Platts - Friday, June 19, 2009 http://www.platts.com ------------ US NRC to review decommissioning funds of 18 nuclear units Washington (Platts)--19Jun2009 The US Nuclear Regulatory Commission on Friday said it has contacted the owners of 18 nuclear power plants asking them to explain how the economic downturn has affected funds they must set aside to cover future decommissioning costs. Plant operators are required to establish funding during a reactor's operating life to ensure the reactor site will be properly cleaned up once the plant is permanently closed, the NRC said, adding that its review of the latest reports from reactor operators "suggests several plants must adjust their funding plans." "We'll discuss this with the plants over the next few weeks so they can explain to us how they'll get the funds back on track to account for their decommissioning cost estimates," Tim McGinty, director of policy and rulemaking in the NRC's Office of Nuclear Reactor Regulation. "This is not a current safety issue, but the plants do have to prove to us they're setting aside money appropriately." The NRC said it sent letters to the operators of Beaver Valley 1, Braidwood 1 and 2, Browns Ferry 1, 2 and 3, Byron 1 and 2, Calvert Cliffs 1, Clinton, Duane Arnold, Ginna, Indian Point 2, LaSalle 1 and 2, Nine Mile Point 1 and 2, Palisades, Point Beach 1 and 2, River Bend, Sequoyah 1 and 2, Vermont Yankee, Waterford and Watts Bar 1. The NRC letters come two days after the Associated Press reported that the operators of nearly half of the US' 104 nuclear reactors are not setting aside enough funds to cover projected decommissioning costs. The AP report said the shortfalls have been caused by a combination of falling investments and rising decommissioning costs. ------------ ITER fusion partners back phased approach to minimize risks: EC London (Platts)--19Jun2009 The six parties looking to build the world's first real scale fusion nuclear reactor at Cadarache near Marseille in southern France have decided on a "phased approach" to its completion, the European Commission said late Thursday. The International Thermonuclear Experimental Reactor project is a joint scientific program being undertaken by the European Union, China, India, Japan, South Korea, Russia and the United States. The governing body of the project met in Mito, Japan, on Thursday to thrash out the way forward for the project against a background of rising cost projections, possible delays and technical difficulties. The EC said it welcomed the decision by the parties to adopt a "phased approach to the completion of ITER construction as a working basis for development of the project baseline." In particular the EC said it welcomed a proposal to finalize a realistic schedule for the project. "This is key to ensure a sound management of the project, which in turn will warrant running ITER in the most cost-effective and efficient way," the EC said. The project parties also agreed to appoint an assessor to conduct a management assessment of the ITER Organization, the body charged with making the project a reality. The experimental reactor aims to use nuclear fusion--the same process found in the sun and other stars that releases energy when multiple like-charged atomic nuclei join together to form a heavier nucleus. It aims to produce this on an unprecedented scale--500 MW of fusion power sustained for 1,000 seconds--by heating a mixture of deuterium and tritium, two isotopes of hydrogen, to more than 150 million degrees Celsius, forming a hot plasma, according to the ITER project website. TARGET DATE OF 2026 FOR OPERATION Following the adoption of the phased approach, the target date for the production of the first plasma has been set for end-2018, with maintained operation from 2026, the ITER Council said after Thursday's meeting. "In order to substantially reduce overall risk, the primary components of the ITER machine will be assembled and tested together before the progressive installation of in-vessel components continues. A similar approach has been adopted during the construction of all major tokamaks," the ITER Council said, referring to the machines that produce a magnetic field to contain the plasma. "Council recognized that this is a responsible way to build ITER," said ITER Council chair Chris Llewellyn Smith. "Agreement on this approach was a key milestone towards the planned adoption of the baseline at the next meeting in November." The European Commission has assigned Eur1.94 billion ($2.69 billion) to ITER in its 2007-2011 budget for nuclear research, out of a total of Eur2.35 billion. But in a broadcast on June 17, British broadcaster BBC said leaked emails showed the projected overall costs of the project had risen to $16 billion, up from initial projections of $6 billion. EU science and research commissioner Janez Potocnik said the EU, as host for the project, remained a "fully committed partner," and welcomed the outcome of the ITER Council meeting ,"but a number of conditions still have to be met to reach the goal." "Together with our international partners, we will intensify our work to obtain credible costs assessment, including means to contain them and to find ways to further improve the efficiency of the project's management at international and EU level," Potocnik said. --Paul Whitehead, paul_whitehead@platts.com ------------ Partners begin talks on potential new reactor at DOE site in Ohio Washington (Platts)--18Jun2009 Negotiations over development of a 1,600-MW Areva EPR at a DOE site in Piketon, Ohio have begun, the coalition of energy companies involved in the project said June 18. The partners, led by Duke Energy, recently submitted a proposal to DOE seeking funding for the initial phase