Saturday, June 12, 2010

Western Lands Uranium Gopher for June 12, 2010

Ufranium prospectingThis blog post is a round-up of several articles previously published in Fuel Cycle Week by International Nuclear Associates, Washington, DC.

Ur-Energy gets Wyoming UIC permit

The Wyoming Department of Environmental Quality (WDEQ) gave final approval June 1 for a Class I Underground Injection Control Permit (UIC Permit) which authorizes Ur-Energy (AMEX:URG) to drill, complete and operate up to five Class I non-hazardous injection wells at the Lost Creek site, an ISR mine located in Sweetwater County, Wyo, northwest of Rawlins.

Rich Boberg, a spokesman for the company, told FCW the permit is a major milestone and the firm expects to get its Wyoming mining permit and its NRC source materials license later this summer.

"At that point we will start construction, Boberg said. He added the firm has spent $24 million so far on the project.

According to Boberg, production in 2011 could ramp up to 1 million pounds. Two other nearby sites, one north, the other south, of the main site, may eventually bring in another 1 million pounds a year. The company claims on its website the adjacent sites could hold an additional 24 million pounds of uranium, but it has not issued yet issued an NI 43-101 report on that resource.

Separately, the firm also announced June 1 a CDN$5 million brokered private placement with Blackrock Inc. The proceeds will be used to support exploratory drilling on its Lost Creek property and for general corporate purposes.

Boberg said the firm is pushing hard to bring the mines into production. He pointed to recent developments in Canada saying their high quality ore presents a competitive presence in the market relative to ISR mine production in the West.

Colorado legislature bears down on Cotter Mill cleanup

The Colorado State Senate voted 24-9 the last week of April to pass a bill requiring uranium mills in the state to clean up legacy mill tailings and other waste before generating or accepting new radioactive materials. The bill has targeted a single site in its crosshairs, which is Cotter's mill in Canon City, located in Fremont County west of Colorado Springs. The mill has been a source of contamination and controversy since it was designated as an EPA Superfund site in 1984.

Plans to build new heap leach capabilities at the site, with an opening date of 2014, prompted area legislators to change existing law. Prior to passage of the bill in the Senate, which earlier this year passed handily in the House, uranium mills in Colorado could postpone cleanup and decommissioning costs as long as they were in production.

HB 1348 will require uranium mills to comply with cleanup orders before applications for new operations would be considered by state regulators. The bill strengthens public scrutiny of bonds for reclamation of mill sites and adds notification requirements regarding contamination of wells near mills used for drinking water.

The bill was sponsored by state legislators from Canon City and Pueblo. Statewide environmental groups added lobbying muscle to local supporters. Matt Carrington, a spokesman for Environment Colorado, told the Canon City Daily Record, " The days of uranium companies forcing communities to live with pollution are over."

State Sen. Ken Kester, one of the sponsors of the legislation, said, "Actions have consequences, and uranium companies need to clean up their mess." Kester represents Fremont County which is home to the Cotter Mill.

Over the past few months Cotter VP John Hamrick told the legislature, the news media, and anyone who would listen the bill will prevent the mill from processing ore from a New Mexico uranium mine near Mt. Taylor to be opened in 2014. He said the company is thinking about a challenge to the state law in court on the grounds the mill can continue operation as long as cleanup of groundwater contamination is taking place.

If the bill is allowed to stand, Hamrick said the mill might be forced to close. Cotter has estimated the new mill would include $200 million in capital investment and create 80 high paying jobs. Pueblo Rep. Buffie McFadyen says Cotter is mistaken that the bill will force the mill to close. She says it only imposes new requirements in the planned expansion not current operations.

While Hamrick has repeatedly pointed to an as yet unnamed mine in New Mexico as the source of new ore, he has not mentioned to the news media the developing uranium mine in his backyard. Black Range Minerals (ASX:BLR), an Australian miner, has been developing the Taylor Ranch mine in the Tallahassee Creek District of Fremont County less than 50 miles west of the Cottter Mill site in Canon City. The miner has published resource estimates which, if confirmed by operations, would make it a significant producer.

Uranium in Denver reservoir?

