Saturday, July 16, 2011

SEC takes another swing at AEHI

The agency alleges company officers used private placements to mislead investors

gillispiedonThe Associated Press reports that the Securities & Exchange Commission has amended the agency's claims against would-be Idaho nuclear plant developer Don Gillispie, alleging in a new complaint that the company's leaders defrauded investors.

In the new filing, SEC attorneys amended the complaint against AEHI emphasizing their claims that Chief Executive Officer Don Gillispie (right) misled investors, lied about paying stock promoters and didn't accurately disclose his or his employees' pay.

Gillispie has denied wrongdoing. His attorney did not respond to inquiries from the wire service.

Full text of the SEC complain here.

Snake River Alliance revives “scam” label for AEHI

A few years ago the Snake River Alliance almost found itself in court after calling AEHI a “scam.” Company CEO Don Dillispie filed a “slap suit” claiming defamation, but the SRA’s leadership backed off and AEHI dropped the case.

With the latest filing by the SEC, the SRA has rediscovered the label, well almost. Here’s what Liz Woodruff, SRA’s Director, has to say.

stop sign“As if things couldn’t get any worse for AEHI, the nation’s securities watchdog agency continues to expose this company for the sham that it is. If there was ever any doubt about the integrity of this company and its prolonged scam on Idahoans and investors worldwide, this new complaint puts them to rest.”

“The list of new charges is extensive. These new allegations come when, incredibly, AEHI stock can still be purchased. According to these charges, AEHI is not in the business of building Idaho’s first privately owned nuclear reactor. It is in the business of separating Idahoans from their hard-earned money.”

Impact on other nuclear programs in Idaho

AEHI’s now tarnished reputation has been a pain in the neck for the Idaho National Laboratory, which conducts nuclear energy R&D work for the federal government.

An anonymous source familiar with the issues at the Idaho lab told this blog this week via email that having a firm like AEHI in Idaho has often challenged INL's public image.

"We all too often have to defend our own programs and the nuclear industry because of their corrupt tactics, rhetoric, and confusing promises. The sooner AEHI goes away the better."

The Idaho lab is developing technologies for future nuclear reactors, but it is unlikely any of them will actually be built in Idaho. For instance, the Next Generation Nuclear Plant, a 300 MW HTGR concept, will likely be built at a customer site.

The timeline for it keeps getting stretched out as the Department of Energy seems focused on LWR concepts for small modular reactors (SMRs) and has raised the cost sharing requirements to access federal funds.

Several other private efforts, not associated with the lab, are investigating options to build an SMR in Idaho.

The biggest nuclear project in the state, outside the lab, is Areva's planned $2.4 billion uranium enrichment plant to be built 18 miles west of Idaho Falls, ID. An NRC license for the Eagle Rock Enrichment Plant is expected later this year. Construction is expected to start in Spring 2012.

History of the investigation

This is the second time the SEC has tried to shut AEHI down. It failed in its first attempt last December. The U.S. District Court in Boise tossed the SEC’s first round of complaints.

Last February, a federal judge lifted a previous freeze on Alternate Energy Holdings Inc.'s assets, but required the company to report expenditures of over $2,500 to the Securities and Exchange Commission.

Separately, the Payette County Commissioners have approved a land use change for AEHI’s proposed nuclear power plant. They seem oblivious to the investor issues.

The site is near one abandoned by MidAmerican, a Warren Buffet company, because of its remote location, lack of transmission lines, and poor transportation infrastructure. Buffets’s firm also quit the project because the costs of building a Mitsubishi 1,700 MW reactor weren’t defined and the design had not been certified by the NRC.

Prior coverage on this blog

baloneyReaders of this list should be aware that I have posted articles on my blog since 2007 calling into question the technical feasibility and financial basis for the project. However, I have not had any communication with the SEC about the company.

In June 2007 this blog described the “no bozos” paradigm of then NRC chairman Dale Klein who said the nuclear energy industry has no room for amateurs. In October 2007 this blog published its now world famous “baloney test for new nuclear builds.”

Based on these principles, I have written that there are inconsistencies between what AEHI claims and the facts.

For instance, AEHI claimed the NRC was on a fast track to approve the design certification of a South Korean 1,400 MW reactor. In fact, in preliminary discussions in Fall 2009, the NRC told the South Koreans it could be two years, or longer, before the agency would even consider having serious pre-application discussions with the vendor. I cited and linked to NRC documents in the Adams system.

Also, I pointed out in previous blog posts the massive investment that would be needed to upgrade the grid in Idaho to take the power from the plant and deliver it to customers elsewhere in the Pacific northwest.

The firm has gone through three so-called investment bankers. None have raised any money for the firm.

The second “banker” took $25,000 from AEHI as a finder’s fee and spent it on ski chalet rentals and parties. The 29 year old banker subsequently settled with regulatory agencies in a plea deal admitting to selling unregistered securities in Utah.

While AEHI was not a party to that proceeding, it didn’t do much for investor confidence that the company would be able to raise the six billion needed to build the reactor.

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Wednesday, July 13, 2011

NRC Near Term Report on Fukushima Safety Issues

Meltdowns in Japan drive an ambitious agenda in the U.S.