of the project, which would include development of a generic early site permit, or ESP, and review of site decommissioning plans. The Southern Ohio Clean Energy Park Alliance, comprised of Duke, Areva, USEC Inc., UniStar Nuclear Energy, and the Southern Ohio Diversification Initiative, will evaluate the site as a potential location for a new EPR. Their work includes preparing a plant siting study and a generic ESP request for submittal to NRC. Negotiations and a feasibility study are expected to last 18 months, construction could begin in six to seven years, and the reactor could start up between 2018 and 2020, according to participants at a June 18 press conference at the site. ------------ Negotiations on US House climate bill heat up Washington (Platts)--18Jun2009 US House of Representatives leaders stepped up negotiations on climate change Thursday to meet a target of completing a comprehensive energy and climate change bill by Friday. House Speaker Nancy Pelosi set the June 19 target to speed negotiations between authors of the bill (H.R. 2454) and members of the chambers who continue to have concerns about it. On Thursday, she told reporters at a briefing that progress was being made. "We'll be ready when we're ready," she said. Massachusetts Democrat Edward Markey, one of the bill's lead sponsors, echoed Pelosi's wait-and-see stance. Markey said that there were still issues to be resolved before the measure moves to the floor, though they were becoming fewer and more specific. "We're hoping to complete all of these deliberations in a timely fashion," said Markey. Markey, House Energy and Commerce Committee Chairman Henry Waxman, and Pelosi met earlier this week with Agriculture Committee Chairman Collin Peterson, who has emerged as one of the toughest obstacles to a House vote on the bill. The Agriculture Committee shares partial jurisdiction over the measure, and Peterson has demanded that substantial changes be made to the bill the Energy and Commerce Committee approved in May if he is to support it. Peterson is also a leader of the House's large contingency of Democrats representing agricultural constituencies, many of which are swing districts. The Minnesota Democrat has raised particular concerns about the way biofuels' greenhouse gas lifecycle emissions are calculated to determine a fuel's eligibility for the bill's renewable fuels standard. A 2007 energy law directed the Environmental Protection Agency to consider GHGs released as a result of international land use changes, which are indirectly related to biofuels production, in its calculations and Peterson and others have insisted that this provision be revisited. Peterson has also asked for a larger share of credits for rural utilities, and for more agricultural offsets. Markey said these were "among the main issues" still being discussed. Peterson and his fellow Democrats from agricultural districts are not the only votes Pelosi, Waxman and Markey are wooing. The speaker plans to meet with moderate Republican House members in her office Thursday at 2:30 pm EDT (1830 GMT) to shore up their support for the bill. Pelosi's aides would not provide a list of the members attending, but one is likely to California Republican Mary Bono Mack, an Energy and Commerce Committee member who voted for the bill in committee but expressed continued doubts about its provisions, particularly as it relates to nuclear energy. "Omitting [nuclear] from being classified as a renewable energy for those many states that rely heavily on this resource is a mistake, and I hope that this will be rectified as the bill progresses through the House and Senate," said Bono Mack in a statement following the committee vote. The speaker has also discussed the measure with members from districts that have manufacturing and fossil fuel production situated there, and in regular meetings with newer members of the Democratic caucus. She would not set a timeline for floor consideration, but when asked if it could still come to the floor next week, Markey said: "It's a possibility." --Jean Chemnick, jean_chemnick@platts.com ------------ Cameco resumes UF6 production at Port Hope facility Washington (Platts)--17Jun2009 Cameco has resumed production of UF6 at its Port Hope, Ontario uranium conversion facility, the company said June 17. Production of uranium hexafluoride had been suspended at Port Hope since December 2008 because the company was unable to secure supplies of hydrofluoric acid, or HF. But Cameco spokesman Gord Struthers said June 17 that the company has signed a new contract for HF with Honeywell, which was its historic supplier, after "working out issues." Struthers said Cameco is, however, continuing to seek alternative suppliers to reduce its dependency on a single supplier. ------------ NRC completes safety review for Beaver Valley license renewal Washington (Platts)--16Jun2009 NRC has completed its safety evaluation of the Beaver Valley license renewal application, NRC spokeswoman Ivonne Couret said June 16. The safety evaluation report, issued that day, said the application addresses all renewal-related safety issues as required by regulations. Couret said the staff will present the evaluation to the NRC's Advisory Committee on Reactor Safeguards at its July 8-10 meeting. FirstEnergy Nuclear Operating Co. applied in August 2007 to extend operating licenses for Beaver Valley-1 and -2 to January 2036 and May 2047, respectively. The NRC is scheduled to complete its license renewal review by September 2009. The safety evaluation report is on NRC's Adams document system under accession number ML091600215. ------------ EDF seeks legal action to stop strikes, warns of outages London (Platts)--16Jun2009 France's EDF has applied