Platts - Friday, April 03, 2009 http://www.platts.com ------------ J-Power to buy MOX fuel from France's Areva for Ohma reactor Barcelona (Platts)--3Apr2009 Japan's Electric Power Development Co, or J-Power, said Friday it had entered into an agreement to buy mixed uranium/plutonium oxide, or MOX, fuel from France's Areva for its Ohma nuclear plant. J-Power said it entered into an agreement with Global Nuclear Fuel Japan Co, which will outsource the manufacture of the MOX fuel to Areva's Melox facility, according to a statement on its website. In a separate statement, Areva said it would use Japanese plutonium recovered from the treatment of spent fuel at its La Hague plant to manufacture the MOX fuel. The Ohma plant is a 1,383 MW GE ABWR reactor under construction. It is set to load fuel in December 2013 and commence operations in 2014. Areva also has contracts to supply MOX fuel signed in 2006 and 2008 with Japanese utilities Chubu, Kyushu, Shikoku and Kansai, the company said. ------------ German prompt power low while equities, oil pull curve up London (Platts)--2Apr2009 German day-ahead OTC power prices were virtually flat with the previous day with high temperatures keeping prices low but weak wind power production preventing them from tumbling while the forward curve was pushed up by a bull run in equity and commodities markets. Day-ahead baseload OTC was last heard at Eur38/MWh ($50.76/MWh) before 13:00 CEST (11:00 GMT), peak at Eur43.25/MWh. Compared with a day earlier these were losses of 25 euro cent each. "Given traditionally lower demand on Friday, prices were being held up as we are seeing nearly no wind production tomorrow but the high temperatures kept prices from rising further," one trader said. In Switzerland, day-ahead base prices have tumbled Eur12.60/MWh to Eur41/MWh since last Thursday as high temperatures kept a lid on demand and have been causing the first Alpine snow to melt. "The first hydro power plants are profiting from melted water and we expect this trend to continue in the weeks to come," one Swiss trader said. The German weather service DWD said it expected temperatures to reach 16 to 23 degrees Celsius during the day and drop to 3 to 10 degrees at night. Wind levels were forecast to be weak to moderate. Nuclear and fossil power generation, according to EEX, was expected to remain stable between 64.24 and 64.53 GW Thursday and Friday. BULL RUN ON THE FORWARD MARKET Further out on the curve, a bull run in equity and commodity markets pushed Platts Power Index (PPI) for the German forward curve up Eur1.34/MWh to Eur47.68/MWh between its last close and midday Thursday. The rise was largely driven by jumps in front-quarter and front-year contracts to Eur38.65/MWh and Eur51.10/MWh respectively. The bull run in the markets reflected "broad-based risk appetite based on G20 optimism," Societe Generale's global head of oil research Michael Wittner said. "It's not so much that equities drive oil. The risk appetite is driving both oil and equities [simultaneously]." The German DAX stock index was up 4.26% at 4,307 points at 13:00 and front-month Brent crude was up around $3 to above $51/barrel. With CIF ARA 2010 coal also up nearly $3 to $85.25/mt and EUA December 09 carbon allowances around Eur12.35/mt, the midday green dark spread between power and coal/carbon was around Eur12.60/MWh, up 20 euro cent from Wednesday evening. Traders also said that a rise in the euro ahead of the ECB's rate call had also benefited euro markets such as German forward power. ------------ Chu aware of risks of US nuclear waste dump reversal: congressman Washington (Platts)--2Apr2009 US Energy Secretary Steven Chu acknowledged the "enormous legal, contractual and environmental challenges" resulting from the Obama administration's decision to reverse government plans to bury spent nuclear fuel in Nevada in a meeting with Idaho Representative Mike Simpson and three other Republican lawmakers, Simpson said Wednesday. But Chu held to the administration's position, disclosed in March in a budget plan for fiscal 2010, Simpson said. Simpson said he and his colleagues from South Carolina, Tennessee and Washington state, all home to US Department of Energy nuclear weapons sites, sought Chu's views Tuesday on alternatives to the proposed spent-fuel repository at Yucca Mountain. In addition to spent fuel from reactors, the dump would also hold waste from the weapons sites. "Secretary Chu repeated the company line in our meeting [regarding Yucca Mountain], but I sensed recognition on his part that this decision presents enormous legal, contractual