Two steps forward, one step back

In last year's annual roundup of nuclear news, NEI commented: "It looks like the industry is at a turning point, and it could turn in either direction." Since then, the momentum has been very much in the nuclear industry's favour.

There have, of course, been a number of setbacks over the year, the most damaging being security concerns prompted by the 11 September terrorist attacks. Plant security measures - particularly in the USA - have been stepped up, and the IAEA has developed an anti-terrorism plan.

Another setback occurred when the USA reneged on the Kyoto protocol to reduce greenhouse gas emission levels. But - from the perspective of the nuclear industry - this move has been more than compensated for by the launch of the US Department of Energy's "Nuclear Power 2010" initiative to work towards a new nuclear build by 2010.

Just before this issue of NEI went to press, the US Tennessee Valley Authority approved a staff recommendation to restart Browns Ferry 1, at an estimated cost of $1.7-1.8 billion. Although the move demonstrates a renewed faith in nuclear there is still no evidence of a real commitment to building a new plant in the USA. This point was underlined by Exelon's recent decision to pull out of the PBMR project.

In Europe, countries wishing to join the European Union are finding that a major sticking point in accession talks is the operation - or closure - of Russian-designed nuclear reactors. In western Europe, governments are beginning to realise that they can't cut carbon dioxide emissions and phase out nuclear power at the same time, but so far only Finland has taken the brave step of considering a new nuclear unit.

As if to symbolise the end of an era - and perhaps the birth of a new one - two of the world's first-ever nuclear power plants have recently closed. After nearly 48 years of virtually uninterrupted service, Russia's Obninsk nuclear plant was officially closed on 30 April. The 5MWe unit, claimed to be the world's first for generating power, will be turned into a museum. In the UK, the Bradwell nuclear power plant (two 123MWe Magnox reactors) was closed at the end of March after 40 years and 70TWh output. It was one of the first plants in the world built purely for electricity production.

Another significant industry event occurred last October when NEI underwent a major redesign. However, it still remains to be seen whether NEI's new beginning coincides with a new nuclear era.

Armenia

The closure date of the Armenia 2 unit in Metsamor is becoming a major sticking point in Armenia's negotiations with the EU. Armenia had agreed to shut down the VVER-440 reactor - which accounts for around 40% of the country's electricity production - before 2004, on the condition that alternative energy sources could be found. Recently, the EU announced plans to give Armenia E100 million for alternative power generating facilities, but there is still no closure timetable. While the EU remains firm on the 2004 deadline, Armenia appears to have no intention of meeting it.

Towards the end of 2001 energy minister Karen Galustyan announced a plan to enter into a joint arrangement with Russia. Should it go ahead, the plant will be part of Rosenergoatom and Russia will own 50%. However, this arrangement - which would require the plant to operate well beyond 2004 - will depend on any agreement reached with the EU.

Belgium

When the Liberal-led government - Belgium's first coalition to include the Greens - came to power three years ago it promised to withdraw from the nuclear energy sector. Earlier this year, Belgium's cabinet agreed on legislation - which is still to be passed by parliament - to shut down the seven reactors at Doel and Tihange. In the closure schedule, the oldest reactors, Doel 1 and 2, would be shut down in 2015, while the newest, Tihange 3, would be closed in 2025. The draft bill allows an exception to be made in the case of a "force majeure" - a term that has not been clearly defined.

Brazil

After the successful completion of Angra 2 at the end of 2000, and an energy crisis at the end of last year, it was looking highly likely that a decision in favour of finishing Angra 3 would be made. However, president Fernando Henrique Cardoso opted to leave this decision to the next government. Cardoso's successor will take office on 1 January, 2003. The Brazilian government has already invested $700 million in the project, but a further $1.7 billion is needed. It now looks as if Angra 3 will only be completed if there is an even worse drought at the end of this year.

Bulgaria

Although the country's nuclear industry has featured in the news regularly over the past year, the current situation is much as it was a year ago. There is still confusion over the closure dates for Kozloduy 3 and 4, and country is still mulling over new build. Prime minister Simeon Saxe-Coburg Gotha recently said that the government plans to resume the construction of the nuclear power plant at Belene. The plant was mothballed in the early 1990s over environmental concerns.

Canada

Earlier this year, the Canadian parliament approved a national Nuclear Fuel Waste Act, which provides a framework to enable a waste management organisation (WMO) to be established. According to the bill, within three years the WMO will propose disposal strategies, which it will later implement. The act also authorises the government to make a decision on the choice of approach for the long-term management of nuclear fuel waste, to be implemented by the WMO.

