Platts - Friday, February 09, 2007 http://www.platts.com ------------ Swedish minister says more Forsmark executives will be 'replaced' London (Platts)--9Feb2007 Sweden's minister for enterprise and energy Maud Olofsson said Friday she would demand to see reports from the Vattenfall board regarding safety developments at Forsmark nuclear plant. She also warned that other board members at Forsmark would be "replaced." Speaking at a press briefing in Stockholm, Olofsson, who also acts as Sweden's deputy prime minister, pointed to what she called "lack of safety focus" at Forsmark, which she also said Vattenfall had admitted. State utility Vattenfall owns the operator of Forsmark, Forsmark Kraftgrupp, and it also owns 66% of the plant. The other owners are Mellansvensk Kraftgrupp (25.5%) and E.ON (8.5%). Vattenfall said Thursday it had initiated an "action plan" regarding nuclear safety, by setting up a safety committee for Forsmark consisting of Vattenfall board members, and by looking to "immediately appoint" an independent, external expert to analyze the management system and safety at Vattenfall's nuclear power plants. Olofsson, who had a meeting with Vattenfall executives early Friday morning, said the safety measures initiated by Vattenfall were "powerful," but that "it remains to see if it is enough." "To run a nuclear power plant is a very difficult and complicated affair," she said. "Safety focus at Forsmark has not been sufficient, and Vattenfall's board agrees that ... Nuclear plants need extreme safety focus." Olofsson said she had made it clear to Vattenfall that the safety issue at Forsmark had caused problems for politicians who are responsible for both power supply to citizens and also for making sure nukes are safe. "But naturally it has also caused problems for Vattenfall as a company, with regards to the view if Vattenfall can manage to run these nuclear plants in a safe and efficient way." Olofsson said she had talked to Vattenfall about safety culture and technical issues at other nuclear plants. "Vattenfall has said that safety routines are being strengthened at other nuclear plants in the same way it's being done at Forsmark," she said. "What I have demanded from Vattenfall today is that I want ... reports from Vattenfall's board about how this proceeds ... in order to make sure that we can have safe nuclear power," Olofsson said. "It is extremely serious if the operation of nuclear plants is not safe." Her comments were made one day after Vattenfall's CEO, Lars Josefsson, told reporters the Forsmark plant was "safe" and that there were "no risks" involved. Later the same day, Vattenfall announced that the managing director of Forsmark, Lars Fagerberg, had decided to resign "voluntarily." At the press briefing Friday, Olofsson made it clear that Fagerberg would not be the only Forsmark board member to leave. "We are going to replace some people in the board," she said. 'VULNERABLE' NUKE DEPENDENCY Sweden's power production is roughly 50% nuclear and 50% from hydropower. Olofsson said dependency on these two energy sources made Sweden "vulnerable" and that Sweden needed "a third pillar" of energy supply. That would be renewables combined with energy efficiency, she said, which was in line with the European Commission's view. Quizzed by reporters about the role of nuclear in Sweden in the future, Olofsson said: "I think many who have believed in nuclear power feel disappointed today." Forsmark's 987-MW unit 1 and 1000-MW unit 2 were both taken offline over the weekend to carry out analysis of the plants' rubber seals. The Swedish nuclear watchdog, SKI, said the results of the analysis of unit 1 were unsatisfactory and that the seals had to be replaced. Earlier this year, SKI said it had decided to report Forsmark Kraftsgrupp AB, the operator, to a district attorney for the way it handled the incident at Forsmark 1 on July 25. 2006. A short circuit in a switchyard outside the plant had forced parts of the plant's reserve power system and the information system in the control room to shut down for 20 minutes. SKI argued that the operator should have cooled the plant down immediately after the incident, instead of waiting until the next day. SKI reported the operator to the district attorney also in November, when it said Forsmark had been running at a higher capacity than allowed. ------------ NRG Energy to apply for COL by September 30 Washington (Platts)--8Feb2007 NRG Energy plans to apply by September 30 for a combined construction permit-operating license, or COL, for two 1,350-MW ABWRs at its South Texas Project site, Brad Porlier, vice president, business development, told the Platts Nuclear Energy conference in Washington February 8. He said the COL application is