Cotter is in trouble at another mine along the Colorado Front Range. The Schwartzwalder mine, located near Golden, Colorado, just west of Denver, is contaminating groundwater with uranium which flows via a creek into the Ralston reservoir used for drinking water by the City of Denver. Last winter Colorado mining regulators warned Cotter "water degradation of the mine may require emergency response." The regulators rejected a plan by Cotter to deal with the issue as "inadequate," and declared the closed mine "a potential hazard to human health, property, and the environment."

Cotter VP John Hamrick issued a statement in response admitting the contamination coming from the mine exceeds water quality standards, but he denied in response to news media inquiries that it is getting into the reservoir.

The Denver Water Board and environmental groups are demanding that Cotter dig up the creek bed receiving the uranium contaminated water from the mine and put in a pump and treat facility. Cotter responded its plan will do the job which includes creating an artificial wetland to filter out the uranium.

Cotter acquired the Schwartzwalder mine in 1965. The property was developed as a hard rock underground mine. The firm reports total production from the Schwartzwalder has been approximately 17 million pounds U3O8. Based on long-term forecasts in 2000 for a weak uranium market, Cotter placed the mine on standby and begin reclamation of the property.

Update June 9, 2010

Colorado Gov. Bill Ritter signed the uranium cleanup law June 9, 2010, in Canon City. He said he does not oppose uranium mining in the state, but that miners must meet their cleanup responsibilities.

Also, Cotter Corp. has been ordered by the Colorado health department to stop discharging polluted water into Ralston Creek.

According to a wire service report, Department spokesman Mark Salley said the company could face fines of $10,000 a day for the violations.

Opponents rally to stop Powertech mine in South Dakota

A group calling itself the "Clean Water Alliance" held a grass roots organizing meeting in Rapid City, SD, in mid-April to try to stop Powertech (TSE:PWE), a Canadian miner, from developing the Dewey-Burdock property near Edgemont. The group told area news media its primary concern is that groundwater will be permanently contaminated with mine chemicals and uranium.

It cited an undocumented figure that three billion gallons of water would be affected by the mine. The most immediate concern the group has is water quality in the Inyan Kara aquifer which reportedly supports 80 wells used for drinking water. The group claims that some of the wells are as close as two miles to the mine.

The group seems to be ignoring the reality that the mine at the leased site wouldn't be developed if uranium wasn't in the porous underground formations in the first place. Mark Hollenbeck, Powertech's project manager, told the Rapid City Journal in April water in the formation is unfit for drinking water because it already has uranium in it. "Mining won't change that fact," he said.

His company has leased about 10,000 acres and has drilled about 100 test holes, but is not mining. The firm is still in the process of getting state and federal regulatory approvals. The Nuclear Regulatory Commission recently submitted 14 RAIs to Powertech on its license application. Hollenbeck told FCW the questions did not contain any surprises, but he complained about the "glacial pace" of regulatory review.

He also denied reports by landowners the firm is seeking new leases. He clarified that Powertech has a leased site near Aladdin, Wyo, which will eventually be used as a recovery facility. Work will begin there after mining operations, and cash flow, occur at the Dewey-Burdock site. "It's a ways down the road," Hollenbeck said.

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Canadian uranium news for June 12, 2010

Market buyers and producers abound despite low price

Uranium symbolThis blog post is an edited version of an article published June 3, 2010, in Fuel Cycle Week V9:N379 by International Nuclear Associates, Washington, DC.

Rock bottom uranium prices, the spot price reported this week by UX Consulting is $41/lb, have led to stockpiling of uranium by major utilities. Paradoxically, several Canadian uranium mining industry announcements indicate significant increases in supply are on the horizon.

Usually, the supply demand relationships have these vectors going in opposite directions with predictable results. Supply dries up as the price drops. Not now. Supply is increasing despite continued low prices.

Analysts wonder what to make of all the buying and all the future production. A major increase in the U.S. and U.K. in the number of new nuclear reactors requiring their first fuel load isn't expected for another five-to-eight years.

At the heart of low prices one finds rapid growth in production by Kazakhstan which significantly impacts global supply chains. According to World Nuclear Organization, in 2009 Kazakhstan produced the largest share of uranium at 27% of world supply which in 2009 was 50.3 million tonnes, followed by Canada (20%) and Australia (16%).