The U.S. Nuclear Regulatory Commission (NRC) has released a "Near Term Report" this week that calls for a wide range of safety improvements for the U.S. fleet of 104 nuclear reactors. (Summary & Full text in PDF format at US NRC blog)

The report ominously calls for "redefining the level of protection that is regarded as adequate." If that's the case, just exactly what has the agency been doing up to now? This is not gratuitous skepticism. If a federal regulatory agency calls for moving the goal posts, it's time to take a close look at its reasons for doing so.

Yet at the same time the NRC calls for change, it acknowledges that the information it has on what happened at Fukushima is "unavailable, unreliable, or ambiguous because of damage to equipment at the site." In short, the report is vulnerable to criticism that it appears to be a case of shoot first and ask questions afterwards.

The 90 page report was written in response to the earthquake and tsunami of March 11 which resulted in partial or complete meltdowns of three reactors and the destruction of the infrastructure supporting six reactors at Fukushima, Japan.

Two key areas stand out in the report. The first is the question of how nuclear utilities will deal with multiple reactors impacted by the same natural disaster and second how to address "station blackout" when both internal and external electrical power is lost. It is clear from the experience at Fukushima that four-to-eight hours of battery power and a few days of diesel generator emergency power are not good enough. See also Reuters Fact Box list of subjects covered in the NRC report.

There are lots of reasons why the 40-year old Japanese reactors would never be built in the current era. The report takes pains to point out there is "no imminent risk" for U.S. nuclear reactors. The NRC needs to take care that it doesn't over-react to problems in Japan that don't affect the U.S. fleet.

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Tuesday, July 12, 2011

U.K. and China pursue plans with Japanese disaster in mind

New safety measures will create delays, add costs

Vincent de RivazThe ambitious plans for construction of new nuclear reactors at eight sites in the U.K. took a hit this week. Reuters reports July 5 that EDF, the nation’s biggest utility, will push back the start date for its first new nuclear plant. Vincent de Rivaz, (right) who leads EDF operations in the UK, told the wire service the timetable will be revised in Fall 2011. EDF had planned to build a new 1,600 MW Areva EPR at Hinkley Point in Somerset by early 2018.

Rivaz now says that that date won’t be met. He cites an order by the UK government last March immediately following the March 11 earthquake and tsunami that crippled six Japanese nuclear reactors. The Generic Design Assessment, which is reviewing safety issues for the Areva EPR and the Westinghouse AP1000, is now subject to an additional review of what happened at Fukushima.

Two key issues are likely to be station blackout, where there is no electricity for emergency cooling, and how to conduct emergency response when more than one reactor is impacted by a disaster. Emergency communication within the plant and with the government is also a key issue.

While earthquakes and tsunami like those that hit Japan are unknown in the UK, the review is still going to take time hence the expected delay in startup of the new Hinkley Point units.

NucNews reported Rivaz told an industry conference in London that events at Fukushima-Daiichi in Japan “should not unnecessarily delay plans” for new build in the UK.

He said: “We continue to aim, with our partner Centrica, to be the first to deliver new nuclear in the UK.” EDF Energy is planning to build four new units in the UK.

He said in response to Fukushima EDF Energy had identified five main areas the UK nuclear industry needs to asses. They include improving communications, improving onsite “resilience” to the effects of major events and providing off site emergency back-up equipment that can also be readily connected to plant.

He said: “We are reviewing each of these areas now and it is clear to me there will be tangible enhancements.”

Another developer of new nuclear power stations in the U.K., RWE Power, told Reuters that its plans to build 6 GWe of new nuclear power in the UK will face delays and increased costs due to additional safety measures. CEO Volker Beckers told the wire service his firm is waiting to see how much impact changes to be mandated by the government will have on the projects. The UK government is expected to publish a white paper on nuclear safety issues before the end of July.

China’s moves ahead with nuclear energy plans

Areva EPR under construction in ChinaIn a series of statements, a trade association composed of members of China’s nuclear industry have been unusually open about the state of the new build in that country.

(Image right: Areva EPR under construction in China)

China is the world leader in aggressive plans for building new nuclear power stations so when their nuclear energy developers speak in a collective voice it is important to listen.

The head of the China Nuclear Energy Industry Association (CNEA), Zhang Huazhu, told Japanese English language wire services June 25 that, “the country’s nuclear policy, as well as its medium and long term goals, will not change.” But, he also said that some projects could be affected by internal reviews related to the nuclear disaster at Fukushima.

China has plans to significantly increase its nuclear fleet. Currently, the nation has 14 reactors in operation for 10 GWe of power, or less than 2% of total electricity production. The nation has said it will raise that number to 4% by 2020 through the construction of as many as 30 1,000 MW reactors. Four will be Westinghouse AP1000s.Two of the units will be Areva 1,600 MW EPRs, and several others will be Russian VVERs.

