Friday, December 7, 2007

Second China reactor deal for Westinghouse

AP1000s for Fujian Province

Bloomberg wire service reports via the Paris, France, based Herald Tribune that China Guodian, one China's biggest electrical utilities, plans to build a nuclear power station in Fujian, southeastern China, using technology from the Westinghouse, which is owned by Toshiba.

The plant in Zhangzhou city will have "several" reactors with 1,000 MWe capacity each using the Westinghouse AP1000 technology, according to a statement on a Chinese government web site.

Bloomberg quoted Yao Wei, an analyst at Guotai Jun'an Securities in Shanghai, who said, "Westinghouse has its advantages in terms of technology and reactors operation. It has a good relationship with Chinese partners."

Bloomberg reported that Liu Kemou, a director at China Guodian's media department, confirmed the statement about the potential reactor deal. No financial details were given.

Westinghouse secured a $5.3 billion order from China National Nuclear in July to provide four AP1000 nuclear power reactors in Haiyang, Shandong Province and Sanmen, Zhejiang Province, both in eastern China.

Westinghouse will start building the reactors in eastern China in 2009. The first reactor will begin operation in 2013 and the remaining three will start up in the next two years.

On November 26th Areva in November won an €8 billion, or $12 billion, agreement to build two nuclear reactors for China Guangdong Nuclear Power in Taishan in southern Guangdong Province.

According to Bloomberg China plans to increase its spending on nuclear power plants by 12.5 percent to 450 billion yuan, or $61 billion, during the 15 years ending in 2020, the National Development and Reform Commission, the top economic planner in the nation, said Nov. 2nd.

Nuclear industry needs to tell its story

We're burning dead dinosaurs at an extraordinary rate!

The nuclear industry could do a better job telling its story says Eric Loewen, the current treasurer of the American Nuclear Society. At the December monthly meeting of the Idaho Section of ANS, Loewen who is now a senior nuclear engineer for General Electric in Wilmington, NC, told a story of how the industry's best flubbed an opportunity to get out the word to Wall Street investment bankers in August 2007.

According to Loewen he received a call from Van Eck Global, a $20 billion investment house listed on the American Stock Exchange (AMEX) to ring the bell for the announcement of the fund's newest offering which features nuclear energy.

His request to the ANS board to represent the organization was turned down. Loewen said he then sent email inquires to the Nuclear Energy Institute and the Department of Energy both of whom also turned him down. Finally, Loewen went to the AMEX bell ringing ceremony as a private citizen.

Lowen's frustration was evident. He complains that the "nuclear industry must get spine" to stand up for nuclear energy. He said, "we are burning dinosaurs at an increasing rate, and climate change is an increasingly important issue."

Loewen should know because he spent a year learning firsthand about the policy process as the American Nuclear Society's 2005 Glenn T. Seaborg Congressional Science and Engineering Fellow in the office of Senator Charles Hagel, where he was the senator's chief advisor on climate change. Eric Loewen holds a PhD in Engineering Physics from the University of Wisconsin, where he also received a MS in Nuclear Engineering.

You would think that ANS, NEI, and DOE would fall all over themselves having a guy this credible show up and represent them. Clearly, it was a missed opportunity. The good news is that Loewen spent the day with investment bankers patiently explaining nuclear reactor physics to them. What a guy.


Eric Loewen, right, rings the bell at AMEX 08/15/07

AEHI Claims $150 Million for startup costs

It's difficult to qualify the investors' background
[Update 01/11/08]

Alternative Energy Holdings Inc., a Virginia firm (PK:AEHI) that claims to be engaged in planning to build a nuclear power plant in southwestern Idaho, this week said it had $150 million in a commitment letter from Silverleaf Capital Partners, LLC, Salt Lake, Utah.