Many refurbishment projects are underway. The restart work on Bruce 3 and 4 is progressing well and in line with the C$340 million ($210 million) budget. The units are scheduled to be back online in a year, subject to regulatory approval from the Canadian Nuclear Safety Commission (CNSC).

There have been reports that the restart project of Pickering 1-4 is not progressing as well as at Bruce, but the CNSC has given the provisional go-ahead for the restart, subject to improvements being completed. Last year, OPG said it expected the first of the units to have recommenced operations by now.

Both Gentilly 2 and Point Lepreau have initiated refurbishment projects, which are expected to extend the operating lifetimes of each unit by 25 years. NB Power has recently asked the province of New Brunswick to approve the C$845 million ($530 million) plan to refurbish Point Lepreau.

China

The nuclear industry in China has made tremendous progress in the last year, and it is likely to continue doing so. A significant milestone was achieved on 17 April with the start of commercial operation of the first unit of the second phase of the Qinshan station. The 600MWe reactor is the first commercial nuclear reactor of China's own design and construction.

About two months earlier, on 4 February this year, the first 984MWe unit of the Ling Ao plant achieved criticality. Commercial operation of the reactor is expected very soon.

Work on the Candu units at Qinshan (phase 3) is well underway. The first unit is likely to begin operating later this year. Also, installation of equipment at the Tianwan plant (2xVVER-1000) has begun. Initial site preparation works has also commenced at the Sanmen site, in the east-coast province of Zhejiang.

Czech Republic

Sometimes one might be forgiven for thinking that many Austrian and German politicians have very few problems within their borders. Why else would they be able to spend so much time and energy trying to shut down Temelin - one of the safest plants in the world? At one point, Temelin executive director Frantisek Hezoucky finally lost his cool with Germany's environment minister Jürgen Trittin. In an open letter to Trittin, Hezoucky invited him to visit the plant to familiarise himself with a subject on which he often comments, "so far without the necessary knowledge." Trittin declined to reply.

An agreement of sorts was reached with Austria on 29 November, 2001. Czech prime minister Milos Zeman and Austrian chancellor Wolfgang Schüssel agreed that Austria would consent to the closure of the Czech energy chapter of EU membership negotiations in exchange for the Czech Republic's fulfilling seven Austrian demands relating to the safety of Temelin. The obligation for the Czech side to strengthen safety inspections and information-sharing procedures will be written into the accession treaty. However, the agreement did not reduce the level of noise made by Temelin's Austrian critics.

The startup of unit 1 continues, with several technical problems along the way. It has been a difficult year for the unit, but 100% power was finally achieved in January. Fuel loading at unit 2 was carried out in March and it is expected to achieve criticality soon.

The Temelin factor was partly responsible for the fiasco over the privatisation of CEZ, with prospective buyers apprehensive over the possibility of having a stake in the much-maligned plant. The Czech government had invited bids for its 67.6% stake in CEZ but rejected the bids as they failed to meet the government's minimum expectations of $5.56 billion.

Finland

The crucial parliamentary vote on whether to go ahead with the country's fifth nuclear reactor is expected very soon. Finland is alone in western Europe in its apolitical - at least to some extent - approach to nuclear power, and the result of the vote will have far-reaching consequences for the industry. However, despite a 10-6 vote (and two abstentions) by the five-party government cabinet in favour of the new unit, and strong support from prime minister Paavo Lipponen, the parliamentary vote is likely to be extremely close.

The country has already led the way after it approved a high level waste repository. Initial tests at the site have not gone as well as expected. Radiation and nuclear safety authority STUK has said that it wants to carry out an additional year of bedrock testing at Olkiluoto, the proposed site for the final spent fuel repository. As a result, STUK proposed that granting a construction permit for the repository should be set back by a year.

France

The structure of the French nuclear industry has completely changed over the last year. Areva was formed in September and is headed by Anne Lauvergeon. Areva comprises the activities of Framatome ANP, Cogema, Framatome ANP's new technology unit Framatome Connectors International and an 11% stake in chipmaker STMicroelectronics. It is the largest nuclear power company in the world and is expected to generate annual sales of $9 billion. Soon after Areva was formed, president and CEO of Framatome ANP Dominique Vignon resigned. Vignon had been head of Framatome since 1997 and organised the merger of the company's nuclear activities with those of Siemens, to form Framatome ANP. During 2000, Vignon lost a long battle to prevent the company from being attached to Areva. Vincent Maurel is the new head of Framatome ANP.

