Monday, March 24, 2008

Turkey calls for bids on three nuclear plants

After a few internal delays the coast is clear

Turkey opened for business this week issuing a "tender" for three new nuclear plants. The country's energy ministry said Turkey would guarantee purchase of electricity from the plants for the first 15 years of operation. In addition to balancing its own portfolio of fossil plants with the new nuclear build, Turkey plans to become a regional exporter of electricity. See prior coverage on this blog for background.

Bloomberg reports the state electricity company Tetas will accept offers until Sept. 24, the government's Official Gazette said. The 4,000 MWe power station will be built in Akkuyu near the Mediterranean port city of Mersin.

The government will issue a license for a second site on the Black Sea coast near Sinop early next year according to the Turkish Atomic Energy Institute. Turkey wants non-state companies to build three nuclear power plants by 2013.

The bid process was delayed for reasons having to do with the appropriately named Byzantine government processes of the Turkish government. One of the issues is whether foreign nationals can operate the plants. Given Turkey's few available nuclear engineers, that political debate probably was resolved in the face of reality. Maybe not? In any case they seem to have gotten the tender out the door at this point.

A lot of companies are interested in the plants which likely will function as merchants in terms of a business model. Turkish construction companies are casting a wide net for international partners with nuclear expertise. Firms in Korea and Japan have expressed interest as has General Electric from the U.S. and so have European utilities. Given the way the European Union has treated Turkey's request for membership, it will be interesting to see how the selection process turns out.

Energy Minister Hilmi Guler said that nuclear power is one of the best options Turkey has for increasing its energy security, and that nuclear power should supply 20 percent of the nation's needs within two decades.

Sunday, March 23, 2008

Indian Point under fire

New York is the first state to formally oppose relicensing of a nuclear power plant

At a time when the rest of the world is experiencing what is called a "nuclear renaissance," the situation in the Empire State appears to be retrograding into a dark age where all things nuclear are considered a threat, and often on an emotional rather than rational basis.

The relicensing hearing now being conducted by the NRC seems more like the medieval hunt for the unicorn portrayed in tapestries at the Cloisters in New York than a modern 21st century assessment of nuclear energy technologies.

At a time when many large utilities, such as TVA, do not see any alternative for base load demand, besides nuclear energy, to the problem of greenhouse gases from coal-fired power plants, the issue of what would happen if Indian Point were shut down seems to have been set aside. Locking up and shutting down nuclear energy seems to be the more general goal of opponents of the Indian Point nuclear power plant.

State of New York once a defender, is now the hunter

The New York Times reports that at one time the State of New York was a defender of the plant, now owned and operated by Entergy Nuclear. New York, which built the plant, sold it to Entergy for the bargain-basement price of $600 million in 2000. The plants supply 2,000 MWe and, depending on seasonal variations, cover from 20-40% of the region's need for electricity.

Now the state has joined with Westchester County and a coalition of municipalities, environmental, and anti-nuclear groups to petition the Nuclear Regulatory Commission (NRC) not to grant a 20-year extension for the two operating reactors. Their licenses expire in 2013 and 2015 respectively.

The Times reports that the charge, once led by the now disgraced Gov. Elliott Spitzer, is being brought forward by Mylan Denerstein, a deputy attorney general for NY state. Her lead off position is that the plants represent targets for terrorists. In an emotional presentation she told the NRC this month, "The continued operation of Indian Point is untenable. The risks are simply too great."

Supporters of the plant point out that the risk of an attack must be weighed against the issues of possible brownouts and the certainty of much higher costs for electricity if replacement power from fossil plants must be bought on the spot market.

The NRC, which will take some time to make up its mind on the relicensing issue, says it is not persuaded by popular political passions. Commissioner Peter Lyons told counterparts in Istanbul,Turkey, last January that his view on regulation is to "maintain stable regulatory standards."

The Times points out the NRC must consider two factors in its decision whether to extend the licenses. The first is whether Entergy has an adequate plan for managing the plants, and the second is the environmental impact of keeping the plants open.

Environmental groups list their issues

The NRC rejected a laundry list of issues raised by Ms. Denerstein which included the threat of terrorism, emergency evacuation, accidental releases of radioactivity, storage of spent nuclear fuel, and the danger of earthquakes. For its part the NRC said these issues are not relevant for the license extension decision and are covered in regulations that govern plant operations.

The lead environmental group in the mix is Riverkeeper which seems to be supplying Ms. Denerstein's talking points based on the text of its website. Nearly three dozen other environmental groups count themselves as allies in the drive to close Indian Point.

The group submitted detailed technical arguments against relicensing including metal fatigue of aging plant components, corrosion in the cooling system, and leaks of strontium-90 and tritium into groundwater.

