Platts - Friday, June 22, 2007 http://www.platts.com ------------ President Bush congratulates workers on Browns Ferry-1 restart Washington (Platts)--21Jun2007 President Bush toured Browns Ferry-1 June 21 and congratulated and thanked Tennessee Valley Authority employees and contract workers for their efforts to restart the unit. Bush said that it's "one thing to restart" a reactor and "It's another thing to build new ones. And that's what we ought to have happen if we're interested in a comprehensive, sound, wise energy policy that is environmentally friendly." Bush said he wanted to "nudge Congress along" on its work on energy legislation. He noted that the fiscal 2008 budget he submitted would double the requested funding to $114 million for the Nuclear Power 2010 initiative to bring new reactors online. "In other words, it takes money to get this initiative moving," he said. Also attending Bush's speech to plant employees were NRC Chairman Dale Klein and Energy Secretary Samuel Bodman. Browns Ferry-1 returned to the grid June 2. All three Browns Ferry units were shut in March 1985 to address various performance and management deficiencies. Units 2 and 3 returned in 1991 and 1995, respectively. ------------ Hedge funds drive up EU uranium prices in 2006: Euratom agency Brussels (Platts)--21Jun2007 Hedge funds buying uranium holdings in 2006 contributed to substantial increase in spot prices for uranium, the raw material for nuclear power plant fuel, the Euratom Supply Agency said Thursday. ESA, the EU's nuclear fuel supply agency, said in its 2006 annual report that hedge fund buying had helped to double published spot price indicators from $36/lb U308 at the start of 2006 to $72/lb U308 at the end. These indicators exceeded $100/lb U308 in April 2007, said ESA. Platts' U308 spot price indicator June 18 was $135 to $145/lb U308. ESA's spot price definition--delivery within 12 months--does not include a time limit between contract signing and delivery of the material, hence some spot deliveries which occurred in 2006 may have been agreed by the contracting parties in the previous year, when the prices were lower. This would lower the ESA 2006 average price even more compared with published spot prices. Excluding Bulgaria and Romania, the average delivered spot price for uranium in 2006 to the EU-25 countries was Eur53.73/kgU ($25.95/lb U308), compared with Eur44.27 kgU ($21.19 lb/ U308) in 2005. For multi-annual contracts, the average delivered price in the EU-25 in 2006 was Eur38.41/kgU ($18.55/lb U308) versus Eur33.56/kgU ($16.06/lb U308) in 2005. Since fixed price contracts are rare, spot price indicators are highly dependent on occasional uranium auctions, said ESA. The New York exchange NYMEX introduced financial futures contracts for uranium in early 2007, bringing uranium closer to other energy commodities and metals in that respect. Global demand is putting pressure on supplies and prices, ESA said, with securing energy supplies a hot political issue in many countries, including China and India. Nuclear energy has the advantage that uranium resources are relatively well dispersed around the globe, and despite uranium price increases, fuel costs are still relatively low compared with power generation from fossil fuels, ESA said. Nuclear energy produces about 32% of Europe's power, making it the EU's largest source of low carbon power. Reducing carbon emissions is a key aim of European energy policy. For the EU-25, average reactor needs for natural uranium over the next ten years are forecast to be 19,840 mt U/year, while average net requirements are about 17,840 mt U/year, ESA said. ESA recommended that EU utilities maintain an adequate level of strategic inventories. use market opportunities to increase their inventories. and cover most of their needs under long-term contracts with diversified supply sources. And it was "pleased to note that for the first time in many years, uranium deliveries to EU utilities were slightly higher than the amount of uranium loaded into reactors. Thus inventories are being rebuilt in response to security of supply concerns and rising prices." The full report can be obtained at: http://ec.europa.eu/euratom/index_en.html. --David Stellfox, david_stellfox@platts.com ------------ Areva seeks UK regulatory review of EPR design Paris (Platts)--20Jun2007 Areva has applied for UK safety regulators' review of its EPR third-generation PWR design, the French reactor vendor said June 20. Areva said the three-year generic design assessment, or GDA, project would be "jointly managed" with