Platts - Friday, February 22, 2008 http://www.platts.com ------------ New UK nuclear must provide for decommissioning 'from day one' London (Platts)--22Feb2008 Operators of new UK nuclear generation will be required by law to first establish a nuclear waste clean-up fund, the UK government said Friday. UK business minister John Hutton said in a statment that new merchant nuclear generators must, as a precondition for receiving government approval, set aside money "from day one of generating electricity for their eventual decommissioning and waste costs." Draft guidance released Friday explains how clauses in the government's energy bill published in January that require operators of new nuclear power stations to meet the full cost of decommissioning and their full share of waste management costs would work. Companies would be required to: demonstrate detailed and costed plans for decommissioning, waste management and disposal before they even begin construction of a nuclear power station; set money aside into a secure and independent fund from day one of generating electricity; and have additional security in place to supplement the fund should it be insufficient. A new Nuclear Liabilities Financing Assurance Board is to be set up to assist the minister in ensuring these safeguards, the statement said. "It is in the national interest that the energy industry is able to invest in secure low-carbon energy sources. But it is also in the national interest that we take every step to ensure that the taxpayer is protected from the clean-up costs down the line," Hutton said in the statement. "The energy bill and the guidance published today make clear that companies are liable by law to meet their full costs. Let me be clear--full means full," he added. "Funds will be sufficient, secure and independent, it will be a criminal offence not to comply with the approved arrangements and we are taking powers to guard against unforeseen shortfalls." Included with the draft guidance is an indicative schedule for the government to publish updated estimates of the costs of decommissioning and managing and disposing of the waste from new nuclear power stations. This should enable it to set a fixed unit price for disposal of intermediate level waste and spent fuel. This will be set "at a level over and above expected costs and will include a significant risk premium, to provide the taxpayer with material protection." Hutton said: "We consider that a decision by an operator to proceed in principle with building a new nuclear power station and therefore to request from the government a fixed unit price for waste disposal in a Geological Disposal Facility could come as early as mid-2009." Consultation on the draft guidance will end May 16, 2008. Under the energy bill, operators of new nuclear power stations must produce a funded decommissioning program for approval, including a decommissioning and waste management plan and a funding arrangements plan. ------------ NEI: Four to eight new US reactors likely by 2016 Washington (Platts)--21Feb2008 By 2016, four to eight new us nuclear plants are likely to be generating electricity, with a second wave of new units under construction, Nuclear Energy Institute President/CEO Frank "Skip" Bowman told a February 21 briefing for financial analysts in New York. Bowman said the exact number will "depend on many factors -- forward prices in electricity markets, capital costs of all baseload electric technologies, commodity costs, environmental compliance costs for fossil-fueled generating capacity, natural gas prices, and more." Bowman said that "financial analysis shows, however, that new nuclear plants can deliver electricity in the range of $70 to $80 per megawatt-hour," assuming federal loan guarantees or "supportive rate policies at the state level." He said that "analysis by NEI and others shows that this would be competitive with other options -- coal- or gas-fired." John Rowe, chairman/CEO of Exelon, told the briefing that "a dispassionate assessment of new nuclear plant construction must acknowledge the large financial risk associated with a capital project that may cost around $7 billion and represent a substantial portion of a company's market value." But Rowe said such analysis "also shows that many of the conditions that led to large cost increases and construction delays for many operating nuclear power plants no longer exist, and that the industry has taken steps and created mechanisms to manage and contain those risks." Presentation materials from the briefing are online at www.nei.org/filefolder/Wall_Street_Brief_Script_and_Slides_Final_1.pdf. ------------ British Energy takes offline 635 MW Torness-2 nuclear power unit London (Platts)--21Feb2008 British Energy took offline its 635 MW Torness-2 nuclear power reactor in southern Scotland at 12:10 GMT Thursday, BE spokeswoman Sue Fletcher said. "We took it down manually...it was unplanned," Fletcher said, but she declined to give a reason for the shutdown, due to company policy. BE is also to carry out some routine maintenance work while the plant is offline, she added. The company does not give return dates for such outages. Torness-1, the 650 MW sister reactor of unit 2, was online and available to the grid Thursday, Fletcher said. British Energy also has four nuclear reactors offline, at the Hartlepool and Heysham 1 power plants. The four units shut last October for wire-winding checks and together they can generate 2,360 MW. The company has identified a number of engineering modifications that will be needed to reduce the reliance on the current wire windings. BE