The Idaho Statesman interviewed Shane Baldwin, the director of the firm, who told the newspaper if the due diligence goes well the company could provide the funding by the end of this month. Baldwin said the firm launched in December 2006 and focuses primarily on real estate development and alternative energy. He told the newspaper this is the first investment they’ve made in a nuclear power plant. “We think the next wave of investment dollars will be going toward new nuclear plants,” Baldwin said.

Many important facts are still not visible

An attempt to qualify the firm's experience in the investment banking world with energy projects turned up more questions than answers. Mr. Baldwin has a profile on LinkedIn, which lists no prior employment in the investment banking industry nor for that matter does it list any prior employment. It is unusual and perplexing to read that someone in investment banking has declined to list prior placements and levels of funding in a public profile especially on LinkedIn which is a business relationship building web service with over 12 million members. Maybe he just never got around to finishing it? The Silverleaf website is also a minimalist effort and most of its pages are blank.

His partners also have business backgrounds, but again their prior work isn't with energy projects nor investment banking. Cory Moore lists on his LinkedIn profile work as a construction manager for the past 12 years. Cody Rasmussen has posted information on line that he has at least four years of experience as a real estate agent in the Layton and Ogden, Utah area.

In short, there is no way to make a judgment whether Silverleaf or its principals have any experience with a deal of this size, e.g., $150 million, or with energy projects of any kind. There is no way to judge from online information whether the firm has the capability to manage the effort or subsequent rounds of fund raising which would be needed for a multi-billion dollar nuclear power plant. Perhaps the information to qualify their ability to deliver is elsewhere?

That said if I were looking at qualifying a $150 million investment for a nuclear power plant, I'd want boatloads of online information about the firm and its principals. Since there is very little, skepticism is the only perspective that makes any sense at least for now.

There was no mention in this week's announcement of AEHI's prior investment banking partner, Cobblestone Financial Group, from upstate New York which last June announced it would raise $3.5 billion for the nuclear power plant. Like Silverleaf, Cobblestone has a background in real estate such as shopping centers, self-storage units, and convenience stores. It has no experience with the energy industry either fossil or nuclear, nor with placement of investments in the energy field.

CFO leads stock buy back effort

In other news about AEHI the firm announced in September that it had hired a CPA as its CFO. The firm's press release said Rick Bucci has practiced accounting and tax for 19 years; his diverse background includes hotels, construction, real estate development and banking. It appears Mr. Bucci is crossing over to the nuclear energy industry since there is nothing in his reported background to indicate prior experience in this field.

And finally it is noteworthy that AEHI announced in October, a month after hiring Mr. Bucci, that AEHI said in a press release that the company's Board of Directors approved a plan to repurchase up to 1 million shares of its outstanding common stock in order to take advantage of the undervalued market price. At the December 6th close the stock was trading at $0.23/share down from a 52-week high of $0.96/share last summer.

Update 01/11/08

Neither AEHI nor Sivlerleaf have ever updated the initial press reports with information on their progress to acquire $150 million in startup funds. This week AEHI announced it was suspending the buyback of its stock despite the fact that it was "undervalued." At the end of trading today AEHI's stock (PK:AEHI) closed at $0.20/share on volume of 13,500 shares down from a high of $0.96/share last August.

Tuesday, December 4, 2007

Areva's Flamanville EPR build is underway

Areva's EPR costs are higher than expected

[Update 08/16/08]

French utility EDF said this week it started building the nuclear block of its first 1,650-megawatt new generation reactor in Flamanville. Work at Flamanville in northwest France is expected to last for another four and a half years with the E$3.6 billion plant scheduled to start production in 2012, EDF said.