Phillip Musegaas, an attorney for Riverkeeper, told the NY Times he did not think his group would prevail in the NRC hearings.

"We are fairly pessimistic. When you look at the challenges that have been raised by other plants in the past, the NRC is very resistant." He said the NRC was "captive" to the nuclear industry, a charge the agency's commissioners have rejected.

Entergy responds to its challenges

While the NRC has been working through the regulatory process to see which issues and what parties have standing in the regulatory mix, the utility that owns and operates Indian Point is not leaving anything to chance. This week it announced that the "special circumstances" of the relicensing process merits an independent safety evaluation which Entergy would pay for itself.

Michael Kansler, President and Chief Nuclear Officer of Entergy, told the New York Times, "Repeated and continuous NRC assessments have concluded Indian Point is safe. We hope this evaluation will be another step in building public confidence."

"We are taking the extra step of performing an independent safety evaluation (ISE) to reassure the public that Indian Point is a safe and secure facility with acceptable plans in place to address an emergency."

Kansler said the decision to perform an ISE came after the company listened to various constituencies and policymakers and conducted numerous focus groups in an effort to understand the concerns associated with Indian Point.

Riverkeeper immediately took issue with Entergy. Lisa Rainwater, the group's policy director, told the Times her group had no confidence in the assessment. She said this was a job for the NRC. [Update 03/25/08 NEI's blog has more detail.]

The NRC said it had no objection to Entergy's assessment, but pointed out it was paid to do this work by fees from the nuclear industry as appropriated by Congress. In effect, Entergy is already paying for the NRC's work, and appears to be willing to get a second opinion, even at its own expense. The NRC also noted that independent assessments of nuclear power plants are conducted all the time by the Institute of Nuclear Power Operations (INPO), which is an independent nuclear safety organization.

James Rhodes, chairman of the Entergy panel, is the former chairman and CEO of INPO. He is also the former CEO of Virginia Power which is also a nuclear utility. The panel members will spend three weeks at the plant and more time writing a report. Rhodes told the TImes his group's findings will likely be used by both sides in the licensing dispute. He noted the group must notify the NRC of any problems it finds.

Entergy emphasized two areas would be covered in the assessment.

  • Implementation of nuclear safety requirements, conservative decision making, regulatory compliance, and identification and resolution of safety problems.

  • Conduct of operations, engineering, maintenance, management, and plant material condition.

The security evaluation would include Indian Point's capability to deal with credible security events, including ones involving terrorist attacks. The emergency preparedness evaluation includes:

  • Accident response and accident management capability.

  • Interface with and support of offsite emergency management.

Closure could cause cost of electricity to rise by 50%

Closing the Indian Point plant could cause very significant increases in the cost of electricity according to a report prepared for the a coalition of business groups by Energy Strategies of Albany, NY.

The New York Times reported that the consultant's study indicates the plant is cost-effective and that its closing would have a direct impact on the loss of 11,000 jobs in the region because of higher electricity prices. Riverkeeper charged the report's findings were biased because Entergy is a member of the coalition.

Marsha Gordon, CEO of the Westchester Business Alliance, told the NY Times, "Entergy had no role in the development of the report." She added that closing Indian Point would bring the potential for rolling blackouts and disruption of business operations.

The study also said that "conservation measures and the development of renewable energy sources such as windmills will not be sufficient to offset the loss of Indian point."

Indian Point faces operational issues

In the midst of a contentious relicensing hearing, the utility took two hits to its public profile. First, the NRC issued a notice of violation to Entergy over problems with the failed operation of emergency sirens at the plant. If upheld the utility will have to pay a fine of $650,000. Second, two Indian Point plant security guards tested positive for cocaine in their systems and were suspended from work. The NRC said that nationwide incidents of this type are rare.

& & &

All-in-all March has not been a good month for Indian Point. The NRC hearings could easily spill over into 2009 and even beyond the current political life of the incumbent NewYork Governor. Until the NRC makes a decision, the plants will keep operating and the lights will stay on.

Update on UK new nuclear build

The country is turning on the warp drive to get a new generation of nuclear energy plants

The Guardian reports that the current UK government is even more "bullish" on the advantages of building new nuclear energy plants.

In 2006 Tony Blair, then prime minister, made it clear that he favored nuclear energy. Under Gordon Brown and his business secretary, the pace has accelerated and in recent weeks has turned into a rush.

On March 5, Hutton, whose constituency is close to Sellafield, made it clear that the government would pull out all the stops to maximize the expansion of nuclear power.