expects these units to return between July and December. ------------ EDF financial results up in 2007, but stock price falls Paris (Platts)--20Feb2008 Electricite de France announced better-than-expected 2007 financial results February 20, but its stock price plunged 9.39% on the Paris exchange, to 67.05 euros, on investors' disappointment with the utility's projections for profit growth in 2008 and beyond. EDF said its net income (group share) remained stable in 2007 at Eur 5.6 billion, and net income excluding one-time items was up 10.6% to Eur 4.7 billion, on sales of Eur 59.6 billion. Ebitda (earnings before interest, tax, depreciation and amortization) was up 6.1% to Eur 15.2 billion. However, analysts said the proposed dividend of Eur 1.28 a share was disappointing. They also said EDF's net debt at the end of 2007 -- Eur 16.26 billion, up 8.9% from the end of 2006 -- was higher than expected. Chief Financial Officer Daniel Camus said 2008 would be a year of accelerated investments, with a target of Eur 10 billion in operating investments. ------------ Spot uranium prices hold at $75/pound as sellers hold firm Washington (Platts)--20Feb2008 The spot price of uranium remained at $75 a pound U3O8 this week, with both TradeTech and Ux Consulting saying sellers are resisting lowering their offer prices. And while buyers are continuing to look for opportunities to conclude deals at lower prices, there was a growing sense among market analysts that the price gap is closing. Ux Consulting late Tuesday said some buyers are "considering buying as they believe the current price may be primed for a rebound." The price reporting company said that as a result "we may see more buying in the near future." TradeTech late Friday said it was unable to confirm rumors in the market last week of a sale of 800,000 pounds U3O8 at a price of about $65/pound. The Platts NuclearFuel price range for the week was $68- $78/lb U3O8. --Mike Knapik, newsdesk@platts.com ------------ UK's Nuclear Decommissioning Authority gets new chief from March London (Platts)--20Feb2008 Stephen Henwood has been appointed new head of the Nuclear Decommissioning Authority, the UK Department of Business Enterprise and Regulatory Reform said Wednesday. Henwood is to head up the NDA from March 1 for a three-year term. The NDA is a public body, funded by BERR. Headquartered in Cumbria, northwest England, it is responsible for dealing with the decommissioning and cleanup of the UK's nuclear power plants. NDA's budget for the financial year 2007-08 is GBP2.8 billion (Eur3.7 billion, $5.6 billion). For the three subsequent years, its budget is over GBP8 billion, BERR said. "This funding allows the NDA to operate safely and effectively with priority being given to the most hazardous sites," it said. Stephen Henwood was group managing director of international partnerships at defense and aerospace major BAE Systems until 2006, a role which included the chairmanship of the GBP2 billion missiles joint venture, MBDA. He is not active on behalf of any political party and holds no other ministerial appointment. "This is a significant appointment and I am confident that Stephen Henwood's extensive commercial and financial experience will be invaluable in the next critical phases of the NDA's efforts to clean up the UK's nuclear legacy," said John Hutton, Business Secretary and head of BERR. In its white paper on nuclear power published January 10, the government gave the go-ahead for new plants. It said it would publish a consultation on waste and decommissioning financing for new plants in February or March of this year. The consultation would set out the proposed arrangements for ensuring the full costs were met by the companies which invest in the plants, it said. ------------ Areva's Georges Besse II enrichment plant project on schedule Paris (Platts)--19Feb2008 Areva is on schedule with its Georges Besse II centrifuge enrichment plant project, the French vendor said February 19. Areva said that "in line with the Georges Besse II project time schedule, Areva has just handed over the keys to the centrifuge assembly building of the uranium enrichment plant on the Tricastin site to the Enrichment Technology Company." It called that "a major milestone in the construction" of the GB II plant. ETC, a joint venture of Areva and Urenco, and its subsidiary ET France will assemble centrifuges from German and Dutch workshops beginning this summer, Areva said, adding that "component manufacture is currently under way, in line with ETC's time schedule." The first centrifuge cascades at GB II will be in operation in first-half 2009, it said. ------------ NRC to continue reviewing its response to security allegations Washington (Platts)--15Feb2008 The NRC will continue a self-examination of its handling of allegations of inattentive security officers at the Peach Bottom station, NRC Commissioner Gregory Jaczko said February 15. In an interview, Jaczko said the agency's lessons-learned review, a summary of which was issued earlier this week, was only "one piece" of the work that will be done in this area. "There's a lot more the agency needs to do to get the bottom of how we make improvements to our own processes and programs," he said. NRC's Office of Enforcement is reviewing its allegation program, and the regional offices also will provide input on how they deal with allegations and security issues, he said. He said the work would look at what happened at Peach Bottom, how plant operator Exelon could improve its performance, and how other licensees can work to ensure they don't have a similar situation. ------------