EDFs costs for Flamanville are significantly higher than the cost per kilowatt announced by NRG in September for its two new reactors in Texas.
  • Coming in at 1,650 MWe, Areva's EPR will cost E$3.6 billion which equals E$2,182 per Kw. At current conversion rates (WSJ 12/04/07; E$1=US$1.473) it comes out to US$3,215 per kW.
  • That's US$1,200/Kw higher than NRG's estimate in their COL filing to the NRC last September.
  • The total capacity of the two new NRG units is expected to be 2,700 MWe. NRG said the plants will cost $5.5 billion which brings them in at $2,000 per kW. The NRG plants will be GE-Hitachi ABWRs.
NRG has historical data as the basis for its cost estimates for ABWRs since Toshiba, which will handle the construction at Bay City, TX, has experience building four of them in Japan. On the other hand Areva is experiencing higher costs building an EPR at Olkiluoto-3 in Finland.

So what we have here is a considerable competitive gap. Toshiba has four reactors under its belt and Areva is struggling with a 'first-of-a-kind' effort. NRG's reactors are estimated to come in at $2,000/kW and Flamanville's are reported to be $1,200/kW more. Now, here comes a kicker. Areva is contracted with Constellation Energy to build a standardized EPR in the U.S. once the reactor design is ok'd by the NRC. Wait for it . . . what's an Areva EPR going to cost in the U.S.?

As it turns out the price per Kw cited by NRG in September 2007 has gone up as have costs for all new reactors. Still a price of $3,200/Kw is high and Areva has its work cut out for it to prevent the costs from escalating. That said more recent costs cited by Progress Energy for two new Westinghouse AP1000s in Florida make the Areva plants look like a bargain. Nuclear reactors aren't supermarket commodities and price comparisons alone do not complete differentiate them. Areva has great global ambitions to sell the EPR reactor. It must prove the cost competitiveness of the product to achieve its goals.

* * *

France is Europe's top producer of nuclear power with 80 percent of its electricity nuclear-generated. The Flamanville nuclear reactor will be EDF's 59th, but only the 2nd EPR.

Under the terms of a deal inked last week with EDF, Italy's Enel will take a 12.5 percent stake (E$450 million) in the new-generation reactor and will also have an option to take part in the next five new generation reactors, that are not yet planned.

EDF plans to add 6,000 MWe of power capacity in France by 2012, split between 1,650 MWe of nuclear power and 4,000 MWe in thermal power. The Flamanville site already hosts two 1330 MWe pressurized water reactors (PWRs), which began operating in 1986 and 1987, respectively.

Update 08/16/08

The New York Times has published a profile of the Famanville reactor project and the French government's strong commitment to nuclear energy. The newspaper reported,

"Flamanville is a vivid example of the French choice for nuclear power, made in the late 1950s by Charles de Gaulle, intensified during the oil shocks of the 1970s and maintained despite the nightmarish nuclear accidents of Three Mile Island and Chernobyl.

Nuclear power provides 77 percent of France’s electricity, according to the government, and relatively few public doubts are expressed in a country with little coal, oil or natural gas. "

The article also goes into some detail about recent leaks of radioactive materials at french nuclear sites, but points out that the incidents were relatively minor on a scale that measures them.

Areva TV Commercial Video

Getting the nuclear industry to tell its story is sometimes a perplexing quest. Video is becoming more common as a primary means of getting a message across. This video from Areva has achieved something of a folk following because of its effective use of animation to tell the complicated story of the nuclear fuel cycle.

Second nuclear plant proposed for Idaho

This time it is not a penny stock outfit
[Update 12/06/07; NRC notified]
[Update 12/21/07; Timetable announced]
[Update 12/28/07; Anti-nuclear response]

The Idaho Statesman reports that a company is reportedly conducting tests at a site in Idaho's Payette County for a nuclear power plant.

MidAmerican Nuclear Energy Co. officials said that if the site is found acceptable it would be years before such a plant began producing power. Even so it is a really big fish in a really small pond.

At least this time the company proposing to build the plant is not a penny stock outfit. We'll still need to learn more about other investors besides Berkshire-Hathaway, when it plans to file a COL with the NRC, and so on. The real test will be whether this is some kind of fish story or if the company really means it.

