Saturday, September 22, 2012

Japan’s U-turn on the zero option for nuclear energy

The Cabinet hits the brakes on a formal policy to phase out all nuclear reactors in 30 years.

Hiromasa Yonekura, Chairman
of the Keidanren business lobby (L)
in happier days shaking hands with
Japan Prime MInister Yoshihiko Noda (R)
at a Asian trade conference in 2011
The Japanese government bowed to pressure from the country’s largest business firms to keep the reactors running.  While only two have been restarted this year, the clear implication is that the rest need to come online and soon.

Hiromasa Yonekura, chairman of Japan’s largest business lobby, Keidanren, said this week that the business community cannot accept the zero option strategy.

He said the lobby “wants a responsible energy policy.”

One of the key reasons may be the failure of Japan’s export driven economy to produce positive numbers. Japan posted a trade deficit in August of $7.7 billion only slightly smaller than the deficit of $9.6 billion a year ago. At market close on Friday Sept 21 the Yen traded at ¥78.15 against the U.S. dollar.

Japan’s heavy industries produce earnings that pay for the imports of food and fuel since the country is less than 50% self-sufficient in terms of agriculture and has few local fossil resources. Since shutting down all of its reactors, Japan’s imports of crude oil and liquefied natural gas have skyrocketed contributing to the balance of trade deficit.

What happened in the Japanese cabinet is a major loss of face for Prime Minister Noda. Energy Minister Motohisa Furukawa said in an official press conference that the cabinet had decided to reign in Noda’s plan to shut down all of the nation’s nuclear reactors over the next 30 years.

Instead, he said the cabinet “would take his policy into consideration” when formulating a long-term program. Translated from the euphemistic language of Japanese politics that comes out that the likelihood of the nuclear phase out policy being adopted has the same chance as a snowball in hell.

Noda had announced the plan after acknowledging that over 70% of Japanese voters oppose long-term investments in nuclear energy. His announcement was seen as being politically expedient since it has numerous loopholes and caveats.

Apparently, these exceptions were not enough for the major industrial members of the Keidanren who have been threatening to take their manufacturing operations offshore if the reactors are not kept running. Prior to the Fukushima disaster in March 2011, Japan got 30% of its electricity from 54 reactors and had plans to increase that number to 50%.

The head of the Japanese Chamber of Commerce said in the joint press conference with the Keidanren that the 2030 deadline “was not a viable option in the first place.”

In addition to the business federations, provincial officials in prefectures where the reactors are located have objected to the loss of tax revenue and payroll from jobs that would result from closing the power stations. Additionally, they objected to the decommission plans that would keep spent fuel at the reactor sites for decades after the units shut down.

New nuclear regulatory agency starts up
Shunichi Tanaka, Chief of the
Nuclear Regulatory Authority
Amid immediate criticism from anti-nuclear groups that it is not independent, the new Nuclear Regulation Authority (NRA) began operations with five members headed by a 67-year old former executive of the Japan Atomic Energy Agency.  

Shunichi Tanaka will head with organization with four others with technical backgrounds. The former Nuclear Industrial Safety Agency (NISA), which was discredited for its poor performance during the Fukushima crisis, was staffed with career bureaucrats.

Tanaka’s prior professional work with a pro-nuclear organization raised fears among anti-nuclear groups that the new regulatory agency would be no better than the last one. However, NISA was captured by business groups being embedded in METI, the government’s trade agency. The NRA is attached to the government’s environmental agency to put distance between it and industry influence.

Three for three
While the cabinet was bowing to pressure from business groups over the zero option for nuclear energy, the government also initiated what looks like a swap of new lamps for old. It said it would decommission three reactors in the Fukui Prefecture, one owned by Tsuruga Power and two owned by Kansai Electric. All three are more than 40 years old. The units are Tsuruga #1 and Mihama Units #1 & 2 all of which began operation in 1970.