part of a "critical path" NRG is on which will bring the first reactor into service in late 2014. With electricity demand projected to rise within the Electric Reliability Council of Texas, positive local and state political support, experienced management at STP, and modular construction practices developed in Japan, Porlier said NRG believes it can build the two units as merchant plants and obtain limited recourse project financing for the project. The site already hosts two 1,333-MW reactors, but was originally planned for four. Porlier said the cooling water reservoir and water rights are sufficient to support the two new units, which will be General Electric advanced BWRs of a model already operating in Japan. GE's partner is Toshiba. Porlier said NRG is close to selecting the engineering/construction firm for the project. ------------ Cost of US nuclear waste repository put at $20 bil Washington (Platts)--8Feb2007 US Energy Secretary Samuel Bodman told Congress Thursday that building the proposed high-level nuclear waste repository at Nevada's Yucca Mountain will cost a total of roughly $20 billion. DOE has spent some $10 billion on the project to date. Testifying before the House Energy and Commerce Committee on his agency's fiscal 2008 budget request, Bodman stuck to a deadline of completing the Nevada project by 2017, and said that the $19 billion currently in the Nuclear Waste Fund would cover most of the future repository costs. Money in that fund is paid by consumers of nuclear energy through a surcharge on nuclear-generated electricity. "I looked at the numbers...we still are working at it, [but] my own estimate is something like $20 billion," Bodman said. "There is already $19 billion in the fund, some $700 million that will be paid in this year. The income [from interest] is also going to be $700 million to $800 million dollars," the secretary added. --Daniel Whitten, daniel_whitten@platts.com ------------ Transmission grid enhancements of interest to NRC: Agency chief Washington (Platts)--8Feb2007 Because the addition of new transmission lines can take several years, the timing of such additions is of interest to the US Nuclear Regulatory Commission with about 30,000 MW of new generating capacity planned in new nuclear plants, NRC Chairman Dale Klein said Thursday. Speaking at Platts' Nuclear Energy conference in Washington, Klein said NRC staff and staff at the Federal Energy Regulatory Commission are examining grid reliability issues to ensure that new nuclear generation does not overload the grid in years to come. Because many of the new nuclear plants are being planned in areas where the need for new generation may not be the greatest, transmission enhancements may be needed to move the power to other regions, he said. In dialog with FERC officials in the past, Klein said he found it eye-opening that major transmission lines can take up to five years or longer to be approved and built, which is about as long as a new nuclear plant needs, though the first new nuclear plant is not expected to be online until 2014 or so. It is important that the transmission system is able to handle the additional generation expected, he said. The NRC will continue to work with FERC in areas where their jurisdiction overlap regarding reliability, Klein said. Even with the amount of new nuclear generation planned, "I don't think we're looking at an overbuild" of baseload generation in the US, Klein said. He also sought to reassure the audience that the regulatory framework at NRC is set to address new combined construction and operating license applications making their way to the agency for new nuclear plants, and he directed the industry to file accurate and complete applications. "If the industry shows us clarity and quality then the NRC should provide timeliness" in addressing the applications, Klein said. ------------ Rising fossil fuel costs boost nuke unit's economics: TVA chief Washington (Platts)--8Feb2007 Rising natural gas and coal prices have made the $1.8-billion refurbishment of the Browns Ferry-1 nuclear plant even more economical for the Tennessee Valley Authority, TVA President and CEO Tom Kilgore told Platts' Nuclear Energy conference in Washington on Thursday. Kilgore said the TVA board authorized the 5-year project when the projected payback time was eight years. Now, he said, the project is expected to pay for itself in five years or less. The payback time could be reduced even more if the US enacts any restrictions that add a cost to carbon emissions, he added. TVA shut Browns Ferry-1 along with all of its nuclear units, in 1985. It has gradually brought four units back online and completed construction of a fifth, but rehabilitation of Browns Ferry-1, its oldest unit