Early this year Electricité de France (EdF) announced a major corporate restructuring. As of 1 February the group's activities in 22 countries are divided among four main geographical branches: Central Europe; Western Europe, Mediterranean and Africa; Americas; and Asia-Pacific. Three further branches are based on business activities. Despite EU directives mandating a fully competitive power market by 2003-4, the government has stated that it will protect EdF's home market advantage.

The national nuclear regulatory and radiation protection authority has also undergone major restructuring. The Direction Générale de la Sûreté Nucléaire et de la Radioprotection (DGSNR), headed by André-Claude Lacoste, replaces the Direction de la Sûreté des Installations Nucléaires (DSIN). The Autorité de Sûreté Nucléaire (ASN) is made up of the DGSNR and its regional divisions. The ASN receives technical support from the Institut de Radioprotection et de Sûreté Nucléaire (IRSN). The IRSN is made up of the former nuclear safety advisory body, the Institut de Protection et de Sûreté Nucléaire (IPSN), and the advisory and support functions of the Office de Protection contre les Rayonnements Ionisants (OPRI). At the same time, there is no longer any affiliation with the Commissariat à l'Énergie Atomique (CEA).

Germany

The new German atomic law came into force on 27 April. The law limits the average total operating lifetime of reactors to about 32 years. German utility leaders said last year that their aim in signing the agreement was to continue producing nuclear energy "for as long as possible without political interference", and added that the government had "guaranteed the undisturbed operation of nuclear plants".

The opposition party has said it would change German nuclear law if elected in the next general election on 22 September, 2002. The German Christian Democratic Parties (CDU and CSU) said they would again keep the option for the use of nuclear energy open, even if no new nuclear power plants are being planned. They also intend to continue the exploration of the Gorleben salt dome as a potential repository for radioactive waste. The new law bans the reprocessing of spent fuel after 1 July 2005, when existing contracts expire, and commits nuclear plant operators to build and use on-site "interim storage" facilities.

Two events at BWR reactors have been the focus of intense scrutiny over recent months. After a routine outage, Philippsburg 2 was restarted and allowed to operate for several days without sufficient levels of boric acid in three of four emergency water dump tanks. State regulators concluded that the plant manager and senior control room personnel had made subjective, non-conservative assumptions in dismissing the potential safety implications of the incident. Several resignations at Energie Baden-Württemberg (EnBW) resulted.

An incident involving the rupture of a head spray cooling system pipe at the Brunsbüttel plant also called management decisions into question. Regulators said Hamburgische Electricitäts- Werke (HEW) had dismissed the possibility that a pipe had ruptured and refused to shut the plant until it was threatened with legal action.

India

Over the last few months it has been beginning to look as if some of India's plans for the nuclear industry will actually materialise (see News Update on page 13). As if to prove the point, a record increase of 17% for the Department of Atomic Energy's fiscal 2002 budget has just been approved by parliament. Earlier, first concrete was poured at Kudankulam (two VVER-1000 units). Around the same time, construction began on units 3 and 4 (220MWe PHWRs) of the Kaiga station.

Japan

The last year saw Japan take its first steps towards decommissioning a commercial reactor. The Japan atomic power company (JAPC) has begun a 17-year project to dismantle the Tokai 1 Magnox reactor. At the other end of the plant lifecycle, at the end of January, Tohoku Electric Power announced the start of commercial operation of Onagawa 3, an 825MWe BWR.

On the down side, the small town of Miyama in Mie prefecture voted against building a nuclear plant nearby. In another vote, the tiny farming village of Kariwa narrowly voted against loading MOX fuel at Kashiwazaki-Kariwa. Abandoning the plan - at least for the time being - Tepco president Nobuyu Minami reaffirmed the company's commitment to the so-called "pluthermal" project.

At the end of 2001 Kansai Electric Power suspended its orders for MOX fuel from France's Melox plant after Japan's ministry of economy, trade and industry (METI) said it would not allow the fuel to be used. As well as being yet another severe blow to the programme, the move is expected to cost Kansai Electric around ¥6 billion (around $46 million) in payments for fuel already produced.