The government said it was strictly adhering to PM Noda’s policy to close reactors after 40 years of operation though the policy has a loophole to allow a license extension of another 20 years following a safety analysis. Over the next six years another five reactors will pass the 40 year mark.

At the same time the government said that reactors already under construction will be completed, says Yukio Edano, Japan’s Ministry of Economy, Trade and Industry trade minister. They are the No. 3 reactor at the Shimane plant (94- percent complete) in Matsue, capital of the Shimane Prefecture, which is operated by Chugoku Electric; a reactor at the Oma plant (38 percent complete) in Aomori Prefecture, which is operated by Electric Power Development; and, No. 1 reactor (10 percent complete) at the Higashidori plant also in Aomori Prefecture.

Chief Cabinet Secretary Osamu Fukimura said the government would approve continued construction of these power stations refusing to take back permits or approval of building plans for them.

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Sunday, September 16, 2012

Intractable delays at three U.S. nuclear plants

Restarts of reactors at three utilities are still distant gleams in the eyes of their operators

Customers of three nuclear electric utilities will have a long wait for the restart of four U.S. reactors. The sites are Southern California Edison's (SCE) twin 1100 MW units at San Onofre,  the 478 MW Ft. Calhoun plant near Omaha which is owned by OPPD, but operated by Exelon; and the 860 MW Crystal River now owned by Duke via a merger.

Sad melody at SONGS

The latest development at the San Onofre Nuclear Generating Station (SONGS) is that the two units are winding up on different tracks.  Units 2, which has far less damage to its steam generator than Unit 3, is close to having a restart plan. SCE is said to be preparing one to be submitted to the NRC in October.  For its part, the NRC said the review could take months.

On the other hand, SCE said it has no immediate plans to submit a similar restart plan for Unit 3.  The utility says extensive repairs are needed for the steam generator. In the meantime, SCE is removing fuel from the reactor and laying off over 700 people from the plant. It could be a long time before Unit 3 is back in operation.

California Senate Barbara Boxer used the troubled plants as rhetorical device to brow beat the NRC in a hearing last week. Boxer, who is no friend of the nuclear industry, said she wants absolute assurance of the safety of the plants before they are allowed to operate again.  Newly appointed NRC Chair Allison Macfarlane said in response the review of a restart plan for Unit 2 "would be on the order of months."

The cost of fixing the plant is a key issue among Boxer's constituents.  Keeping the plants shut down, since last January, has cost millions per month for replacement power from fossil fuel plants.  Repair and inspection costs thus far have notched forward of the $50 million mark.

The California Public Utility Commission wants to know whether SCE will ask rate payers to cover the costs of repairs or try to get Mitsubishi, which supplied the now troubled steam generators, to cough up the money.  The one option that doesn't seem to be on the table is wholesale replacement of either steam generator. The units cost over $600 million when installed three years ago.

SCE will likely pursue repairs for the steam generators at both reactors since their licenses run until 2022.

Ft. Calhoun still under water more or less

The Omaha Public Power District, which once said confidently it would restart its only nuclear reactor in September now looks with hope at a December date.  Nothing is certain according to the NRC which wants the utility to complete a long list of actions to clear up safety issues.

The combination of problems resulting from flooding in June 2011 and other safety issues, including an electrical fire outside the reactor building, have kept the plant offline. Last month OPPD announced it has hired Exelon to operate the plant. The move is expected to produce progress in closing safety issues.

OPPD says they would like to heat up the plan in December to test power generating systems that have been offline since April 2011. However, the NRC says it has no timeline for restart of the plant.  Agency spokesperson Lara Uselding said the completion of the list of safety actions still has a long way to go.

Crystal River repairs may be too costly

The estimated costs of between $900 million and $1.3 billion for repair of the damaged containment structure at the Crystal River reactor in Florida may be too high a price to pay.

Record low prices of natural gas, which if they remain there, indicate Duke Energy, which now owns the reactor, may replace it with a gas fired power plant.

The sticking point is whether the reactor's decommissioning fund is robust enough to pay for setting it on that path. The NRC license for the Crystal River plan expires in 2016.