"We need the maximum contribution from nuclear sources in the next 10 to 15 years," he explained. Asked if the government wanted the share of electricity generated from nuclear to rise beyond the current 19%, he replied: "That's the ambition we should have ... I'd be very disappointed if it's not significantly above the current level."

The effort is bigger than just providing more electricity for toaster ovens and television sets. The UK government has staked out a leadership position to hurl nuclear energy at the problem of global warming like a faster than light starship speeding towards the next galaxy.

"It's just like the late 50s and 60s when nuclear was being promoted as a source of free energy," said John Large, a nuclear industry consultant. "Now it is being heralded as something to save the world."

General design assessment for reactors

The UK government said it has started a process to select no mofe than three nuclear reactor designs to proceed to the next stage of its Generic Design Assessment (GDA).

The government said this next step will allow nuclear regulators to focus on the designs which can be licensed and built starting in 2016.

Earlier this week, the government said the four new designs under consideration for future UK nuclear reactors had all passed initial safety tests. The four designs - from AECL, Areva, General Electric-Hitachi and Toshiba Westinghouse - are now eligible for next step of GDA.

"It is vital for regulators to get involved with potential designs at the earliest stage...so that we can ensure that the existing high standards of nuclear safety and security in the UK are being maintained and improved," Mike Weightman, the head of the HSE's Nuclear Directorate, said in a statement to Reuters.

The UK government said it will make up its mind on the three designs by 2011.

UK / French nuclear deal

Brown's government isn't stopping its drive for nuclear energy at the shores of the English Channel. In a global quest to address the threat of climate change, Britain and France are to sign a deal to construct a new generation of nuclear power stations and export the technology around the world.

The pact is to be announced at the "Arsenal summit" next week when prime ministers Gordon Brown and Nicolas Sarkozy will meet in London. Sarkozy is at this point the world's most successful nuclear advocate having inked a $12 billion deal with China and just returned from negotiations with India and South Africa. In the U.S. Areva is developing new reactor proposals almost as fast as the paper can come out of the printer.

Britain hopes to take advantage of French expertise to build nuclear power plants. Also, Brown hopes the partnership will create a skilled British labor force who would then work in partnership with France to sell nuclear power stations to other countries over the next 15 years.

Perhaps complicating this rosy picture is a separate process the UK has set in motion which is to sell off all or part of British Energy.

British Energy is for sale

British Energy, the country's biggest reactor operator, announced last week that it had become the target of a potential £7bn takeover bid, and all the UK's top gas and electricity suppliers are competing to get into what could be the next boom market.

According to the Guardian, shares in the British company soared 20% after it confirmed the news. EDF of France, E.ON of Germany and Centrica, owner of British Gas, are among the key players known to have been holding talks with British Energy

The Guardian's analysis shows British Energy is in demand because it generates about a sixth of Britain's electricity but, more importantly ,has the most attractive potential sites to build a new generation of nuclear plants.

"The board announces that the company is in discussions with interested parties in the context of its future and its plans to take a pivotal role in any new nuclear program," said a formal statement from British Energy, which continues to be 35% owned by the UK government. "There can be no certainty that any offer will be made," it added.

John Hutton, the UK government business secretary, said "A range of possibilities including co-investment, equity stakes and full offers are all possible but nothing is going to happen overnight," he added. "There will be no announcement next week; it is likely to take quite a long time."

The Guardian reminded its readers British Energy was saved from financial collapse in 2002 by the government after being hit by weak power prices. Its shares were only relisted on the stock exchange in 2005. Some officials have hinted that they want to sell the whole government stake. That seems unlikely.

Lakis Athanasiou, utility analyst at Evolution Securities, told the newspaper it was most likely the government's stake would be split between British Energy's partners in new nuclear reactors. "It is difficult to see government wanting to face the political difficulties of placing the entire UK nuclear industry in the hands of a single foreign company," he said.

PBMR reactor design gets on track

A commercial reactor could be in operation by 2013

After a series of fits and starts development of the Pebble Bed Modular Reactor (PBMR) appears to be getting back on track. According to wire service reports in South Africa the demonstration reactor design is completed, and construction is due to start next year, with the first fuel to be loaded four years later. If successful, another 10 plants could be built. It looks like the PBMR train is finally leaving the station.

A full size commercial plant could be in operation as early as 2013 according to Robert Peters, a senior consultant at the fuel development laboratories for PBMR. The demonstration reactor is to be built at Koeberg outside Cape Town and a pilot fuel plant at Pelindaba near Pretoria.

The project is supported by the government, Eskom, the Industrial Development Corporation, and US companies Westinghouse and Exelon. The commissioning of the first commercial pebble bed plant is scheduled for 2013.