More recently, at the annual conference of the Japan Atomic Industrial Forum, parliamentary secretary for METI Akira Matsu said: "The MOX programme must happen, and the government will continue its efforts in this regard."

Lithuania

The European Commission has pledged long-term support for the closure of Ignalina, with funding of E105 million in 2004, plus E70 million per year in 2005 and 2006. Lithuania has agreed to close unit 1 by 2005 but is yet to agree on a shutdown date for unit 2. The EU is pushing for unit 2 to be closed by 2009. The country's president, Valdas Adamkus, said that Lithuania would not be able to meet this deadline.

North Korea

Despite US president Bush branding North Korea an "axis of evil", there has been some - albeit slight - progress on the Korean Peninsula Energy Development Organisation (KEDO) project. The USA had complained that North Korea had been obstructing access by UN inspectors to verify that it has no stockpiles of weapons-grade plutonium. North Korea has agreed to resume talks over the project. Recently the International Atomic Energy Agency made its first visit to a North Korean nuclear establishment since 1994.

Russia

Russia is one of the many countries that could be accused of talking up its plans for nuclear power. The country's current targets look optimistic, but there is no doubt that the commitment to expansion exists. In 2001, 29 units generated a record 134.9TWh, an increase of 3.3% on 2000, and accounting for 15.4% of electricity production. Nuclear generation is targeted to grow by 34% to 174TWh by 2005.

Four units are currently under construction. Kursk 5, a modernised RBMK unit, is due for completion by the end of this year. Kalinin 3 is expected to go into operation by 2003, Volgodonsk (formerly Rostov) 2 by 2005 and Balakovo 5 by 2005. Several other reactor projects are underway, including a BN-800 fast reactor at Beloyarsk, expected to be in operation by 2009.

Abroad, there are several VVER-1000 projects that appear to be going well - Tianwan (China), Kudankulam (India) and Bushehr (Iran). Russia is also involved in negotiations over the completion of Khmelnitski 2 and Rovno 4 in Ukraine.

Meanwhile, several organisational changes have taken place. Rosenergoatom president Oleg Saraev announced that his agency has created a new national electric power operator, the Unified Generating Company. The new body brings together the output of Russia's ten nuclear power stations, and will compete on the domestic and foreign electrical energy market with Unified Energy Systems, a bitter rival of the ministry for atomic energy (Minatom).

Heads of several key Minatom departments, including First Deputy Minister Valentin Ivanov, were dismissed amid allegations of corruption relating to shipments of spent nuclear fuel from Bulgaria. Ivanov has been replaced by Mikhail Solonin. The changes at Minatom may simply reflect the desire of atomic energy minister Alexander Rumyantsev to bring in his own people.

Slovenia

The Krsko 664MWe PWR unit, sited in Slovenia, was co-funded by Croatia but - since the break up of Yugoslavia in 1991 - the two neighbours have been locked in dispute over sharing its output and the disposal of radioactive waste. Last year, the two countries signed an agreement to end the dispute over ownership, but the agreement has still to be ratified by their respective parliaments.

The management board of the decommissioning fund for Krsko said that the Slovene-Croatian contract is not acceptable for Slovenia because of the articles on decommissioning and waste. The contract proposes Slovene funds are raised within the state budget, but the management board is afraid of losing funding that depends on the government.

South Africa

The Pebble Bed Modular Reactor (PBMR) project has been one of the main driving forces behind the perception that the nuclear industry is undergoing a renaissance. One of the biggest advocates of the project was former chairman and co-CEO of Exelon Corbin McNeill. Soon after the announcement that McNeill was retiring 20 months earlier than expected, Exelon announced that it will withdraw from the project as soon as the feasibility study is completed. While Exelon maintained that the move reflected the company's decision to concentrate on its core business of generation, transmission and distribution, many will still be asking themselves: "What do they know about the project that we don't?"

The feasibility study is likely to be completed by the end of the year. Two main issues - concerning the turbine design and the graphite core internals - have yet to be resolved and are responsible for setting back the timetable by around a year.

Sweden

The Riksdag (parliament) is currently debating a phase-out plan, which will give the industry a greater say on when to close Sweden's reactors. According to energy minister Björn Rosengren, the government was still committed to the phase-out, but "it will take 30 to 40 years before it can be phased out." In 1980, parliament had voted to close the country's reactors by 2010.