Electricite de France. The application, it said, was "accompanied by letters of support" from six European utilities considering EPR for deployment in the UK: British Energy, EDF, E.On UK, Iberdrola, RWE npower, and Suez. Areva said it will "manage an alliance" of major utilities potentially interested in building and operating an EPR power plant in the UK. It said it would make the utilities into "intelligent licensees" capable of supporting a site license procedure with the Nuclear Installations Inspectorate. Westinghouse applied for GDA of its AP1000 shortly after the UK government's May 22 release of a consultation document on the country's energy future. Atomic Energy of Canada Ltd. and General Electric have also said they would apply for GDA for their third-generation reactor models, ACR-1000 and ESBWR, respectively. ------------ EU's European Investment Bank studies nuclear energy projects Brussels (Platts)--20Jun2007 A position paper on nuclear energy projects is being developed at the European Investment Bank, the European Union's financing institution, a press spokeswoman said June 19. Sabine Parisse said the EIB was moving to enhance its funding of energy projects generally, particularly in the area of renewables, to support EU energy policy, and it is also looking at establishing criteria for the financing of nuclear projects. The bank currently has only one nuclear energy project funding request before it--for up to Eur200 million ($269 million) for Urenco for the expansion of centrifuge technology capacity at facilities in the UK and the Netherlands--but expects that more could follow, she said. Following a June 5 board of governors meeting, EIB president Philippe Maystadt was quoted as saying that the bank would consider funding new nuclear plants as part of a national strategy to reduce greenhouse gas emissions, Parisse confirmed. ------------ EU's European Investment Bank studies nuclear energy projects Brussels (Platts)--20Jun2007 A position paper on nuclear energy projects is being developed at the European Investment Bank, the European Union's financing institution, a press spokeswoman said June 19. Sabine Parisse said the EIB was moving to enhance its funding of energy projects generally, particularly in the area of renewables, to support EU energy policy, and it is also looking at establishing criteria for the financing of nuclear projects. The bank currently has only one nuclear energy project funding request before it--for up to Eur200 million ($269 million) for Urenco for the expansion of centrifuge technology capacity at facilities in the UK and the Netherlands--but expects that more could follow, she said. Following a June 5 board of governors meeting, EIB president Philippe Maystadt was quoted as saying that the bank would consider funding new nuclear plants as part of a national strategy to reduce greenhouse gas emissions, Parisse confirmed. ------------ Areva signs long-term enrichment contract with KHNP Paris (Platts)--19Jun2007 Areva announced a long-term enrichment contract with Korea Hydro and Nuclear Power Co. June 19. This is Areva's first big enrichment contract with KHNP, which has traditionally bought SWU from Urenco, USEC and, more recently, Russia's Techsnabexport. Areva said the contract, worth over 1 billion euros (US$1.34 billion), marked its role as a key player in Asia. It also said the contract "will secure orders for Areva's future Georges Besse II enrichment plant," its first facility using the efficient gas centrifuges to which it gained access by pooling technical efforts with Urenco in a joint venture, the Enrichment Technology Company of Urenco, in 2003. Areva declined comment on the duration of the contract, but industry sources said that it stretches beyond a decade. A few years ago, "long-term" enrichment contracts were concluded for only up to about five years. ------------ British Energy starts design selection for new UK nuclear plant London (Platts)--19Jun2007 British Energy has started a technical assessment of nuclear reactor designs for the next generation of nuclear stations it plans to build in the UK, it told Platts Tuesday. BE spokesperson Sue Fletcher said that the company is to look at the four main reactor designs: Atomic Energy of Canada's ACR-1000, Westinghouse's AP1000, Areva's Evolutionary Pressurized Water Reactor (EPR) and GE's Economic Simplified Boiling Water Reactor (ESBWR). The announcement comes days before the UK government's deadline for submissions by reactor manufacturers for pre-licensing of reactor design, so- called generic design acceptance