Saturday, April 25, 2009

Two setbacks spook nukes

Ameren calls it quits in Missouri and a top federal energy regulator says baseload power is dead

halloween_pumpkinThe U.S. nuclear industry had good reason to be spooked this  week even though Halloween is still on the other side of the equinox. Two unrelated events that represent significant setbacks for the nuclear renaissance took place this week.  In the first instance, a Midwestern utility announced it was walking away from building its second nuclear power plant, a 1,600 MW Areva EPR.  In Washington, DC, a powerful energy regulatory official sent a signal sure to send shivers down the spines of anyone else thinking of build a new reactor. He said the nation doesn’t need them.

In Missouri, according to the St. Louis Post Dispatch, Ameren’s CEO told the state legislature to take their session and shove it along with plans to build a second nuclear reactor at Callaway, MO.  The reason is the legislature killed a measure that would allow the utility to recover construction costs while the process of building the $6 billion plant, as long as six-to-eight years, was in progress.

In Washington, D.C., the head of the Federal Energy Regulatory Commission (FERC) gave a barn burner of a speech in which he said, according to a headline in the WSJ, “we don’t need no stinkin’ nukes.”  The NY Times reports that Jon Wellinghoff said no new nuclear or coal plants may ever be needed in the U.S.

“I think baseload capacity is going to become an anachronism.”  He said wind energy is cheaper than coal or nuclear.

Show me state shows Ameren the door

Missouri show meAfter long and contentious debate in the Missouri Senate and House, the state legislature killed off a bill that had initially been crafted by Ameren (NYSE:AEE) to overturn a 1976 state law the prohibits the utility from recovering construction costs while building the reactor is in progress. 

Ameren did a number of things right, including building a business network of support, but also over-reached in some of the provisions of its bill instantly angering consumer groups and alienating its supporters including the Public Utilities Commission.  By the time a revised bill was introduced in the legislature, opposition groups had taken advantage of the delay to mount a successful campaign against the legislative measure. 

NOranda aluminumOne of the key members of the opposition is one of  Ameren’s biggest customers, Noranda, which owns and operates an aluminum manufacturing plant in Missouri.  An a classic hardball play, the plant’s management said that if the legislature passed the measure, and Ameren significantly raised its rates, the firm would be forced to close laying off hundreds of workers.  This threat seems to be more bark than bite since aluminum smelters often align with nuclear power plants because of their reliability in supplying electricity to meet baseload demand.

Ameren also came in for withering criticism for putting the cart before the horse in the timing of its request to the legislature.  Missouri Gov Jay Nixon told a news conference on April 23 that Ameren would have better luck overturning the state law if it came to the legislature with an NRC license in its hand.  Nixon said Ameren didn’t get it, or chose not to get it, in an aggressive quest to raise rates even before it breaks ground. 

For its part Ameren said it has already spent $75 million of which $65 million is for submission of a license application to the NRC and another $10 million for orders for long lead time large forgings for the proposed plant.

Ameren CEO Tom Voss gave the news media a pretty good impression he was taking his bat and ball and going home.  However, supporters and detractors alike think the utility is just headed into a cooling off period. 

The most significant signal is that it did not tell the NRC to stop working on its license application.  Second, there are two more legislative sessions before the utility gets a license from the NRC in 2011 which gives the utility plenty of time to figure out what went wrong and try again.  Third, Ameren is not under any pressure to be among the nation’s “first movers” in building a new reactor.  It can meet growth in demand for electricity in its service area with natural gas plants while it watches what happens elsewhere in the country with the first wave of new nuclear power plants.

FERC chairman swings away with controversial remarks

Green_Monster_2006If FERC Chairman Jon Wellinghoff was playing outfield at Boston’s  Fenway Park, right now he’d be so far from home plate that fans would rightfully assume he was hugging the green monster.  Fenway Park’s left field boundary is marked by a 37-foot high green wall that sends hits that would be career making home runs in other parks bouncing back into play.

What sends Wellinghoff’s public profile into the center of a controversy about the Obama’s administration’s plans for nuclear and coal are remarks he made this week in which he said no new plants for either fuel type might ever be built.  In doing so he planted himself in the political outfield going far beyond the views of other energy officials, including Energy Sec. Steven Chu, who says that nuclear and fossil fuel plants will continue to play an important role in the nation’s economy.

