgh@platts.com For more information, take a trial to Platts Nucleonics Week at http://nucweek.platts.com. ------------ Rosatom official: Decision on Russian nuclear power program near Paris (Platts)--19Apr2006 A decision on an amibitious Russian nuclear power program is imminent, according to Valery Rachkov, the deputy head of the Federal Atomic Energy Agency (Rosatom). Rachkov said meeting the goal of increasing nuclear's share in Russia's electricity supply to nearly 25% by 2020, with 40 gigawatts installed, will require commissioning of 2-4 gigawatts of nuclear capacity per year. He said that by 2013 Russia will have to replace existing nuclear units with gas-fired power plants, but the gas plants would later be replaced by nuclear units. He spoke at the Rosenergoatom-organized international conference, Safety, Efficiency and Economy of the Nuclear Power Industry, in Moscow today. The conference, an annual event, drew over 700 participants this year. ------------ Greenpeace disputes official estimates of Chernobyl health impact Washington (Platts)--18Apr2006 Official estimates of the health impact from the Chernobyl accident have been "hugely under-estimated," Greenpeace said today in releasing a new report. The report predicts that 270,000 cancers will be caused by Chernobyl fallout, and 93,000 of those will be fatal. In a report released in September 2005, the Chernobyl Forum, established at the request of the IAEA, estimated accident-related deaths at about 4,000. The 138-page Greenpeace report, "Chernobyl Catastrophe: Consequences on Human Health," is on the web at: www.greenpeace.org/chernobylhealthconsequncesreport. ------------ ANALYSIS: UK lawmakers say nukes won't fill energy gap, gas could London (Platts)--18Apr2006 New nuclear power plants cannot help the UK fill its generation gap over the next 10 years or help the UK reduce its carbon dioxide over that period, "as it simply could not be built in time," members of parliament from the House of Commons Environmental Audit Committee said in a report released Easter Sunday. However, the MPs said that a second "dash-for-gas" similar to the expansion of gas-fired power plants in the 1990s could be the answer. "The potential generating gap during this period will need to be filled--largely by an extensive program of new gas-fired power stations," the lawmakers said. Another "dash-for-gas" would result in "significant carbon savings," contrary to popular opinion, they said. By 2016 between 15 GW and 20 GW of electricity plant is set to be decommissioned, nearly a quarter of total UK generating capacity. About half of this capacity is existing nuclear and half is coal. Many commentators have questioned the wisdom of building new gas-fired power plants on security of supply grounds, especially after flows for gas from Russia to western Europe were interrupted during a dispute with Ukraine early in 2006. But the MPs' report said that security of gas supplies was probably a problem the UK would have to get over whether or not it had new gas-fired power plants. "We will in any case become highly dependent on foreign imports of fossil fuels for our total energy requirements--including over twice as much natural gas for industrial and domestic uses as we use for electricity generation," the MPs said. Senior industry figures have expressed similar views to the committee. Centrica Energy's MD Jake Ulrich said in March that nuclear "doesn't really hit the short-term or mid-term issues." Ulrich said gas-fired generation was still attractive and would be "favored" by the long-term trend for saving carbon dioxide emissions. Centrica is developing a new 1,000-MW gas-fired plant at Langage in Devon. Other major UK energy companies including Eon UK and RWE-Npower are also planning new gas-fired power plants. But no one yet has firm plans for nuclear power plants in the UK. The MPs in their report cast doubt over the future of nuclear. Before new nuclear could be built, long-term waste disposal, public acceptability, the availability of uranium and the threat of terrorism needs to be addressed, they said. "It is by no means clear whether investors will wish to commit themselves to 70 years of nuclear generation," the committee said. The report argues that renewables and carbon capture and storage technologies deserve a lot more support than they are getting. It also said more action was needed to reduce demand. The Environmental Audit Committee called the government's energy review into question. "It does not appear to have resulted from a due process of monitoring and accountability," the MPs said. Some critics have called the review little more than a smokescreen for the government to launch a program of new nuclear, which Prime Minister Tony Blair is said to favor. The government has said that the energy review would decide whether to go ahead with new nuclear. The committee was puzzled. The government has declared itself in favor of a market-based approach in which industry decides the forms of generation it wants to support. The MPs questioned what sort of decision the government could therefore make on nuclear. The report says the nature of the decision is "unclear." The suspicion is that the government--in making a decision on nuclear-- could break with its past declarations that it will not prescribe the UK fuel mix. Some commentators have said a "nuclear obligation" could be introduced, forcing companies to buy a set percentage of nuclear power. That would be "a major U-turn in energy policy," the MPs said. If government is going to make decisions on nuclear, they said it was unclear why the government should not make similar "decisions" on many other technologies, suggesting a much more interventionist role. Long-term the committee backs the White Paper of 2003. "We remain convinced that the vision contained in the White Paper--with its focus on energy efficiency and renewables as cornerstones of a future sustainable energy policy--remains correct." David Porter, CEO of the UK Association of Electricity Producers, said Sunday the UK faced a huge generation gap. Electricity companies "want to invest" he said but "they cannot invest in any new project, without taking account of the politics." He said government must complete its energy review on time, by summer 2006, and make sure it produces a framework for energy policy that lets the market make decisions. It has to be clear and long-lasting, he said. Long-term certainty is particularly needed over carbon emissions. A plant may have a life of 30 years or more, but today's carbon framework only runs until 2012. For more information, take a trial to Platts Nucleonics Week at http://www.platts.com/Request%20More%20Information/ ------------ Nine Mile Point-2 sets station record for shortest refueling Washington (Platts)--17Apr2006 Nine Mile Point-2's 25-day refueling outage set a station record, operator Constellation Energy said April 14. The company attributed its long-range planning, which began more than a year ago, to the success of the outage. It said major outage work completed included inspections on two low-pressure turbine rotors, material improvement modifications to four service water valves, and replacement of a feedwater heater nozzle. ------------