Confusing signals

In last year's annual roundup of nuclear news, NEI commented: "Momentum has been very much in the nuclear industry's favour." However, progress this last year has, in a number of areas, been slow, with some setbacks. The most damaging of these setbacks have been related to maintenance issues, most notable of which has been the crack inspection scandal within Tepco.

The industry has also suffered from the uncertainty over concerns on potential proliferation. These concerns include those of the USA regarding Iran and North Korea.

In Europe, the most encouraging news for the industry comes from Finland, where there has been significant progress on the fifth reactor. Bids for construction have been received, and a decision will soon be made by the Finnish utility TVO as to which bid it has accepted.

In the UK, Calder Hall ­ claimed to be the world's first commercial nuclear power plant ­ finally shut down on 31 March after 47 years of service. The UK government published its white paper on energy policy. It effectively rules out construction of any new nuclear plants in Britain in the foreseeable future.

There is still only very limited progress on new construction in the USA, but there has been much more activity in extending the operating life and in expanding the output of nuclear plants.

Armenia

The financial management of Armenia's Metsamor nuclear power plant proved to be a significant issue over the last year. In response to $40 million unpaid fuel bills, the Russian utility United Energy Services (UES) took over the financial management

of the plant in February 2003. Ownership of the plant remains with Armenia. Armenia had already transferred shares in several enterprises to Russia as payment for energy debts.

Bulgaria

In line with European Union (EU) accession agreements, Kozloduy units 1 and 2 were shut down on 31 December 2002.

There is still much debate regarding the future of Kozloduy 3 and 4. The government finally accepted the European Commission's (EC's) closure date of 2006, after the EC agreed for the European Council to carry out a peer review of the units. Prior to the agreement, the Bulgarian parliament declared that the country would not close the units until after joining the EU, which is planned to take place in 2007. More recently, the country's Supreme Administrative Court ruled that the government's decision to close the reactors in 2006 was insufficiently justified.

Canada

The restart work at Bruce A has progressed significantly. Bruce Power announced that it was to invest C$1.8 billion ($1.3 billion) upgrading Bruce A units 3 and 4. In addition, it was announced that C$800 million ($600 million) would be spent replacing the turbines and other improvements at the four Bruce B reactors.

However, when British Energy's (BE's) financial position collapsed in October 2002, questions were raised about Bruce Power, as BE was holding an 80% ownership in Bruce Power. BE agreed to sell its stake in Bruce Power to a consortium of Cameco, TransCanada PipeLines, and BPC Generation Infrastructure Trust. It was agreed that BE would receive C$50 million ($36 million) provided the first unit is restarted by 15 June 2003, and another C$50 million ($36 million) if the second unit is restarted by 1 August 2003. Delays in the restart would result in payments being reduced by 10% per month.

In February, the Canadian Nuclear Safety Commission (CNSC) accepted the environmental assessment report on the return to service of Bruce 3 and 4. At this time, Bruce Power planned to restart unit 4 in April 2003, and unit 3 in June 2003. The CNSC also gave the go-ahead to begin fuel loading at the units. All systems required to control and monitor the fuelled reactor had been returned to service in preparation for fuel loading. In April, the CNSC said that it would not permit a restart of Bruce 4 until it was satisfied that training and equipment concerns at the station had been resolved.

The restart of the four Pickering A units has not followed its original schedule. Ontario Power Generation had originally estimated that the first unit would go back online in late 2001. The plan was pushed back to bring the first unit back online by the end of 2002, with the other three units restarting at 6-9 month intervals thereafter. The restart of the first unit was then further delayed until the second quarter of 2003; and at CNSC hearings in February, Pickering A senior vice president Bill Robinson said the plan was still to have unit 4 in service by the end of June 2003.

AECL has launched the next generation of Candu reactors, the Advanced Candu Reactor (ACR-700), a 700MWe capacity reactor that is expected to be ready for the market by 2005. AECL is also working on the ACR-1000, which will have a 1000MWe capacity. According to AECL, in addition to requiring a lower inventory of heavy water, there are features that will reduce the capital cost by up to 40%.

China

The Chinese nuclear industry has made several significant achievements. Ling Ao 1 entered commercial service at the end of May 2002, followed by unit 2 in January 2003. Approval for a further two units at Ling Dong on the Daya Bay/Ling Ao site has been given by the government. Framatome ANP will work in joint venture with Chinese partners on the two 1000MWe PWRs.

The first unit of phase 3 at Qinshan was connected to the grid in November 2002 (with commercial operation on 31 December), and the second of the Candu 6 units reached criticality on 29 April this year. The start-up of unit 2 of the 600MWe PWR at Qinshan phase 2, however, was delayed because of welding and equipment supply problems.

In addition, China's first high-temperature gas-cooled reactor (HTGR) completed two years of trials and was connected to the grid in January 2003.

Europe

A number of common regulations across the EU have been proposed and debated. For example, David Sycamore, Foratom's director of institutional affairs, has proposed that nuclear regulators from candidate EU accession states be invited to join their western European counterparts in a regional association to discuss the

harmonisation of safety standards.

The European Commission (EC) published its report on the debate on its Green Paper on security of energy supply. While not endorsing nuclear power, it did recommend keeping the nuclear option open. The EC said that the four main lessons to emerge from the energy debate were: demand management; better organisation of oil and gas stocks; increased international cooperation on energy issues; and that there should be a clear answer to issues of nuclear safety standards and radioactive waste disposal. The report also pointed out that nuclear energy accounts for 35% of EU electricity production, and that the future of nuclear power depends on finding solutions to waste disposal and transportation.

Regarding the issue of safety, the

EU intends to maintain a "rigorous

policy", particularly in accession

talks with candidate countries, and considers this point a "specific condition for entry to the Union."