According to a report in the New York Times April 22, Wellinghoff spoke as though he had a “swing away” signal from the White House.

swingforthefences"I think baseload capacity is going to become an anachronism. Baseload capacity really used to only mean in an economic dispatch, which you dispatch first, what would be the cheapest thing to do. Well, ultimately wind's going to be the cheapest thing to do, so you'll dispatch that first."

"People talk about, 'Oh, we need baseload.' It's like people saying we need more computing power, we need mainframes. We don't need mainframes, we have distributed computing."

The nuclear industry was understandably livid over Wellinghoff’s remarks. 

"If expansion of nuclear plants is the nation's policy, then Congress has to recognize that the U.S. energy companies cannot afford to do this alone," said Paul Genoa, policy director for the Nuclear Energy Institute. 

 The nuclear industry trade group also offered readers of its blog a strongly worded analysis of Wellinghoff's views.  The blog post noted, "Baseload capacity also means reliable, constant power to meet the minimum load requirements. Wind, which is supposedly "going to be the cheapest thing to do," does not produce reliable, constant power.

The implications of Wellinghoff’s views, if shared at the White House, could be that they see the nuclear renaissance in the U.S. is over.  It could also mean that Al Gore’s vision of an implausible ten-year moon shot for renewable energy technologies and smart grids has come front-and-center in the Administration’s thinking. 

However, almost no one in the nuclear industry accepts those views as take-aways from from Wellinghoff’s speech. Instead, they looked to the White House for some clarification on these and broader energy issues.

"The president needs to show his cards on nuclear energy," said energy consultant Joseph Stanislaw, a Duke University professor, told the NY Times. "He cannot keep this industry, which must make investments with a 50-year or longer horizon, in limbo for much longer."

Nuclear bloggers want to send Wellinghoff to the showers

So far the White House has been mum about Wellinghoff’s speech.  Meanwhile, Wellinghoff came in for a roasting in the nuclear blogsphere.  To use another baseball metaphor, they pulled him from the lineup and sent him to the showers. At least that’s what they’d like to see the Obama Administration do. I would too.

  • At Atomic Insights Rod Adams called Wellinghoff “dangerous.” He noted that before joining the federal energy commission in 2006, Mr. Wellinghoff, a lawyer, “focused exclusively on client matters related to renewable energy, energy efficiency and distributed generation,” according to FERC’s official bio

    Adams adds that Wellinghoff fails to understand how important it is to have reliable electrical power that is not dependent on the whims of the weather. At best, he notes, solar and wind work well about 30% of the time.

  • cerekov radiationAt Blogging About the Unthinkable, Sovietologist used a pen warmed up in Cerekov radiation to say that Wellinghoff has “absolutely no idea what he is talking about.”  He writes, “Wellinghoff is seriously confused, both in terms of the current status of renewable technology but also in that he's proposing technological frameworks that are currently wishful thinking.” 

    He closed with this assessment.  “Wellinghoff is a technological fantasist who's determined to pick energy winners before they've been tested in the real world. It's rather akin to trying to pick the winning racehorse before it has been born.”

While Wellinghoff was playing to the Obama administration’s green supporters, in Congress Sec. of Energy Steven Chu told the House Energy & Commerce Committee,

“I believe nuclear power has to be part of the energy mix in this century.”  He said the U.S. has to regain its lead in nuclear energy. “We are trying to start the American nuclear industry again.” 

Mr. Wellinghoff needs to call the Energy Secretary and get his playbook up-to-date.  Right now it is missing very important pages with the words “nuclear” and “baseload demand” in the headings.

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Wednesday, April 22, 2009

Areva doubles its bet in Idaho

NRC license application for Idaho Eagle Rock uranium enrichment plant will change

arevaAreva Enrichment Services has asked the NRC to change its license application to double the capacity of the planned $2.4 billion ‘Eagle Rock’ Enrichment Facility in Idaho Falls. The change in the license application was reported April 22 by the Idaho Business Review (IBR) and by World Nuclear News in London.  The full text of Areva's March 31, 2009, letter to the NRC, which is now part of the agency's public record for the license application, was made available by Areva Enrichment Services

The assumption that Areva is planning to double the size of the plant has been an open secret here in Idaho Falls for months. The reason is that Louisiana Energy Services, which is building a similar plant in Eunice, NM, announced last November it was doubling the size of its plant, now under construction, from 3.0 to 5.9 million SWU. That plant is expected to spool up its centrifuges in December of this year. (See URL below)

Areva’s original license application, submitted in December 2008, called for a capacity of 3.3 million separative work units (SWU) per year. This is the basic measure used to keep track of uranium enrichment production. Both online sources cited above said the revised application, which reportedly will be submitted on April 23, would increase that capacity to 6.6 million SWU per year.