In an JUne 1 interview with the Times of London, Ed Sterck, a uranium analyst at the Bank of Montreal, said that low prices is "encouraging" utilities to boost their stocks of fuel. The firms involved include Exelon, E.on, and EDF. He said it is cheaper for the firms to buy on the spot market at $41/lb than to sign long-term contracts at $58/lb.

New supplies coming to market

This month Canadian mining firms made multiple announcements to bring new supplies to market. The plans by producers and juniors contain eye popping numbers.

Cameco said it would double production from 20 million to 40 million pounds by 2018. The planned start-up of its Cigar Lake mine in 2013 will be a major contributor to the world's supply of uranium.

UEX Corp. (TSE:UEX) reported in an NI 43-101 report on its Shea Creek joint venture with Areva that the site contains 63.6 million pounds indicated resources and 24.5 million pound U3O8. These numbers make it the third largest uranium resource in the Athabasca Basin behind Cameco's McArthur River and Cigar Lake mines.

UEX CEO Graham Thody told FCW the Shea Creek site was "still in the development phase," and he declined to specify a date it would be in production. He said the firm will spend CDN$8 million in 2010 on further drilling at the site.

He also said the firm's Hidden Bay Property in with its Horseshoe and Raven sites, located 4 Km from the Rabbit Lake mill, has a September 2009 NI 43-101 report of 41.62 million pounds U3O8 indicated resources, with a further 3.47 million pounds of U3O8 in the inferred category. Thody told FCW the Hidden Bay property is now the sixth largest uranium deposit in Canada.

Some of the firm's future production already has a customer. According to David Talbort, a uranium industry analyst at Dundee Capital Markets, Cameco purchased an additional 2.5 million shares of UEX in May bringing its total interest to 22.4% with 44.2 million shares.

At market close June 1 UEX stock was trading at CDN$0.88 against a 52-week range of $0.64-$1.61. This would make Cameco's stake worth CDN$38.9 million. It's likely once the mine goes into production, it will be part of Cameco's planned doubling of total volume that it brings to market.

In other Canadian uranium developments

· Hathor (CVE:HAT) reported drilling results from its Roughrider uranium deposit in Saskatchewan including assay results of 11-15% U3O8.

· Fission Energy Corp (CVE:FIS) and its joint venture partner KEPCO announced drilling results from Waterbury Lake in Saskatchewan of from 1.89% to 4.74% U3O8.

Overall, utilities are buying and Canadian firms are producing. The price of $41/lb may be low by historical comparisons to speculative highs in 2007, but it also must be profitable or the miners would be staying home.

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USEC gets two new investors

ACP logoCEO John Welch says the firm will re-submit its application for a $2 billion DOE loan guarantee

This blog post is an edited version of an article published May 27, 2010, in Fuel Cycle Week V9:N378 by International Nuclear Associates, Washington, DC.

May 25th was a red letter day for USEC (NYSE:USU) CEO John Welch. He's had more than his share of bad news about the prospects for construction of the $3 billion American Centrifuge uranium enrichment plant in Piketon, OH. Last August the Department of Energy deferred making a decision on the firm's application for a $2 billion loan guarantee because the centrifuge technology wasn't working to DOE's satisfaction and because the firm lacked the financial horsepower to build the plant.

Now two of the nuclear industry's central players have stepped up to the plate with joint investments of $100 million each to provide financial confidence and support for USEC in its quest to submit a revised application to DOE for the loan guarantees. Toshiba and Babcock & Wilcox are each investing $100 million, for a total of $200 million, in the project. In return they will receive shares of preferred stock and, if all goes well with the loan guarantee, have the right to convert it to common stock and equity positions based on the stock price at the time.

FCW talks with CEO John Welch

raising_capitalWelch told FCW in an exclusive interview these two investments are the only equity deals the firm will make for the American Centrifuge Plant. He said the money from the two firms is not for R&D.

"The design is frozen," he said. "We are planning to install 11,520 centrifuges based on the design at the Piketon plant."

Once operational, the plant will eventually produce 3.5-3.8 million SWU/year. Welch said customers are lining up for the enriched uranium to be made into fuel for their reactors.

"We have 60% of the plant under long-term contracts. As far as future sales are concerned, a lot depends on new reactors. It's a big market and we will make product for the global industry."