Bear in mind that this site might not be the only one the firm is considering for a nuclear plant. There could be several sites and it is just this one got in the news media. We'll have to see if it is a preferred site or if the company has other places around the country that make sense.

* * *

MidAmerican Nuclear Energy Co., a subsidiary of the Des Moines, Iowa-based MidAmerican Energy Holdings Co., has been doing geologic testing on about 3,300 acres of private land south of Paddock Valley Reservoir.

MidAmerican owns and operates major utilities, including PacifiCorp, Oregon's largest utility, and Rocky Mountain Power, which serves eastern Idaho.

"We're in a very preliminary due diligence process to look at a potential energy project in Payette County," Bill Fehrman, president and chief nuclear officer for MidAmerican Nuclear Energy Co., told the Idaho Statesman.

* * *

The size of the plant hasn't been determined, but Fehrman said most new plants being planned are in the range of 1,100 to 1,600 megawatts. A plant at the upper range could potentially provide more power than all three of Idaho Power's Hells Canyon hydropower dams.

Fehrman said MidAmerican had looked at other sites in the region, but the Payette site appealed to the company because MidAmerican would be able to provide power for its subsidiaries, including PacifiCorp and Rocky Mountain Power, as well as other Idaho utilities like Idaho Power.

The company's actions in Idaho took some pro-nuclear groups by surprise, and they reacted cautiously asking whether this is just another speculative venture. It would be a greenfield site with no existing infrastructure to help cut costs. Every other announced, and credible, new reactor project in the U.S. is for a pad site adjacent to an existing reactor.

Update 12/06/07

The Wall Street Journal reported this week that MidAmerican has taken the extraordinary step of notifying the NRC it plans to build a Mitsubishi PWR at 1,700 MWe in Payette County, Idaho. Mitsubishi has told the NRC it expects to begin the reactor design certification process in 2008. That process could take several years.

The WSJ notes that MidAmerican has formed a nuclear unit, headed by William Fehrman, to pursue nuclear opportunities. Mr. Fehrman is formerly head of Nebraska Public Power District, which operates a nuclear plant.

Also reported in the Omaha World-Herald which noted, if the plan goes ahead, approval and construction could take 10 or 12 years, Fehrman said. It's too early to estimate the cost of such a plant.

Assuming the plant began construction in five years, and came in at $3,000/Kw, the cost of a 1,700 MWe plant would be about $5.1 billion in current dollars.

Update 12/28/07

One anti-nuclear activist wants to put all nuclear power plants proposed in Idaho to a statewide vote. Peter Rickards, a Twin Falls foot doctor who for years has fought nuclear and coal-fired power plants, told the Idaho Statesman today he submitted an initiative restricting nuclear power plant building to the Secretary of State’s office for review.

The initiative would prohibit building any nuclear power plants until a repository for nuclear waste is open and require voter approval in a statewide election for a plant to be built. He also wants to put coal fired plants to the same vote. Rickards is asking the Attorney General’s Office to review his proposal and hopes to see the Idaho Legislature vote on it during their upcoming session, which starts in January.

He tried to overturn the Idaho Settlement Agreement in the mid-1990s using the same tactics and failed. Only two counties of Idaho's 44 voted in favor of his proposal. One is Blaine County which includes Sun Valley, a hotbed of environmental activism and the money from media moguls and Hollywood stars to support it. The other was Kootenai County up in the panhandle which is home to Hanford downwinders.

During the campaign actor Bruce Willis gave the initiative's organization "Stop The Shipments" a big check to pursue the election. It didn't help. Today an initiated referendum will cost millions, and neither Rickards nor the Snake River Alliance are likely to be able to raise that kind of money to collect the necessary signatures, 46,000 in all, to put the measure on the ballot.