for a court order demanding striking maintenance workers at its nuclear power plants go back to work, an EDF spokeswoman said Tuesday. Workers were on strike Tuesday at the Bugey, Cruas, Cattenom, Dampierre and Paluel plants, she said. "The ongoing strike action is disturbing the maintenance outage schedule," said the spokeswoman and added that if the issue was not resolved in the coming weeks, it "could lead to brownouts [drop in voltage in an electrical power supply] if higher-than-normal temperatures increase power demand more than is projected. On June 12, EDF spokeswoman Capucine Leroux said it was "impossible to evaluate" the impact of the strikes on nuclear fleet availability, saying some delays could be made up for by the end of the year. She said no information on cost impact would be provided before the publication July 30 of EDF's first-half 2009 accounts. Following no resolution to the dispute, EDF applied Monday to a tribunal court in Bobigny, asking the judge to take action against the strikers to avoid power cuts in the event of an increase in power demand, the company spokeswoman said. The court is to hear the case June 26. While strikers are prohibited from shutting down operating nuclear plants, nothing stops them from delaying maintenance work at already shut plants, thus extending scheduled outages. Nuclear maintenance workers have been on strike demanding better pay conditions for several weeks at many of EDF's nuclear power plant sites, and unions claim they have delayed the restart of reactors. According to reports, the delays to restart have cost the company up to Eur250 million ($347 million). Strike-related delays in scheduled maintenance also threaten EDF's goal of an average 81% availability factor for its reactor fleet this year and could, according to reports. EDF wrote a letter to unions last week, outlining the risks of restart delays to the country's power balance when temperatures increase and power demand rises. The spring season typically sees EDF take plants offline for several weeks to perform refueling and maintenance duties, taking advantage of a period of relatively low power demand. EDF says strike action has not directly affected production at the plants, but if restarts are suffering delays, then the company's power capacity is markedly dented. The effect on EDF's maintenance schedule is also likely to make it harder for the company to plan its wholesale market trading activities. EDF's 58 nuclear power reactors each have capacity between 900 MW and 1,550 MW. Union leadership was scheduled to discuss a strategy going forward this week. ------------ Contract signed for completion of Mochovce-3, -4 Paris (Platts)--15Jun2009 The contract for completion of the Mochovce-3 and -4 nuclear islands was signed by Skoda JS and Slovenske Elektrarne June 11 in Bratislava, Skoda parent OMZ said June 15. It said the contract is worth more than 10 billion Czech crowns (US$517 million). Skoda JS's scope includes supply of nuclear island equipment, including part of the instrumentation and control system, from detailed design through commissioning, testing and startup of the two 440-MW VVER units, OMZ said. Key equipment for Mochovce-3 and -4 was delivered by Skoda in the 1980s but the project was put on hold. The negotiations for completing the units have been going on with SE, majority-controlled by Enel, for two years. SE has said it aims to put the two VVER-440s online in 2012 and 2013; site work was inaugurated last November. OMZ said the contract for Mochovce-3/4 completion would allow the Czech company to develop and participate in "planned construction of new [nuclear] units at Temelin, Bohunice and Dukovany Nuclear Power Plants." Bohunice is in Slovakia and Temelin and Dukovany are in the Czech Republic. Plans for new reactors at those sites are still tentative. ------------ Governors seek to deter nuclear waste storage in Western US Park City, Utah (Platts)--15Jun2009 Saying there are growing uncertainties about US nuclear waste policy, the governors of 19 states adopted a resolution Sunday that seeks to deter the Obama administration and private energy companies from building any interim storage facilities for spent nuclear fuel in the Western US. The resolution, adopted at a meeting of the Western Governors' Association in Park City, Utah, says it appears "increasingly likely" that the administration of US President Barack Obama will propose establishing one or more centralized interim storage facilities for spent fuel from US nuclear power plants. But the 19 western governors, many of whom staunchly oppose having nuclear waste sent to their states, said in their resolution that no such interim storage facility shall be built in a western state without the written consent of the governor. "The creation of interim storage sites would be a direct result of the federal government's failure to begin accepting spent fuel on schedule," the resolution says. The resolution comes on the heels of a recent decision by the US Department of Energy to abandon the federal government?s 25-year-old plan to build a permanent nuclear waste repository at the Yucca Mountain site in Nevada, about 100 miles north of Las Vegas. DOE and other federal agencies have spent more than $7 billion studying Yucca Mountain's potential to serve as the nation's nuclear waste dump, but Energy Secretary Steven Chu reversed his position earlier this year and told lawmakers that the Obama administration was taking Yucca off the table for safety and environmental reasons. Chu called for the establishment of a blue-ribbon commission to study various alternatives to Yucca, including building the type of interim storage sites that the governors express concerns about in