Overall, China has 25 reactors under construction. According to WNA additional reactors are planned, including some of the world's most advanced, to give more than a ten-fold increase in nuclear capacity to at least 80 GWe by 2020, 200 GWe by 2030, and 400 GWe by 2050. (See also the review of China’s nuclear power plans by the World Nuclear Association)(map of reactor locations)

Nuclear Association Vice President Zhao Chengkun, said that the Chinese government had temporarily suspended applications for new reactors until it could complete safety reviews related to Fukushima. In a new development, the head of China’s Ministry of Environmental Protection told a visiting delegation of U.S. nuclear officials that it was committing funds for safety analyses and radiation protection at the new reactors.

China briefs U.S. on safety plans

On June 15 Vice Minister Li Ganjie (profile) told U.S. DOE nuclear program manager Pete Lyons (profile) the Chinese agency will complete its safety reviews by this October.

Vice Minister Li said, after the occurrence of Fukushima nuclear accident, the Chinese Government attached great importance to it with quick and effective response.

“We start doing the following two activities:

1) Large scale inspection on safety of nuclear power facilities. This work started in April and will be finished within 6 months. Among them, inspection on safety of all nuclear facilities under operation will be conducted in the first stage.”

In the second stage, we will carry out comprehensive review of the safety of all nuclear power plants under construction. At present, the work of the first stage has been finished with the safety check pace similar to that of EU and the United States.

2) Development of China National Plan for Nuclear Safety as soon as possible. The Chinese Government will suspend the review and approval of all new nuclear power plant projects before the approval of this Plan. “

(Complete Summary of Ganjie’s remarks in English)

It isn’t likely that the Chinese have stopped current construction projects so much as they are reviewing the plans for these units and those that are still on the drawing boards. Approvals of new projects could be delayed by up to two years according to a statement by Zheng Yuhui, Director of Research, at the China Nuclear Energy Association.

New legislative framework for China

According to the China Daily, Yuhui is involved in the drafting of a new nuclear energy legislative framework which began last April.

Zheng said at that time he believes the law will promote transparency in the industry and should include clauses that have been proven effective by past practice in other countries. He said such standard procedures as holding public hearings when deciding the location of new nuclear plants should be written into the legislation.

The China Daily reported that “insiders said” the draft law will include rules governing the exploitation of uranium resources, the management of nuclear materials, facilities, technology and spent nuclear fuel and emergency management as well as damage compensation.

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UK plans $174 billion investment in new electricity generation

Long-term price contracts will make new nuclear reactors attractive to investors

raising_capital(NucNet) Plans to secure 110 billion pounds (174 billion US dollars, 124 billion euro) of investment in electricity generation were unveiled in the UK July 12, including long-term price contracts with nuclear plants in order to attract investment in new build and make electricity prices more stable.

The Electricity Market Reform White Paper, or policy document, sets out key measures to attract investment, reduce the impact on consumer bills, and create a secure mix of electricity sources including gas, new nuclear, renewables and carbon capture and storage.

It says the UK needs “huge investment” in renewables and a new generation of nuclear plants.

Plan for price

Companies will be attracted to build new power plants, including nuclear, because with long-term price contracts they will be able to plan for the price they will receive, energy secretary Chris Huhne said.

The plans detailed in the White Paper would replace a quarter of the country’s power stations by 2030. The White Paper says more than GBP 110 billion in investment is needed to build the equivalent of 20 large power stations and upgrade the grid.

The proposed reforms have three central elements. Mr Huhne is proposing a government guarantee of a fixed price for electricity payable to generators designed to encourage new nuclear power plants and renewable energy.

Capacity mechanism

He also wants a “capacity mechanism”, with the aim of ensuring that the UK has sufficient spare capacity on the national grid to cope with surges of demand and the intermittency of wind generation.

The White Paper proposes more stringent emissions performance standards on the UK’s fossil fuel power stations, ensuring that coal-fired plants become cleaner or shut down.

In an article written for ‘The Daily Telegraph’ newspaper, Mr Huhne said recent electricity and gas price rises in the UK are “symptomatic of fundamental ills in our energy system”.

He said: “Our fossil fuel habit leaves us hostage to global energy markets. The days of North Sea self-sufficiency are long gone. Today, we rely on imported fossil fuels to provide a third of our energy; in less than 15 years, it will be half.

“This would not matter so much if we had a balanced energy portfolio where nuclear and renewables smoothed out volatile gas prices. But we are 25th out of 27 European countries for renewables, and have not built a nuclear power station since 1987.”

In June the UK government published final proposals naming eight sites across the country as suitable for the construction of new nuclear plants by 2025.

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Sunday, July 10, 2011

Some Good News About Small Modular Reactors

Interest is growing in the class of units rated at 300 MW or less

small reactorsRecent developments in the field of small modular reactors (SMRs) suggest that the nuclear renaissance in the U.S. may come in two sizes.

The first size, at ratings in terms of electricity generation of 1,000 MW or more, has a near term future that involves eight reactors being completed in the U.S. by 2020.

The second size, at ratings of less than 300 MW, shows near-term promise for designs that are based on conventional light water reactor (LWR) technologies.

SMRs of all types may get new attention as a result of the Fukushima nuclear crisis. Recent developments suggest that commercial success may become a reality for light water designs also by 2020.

Read the full details exclusively online at CoolHandNuke online now.


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