As my friend Rod Adams points out over at the Atomic Insights blog, battles by anti-nuclear groups over proposals for new nuclear power plants are, in fact, battles for control of energy markets. Earlier this month the Idaho Statesman reported that two manufacturing firms pulled out of plans to relocate to the Boise area because they could not be assured of an adequate supply of electricity for their operations. I wonder if everyone in Idaho understands the stakes that are on the table?

Indian Point license renewal challenged

Democrats to nuclear utility - "drop dead"
[Updates 12/05/07, 12/27/07]

There's some bunk and some complicated politics going on in New York state over the relicensing of the Indian Point nuclear plant. Governor Elliot Spitzer wants to shut down the Indian Point nuclear plant. The New York Times has coverage this week. Here are some highlights and also some reactions from nuclear blogs around the country.

I have one question for the State of New York. Once you've killed off the Indian Point reactors, and the electricity they made, how will you explain the much higher prices the voters will be paying because the hole you made in the grid has to be filled with fossil fuel based juice purchased on the spot market? It seems to me the Democrats in New York at going to have a huge impact on their constituents, right in the checkbook.

Highlights of NY Times coverage

New York Attorney General Andrew M. Cuomo said this week that the state had asked the Nuclear Regulatory Commission (NRC) to deny an application to extend the license of the Indian Point nuclear reactors, citing “a long and troubling history of problems.” Mr. Cuomo, flanked by Lt. Gov. David A. Paterson and members of the Congressional delegation at a news conference, claimed that the nuclear plant, in densely populated Westchester County, could not be defended from a terrorist attack and that the surrounding area could not be evacuated if a major accident occurred. The state filed a 313-page petition on behalf of Mr. Cuomo and Gov. Eliot Spitzer.

* * *

The state also contends that the application to extend the plant’s license for 20 more years, which was filed on April 30 by the plant’s owner, Entergy Nuclear, failed to account for pipes, cables and fire-protection systems that have deteriorated at the nuclear reactors, which began operation in the mid-’70s.

* * *

Officials of the N.R.C. could not recall a previous occasion when a state had tried to intervene in a license-extension proceeding to block the extension. New York State owned Indian Point 3 from 1975 until 2000.

* * *

Jim Steets, a spokesman for Entergy, said the company had invested hundreds of millions of dollars to upgrade equipment at the plant since it bought the two reactors. He said that the company was prepared to prove to federal regulators that the equipment still worked properly.

* * *

A three-judge panel appointed by the N.R.C. is expected to rule within the next several weeks whether New York State can intervene in the relicensing application and whether the issues it has raised should be considered. Entergy applied for a 20-year extension of the original 40-year licenses on April 30. The commission, which has granted about two dozen 20-year extensions around the country, has established a goal of ruling on applications within 22 months if there is no hearing, or within 30 months if there is one. The license for the Indian Point 2 reactor expires in 2013, and Indian Point 3’s license ends in 2015. But the licenses have been automatically extended until the commission issues its ruling. Indian Point 1 closed in 1974.

Blog responses to Indian Point issues

To sort things out point your web browser to the Nuclear Energy Institute Blog for updates. Here's a set of links to read up on your lunch hour. All of these links are on the NEI Blog

Official NEI Statement

“The position taken today by the governor and the attorney general pre-judges the facts concerning the Indian Point license renewal application.

Ruth Sponsler (We Support Lee)

Cuomo, Spitzer, and Spano have no responsible plan to replace Indian Point's electricity. They are trying to make a divisive political issue out of a facility that has been operating safely for a number of years. They are also demonstrating a glaring ignorance and refusal to address the issue of fossil fuel emissions and all their ramifications from asthma to climate change.

Rod Adams (Atomic Insights)

If they are successful, natural gas suppliers in the Northeast will be loving life - Indian Point has a capacity of 2200 MWe. It has been running at an average annual capacity factor of about 93%. If that power is replaced by very efficient gas turbine combined cycle plants running at an average heat rate of 7,000 BTU per kilowatt hour, and if the price of natural gas is a well behaved $7.00 per million BTU, it will cost New York residents about $900 million per year to pay for the fuel for the yet to be built plants.