their resolution. But the governors, in their resolution, said any interim storage site would run the risk of becoming the country's de facto permanent nuclear waste dump in light of DOE's decision to scrap the Yucca Mountain project. "Without an available permanent disposal site, there is no guarantee that an interim storage site will be temporary," the resolution says. "There will be no way to ensure spent fuel rods that are shipped to and stored at an interim facility will ever be removed." The resolution notes that some members of Congress have proposed legislation that would allow interim storage site to be licensed for 100 years, significantly longer than the initial 20-year period currently authorized by the US Nuclear Regulatory Commission. Instead of building an interim storage site, the governors say in their resolution that spent nuclear fuel should continue to be stored on-site at the nuclear power plants where it was generated. On-site storage is supported by key lawmakers in Washington, including Senate Majority Leader Harry Reid, a Democrat who has vowed never to let Yucca Mountain open in his home state of Nevada. The governors, in their resolution, note that both NRC and DOE have concluded that onsite storage is safe and cost effective. Chu is scheduled to speak at the governors' meeting on Monday. Chu's decision on the Yucca Mountain project drew a sharp rebuke from some Republican lawmakers who maintain that it represented the best solution for dealing with US nuclear waste. The governors acknowledge in their resolution that the federal government could try to build an interim storage site over their objections. States would have a number of options at their disposal should Washington go down that path, including litigation. The governors' resolution says that if DOE does move to create an interim storage site, the federal government would be responsible for a host of key issues, including transporting the waste from the country's power plants to the site. --Brian Hansen, brian_hansen@platts.com ------------ Uranium One signs deal with Russia's ARMZ on Kazakh uranium mine Barcelona (Platts)--15Jun2009 Canada's Uranium One is set to buy 50% of a Kazakhstan uranium mine from Russia's Atomredmetzoloto, or ARMZ, under a deal which will see ARMZ gain an almost 20% stake in Uranium One, as well as a uranium offtake agreement, the companies said Monday. Uranium One said it would pay $90 million and give ARMZ 117 million Uranium One shares for the 50% stake in ARMZ's Karatau uranium mine in Kazakhstan. The purchase agreement also provides for a contingent payment to ARMZ of up to $60 million in three installments between 2010-12, depending on mine performance. The offtake agreement provides ARMZ Uranium Holding Co with an option to purchase, on industry-standard terms, the greater of 50% of uranium concentrate produced by the Karatau mine (equal to 1,000 mt at full capacity) or up to 20% of Uranium One's available attributable production from assets in respect of which Uranium One has the marketing rights, including Karatau, ARMZ said Monday. The offtake agreement allows ARMZ to access--as of 2014--an amount of uranium greater than that secured by ARMZ's 50% interest in the Karatau mine, it added. Resource-wise, ARMZ Uranium Holding Co will contribute 24,901 mt of reserves and resources of uranium (through its 50% interest in Karatau), in return for a 20% interest in Uranium One's total resource base, equal to 52,266 mt. This represents a 4.9% increase in the total resource base of ARMZ from 561,835 mt to 589,200 mt, ARMZ said. Furthermore, this growth is being achieved with ARMZ gaining access to uranium resources at lower prices than Russia's current uranium reserves and provides broader geographical diversification. Following the acquisition, Uranium One is expected to have attributable 2010 production guidance of 7.5 million lb, an approximate 35% increase over the company's previous 2010 production guidance of 5.6 million lb, and a 2010 weighted average cash operating costs of less than $20/lb sold, Uranium One said. ARMZ is wholly owned by Atomenergoprom, the holding company which consolidates all civil nuclear assets and, in turn, is part of Rosatom -- the Russian State Corporation which controls the nation's nuclear activities. ------------ Kazatomprom tries to reassure investors Barcelona (Platts)--12Jun2009 In a statement June 12, Kazatomprom sought to reassure worried foreign investors that no existing agreements with foreign shareholders would be changed, despite turnover at the company and the reported arrest of its former president, Moukhtar Dzhakishev, last month. Kazatomprom, or KAP, is the world's third-largest uranium producer. In the statement, KAP's new president, Vladimir Shkolnik, said the company "understands its responsibility for resources provision of the world nuclear power industry." Shkolnik said KAP would continue the same pace of development "in order to cover the growing demand [for] our products." KAP said that its top management had met with foreign partners over the past two weeks to discuss implementation of plans ranging from uranium mining to new joint ventures. In particular, it said, negotiations were held with the representatives of Marubeni, Sumitomo, Nuclear Fuel Industries, and Japanese financial and credit and insurance companies and banks, including NEXI, JBIC, ERM, and ING. KAP said management had also met with Atomredmetzoloto, China Guangdong Nuclear Power Holding Co. Ltd., Areva, Uranium One, Nuclear Power Corp. of India Ltd., and others which it did not name. The statement said KAP management would meet soon with Cameco, Toshiba and Westinghouse Electric on further development of cooperation. ------------