Taiwan

Despite an impressive victory for the Democratic Progressive Party (DPP) in the legislative election held on 1 December, 2001, it is beginning to look like the Lungmen project will continue without further political interference. However, the construction delays have caused the project costs to rocket, with some estimates now approaching $6 billion. Taiwan Power was recently given governmental approval to delay the start-up of Lungmen 1 from July 2005 to July 2006, and unit 2 from July 2006 to July 2007.

Ukraine

Either Khmelnitski 2 and Rovno 4 (K2R4) will be completed with help from the European Bank for Reconstruction and Development (EBRD), in which case western safety systems will be installed. Or K2R4 will go ahead with Russian support only, without western I&C.

The EBRD had agreed to grant Ukraine a credit of $215 million, but Ukrainian prime minister Anatoly Kinakh said the conditions of the loan were unacceptable. The EBRD has agreed to certain conditions, such as abandoning its demand for Ukaraine to raise its electricity tariffs, but negotiations are still continuing. Ukraine is also still involved in talks with Russia over financing the project.

United Kingdom

The UK government has taken the unusual step of not leaving important decisions on energy policy to a future government. An Energy White Paper is due to be published later this year. It will take into account the findings and recommendations of the country's recent energy review. Although the review recommended a big shift to renewable energy - without saying how to achieve its targets for renewables - it also left the door open for the nuclear option.

The government also announced the creation of a Liabilities Management Authority (LMA) to take on responsibility for most of the UK's public sector civil nuclear liabilities.

The outlook for BNFL has gradually improved. The two 570MWe Wylfa reactors were restarted after a 15-month outage, caused by the discovery of tiny defects in steam pipe welds in April 2000. Operations have commenced at the Sellafield MOX Plant (SMP). The facility was completed in 1996 but, following financial concerns and the data falsification incident, approval for commercial operation was delayed.

A major setback occurred in July 2001, when a basket containing 24 fuel elements was dropped in a fuel discharge machine during a routine refuelling operation at Chapelcross 3, initiating a major investigation. Two of the four reactors remained offline until early this year. In the meantime, a problem with the charge pans at Calder Hall - which is similar in design to Chapelcross - has resulted in the shutdown of all four Calder Hall units since December. Chapelcross 1 also showed signs of similar charge pan tilting, and is currently offline as a result.

United States

The industry's prospects continue to look up, though the events of 11 September have caused confidence levels to dwindle. Nuclear facilities, according to much of the world's media, have become prime targets for terrorist attacks. Critics of nuclear power have been successful in capitalising on the fear of terrorist attacks to undermine much of the limited public trust in nuclear security. In February, the Nuclear Regulatory Commission issued orders to all commercial nuclear power plants to implement interim compensatory security measures. The NRC said that the requirements will remain in effect until the NRC determines that the level of threat has diminished, or that other security changes are needed following a comprehensive re-evaluation of current safeguards and security programmes.

Despite this setback, the momentum is in the right direction for the industry. It is almost certain now that the Yucca Mountain site will be approved as the nation's high-level waste repository. Almost immediately after energy secretary Spencer Abraham recommended to president Bush that the site be given the go-ahead, Bush gave his approval. As expected, Nevada vetoed the plan, leaving Congress with the final say. The recent 306 to 117 vote by the US House of Representatives in favour of the site demonstrates strong support from both political parties.

More encouraging news for the industry came with the announcement of the Department of Energy's (DoE's) initiative, "Nuclear Power 2010". The scheme is based on recommendations by the DoE's Near-Term Deployment Group, which found that - so long as there is strong support from the government and timely action by prospective plant owners/operators - new nuclear units could be built by 2010. Under the initiative, Abraham said the DoE will cooperate with industry to "pave the way for an industry decision to build safe, new plants." Already, Dominion, Exelon and Entergy have announced plans to pursue early site permit applications.

Prices of operating reactors have continued to increase. Vermont Yankee was finally sold to Entergy for $180 million. Nine Mile Point unit 1 and 82% of unit 2 were sold to Constellation Nuclear for $762 million. And, more recently, FPL Group agreed to buy an 88.2% interest in Seabrook for a total of $836.6 million.

Some utilities have begun looking into the prospect of restarting or completing reactors. The much-speculated restart of the two-unit Zion plant, for example, was ruled out by Exelon at the end of March. However, Tennessee Valley Authority (TVA) last month approved the restart of Browns Ferry 1 at an estimated cost of between $1.7-1.8 billion (see page 2 of this issue). In the USA, nuclear is once again seen as a worthwhile investment.

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