Public Enterprises Minister Alec Erwin is reported to have announced that the government is looking to produce 4,000 to 5,000 MWe of power from pebble bed reactors, which equates to between 20 and 30 modular reactors of 165MW each. It is also possible the government may choose to construct larger units. PBMR has sought investment in the project from Japan's Mitsubishi.

“The plan is to order 14 units, but decisions regarding future PBMR units are dependent on the PBMR demonstration power plant being authorized, constructed and successfully commissioned,” said Erwin.

Eskom is reportedly advertising 900 engineering positions to support its aggressive plans to rapidly build nuclear power plants in South Africa. The turn around follows years of layoffs and downsizing.

Erwin also noted that there are more than 5,000 students in different stages in the training pipeline and that major projects such as the construction of new power stations are contracted as turnkey projects "to ensure that winning bidders bring in additional skills".

Hobbs, NM, places its bet for Areva's plant

Industrial revenue bonds are a key feature
Update 05/06/08 Areva chose Idaho Falls for its new plant

Efforts in New Mexico to secure Areva's $2 billion uranium enrichment plant hinge on the use of industrial revenue bonds. According to a report in the Las Cruces Sun, Lea County Commissioners have approved economic incentives that local officials hope will help them as they prepare to make a final pitch next week to Areva.

According to the newspaper all five commissioners voted in favor of issuing industrial revenue bonds for the project, which would basically make the building exempt from property taxes. Even though the county would be issuing the bonds, the company would be held responsible to pay back the bond money.

Commission Chairman Gary Schubert said the bonds are contingent on Areva picking a specific location between Hobbs and Carlsbad. The county also agreed to pay its share in purchasing the property which located at the border of Lea and Eddy counties. The expected purchase price and necessary improvements would run about $2.5 million according to media reports.

A New Mexico State Senator told the newspaper a stable construction workforce with experience would be a key incentive. Currently, Louisiana Energy Services (LES) is building a uranium enrichment plant in Eunice, NM. The deal here is that about the time that plant is done, Areva would be ready to break ground.

Sen. Carroll Leavell, R-Jal, said LES and Areva could prosper in the area together.

"It would take Areva three years to get the [NRC] license, and that will give LES time to finish construction," he said. "Areva would be able to use the same contractors, and after they finish at LES they could move over to the Areva job if it works the way we see it working."

Leavell may have a logical approach to the situation, but when Areva briefed the NRC on its plans in May 2007, it was looking at a much faster path to getting a license from the agency by mid-2010. Meeting notes on NRC's web site indicate the agency realized it would be pushed to speed up the licensing process.

The workforce angle doesn't look good if two plants are competing for the same people. If LES is still under construction when Areva breaks ground, it is likely costs will go up for both plants.

Is Andrews in or Out?

The Las Cruces Sun reports that Economic Development Corporation of Lea County executive director Bethe Cunningham and three others presented a proposal to the commission that mirrored tax breaks given to Louisiana Energy Services.,

At one time there were reports Hobbs, NM, would work with Andrews County, TX, to jointly seek to secure the Areva plant at a location that would benefit both communities. However, there is nothing in the most recent press report that confirms this is still the case.

Meanwhile back in Andrews a television news report on its status as a potential site for the Areva plant generated 400 inquires about jobs according to the local economic development agency.

Other sites waiting for Areva's next move

The other three sites in Idaho, Washington, and Ohio are now waiting for Areva to make its next move. According to statements by Areva's executives a corporate committee will make a decision to select a site by the end of the month.

In Washington Sen. Patty Murray offered an endorsement of the Richland site for the plant. In Idaho two bills passed in record time by the legislature are awaiting signature by Idaho Gov. C.L. "Butch" Otter. In Ohio despite an state government endorsement of Piketon as a site for the Areva plant, a coalition of civic and environmental groups lashed out at Gov. Ted Strickland and the Department of Energy for failure to make progress in cleaning up the site.

For its part Areva has said it will not go where it is not wanted which may take Piketon out of the running. In Idaho community leaders pointed to the outpouring of community support for two proposed GNEP sites at hearings held in Idaho Falls in 2007. In Richalnd, WA, local support was strong, but green groups opposed to the GNEP site there traveled to testify against it from as far away as Portland, OR, and Seattle, WA.

While New Mexico is playing a card that offers an experienced construction workforce, Idaho is looking at how it will support the plant over it's 30-year operational life. With a long history of providing a workforce and community support for nuclear facilities, economic groups in Idaho Falls feel they are as much in the running as any of the other four sites. Richland's strength is similar to Idaho's with regard to workforce qualities and the proposed site is a stone's throw from a nuclear fuel fabrication plant.

Areva has to make a $2 billion decision soon. Which one will it be?