and the one needing the most extensive work, was in question until the TVA Board approved a five-year plan in 2002. Kilgore said TVA remains on target to restart the plant on May 22. --Margaret Ryan, margaret_ryan@platts.com ------------ UK Atomic Energy Authority promotes COO Harrison to CEO London (Platts)--8Feb2007 Norman Harrison, acting chief operating officer of the UK Atomic Energy Authority, has been appointed the new chief executive officer from February 1, 2007, the UKAEA said in a statement Thursday. Announcing the appointment, UKAEA chairwoman Barbara Thomas Judge said: "With his strong operational experience and excellent safety record, he is the right person at the right time to lead UKAEA as it restructures its operations to prepare for the competition of its nuclear sites and the development of its business activities." UKAEA is a public body, reporting to the Department of Trade and Industry. DTI ministers have endorsed the appointment. Harrison joined UKAEA in 2003 as director of the Dounreay nuclear site and a member of the UKAEA board. He became acting COO of UKAEA in August 2006. UKAEA is responsible for the clean-up of its former nuclear research sites at Dounreay, Windscale, Harwell and Winfrith. It also carries out the national fusion research program at Culham, and manages the international JET facility there, which is a major fusion research project. UKAEA is currently restructuring its operations to create: a continuing non-departmental public body containing those of UKAEA's functions that are expected to remain in the public sector for the longer term, including fusion research and the development of the Harwell Science and Innovation Campus; a subsidiary company capable of competing for the management of Nuclear Decommissioning Agency sites, and other business in the UK and overseas; and licensee companies for individual sites or clusters of sites. ------------ NRC cites Point Beach for defects in analysis Washington (Platts)--7Feb2007 NRC issued a notice of violation to Point Beach for defects in a head-drop analysis. The January 29 notice and accompanying letter were released February 7. They dealt with a failure by owner Wisconsin Electric Power Co. (now We Energies) to update the plant's final safety analysis report with the results of a 1982 analysis. That analysis addressed what would happen if a crane moving a reactor vessel head dropped the head. Because the statute of limitations has expired, NRC said it was not proposing a fine. The nature of the violation -- Severity Level III, the second-lowest of NRC's four levels -- normally warrants one, the agency said. However, NRC said, there have been "numerous opportunities since 1983" for We Energies and Nuclear Management Co. -- which has operated the plant since 2000 -- to correct the mistake. NRC inspectors discovered the problem as Point Beach-2 was preparing for a spring 2005 refueling outage. The notice of violation was based on an inspection completed late last year, NRC said. ------------ Michigan regulators reopen hearing record on Palisades sale Washington (Platts)--6Feb2007 Michigan regulators have agreed to reopen the record in a hearing involving a power purchase agreement associated with Consumers Energy's proposed sale of Palisades. The Michigan Public Service Commission issued an order February 6 granting Michigan Attorney General Michael Cox's request to reopen the hearing record because of new information that has been introduced. Cox said testimony given two weeks ago by a consultant indicated that the purchase price for Palisades was about $476 per kilowatt, less than half of the recent $980/kW price for Point Beach in Wisconsin. The MPSC said its decision would not delay the case because it would require all legal briefs on the matter to be filed within the existing schedule for the hearing, which extends into March. ------------ New reactor work boosted in NRC budget request Washington (Platts)--5Feb2007 New reactor licensing work would get the biggest increase in funding in NRC's $916.6 million budget request for fiscal 2008. The new licensing work would be funded at $216.9 million, up from the $132.7 million NRC expected to get in FY-07. For FY-08, NRC is seeking approximately $709 million for its nuclear reactor safety program and $199.4 million for its nuclear materials and waste safety program. The Office of the Inspector General, which operates independently of the NRC, would get $8.1 million under the proposal. NRC's budget request, including the allocation for the Inspector General's office, is about 12% more than the FY-07 funding approved last week by the US House of Representatives. The Senate could take action on the FY-07 appropriations measure this week. ------------