By comparison, USEC’s planned uranium enrichment plant in Ohio is currently designed to produce 3.8 million SWU. Taken together the three plants could meet about 75-80% of US demand for enrichment uranium by 2018.

Impact of license change

Bob Poyser, vice president of operations for Areva’s Eagle Rock facility, told the Idaho Business Review the change would require the construction of two additional separations buildings.

“What we’re seeing is a lot of interest in nuclear power plants. Obviously, nuclear is moving forward on a worldwide scale. We hope it will go ahead in the U.S. We just want to be positioned to take advantage of that demand that might be there.”

Poyser told the IBR Areva still intends to build to its initial 3.3 million SWU capacity, though the license revision will give it more flexibility.  In short, it is a marketing contingency.  Even if Areva exercises the option, it won't occur until 2018.

“If we can get the licensing part out of the way we’d be in a good position to expand if we needed to."

Construction on the $2.4 billion facility is expected to begin as early as 2011. The Eagle Rock plant will reach a production level of 3.3 million SWU per year by 2018, and 6.6 million SWU by 2022. Much depends on whether contracts sold ahead of completion of construction are still ready to be executed by customers at the time plant production reaches the point where expansion is needed to meet demand.

Areva’s application was accepted for a full review by the NRC in late March. Poyser told the IBR the license revision won’t substantially affect the review process, which is expected to take about 30 months.

“Licensing activity is very arduous, so we might as well do it while we’re doing it once.”

Financing Eagle Rock

Also, Areva is competing head-to-head with USEC for $2 billion federal loan guarantees available for uranium enrichment plants. Even if Areva doesn’t get the nod, it has other options such as offering minority equity positions in the plant to customers. It has already pursued this financing model with its George Besse II plant in France.

LES has not applied for a loan guarantee. It is being built by Urenco, a Dutch firm. USEC has had difficulties raising investment capital, but says publically it will find the funds to proceed with construction.

Prior coverage on this blog

Update April 24, 2009

Areva has posted a statement about the NRC regulatory filings on its North American blog.

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Sunday, April 19, 2009

Italy’s nuclear renaissance blooms

France and Russia compete for market share. Neither Rome nor reactors are built in a day.

In an exclusive post at the Energy Collective this week, I explore the progress of the nuclear renaissance in Italy.

EnergyCollectiveBannerItaly is looking for energy independence, and like many of its politicians, has taken up with two new companions - France and Russia - both of which are promising a new life with nuclear energy at its heart. In doing so Italy is clearly planning to leave behind coal which is its long time companion dating back to the dawn of the industrial age.

Check it out.

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Uranium wastes roil Utah

Cold war legacies and new enrichment plants generate plenty of political heat

UraniumSymbol_000Utah is the center of another uranium waste debate and this time it is tailings from enrichment plants.  Utah’s sole Democrat, already a fit to be tied over delays in cleaning up the Moab mill site, has joined forces with one of the nation’s leading anti-nuclear activists, also a Democrat in Congress. Their purpose is to attack the U.S. Nuclear Regulatory Commission (NRC) over the stringency of its regulation of depleted uranium tails from enrichment plants. For its part the NRC told the two congressmen ‘not so fast’ or words to that effect.

The Salt Lake City Tribune reports the NRC's comments come in an April 9 letter to Reps. Jim Matheson, D-Utah, and Edward Markey, D-Mass.  Both congressmen have questioned the NRC's March decision to regulate large quantities of depleted uranium as the least hazardous kind of low-level radioactive waste, known as Class A waste. 

The NRC says classifying large amounts of depleted uranium as a more radioactive type of waste, without further study, would not provide additional protections to public health, safety or the environment. 

Depleted uranium has a percentage of U-235 smaller than the 0.7 percent found in natural uranium.  It is obtained from spent (used) fuel elements or as byproduct tails, or residues, from uranium isotope separation in uranium enrichment plants. It is currently classified as low-level waste which makes it relatively easy to dispose of in licensed sites in Idaho, Utah, and Texas.

What’s Markey really up to?