The $200 million will come in three phases. The first phase for $75 million. The second phase for $50 million will occur if the Department of Energy issues a conditional commitment to USEC for a $2 billion loan guarantee.

USEC will re-submit its application for a loan guarantee

Welch said USEC will update its application for the $2 billion loan guarantee this summer. He did not give a date when it would be submitted and declined to speculate on when DOE might make a decision. He did say the agency "has been supportive" on learning about the $200 million investment. However, Welch also said "the agency has its own process to go through so that's still ahead of us."

CalculatorWelch also declined to cite a cost for construction of the American Centrifuge Plant. "We'll be re-calculating it as part of our revised loan guarantee application," he said.

DOE Energy Secretary Steven Chu has said he has the authority to issue the commitment in addition to the $ 2 billion loan guarantee conditional commitment he made to Areva last week for its Eagle Rock Enrichment Facility.

The third phase for $75 million will execute if the first two phases go as planned and DOE gives final approval for the loan guarantee. Shareholder approval is also needed for phase three since it would convert the preferred stock to commons stock and equity positions for the two firms.

At market close May 25 USEC's stock stood at $5.26/share against a 52-week range of $3.22-$6.52, up from $4.37/share on May 20. USEC has 114 million shares outstanding and a market cap of approximately $600 million. A $100 million investment would buy about 19 million shares or about a 16% position if the preferred shares were converted to common shares at today's closing price. With two firms investing $100 million each, their stake would amount to just under a third of the firm.

Welch said the conversion from preferred stock to common stock would take place at "a strike price" on the date of conversion. The actual equity position would be based on total shares outstanding and their price.

Update May 31 – Noble House Ltd buys shares

Reuters reported May 31 Noble Group Limited announced acquisition of 5,848,940 shares in USEC, Inc., representing 5.13% of common stock of USEC.

The NYSE was closed Monday May 31. At market close Friday May 28, USEC's stock traded at $5.28/share making the position worth an estimated $31 million.

Noble Group Limited (SGX: N21) is a global commodities trading/supply chain manager of agricultural, industrial and energy products.

Other uranium enrichment equity investments

Other uranium enrichment plants are also selling equity shares of their operations. Areva has sold minority interests to investors for the George Besse II plant in France. GE-Hitachi sold a 24% stake in its new laser enrichment process to Cameco two years ago for $125 million. Areva has not disclosed any equity investments in the Eagle Rock facility.

In a statement about the decision to invest $100 million in USEC, Toshiba's Yasuharu Igarashi said the investment will enhance its presence on the front end of the nuclear fuel cycle. In a previous deal in 2007 Toshiba sold a 10% share of its stake in Westinghouse, worth nearly half a billion, to Kazakhstan in return for access to uranium supplies.

Welch told FCW Toshiba's intent is to bundle fuel with reactor deals. He said he expects fuel processed for Toshiba will be used in ABWR reactors including NRG's twin reactors once they are built in Texas.

B&W said its investment represents an opportunity to partner with Toshiba and USEC including the fact that B&W will manufacture the centrifuges for the USEC plant.

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Friday, June 11, 2010

New Mexico uranium enrichment plant gets NRC green light for start-up

The first commercial enrichment plant built in the U.S. can begin commercial operations

greenlightAnyone who thinks there isn’t going to be a nuclear renaissance in the U.S. needs to take a look at the multi-billion bet placed by Urenco at the Louisiana Energy Services plant in Eunice, NM.

The NRC said in a statement it completed the readiness review of the Louisiana Energy in Lea County, N.M., and concluded that the facility can begin operation of the first cascade under its NRC license. A cascade is a series of rotating cylinders using centrifugal force to separate uranium isotopes.

LES CEO Gregory Smith told AP NRC’s approval is a “turning point” for the nation’s nuclear industry. The plant has contracts with Duke, Exelon, Dominion, and Progress Energy, among others, to make fuel for their reactors.

According to a report in Fuel Cycle Week for June 3, NM Governor Bill Richardson said at a ribbon cutting ceremony, "Urenco always kept their word on what they were going to do and what their timelines were."

Demand for nuclear fuel project to increase

At the full operational capacity the $2 billion plant will produce about 3 million SWU of enriched uranium a year or about 25% of current demand in the U.S. market. Demand for enriched uranium is likely to increase over the next decade which is why Urenco amended the NRC license to be able to produce up to 6 million SWU.