and environmental challenges for DOE that must be addressed," Simpson said in a statement. "The DOE has said what it won't do," Simpson said. "Now it needs to articulate what it will do, and I expect those answers sooner rather than later." DOE could not be reached for comment immediately on Simpson's statement. DOE has already been sued by electric utilities for failing to meet a statutory 1998 deadline to begin taking spent fuel from reactors, and some critics of the administration's recent decision contend the move would intensify those claims. Simpson said he will pursue the matter again with Chu when the secretary testifies on the administration's budget plans for DOE. Simpson said he was encouraged by Chu's overall discussion of nuclear energy. "He clearly understands the importance of nuclear energy to our baseload supply and its crucial role in reducing greenhouse-gas emissions," the congressman said. --Bill Loveless, bill_loveless@platts.com ------------ NRC vote clears way for Oyster Creek license renewal Washington (Platts)--1Apr2009 The NRC cleared the way for license renewal for Oyster Creek in an April 1 commission vote. The commissioners voted to dismiss challenges raised since 2005 by six groups opposing renewal in proceedings before an Atomic Safety and Licensing Board, or ASLB. The groups alleged that corrosion in Oyster Creek's steel drywell containment shell could jeopardize safe operation during the period of extended operation. The ASLB rejected the safety contention in December 2007 and the groups appealed that decision to the commission. The NRC staff's safety review concluded that aging effects could be adequately managed at Oyster Creek during the 20-year extension until April 2029, but a final decision on license renewal has had to wait for disposition of the groups' appeal. NRC spokesman Eliot Brenner said that the commission's vote clears the way for the staff to issue a renewed license "shortly," probably in the next week or so. Commissioner Gregory Jaczko dissented in part from the commission's order. He said the findings of an October 2008 NRC inspection at Oyster Creek showed that moisture can still reach parts of the drywell, so it should be inspected more frequently than is currently required. Paul Gunter of Beyond Nuclear, a spokesman for the groups opposing license renewal, said in a statement that "it is this kind of decision making that can lead to the next Three Mile Island accident and worse. NRC inspection findings show that Oyster Creek has neither a working age-management program for drywell corrosion nor knowledge of the full extent of the damage to the containment." Exelon Nuclear spokesman David Benson said that his company is pleased with the NRC decision. It has proven with more than 1 million pages of documentation and "numerous NRC inspections" that Oyster Creek can generate electricity safely for another 20 years, he said. ------------ Florida Senate committee passes compromise clean energy bill Philadelphia (Platts)--1Apr2009 The Florida Senate's Committee on Communications, Energy and Public Utilities late Tuesday passed a bill with a "clean energy portfolio standard" that establishes a 20%-by-2021 goal for power from generation that does not produce greenhouse gases, and permits up to one quarter of the goal to be met by either nuclear plants or integrated gasification/combined-cycle plants with carbon capture and sequestration. The bill, SB 1154, which was introduced by Senator Jim King, the Republican committee chairman from Jacksonville, sets a 7% "CEPS" goal for 2013, rising to 12% in 2016, 18% in 2019 and 20% in 2021. The bill permits the Florida Public Service Commission to "excuse" a utility from compliace with the CEPS if the supply of clean energy or clean energy credits is not adequate, or if compliance would raise customer rates by more than 2%. The measure also calls for increasing the state's gasoline tax by 1 cent/gallon, with half of the expected $90 million in annual revenue going to support renewable energy projects. The bill, which still must be considered by the full Senate and then by Florida's House of Representatives, represents a compromise of sorts between the advocates of a traditional renewable portfolio standards and utilities such as Florida Power & Light, which advocated for a clean portfolio that would include nuclear power. Both FP&L and Progress Energy Florida own existing nuclear plants and are planning an additional four units, or two units for each utility, to come online in the next ten years or so. ------------ UK regulator, industry discuss