Merve Benson (Prarie Pundit)

So the Democrats think that the cost of energy is too high and there solution is to further restrict supply? We need to be building more nuclear plants and making sure that the ones we have are run properly not shutting them down. This is just another example of how unserious Democrats are about energy policies.

Update 12/05/07

The New York Times, which reported on the initiative by New York's governor, had an editorial today on the issue. While arguing the case for post 9/11 security issues related to nuclear power plants, the Times also had this observation, coincidentally made here on this blog yesterday.

The state has an obligation to explain what it would do about the 2,000 megawatts of electricity that would be lost if the plant closed. Its solution must not compromise New York’s commitment to reducing greenhouse gases in the region. Replacing one potential menace with another — like an environmentally dirtier and costly natural-gas plant — would be a bad outcome.

What a novel idea! Cheap politicians cannot make hay with base load demand just to feed the numbers in their re-election polls.

Update 12/27/07

The NRC issued a press release today highlighting its continuing oversight of the Indian Point nuclear plant. Federal agencies are usually quiet during the holiday season, especially between Christmas and New Year's Day, so it's likely the NRC wants the news media to notice it is on the job at Indian Point amidst all the hoopla from the State of New York. Here's what the NRC had to say.

The Nuclear Regulatory Commission will continue to conduct additional inspections at the Indian Point nuclear power plant throughout 2008 to ensure issues associated with on-site groundwater contamination and the facility’s new siren system are being properly addressed. Entergy Nuclear operates Indian Point, which is located in Buchanan (Westchester County), N.Y.

That's it. The rest is hopelessly arcane bureaucratic language about why NRC is doing this. Bottom line with four resident inspectors at the plant, you'd think Governor Spitzer would know the NRC has a presence there. Maybe that's too politically inconvenient so the NRC decided to kick it up a knotch. Go for it.

Sunday, December 2, 2007

Debate over new builds needs good numbers

Nuclear power is not OK in Oklahoma

The Tulsa World reports that Oklahoma power producers said this week the high cost and lengthy construction time for a nuclear power plant make it unlikely they will turn to nuclear energy to meet rising consumer demand for power in the state.

There's a problem here. The numbers an Oklahoma statehouse group heard from several sources need a second look. NEI was there as well, which is a plus. Of course they were speaking in a foreign land as Oklahoma is at the center of the nation's oil & industry which may not want competition from nuclear energy as a fuel source for the nation's electric utilities.

John Wendling, director of power supply operations for Oklahoma Gas & Electric Co., said OG&E is the largest generator in the state with 6,200 megawatts of capacity but is still too small to afford the cost of a nuclear power plant, estimated at between $5 billion and $6 billion.

"As an individual company, we're not big enough," Wendling told state lawmakers at a meeting of the Oklahoma House Energy and Technology Committee. Wendling said the company will need to find ways to produce energy in the next five years. Nuclear energy will not fit into that time frame, he said. Dennis Adkins, R-Tulsa, noted that no one has proposed building a nuclear power plant in Oklahoma. The cost to build a nuclear power plant is more than $8 billion, he said.

Industry did get a word or two in. Mike McGarey of the Nuclear Energy Institute (NEI) told the Oklahoma legislative committee nuclear energy is the largest source of emission-free electricity in the United States. He said nuclear energy does not experience the cost volatility that other industries see and that waste is safely stored on-site. It takes as long as 3-1/2 years to get a plant approved and four more years to build, McGarey said.

Environmental groups staged a protest wearing costumes. Jean McMahon told the committee she opposes nuclear energy. She wore a polar bear suit with a sign that said, "No Nukes - Solar Yes." She told the committee "nuclear plants are extremely dangerous."

What's wrong with this picture?