There are 104 operating nuclear reactors in the U.S. The NRC currently has 13 license applications pending for new reactors. According to the Department of Energy’s Nuclear Power Deployment Scorecard for June 2010,

  • Nine utilities have ordered large, long-lead nuclear component forgings from three reactor vendors.
  • Four Engineering, Procurement, and Construction Contracts signed (Vogtle, V.C. Summer, STP, and Shearon Harris).
  • TVA resumed construction of Watts Bar 2; construction permits reinstated for Bellefonte 1 & 2.

Additionally, in 2013 the current Megatons-to-Megawatts program that blends down Russian HEU will come to an end. The program, managed by USEC, currently provides up to half the nuclear fuel used by U.S. reactors.

License information

Uranium enrichment The LES URENCO USA Facility was granted an NRC license in June 2006, and the company began constructing the site’s buildings, centrifuges and security structures. The license allows LES to enrich uranium up to 5% U-235 for use in the manufacture of nuclear fuel for commercial power plants.

The NRC said the readiness review takes into account safety systems, training, operating procedures, security and other aspects of facility operation.

“Our inspectors have examined not only the construction and testing of systems, but the additional factors, including training and procedures,” said NRC Region II Administrator Luis Reyes. “Even after the first centrifuge is started, we will continue to inspect the operation to ensure the protection of people and the environment in the area.”

As a result of the green light from the NRC, the plant will begin accepting operational delivery of uranium hexafluoride (UF6) feed stock.

LES is a subsidiary of URENCO, a company that has been using centrifuge technology in Europe for more than 30 years. The Urenco USA facility (formerly the National Enrichment Facility) is the first to use Urenco's European centrifuge technology in the US. The same types of centrifuges are expected to be used in Areva’s Eagle Rock Facility.

In Europe Areva has an equity position in the manufacturer of the centrifuges used in the LES plant and which will also be used in the Eagle Rock Plant.

An interesting nonproliferation note is that the centrifuges are installed by the manufacturer and not by the plant owner and operator.

Other U.S. uranium enrichment plants

There are three other uranium enrichment plants under development in the U.S. They are Areva’s Eagle Rock Enrichment Plant near Idaho Falls, ID; USEC’s American Centrifuge Facility near Piketon, OH; and GE-Hiachi’s Laser Enrichment project at Wilmington, NC.

Areva’s plant recently received a $2 billion loan guarantee from the federal government. USEC said in May it will re-submit its application for a loan guarantee later this year. Neither Urenco nor GE-Hitachi have applied for loan guarantees.

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Thursday, June 10, 2010

Nuclear news roundup for June 8, 2010

First concrete scheduled for Brazil's Angra 3

Angra3_impression (Eletronuclear)Work is expected to begin to build Brazil's third nuclear power reactor after regulators issued a construction permit. According to World Nuclear News plant owner Eletronuclear said this means it can now pour concrete for the reactor's foundation slab, which as 'first concrete' would mark the official start of construction. Angra 3 should be completed in 2015 when it should produce 1,270 MW. (Architect’s rendition right via World Nuclear News)

Eletronuclear got the go ahead from Brazil's National Commission for Nuclear Energy (CNEN), which granted the license after determining the company and the project meet safety requirements.

Work began in 1984 on Angra 3 as a PWR but development came to a halt two years later with about 70% of the plant's equipment purchased and delivered on-site. In June 2007 Brazil's national energy council recommended restarting a stalled and troubled project to build the country's third nuclear reactor.

Brazil currently has two nuclear energy plants, located at Angra dos Reis some 150km (100 miles) from Rio de Janeiro. Work on the third stopped two decades ago in the 1980s over security fears, poor management, and lack of funds. Until recently, the plant had been considered by some to be a white elephant that would never be finished. Brazil currently gets about 4% of its electricity from nuclear energy.

In December 2008, Eletronuclear signed an industrial cooperation agreement with Areva, confirming that it would complete Angra 3. The French firm is also on tap to potentially supply up to 16 additional reactors.

Eletronuclear said 600 million real ($327 million) had already been spent on equipment in the original phase of the project and this would be supplemented by a further 8.4 billion real ($4.5 billion), based on a June 2009 estimate according to the Mines and Energy Ministry.