Matheson and Markey have told the NRC to turn over all e-mails, phone call logs, meeting notes, memoranda and analyses related to the depleted uranium decision. The usual intent of a request like this is to rip through the agency’s paper trail, try to find something at fault, and then condemn the entire proceeding as flawed.

ed_markeyMake no mistake here.  Markey (right) is an ardent anti-nuclear activist.   His motives most likely are focused on trying to make production of enriched uranium in the US much more difficult by ratcheting up the regulatory requirements for its disposal. With three huge uranium enrichment plants coming online by 2014, it is clear that Markey is targeting the nuclear industry’s fuel supply.  His intent is to try to choke it off by making it too costly to dispose of waste products from these plants.  

Billions of dollars in investment are at stake and so is CO2 emission free electricity from the nation's nuclear power plants.  Currently, they get 50% of their fuel from blended down HEU from Russian nuclear weapons via the Megatons-to-Megawatts program. It ends in four years.  Starting in 2013 more than three-quarters of the nuclear fuel for current and new nuclear plants will come from three new U.S. based uranium enrichment plants which will generate the depleted uranium as a waste stream that is at the heart of this controversy.

The NRC says not so fast

In response to Markey and Matheson’s demands for a reclassification of depleted uranium to a more stringent set of standards for disposal, the NRC has said basically it wasn’t ready to do so, and what’s more NRC Chairman Dale Klein wrote,

"In summary, the commission believes that, in the absence of comprehensive technical and legal analyses, changing the waste classification of [depleted uranium] would be premature, could have significant and unforeseeable consequences, and would not provide for more protection of public health and safety and the environment.”

Uranium enrichmentThe debate over how to classify large volumes of depleted uranium first came up in 2005 when Louisiana Energy Services applied for a license to build a $2 billion uranium enrichment facility near Eunice, New Mexico. Since then USEC has also received a license to build a $3.5 billion uranium enrichment plant in Ohio. Areva has applied for a license to build a $2.4 billion plant in Idaho.

Last March the NRC said it would look at the issue of how large volumes of depleted uranium are handled at disposal sites.  The Salt Lake City Tribune reported that the NRC stressed in its letter it doesn’t intend to speed up the process of how or whether to change the current classification of depleted uranium from Class A waste. It stressed the real issue is the licensing process for each disposal site.

“Eventual changes to waste classification designations in the regulations must be analyzed in light of the total amount of depleted uranium being disposed of at any given site.”

The NRC said it consulted with state regulators in South Carolina, Texas, Utah and Washington on how they view depleted uranium to reach its decision.  Klein said in his letter it is "highly unlikely" any disposal of large quantities of depleted uranium will occur before 2011. The NRC said it intends to have its staff hold public workshops and develop technical rules related to disposal of depleted uranium from enrichment plants. 

It could be three-to-five years before the commission completes its work on revising the regulations.  In the meantime, you can bet that Markey and Matheson will be working hard to change that schedule.  Two of their points of leverage is that the NRC has an open seat and NRC chairman Klein, a republican appointee will step down from that leadership post under the new Obama administration. 

jaczkoIn a speech in March to a waste management conference, NRC Commissioner Gregory Jaczko (right) said he was not happy with the current approach by the NRC to regulation of depleted uranium.  Jaczko votes most frequently with positions favored by anti-nuclear groups and once worked for Markey.  He is being promoted by green groups to be appointed as the next chairman of the NRC.  It ain’t over until the fat lady sings so watch this space.

Moab tailings get stimulus money

The Department of Energy will spend $108 million in economic  stimulus money to speed up removal of 16 million tons of radioactive uranium mill tailings on the Colorado River near Moab, Utah.

Rep. Jim Matheson, D-Utah, said the funding commitment shows that the government is working to meet a 2019 cleanup deadline. Before the stimulus money was allocated, DOE had said the cleanup would not be finished before 2028.  The total cost of the cleanup is estimated at $1 billion. 

Union PacificThe money will remove an extra 2 million tons of tailings by 2011.  The funds will pay for more rail cars and more rail shipments from the former Atlas Mineral Corp. site near Moab to a disposal site about 30 miles away. (see map below)

The Atlas Minerals Corp. bought the mill in 1962. It closed in 1984 but left behind the tailings behind on the banks of the Colorado River. The waste is part of a Cold War legacy in Moab, where uranium was mined during the 1950s.

Matheson and other lawmakers have worked to insure the massive waste piles would be moved away from the river's banks, rather than capped in place. The final environmental impact decision adopting that action was issued in 2005.

Matheson said in a statement.

"There is overwhelming scientific evidence that this site is unstable and that the contamination already migrating under the river towards the town of Moab could, with one major flood event, be dumped into the Colorado (River),"

The river is a source of drinking water for 50 million people, including residents of Arizona, California and Nevada.

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