The EC proposed a directive on the safety of nuclear installations, to introduce common safety standards and monitoring mechanisms that will be applied throughout the enlarged Union. The EC also issued a draft directive on spent nuclear fuel and radioactive waste, which would create a network of major radwaste management organisations across Europe. It wants groups from seven EU member states ­ Belgium, UK, Finland, France, Germany, Spain and Sweden, as well as Switzerland, to join the network. However, Germany's RWE chairman Gert Maichel said that Germany would oppose the introduction of joint European safety and waste management standards, as these would have to take into account standards

in EU candidate countries, and are therefore likely to be less stringent than German safety standards.

The EU agreed that its gas and electricity markets would be fully open by 2007, and companies would have to split their generation, transmission and distribution businesses. The EU has slowly been negotiating deregulation of its energy markets for nearly ten years. In 2002, energy ministers agreed on 2004 as the date by which the market would be open to industrial and commercial consumers, but at that time, France and Germany opposed other parts of the plan. France objected to liberalisation at the domestic level, while Germany objected to proposals to force utilities to sell off gas and electricity transmission businesses if they held distribution or generation businesses. France finally accepted the principal of domestic competition, although delayed for three years until 2007. Germany was able to negotiate an agreement to allow utilities to create separate legal entities for different parts of their business.

The European Parliament passed its greenhouse gas trading scheme at the end of 2002. That scheme will set a cap on CO2 emissions across the EU by 2005, and allow companies that have reduced emissions to trade excess credits. Up to 2002, several European countries had set up their own trading schemes. However, these piecemeal schemes were not compatible with each other or the proposed EU scheme, and this made it more difficult to get agreement on the EU plan. It went ahead after it was agreed that countries could opt out of the scheme until 2007.

Finland

In May 2002, the Finnish parliament voted in favour of constructing a fifth reactor. Since then, progress has been steady. Three days after the vote, the Green party voted to leave the government, and the Green environment minister Satu Hassi resigned from

her position.

Even with the fifth reactor, it has been estimated that Finland will need more capacity by 2010. However, for a new unit to be built, Fortum chief executive Mikael Lilius claimed that electricity prices need to increase over the long-term, to r30-35/MWh to make building new capacity profitable.

TVO said it received sufficient tenders for it to evaluate the bids, and the winning tender is due to be selected at the end of 2003. It is thought that TVO is considering four bids. These are the EPR and the SWR1000, both from Framatome ANP, Atomstroyexport's VVER 91/99, and GE's Advanced BWR. Westinghouse declined to bid.

TVO estimates that once the reactor and the site have been chosen, it would take about a year for the safety authority to issue a licence. The project does not have to be debated again in parliament.

France

The French government said that it wants to change the legal status of Electricité de France (EdF), and open its ownership to private investors. Prime minister Jean-Pierre Raffarin said that EdF would remain in the public sector, with the French government retaining at least a 51% stake. One proposal was that just 12% of EdF would be made available to private investors. The rest would be held by employees, Gas de France (GdF) and three external funds set up to resolve EdF's liabilities for pensions, nuclear expenditures and its local

distribution network. Raffarin told parliament that EdF "must be given the same weapons as its European counterparts to take full benefit of the European energy market and promote their industrial and social plans." EdF's special monopoly status, its closed ownership and its opaque accounts have drawn criticism from other European utilities and threatened EdF's expansion potential.

The new government elected in France in 2002 would draft an energy bill that would ensure a larger role for renewables, and recognise a place for nuclear energy. In the run-up to the bill, a public energy debate has been launched.

Raffarin said that he would ask parliament to take up a bill on nuclear safety and transparency. He said: "A nuclear sector reform bill must be passed as soon as possible." The bill currently before the senate does not set up an independent nuclear regulatory authority, as many in the administration had wanted.

France's nuclear safety authority, the ASN, has given EdF permission to operate all 34 of its 900MWe units for a further 10 years. The ASN said that all 34 units have been cleared for further operation following the successful conclusion of their second once-per-decade inspections. French reactors have no pre-specified operating lifetime limits, but are required to be in constant conformity with their safety analysis reports.

EdF also announced in November that it had frozen all spending that was not related to safety, security or public service in the face of a cash crunch. Nevertheless, EdF has said that it is still planning to invest r5 billion in the natural gas sector by 2005, in order to become an integrated utility. EdF's debt stood at r22 billion at the end of 2001. The contract EdF signed with the previous government covering 2001-2005 called for EdF to seek an alliance with a major gas player in the European market. EdF chairman and CEO François Roussely has pushed for an external acquisition drive ­ EdF spent r1 billion of a planned r19 billion to buy European utilities ­ and repeatedly emphasised the need for EdF to raise capital.

Germany

The commission examining sustainable energy supply for the German parliament presented a 1300 page report after two years of deliberations. The report said that the present German energy supply system is not sustainable, as it neglects environmental costs, consumes scarce resources and does take sufficient account of risks. The majority of the commission stated in the report that a reduction of 80% of greenhouse gases by 2050 would be possible, in spite of the nuclear phase-out. However, a minority statement to the report demanded the continued use of nuclear energy and the support of nuclear research to keep the option for it open.

In August 2002, German regulators recommended to the Reactor Safety Commission that the primary piping systems in all German BWRs be examined in detail for signs of damage from hydrogen explosions after it had been discovered that Brunsbüttel had probably suffered from an explosion at least 10 years ago, which had gone undetected until March 2002.

The Lower Saxony cabinet issued the verification licence for the waste repository in the former iron mine at Konrad. The licence was issued to the Federal Office for Radiation Protection in June 2002. However, the judicial process for licensing the repository will take at least 3-4 years.