In 2006 Brazil announced plans to build four new nuclear plants, each with a generating capacity of 1,000 MW, starting in 2013. Brazil has signed the Nuclear Nonproliferation Treaty, and its constitution bans the military use of nuclear energy.

Hitachi sees major growth in new orders for nuclear reactors

ge_hitachiJapan’s Hitachi announced it plans to win at least 38 orders for new nuclear power plants by 2030. The announcement comes as the company also indicated it may split from its relationship with General Electric. Efforts by the GE-Hitachi combo to sell the new 1,500 MW ESBWR have faltered due to an inability to come to terms over costs and risk management with U.S. customers.

The statement, said to be part of a wider business strategy launched by Hitachi Ltd’s Power Systems Company, indicates Hitachi will expand its nuclear fuel cycle business. The company also reaffirmed its intention to enter the interim storage market in order to become involved in the full nuclear fuel cycle.

It aims to increase production capacity for its advanced boiling water reactors (ABWRs), economic simplified boiling water reactors (ESBWRs) and next generation boiling water reactors (BWRs). It said it hoped to win customers for the ESBWR by obtaining US design licensing in September 2011.

One possibility is that General Electric will exit the nuclear reactor business licensing its share of the jointly held intellectual property to Hitachi. Two GE-Hitachi 1,350 MW ABWR reactors are expected to be built at the South Texas Project. However, Toshiba is building the reactors. There are no ABWR’s referenced in any other current or expected NRC license applications. Hitachi has denied media reports it will split with GE to pursue its nuclear business.

Hitachi also said next generation 1,800 MW BWRs would be developed as a national project and confirmed it would develop 600 MW and 900 MW ABWRs, in addition to small 300 MW class reactors.

Olkiluoto-3 to enter revenue service in 2013

Olkiluoto3The Areva-Siemens consortium constructing the Olkiluoto-3 (OL3) nuclear unit in Finland said June 8 most work on the unit will be finished by the end of 2012. Operator Teollisuuden Voima Oyj (TVO) said the new Areva 1,600 MW EPR is expected to enter revenue service in 2013.

Areva said June 4 the consortium submitted a proposal to TVO outlining a timetable and milestones for completion including the key milestone of reactor fuel loading by the end of 2012. The French state-owned nuclear giant also said that it has overcome delays that occured last year with pipe welding. The company added that work would begin soon on installation of the reactor pressure vessel.

Despite these progress indicators, the Finnish customer is still unhappy. According to NucNet, TVO said: “Certain works, such as starting of the piping installation works in the reactor island, have been slower than planned, and the completion of the piping installations will be later than scheduled.”

In October 2008, TVO was told by Areva-Siemens that OL3 would be delayed to 2012 from its initial start-up target of 2009. TVO demanded compensation for the delays and Areva-Siemens filed a request for arbitration.

The EPR being built in Finland is the first of a kind project. A second EPR is under construction in Flammanville, France. In the U.S. Areva is expecting to break ground in 2012 for construction of Calvert Cliffs III for Constellation Energy in Maryland. That project is also expected to receive a federal government loan guarantee to support its financing. Progress in Finland is likely being closely watched by U.S. Department of Energy as it considers the conditional commitment for the Calvert Cliffs project.

Prior coverage on this blog

(NucNet contributed to these reports)

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Wednesday, June 9, 2010

Mixed outlook for gas reactors

Progress planned in Europe, but a fire sale looms in South Africa

HTGR imageThe future of high temperature gas-cooled reactors is taking different directions depending on where you look. In Europe a multi-national collaboration is working on plans for a site to build the Allegro Reactor. However, in South Africa the proposed “rescue plan” for the Pebble Bed Modular Reactor involves selling off the now unfunded project by auction.

In Europe the Czech Republic, Hungary, and Slovakia have agreed to a joint program to select a site and host the construction of the first-of-a-kind project. Nuclear R&D organizations from all three countries signed a memorandum of agreement in late May. Funding support comes in part from the French Atomic Energy Commission.

In South Africa PBMR officials, at least those who remain following massive layoffs, did not attend a key energy conference May 21 where the future of the Pebble Bed Reactor was hashed over by a panel.