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Is there nuclear energy squeeze play in Japan and France?

Political expediency seems to be the motivation in Japan, but the picture is less clear in France

Last Friday Japan's Prime Minister Yoshihiko Noda appeared to bow to overwhelming anti-nuclear sentiment in his country in an effort to save his party's fortunes in the upcoming elections later this fall.

But Japan will operate its current fleet of reactors for at least the next 20-30 years and three new power stations now under construction will be completed which means they could be keeping the lights on until 2070 or longer.

In France, the Socialist Party, which won the election there last May, struggled to balance commitments to reducing greenhouse gases with calls by its partner Green Party to aggressively reduce reliance on nuclear energy.

The French government is unlikely to agree to the demand by the Greens for a zero power option for nuclear energy. Even so the announced plan to reduce reliance in the nations nuclear power stations from 75% to 50% may be set aside.

According to the New York Times for Sept 15, Arnaud Montebourg, French minister for economic recovery, said in a TV interview that nuclear energy is the "industry of the future" and is a "tremendous asset" for France. If nothing else his remarks will give Areva's CEO Luc Oursel at least one good night of sleep. 

These actions follow decisions by Germany and Switzerland to phase out their nuclear reactors. For those who have been living under a rock, Germany shuttered half its fleet and will close the remaining nuclear power stations by 2022. These actions will result in a greater use of coal and natural gas and make Germany a steady customer of Russia's energy production capacity.

As for Switzerland, the parliament has left itself a political loophole in its 2035 deadline saying it might consider new reactor construction if the right "safe" technology comes along. Naturally, the legislation doesn't define it leaving an opening large enough for just about anything a future power starved electorate will be willing to accept.

In France Areva CEO Luc Oursel, who severely cut back the firm's planned capital investments in December 2011, said the global nuclear energy industry needs to restore public trust following the Fukushima crisis.  A Westinghouse executive told Reuters Sept 13 that TEPCO's errors at Fukushima, which contributed to the scope of the disaster, point to the need for international cooperation on safety issues.
 
Some promising signs

While all this hand wringing was taking place, there were several developments that indicate the whole world is not in a head-over-heels retreat from nuclear energy.  In the U.K. Westinghouse said it is "absolutely committed" to the country's new build.

The firm is reported to be in talks to partner with China's State Nuclear Power Technology Corp., and Exelon from the U.S to bid on the Horizon project. It was to be built by two German utilities who quit after their cash flow dried up from the German government's decision to shut down eight of the nation's reactors.

UAE project progress

In a decision that will support thousands of American jobs, the board of the Export-Import Bank of the United States (Ex-Im Bank) has authorized a $2 billion direct loan to the Barakah One Company of the United Arab Emirates (U.A.E.) to underwrite the export of American equipment and service-expertise for the construction of a nuclear power plant in the Emirate of Abu Dhabi, U.A.E.

According to estimates derived from U.S. Census Bureau statistics, the line of credit will support approximately 5,000 American jobs across 17 states.

The loan ranks as Ex-Im Bank's largest transaction in the U.A.E. to date and counts as Ex-Im Bank's first greenfield nuclear-plant financing since the late 1990s.

Barakah One Company plans to erect four nuclear reactor power-generating units on a coastal strip along the Arabian Gulf approximately 220 kilometers from the city of Abu Dhabi.

The 1400 MW reactors, supplied by the Korea Electric Power Corporation (KEPCO) will come online at one-year intervals starting in 2017.

Westinghouse Electric Company LLC, a Pittsburgh, Pa.-based group company of Toshiba Corporation, is the largest exporter involved in the transaction and will provide the reactor coolant pumps, reactor components, controls, engineering services, and training.

A total of eight Westinghouse nuclear power plants are currently under construction in China and the United States.

The UAE also recently let contracts worth $3 billion for procurement of nuclear fuel.   Rio Tino, a mining company, and Areva, will supply the uranium needed to fuel four new reactors.

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