procurement on new reactors Barcelona (Platts)--1Apr2009 The UK Nuclear Installations Inspectorate is in discussions with nuclear reactor vendors Areva and Toshiba-Westinghouse, and utilities that might build the new reactors in the UK, about procurement of manufactured components requiring long lead times, an NII spokeswoman said Wednesday. So-called long lead items include the reactors' pressure vessels and other heavy component forgings such as the steam generator tubesheets and lower shells. Often the items must be ordered months or even years in advance and they are also safety-critical components of nuclear power plants, generating regulator interest. "Long lead item procurement is an important issue for regulators and NII is in active engagement with industry, both the [reactor vendors] and potential operators, about their procurement plans and our procurement expectations for long lead items," spokeswoman Helen Duggan said in a statement to Platts on Wednesday. She said the UK regulator was developing guidance on long lead item procurement and that it would be published "shortly." --David Stellfox, david_stellfox@platts.com ------------ INIS selects New Mexico site for de-conversion facility Washington (Platts)--31Mar2009 International Isotopes, or INIS, has chosen Lea County, New Mexico as the site for its depleted uranium de-conversion and fluorine extraction facility, the company said March 31. INIS said it plans to begin construction of the facility in 2011, after NRC licensing is complete, but did not give an expected date of operation. The initial de-conversion capacity of the plant is expected to be equivalent to about 575 cylinders of depleted uranium hexafluoride per year "from one or more enrichment companies in the US," INIS said. LES, a Urenco subsidiary, is building its National Enrichment Facility in Lea County. INIS said it will "need to raise significant additional capital" to complete the project and, "given current market conditions, there can be no guarantee the capital will be available, or available under acceptable terms." The company said it is "evaluating several paths" to raise the funds, "including agreements with companies that have interests in either enrichment or procurement of the products of uranium de-conversion and fluorine extraction." ------------ UK nuclear decommissioning, waste watchdog board announced London (Platts)--31Mar2009 The UK government Tuesday announced board members of a watchdog created to oversee new nuclear decommissioning and waste disposal funding arrangements. The Nuclear Liabilities Financing Assurance Board (NLFAB) is to scrutinize the financing plans for the decommissioning and cleanup of nuclear waste from new nuclear power stations. "This is in line with the government's commitment that the taxpayer will not have to shoulder any costs for clean-up," the government said. The appointments were announced by Energy and Climate Change Minister Mike O'Brien. Board members are as follows: Lawyer--Anne Baldock, global head of Allen and Overy LLP's projects, energy and infrastructure practice; fund manager--Antony Osborn-Barker, global head of pensions, BNP Paribas; environmentalist--Simon Carroll, program officer, National Center for Biological Diversity, Swedish University of Agricultural Sciences and Uppsala University; economist--Dr Anthony White, MBE, senior adviser to climate change capital; actuary--Simon O'Regan, global head of regions, Mercer; nuclear engineer/waste and decommissioning specialist--Norman Harrison, chief executive, UKAEA. Lady Balfour, who was appointed as chairman of the NLFAB last year, said: "The NLFAB will be providing independent scrutiny of the financing arrangements that will last decades into the future. The work of the NLFAB will require hard thinking and robust negotiation. This will help ensure that energy companies pay for the full costs of decommissioning and their full share of costs associated with nuclear waste management and disposal." ------------ Government to sell UKAEA commercial subsidiary Barcelona (Platts)--30Mar2009 The UK government said it expects to sell the commercial arm of the UK Atomic Energy Authority to the private sector by year-end. The subsidiary, UKAEA Ltd., provides nuclear decommissioning, waste management and site environmental remediation services and nuclear new construction support services under contract both in the UK and overseas. The move was initiated by a strategic review performed by the UKAEA following passage of the Energy Act 2004 and is the culmination of a process to develop a commercially viable