According to wire service reports, the lead speaker, Leon Louw, head of an economic think tank, said that “rescue” of the PBMR project should involve selling it off to the highest bidder.

flounderHe said it was an mistake for the company to have relied so heavily on government funding which has been withdrawn due to the global economic crisis.

He added that losing the project result in South Africa failing to develop a leadership role for the next generation of nuclear reactors.

“Somebody is going to pick this up and run with it. We will be like fishermen who talk about the one that got away.”

Reactor design profiles

The Allegro Reactor design targets 50-80 MW thermal power as a prototype plant for future applications at full scale for generation of electricity and process heat transfer. Several fuel types are being investigated with high temperature (850C) and lower temperature (560C) outputs.

The R&D objective is to demonstrate an alternative to sodium-cooled reactor designs as part of the Generation IV International Forum. Key topical areas include helium as a coolant, fuel qualification, core physics, safety of MOX fuel, and computer codes for safety analysis of fast reactors.

The Pebble Bed Modular Reactor design targets 165 MW output for electricity generation and process heat using spherical fuel elements at about 10% enrichment cooled by helium. The R&D objectives have been to develop a commercial product.

In the U.S. the Department of Energy is providing $40 million for completion of conceptual design work later this year. Like the other two reactors, the Next Generation Nuclear Plant (NGNP) is proposed to be a high-temperature gas cooled reactor. However, it is expected to have electricity output of 300 MW or 600 MW thermal for process heat applications especially in the petro-chemical industry.

PBMR is a member of a consortium fielded by Westinghouse which owns an equity stake in the company. The other participant is a consortium led by General Atomics which has its own technology.

Prior coverage on this blog

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Tuesday, June 8, 2010

Entergy & Exelon retreat from new builds

Costs, risks, and lack of a price on carbon all play in their decisions

Sound retreatTwo of the nation’s largest nuclear utilities are sounding a retreat from building new nuclear reactors in the near-term. In separate speeches Entergy (NYSE:ETR) CEO J. Wayne Leonard and Exelon (NYSE:EXC) CEO John Rowe said they do not want to take the risk of building new reactors.

They cite the low price of natural gas, the lack of a carbon tax to shift investment from fossil plants, and the risks of building a new reactor using the merchant model in de-regulated states.

Speaking at the Reuters Global Energy Summit held in Houston May 25, Leonard said that Entergy does not want to take the risk of building new reactors which is why it suspended two NRC license applications to build four new reactors in Mississippi and Louisiana.

He said there are too many risks the utility cannot control. He cited uncertainty in construction costs as a key item.

In a speech to Resource for the Future in Washington, DC, May 20, Rowe said there are diminished prospects for new reactors because Congress has failed to make fossil fuels more expensive via a carbon tax.

“I just don’t think nuclear has a chance in a pure marketplace without a carbon tax.”

Exelon pulled back from building two new reactors in Texas opting instead to file an Early Site Permit which is a place holder that could lurk at the edges of the deregulated Texas electricity market for as long as two decades.

Both Leonard and Rowe said in their speeches their respective utilities understand and accept climate change as a fact and are committed to reducing CO2 emissions from their fossil fueled plants.

Entergy CEO questions Southern’s logic

Leonard added something new to the debate by criticized Southern Company (NYSE:SO) for going ahead with its plans to build two new Westinghouse 1,150 MW AP1000 plants at its Vogtle site in Georgia. According to Reuters, Leonard said:

“Everybody’s going to price risk differently. When we price the risk appropriately, the numbers just don’t work. I wonder how Southern makes the numbers work. Sitting on the outside looking in, they have some reason we don’t see.”

time to marketSouthern’s advantages include building the reactors in a state (Georgia) which allows the utility to increase rates to pay for the new reactors while they are being built. Also, the utility is the first to get federal loan guarantees for new reactors.

It is emphasizing time to market for the new reactors to meet expected growth in demand for electricity at the same time a carbon tax will make power from fossil plants more expensive.

Rowe also said he thinks new nuclear plants do not make economic sense in the current economic climate. He cited decreased demand for electricity in his markets and prospects for new supplies of natural gas. It is cheaper and faster to build new gas-fired plants in deregulated environments Rowe said.