First of all the numbers are too high. It does not take $8 billion to build a 1,000 MWe nuclear power plant. At current rates it should take $2.4 billion which is only less than a third of the number Rep. Adkins gave to the House Committee. It doesn't take $5-6 billion either. Someone, perhaps NEI, should consider getting a follow-up communication going with the utility and the committee in Oklahoma. Maybe they did and it just didn't show up in the press coverage.

Second, consumer groups have entered the fray and are serving up all kinds of numbers that require clarification. Take for instance a group called Co-op America which put out a press release this week charging the nuclear industry spent $48 million last year lobbying for "subsidies." A review the numbers in the press release shows that the real deal is not from Co-op America which lists the preposterous number of $21 million spent by just one company in lobbying for loan guarantees.

Let's put some real numbers about lobbying in play. They don't add up to $48 million. According to the Center for Responsive Politics, it is true energy companies have spent money making their case. Electric utilities, including fossil and nuclear, gave a combined $7.5 million to Republicans candidates for federal office and $3.8 million to Democrats during 2005-2006 for a total of $11.3 million.

In the nuclear field, AREVA gave $95,000 to House and Senate candidates, and Constellation Energy gave $314,000 to candidates for federal office during the same period. Constellation Energy, which has developed a high public profile promoting loan guarantees, also paid Oglivy Government Relations $100,000 in just the first half of 2007 to lobby Congress on nuclear loan guarantees according to federal disclosure forms reviewed by Forbes Magazine.

Consider the case for Constellation

Constellation (NYSE:CEG) wants AREVA to build a $5 billion reactor next to its Calvert Cliffs nuclear station on the shores of the Chesapeake Bay. This past July, Michael Wallace, who heads Constellation’s nuclear business, told the Baltimore Sun the firm’s bid to build a new plant might be “derailed” if the Department of Energy doesn’t fund loan guarantees for new nuclear plants.

Why isn't the nuclear industry working harder to tell its own story? Loan guarantees are not "subsidies." Worse, when Constellation Energy says it won't build a new nuclear power plant without loan guarantees, it is handing ammunition to the opposition. It's a bad idea to cede control of the agenda to the other side. The latest from Constellation this week goes like this.

"If the loan-guarantee program is able to materialize in early 2008 so we are able to secure loan guarantees for construction of a new plant at the end of 2008," the company's board could move forward, said Michael Wallace, president of Constellation Energy Generation Group. "If it doesn't, we won't."

The Energy Department last month said it will guarantee loans for up to 80 percent of the construction cost of new nuclear reactors, but that budget constraints mean the earliest any company proposing a new reactor could benefit is 2009. By the time DOE gets around to asking for the budget authority, a new president and congress will be in office and so, for that matter, will be a new Secretary of Energy. Bodman's promise of action in 2009 is not a confidence builder.

Schizophrenic or just confused?

Inconsistency in communication about the future of the nuclear industry also came up at the American Nuclear Society meeting held in Washington, DC, last month. Nucleonics Week, an industry trade publication (subscription only) covered the meeting and had this report.

"Speaking at a November 12 special session panel at the ANS/ENS meeting, John Sununu, president of JHS Associates Ltd., described as "schizophrenic" the industry's public positions on several key issues, particularly the Yucca Mountain waste repository project. "I don't know what the industry position is," he said, "because the industry doesn't know what the industry position is."

Under Secretary of Energy Clarence "Bud" Albright, also on the panel, agreed with Sununu. He said it "makes it very hard for the administration" when the industry keeps shifting its position on Yucca Mountain.

Other issues suffering from inconsistent nuclear industry messages include carbon control policy, loan guarantees and production credits, and regulatory reform, Sununu said. When there is not a unified message, "you're confusing your friends" in Congress and the administration, he said."

Sununu also suggested that the nuclear industry explain to the American public what the economics will be of not building nuclear power plants. He added that the message should be sent out on flyers stuffed in electric bills to customers.