or GDA. GDA gives regulators the chance to assess the safety, security and environmental impact of power station designs, including waste arisings and radioactive discharges to the environment. It limits the need to revisit these issues in depth during site-specific planning processes. This reduces regulatory risk and provides a route to shorter and more predictable site- specific assessments. BE says it will be carrying out its own broader preliminary design assessment, independent of but in parallel with the initial regulatory review. Its assessment is to examine licensability and also encompass a review of the commercial viability, broader supply chain considerations, constructability and operability of designs for deployment in the UK. It plans to time its conclusions to coincide with the regulators' initial assessment late 2007/early 2008. BE's CEO Bill Coley said "We're looking at deployment in the UK for commercial operation from around 2016. At this stage, we support regulatory review of all four designs. Our own assessment will put us in a position to make an informed, competitive choice of preferred technology when we need to. This is an important step in making nuclear a real option in powering the low carbon generation." ------------ NRC begins special inspection at Point Beach-1 Washington (Platts)--18Jun2007 NRC has begun a special inspection at Point Beach to "look into a problem" with an auxiliary feedwater pump at unit 1, NRC said in a June 18 statement. The unit has been shut down since June 15. Plant operators received indications of unusually high temperature from the pump during quarterly testing on June 9, NRC said. The temperature "again approached the pump's operating limit" when another test was conducted June 11, leading to it being declared inoperable the next day, NRC said. The unit was shut as required by plant license conditions if an auxiliary feedwater pump is unavailable for more than 72 hours, it said. The inspection "will review the circumstances surrounding the incident and its safety significance; examine the historic maintenance and operation of the pump; review routine pump testing practices," and will "assess the utility's response to the overheating issue, the preliminary root cause determination, and proposed corrective actions," the agency said. Point Beach-1 will remain shut down until the root cause is identified and necessary repairs are implemented, NRC said. Point Beach-1 is a 530-MW PWR operated by Nuclear Management Co. ------------ Quad Cities units can operate continuously at EPU levels: US NRC Washington (Platts)--15Jun2007 The US Nuclear Regulatory Commission, in a letter released Friday, informed Exelon Nuclear that its Quad Cities-1 and -2 reactors may operate continuously at extended power uprate levels. Flow-induced vibration, caused by operating at EPU levels after December 2001, severely damaged steam dryers at both reactors in 2002 and 2003. The dryers were replaced in 2005, but both units operated at pre-EPU power levels while steam dryer performance was monitored and power was gradually increased. At a March 22 meeting, NRC staff gave preliminary approval for continuous EPU operation at the reactors. In a letter dated Monday, NRC Division of Reactor Projects Director Mark Satorius told Christopher Crane, Exelon Nuclear's president and chief nuclear officer, that, after further review, NRC has concluded that modifications to the plant and strengthening of the new dryers "has effectively addressed the vibration-caused degraded conditions experienced by these components sufficient to support continuous operation at EPU power levels." --Steven Dolley, steven_dolley@platts.com ------------ DOE may fine INL cleanup contractor CWI Washington (Platts)--15Jun2007 A cleanup contractor at DOE's Idaho National Laboratory could be fined $55,000 for violations of the department's nuclear safety requirements, DOE said June 14. CH2M-Washington Group Idaho, or CWI, is the prime contractor that manages environmental cleanup at the Idaho lab. DOE noted in a June 14 press statement that the preliminary notice of violation cites violations associated with radiation safety and quality improvements deficiencies identified during a May 2006 assessment of some radioactive waste processing activities at the site. DOE conducted the assessment after a CWI employee said that radiation safety practices were deficient, DOE said. The Price-Anderson Amendments Act of 1988 allows DOE to take regulatory action against contractors for violations of its nuclear safety requirements. ------------