nuclear decommissioning business, according to a March 30 announcement from the Department for Business, Enterprise and Regulatory Reform, or BERR. UKAEA Ltd. has now reached a scale where it can operate and expand independently from the government, BERR said. The sale is being managed by financial advisers Greenhill & Co. ------------ German OTC day-ahead power gains on low wind, curve down London (Platts)--30Mar2009 German OTC prompt power firmed Monday on the back of low wind forecasts. Prompt power remains at low levels overall, however, reflecting rising temperatures and a healthy system. Day-ahead baseload power was heard trading at Eur41.50/MWh ($54.72/MWh) around 11:00 GMT Monday, and peak at Eur45.25/MWh, more than Eur2.50 below EEX's outturn for these contracts of Eur38.96/MWh and Eur42.38/MWh. Traders said the low exchange print was a surprise. "Everyone believed the [exchange] price would be higher," one trader said. Sources said the 912 MW Isar 1 nuclear reactor had been due to come back online Monday but was now scheduled to return to service Thursday, supporting Tuesday's prices. The high day-ahead OTC prices were also attributed to minimal wind levels in Germany for Tuesday and into the rest of the week, although one trader said the return of the 600-MW Baltic Cable power link between Sweden and Germany Sunday had capped the German peak price. Nuclear and fossil power generation, according to EEX, was expected to fall back to 65.21 GW Tuesday from 67.32 GW Monday, as hard coal levels dip. Germany remained a net importer Friday morning, buying in 7.13 GW of power and sending 2.35 GW abroad. The Czech Republic was the main source of imports, with 2.10 GW, while Switzerland was the primary export destination, buying 1.49 GW of German power, data from Etsovista showed. Further out on the curve, sentiment remained bearish as oil, coal, gas and equities were all down. CIF ARA coal was heard trading at $80.75/mt around 11:00 GMT, down from $83.25/mt Friday afternoon. The DAX index had lost 3.1% to 4,075 points by 11:00 GMT. The negative primary energy and stock indicators led German Cal 10 to lose Eur1 in morning, trading to Eur48.65/MWh, while April and Q2 09 were also down. This brought the midday PPI to Eur44.80/MWh, 88 euro cent below Friday's close. The PPI is a weighted forward power index, based on German front-month, front-quarter and front-year base load wholesale prices to indicate curve movements in continental Europe's benchmark power market. Front-month is weighted singularly, front-quarter three-fold and front-year 12-fold. The front-year contract will roll over on the last trading day of November each year. ------------ Palo Verde-1 taken offline to clean clogged strainer Washington (Platts)--27Mar2009 Palo Verde-1 was taken offline early March 27 so crews can clean a clogged strainer in the unit's cooling water system, Arizona Public Service Co. said. "The work is expected to be completed this weekend and unit 1 is to be back to full power by early next week," APS spokeswoman Betty Dayyo said. The plant's other two reactors, Palo Verde-2 and -3, are operating at full power, Dayyo said. ------------ Obama administration to appoint nuclear waste commission: Reid Washington (Platts)--27Mar2009 US Energy Secretary Steven Chu, not Congress, will establish a blue-ribbon commission to develop a new strategy for managing the country's nuclear waste, Senate Majority Leader Harry Reid, Democrat-Nevada, said Friday. Reid issued the comment after he and Chu agreed in a closed-door meeting that appointments to the panel would be made by the Obama administration with input from Reid and other parties affected by the high-level nuclear waste repository the Department of Energy wants to build at Yucca Mountain, Nevada. The panel, Reid said in a statement, would be "composed of experts who will evaluate a range of storage, recycling and disposal options" that might replace the direct disposal option DOE wants at Yucca Mountain. The decision to establish the panel in this manner eliminates the need for lawmakers to consider legislation that Reid and Republican Senator John Ensign, Nevada's junior senator, introduced earlier in March. Under the Reid-Ensign bill, congressional leaders would appoint the nine-member panel. As majority leader, Reid -- a staunch opponent of the Yucca Mountain projectv -- would have appointed three of the panel's members. "Forming the Blue Ribbon Commission administratively will allow us to move more quickly toward a long-term solution to nuclear waste management," Reid said in the statement. ------------