Not waiting for the government

Constellation could take a page from the book being written by three "first-movers" who have taken first major step to build new nuclear power plants. These companies are not confused and are sending a message by their actions. Three companies already have submitted complete construction and operating license applications for new reactors to the NRC. Note that Constellation filed a partial application earlier this year for a proposed new reactor at Calvert Cliffs.

Dominion Resources Inc. (NYSE:D) this week became the third company to file a complete application for a new nuclear reactor, at its North Anna Power Station in Louisa County, Va., following the Tennessee Valley Authority, which last month applied for new reactors at the Bellefonte nuclear power station near Scottsboro, Al. NRG Energy Inc. (NYSE:NRG) in September was the first company in about 30 years to submit a new application to build and operate new reactors, at its Bay City, Tx, power plant site.

* * *

What it boils down to is that when statehouse hearings toss around numbers that are off-the-mark, someone, perhaps the industry and its trade groups, need to follow-up especially with the news media. This isn't to say NEI isn't doing its job. Far from it since they went all the way to Oklahoma for this hearing. Still, good numbers make for good government. That's something that always needs attention.

Thorium fuel prospects advance

Senate leaders from western states offer legislation
[Update 01/07/08]

Two industry reports this past week indicate continuing interest in thorium as a nuclear fuel. MIT Technology Review has an accessible update. Also, Platts Nuclear Fuel (subscription required) reports that assemblies of thorium fuel are scheduled to be tested in a Russian VVER-1000 reactor in 2010 as part of a muti-year program.

Senate Majority Leader Harry Reid (D-NV) and Orin Hatch (R-UT) are reportedly working on legislation to promote thorium fuel which they say has the potential to cut the volume of spent nuclear fuel in half. Fortune magazine noted their interest in 2006.

Even more interesting is that Thomas Cochran, director of the nuclear program at the Natural Resources Defense Council, told the MIT magazine that thorium power "makes a lot of sense." Cochran wants the Department of Energy and the Nuclear Regulatory Commission to look at thorium fuel options. He says legislation and funding will be necessary to assess the fuel.

Seth Grae, President of Thorium Power says in addition to work with the Russians his firm is looking into working with India to help that country exploit its large thorium reserves.

Thorium Power gets $5M consulting deal

Thorium Power, Ltd. (OTCBB: THPW), a developer of nuclear fuel technologies for nuclear reactors announced this week that it has entered into a consulting and strategic advisory services agreement with a foreign government-owned entity. The company will develop a roadmap as the first phase of a feasibility study for a prospective program to deploy civilian nuclear power plants. The roadmap will include recommendations related to timelines, organizational structure and priorities for subsequent phases of the program.

The terms of the agreement call for an initial payment to Thorium Power of $5 million USD at the start of the first 15-week phase of the feasibility study on November 30, 2007.

The firm stated that the agreement also provides a framework for a subsequent consulting engagements. The firm said the scope of the services under the agreement has been defined in consultation with appropriate authorities in the U.S. government in compliance with all applicable U.S. export controls. Presumably this means Thorium Power's technologies and services have been cleared in terms of the government's list of sensitive technologies, countries, or both.

Thorium Power said it intends to communicate additional details about the client relationship "once certain governmental steps are completed in both countries relating to potential additional work." Thorium Power did not name its client for this deal.

Erik Hallstrom, COO of Thorium Power, stated, "While we have had our non-proliferative fuel designs undergoing tests in a research reactor for the past several years, this agreement marks a milestone for Thorium Power's commercialization efforts. The agreement provides validation for our business model, where consulting and government services are early revenue drivers as well as important elements in the sales process for our broader offering."

Update 01/07/08

World Nuclear News reports additional details on this project. Thorium Power announced on December 31st it reached a new formal agreement with Russia's Kurchatov Institute relating to the irradiation testing program for Thorium Power's thorium-based nuclear fuel designs.