“As long as we have $4 gas and no carbon price, we are not going [to build] a new nuclear power plant.”

Exelon is upgrading existing reactors to get more power, and more revenue, from them. The upgrades include new turbines, generators, and digital controls to produce more electricity more efficiently. By the time the firm is done, it will have added the equivalent of a new reactor based on the upgrades.

NRG going ahead with two new reactors

NRG LogoWhile Leonard and Rowe are backing off new builds in deregulated environments, NRG is going ahead with construction of two new reactors at the South Texas Project. Speaking at an energy conference sponsored by Deutsche Bank Securities, CEO David Crane said May 12 that natural gas prices will rise by 2017 which is about the time his reactors will enter revenue service.

“It’s hard for me to find someone who doesn’t think there is going to be a price on carbon in the next several years. Nuclear is the ultimate carbon hedge.”

Entergy’s Leonard agrees. He told the Reuters energy conference climate change legislation “has a good chance of passing if not this year, next year.”

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Monday, June 7, 2010

Sheffield Forgemasters loan may be off

UK Liberals pursue anti-nuclear agenda

Chris Huhne BBCChris Huhne, the UK Energy & Climate Minister, and his political allies are not to be trusted. Last month Huhne said his only concern about the development of new nuclear reactors in the UK was that there be no public subsidy. This week the new Business Minister from the Liberal Party squashed a key government loan for {L}80 million to Sheffield Forgemasters which would have given the UK a 15,000 tonne press to manufacture major components for new reactors.

It seems the Liberals have forgoton about national competitiveness in the mix. The press would have unhooked the UK from reliance on Asian foundries. The Sheffield deal is a crucial element of the supply chain for new reactors to be built at 11 sites around the UK.

Vince Cable, who is a senior members of the new government, told Reuters June 3 the loan lacked due diligence. He alleged the deal was put in place ”in a hurry,” and needs to be reviewed for its impact on the country’s deficit.

Since the deal is a loan, and not spending, it is hard to see how the Liberals can call the agreement a contributor to the deficit. Pat McFadden, a Labour spokesman, told Reuters the deal “ was not agreed to in a hurry.”

The plan by the prior UK government to give the loan to Sheffield also included a commitment for an equity stake by Westinghouse which would have limited the government’s financial exposure. Cable’s claim of a lack of due diligence may come as a surprise to Westinghouse which according to the Financial Times was planning to invest “tens of millions” in the Sheffield Forge.

In reality the justification for cancelling the loan is driven by the Liberal Party’s political platform which states,

[We] Reject a new generation of nuclear power stations “based on the evidence nuclear is a far more expensive way of reducing carbon emissions than promoting energy conservation and renewable energy”.

Japan Steel Works gains market share

JSW forgeMeanwhile, Japan Steel Works told the Bloomberg wire service June 1 it is on tap to sell components for 26 new reactors worldwide in the next three years. A spokesman for the firm told Bloomberg sales will double next year from six reactor pressure vessels to 11 due to expansion of manufacturing capacity. The company’s dominant position in manufacturing large reactor components is aided by government loans.

World Nuclear News reported March 17 that other countries with plans to build large forgings facilities include Doosan in Korea, OMZ Izahora in Russia, two Indian firms – Bharat Heavy and Larsen & Toubro; and Shanghai Electric in China.

In the U.S. there are no plans on the immediate horizon to build a large forgings plants. However, Areva and Westinghouse are investing in nuclear component manufacturing centers in the U.S. which will also serve export markets.

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Sunday, June 6, 2010

Mitsubishi's growing presence in Europe and the U.S.

The Japanese heavy manufacturing firm will build reactors via joint ventures

coolhandnukeMitsubishi Heavy Industries (MHI) as made rapid strides establishing a market presence in the U.S. nuclear industry. In the past three years in North America it has submitted a reactor design for NRC review, inked deals to build new reactors for two U.S. utilities. In Europe the firm will team with Spain's Iberdrola to build a new reactor and is poised to purchase an equity position in Areva, France's state-own vertically integrated conglomerate.

Until recently the firm hadn’t drawn much attention, but its latest success with Dominion, and the potential for taking an equity stake in Areva, have moved it into the spotlight. Read all about it exclusively at CoolHandNuke, a nuclear energy jobs portal and a whole lot more.

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