At the same time, on the margin, renewable sources are touted, and subsidised by governments, as a way forward. There is considerable doubt about whether governments will have the will or be able to afford to continue subsidies up to the level of 10% market share, the target level in UK, Denmark and Germany for 2010. If the power utilities are forced to pick up the cost, it will be passed on to consumers at a level which will severely impact the international competitiveness of industry.
In California, power demand has exceeded the state's domestic supply for some time, due to insufficient investment in new plant. Investors will not risk new capital due to a combination of factors, notably tight emission constraints, the retail price being capped by the state, and a culture of public opposition. Furthermore, supply priority has been given to power from renewable sources despite its erratic availability, so that high-capital cost base-load plant is not allowed a assured load pattern to be properly economic. Coupled with this, following deregulation nobody seems to be accountable for ensuring continuity of supply or for investing in new generating capacity.
California's population grew 13% through the 1990s to some 34 million. Its economy is larger than that of most nations, and includes a major high-technology sector. It produces 12% of US GDP.
Electricity demand growth accelerated in the late 1990s, so that it substantially exceeded the state's 53,000 MWe generating capacity . This left California dependent on imports for 25% of its electricity (14% from US Southwest, 11% from Pacific NW); it currently relies on some 11,000 MWe of out-of-state capacity. At the same time, growth in adjoining states limited the amount of surplus power available, as did the capacity of interstate (and north-south internal) transmission lines.
The basic longer-term problem is that apart from some impressive wind farms, hardly any generating capacity has been built in California in the last 15 years due to officially-indulged environmental activism, despite almost 2% annual growth in demand. Furthermore, some 80% of California's generating plants are older than 35 years (the two largest gas-fired plants are 45 years old), and less than 5000 MWe of new plant is projected to come on line by 2004.
Compounding this long-term problem, towards the end of 2000 the state had a third of its generating capacity off-line, mostly catching up with maintenance deferred from peak summer load conditions. California thus faced severe power constraints and these continued through the winter into 2001.
Several plants, totalling 2700 MWe, had used up their annual pollution credits so could not restart without severe fines. In particular, three gas-fired plants (2000 MWe) were shut down after the south coast Air Quality Management District required them to install emission control equipment for NOx. As the crisis developed, the state's Independent System Operator (ISO), which operates most of the state's power grid, called them back into service, but they are required to obtain NOx emission credits to cover the short-term impact of this. The price of such credits has soared.
Furthermore, a dry summer had reduced hydroelectric availability in the US Northwest. Interstate coal and nuclear plants helped, and local gas-fired plants met some of the shortfall, but demand forced gas prices to double, and in January they were almost five times the level of a year earlier.
As a result, wholesale electricity prices throughout the US West soared to unprecedented levels - briefly reaching US$ 750/MWh (75 c/kWh), but the weekly average ranging from $198 to $350/MWh in January. Electric utilities have generally experienced a quadrupling of wholesale prices from generators but they have their own prices capped and consequently suffered about US$ 12 billion in losses over just six months. The state government has stepped in to bail out the two largest utilities and re-regulate the system.
Three west coast aluminium smelters with long-term power supply contracts closed until 2002, and are making more money selling their electricity entitlements than they could from aluminium, while employees are sent home on full pay. In one case, power bought for 2.25 c/kWh was being sold for 55 c/kWh.
The shortfall in generating capacity is widely seen as being due to years of weak government appeasing extreme environmentalism. Few proposals for base-load capacity have come forward. Defending such proposals against advocates of renewables and demand management as being the total answer to provision of power, means that it takes up to seven years in California to turn a proposal into a functioning power station, compared with three years in Texas. This is despite price levels which would enable an operator in Northern California to pay off a new gas-fired power station (@ $600/kW) in a year.
The supply crisis, with rolling blackouts, initially ran from December to late February (when some of the shut down plant returned to service) but affected mainly the north of the state. It forced renewed interest in building substantial coal and nuclear base-load capacity. Support for building new nuclear power plants in USA generally jumped as a result of the Californian crisis. In the west of the country, opinion that "we should definitely build more nuclear energy plants in the future" rose from 33 to 52%, nationwide it rose from 42 to 51%, compared with October 1999. Support for extending the operating licenses of the nation's 103 power reactors remains strong at 81 percent. More than two thirds said that nuclear energy should play an important role in meeting future US energy needs.
Deregulation
Much newspaper coverage of the Californian crisis has pointed to deregulation as a factor, if not a cause.
Before "deregulation" electric utilities, which have a legal obligation to serve their customers' demands, could build plants regardless of the expense and recover costs from customers. In 1996 utilities owned 81% of the total generating capacity and the average price was 9.5 cents/kWh, the tenth highest in USA. This arrangement locked in certain inefficiencies, and when deregulation loomed it raised the question of how utilities would recover their "stranded costs", mostly the capital component which could not be amortised with expected lower electricity prices. Elaborate mechanisms were put into place to cover these, but there were conditions imposed to ensure that utilities did not exploit the situation.
Under the Electric Utility Industry Restructuring Act in 1996 the Californian government put into place a deregulation scheme which required the major utilities to divest at least half their major generation assets, so that their ownership fell to 46% of the total capacity. The scheme also prevented them from entering long-term hedging contracts that would limit the risk of large price movements, forced them to buy electricity at market rates from a centralised pool, and on top of all this committed the two main utilities to retailing the electricity at fixed 1996 prices until March 2002 regardless of the cost of wholesale purchase. The price cap provision incorporates a transition charge which is the mechanism for utilities to recover stranded costs.
Thus there was not so much deregulation as a much less effective form of regulation.
Spring and Summer
On 19-20 March, both north and southern California were subject to rolling blackouts with the onset of warm weather. These were ordered by the grid manager which is expecting further problems with inadequate generating reserves as summer approaches, and the Governor has called for a 10% reduction in consumer use of power. The supply crisis was exacerbated by the loss of 1080 MWe output from San Onofre-3 nuclear plant due to a turbine hall fire early in February. Damage to rotors, bearings and other components mean that it will not be back in service before mid May.
Efforts to bring on line new capacity are focused on gas-fired plants, which thus have the effect of forcing up gas prices and making such plant less competitive than established base-load plants, as well as putting the whole state at an economic disadvantage. Meanwhile the indebted utilities are unable to pay smaller suppliers including those with high gas bills, who have thus been forced to shut down 3100 MWe of capacity.
US DOE Energy Information Administration web site,
California Energy Commission, Provisions of AB1890, and Wholesale Electricity Price reviews to Jan 2001.
The Utilities Journal, March 2001,
Reuters 6/12/00 & 19/1/01, AFR 27/12/00, 10 & 29/1 & 5/2/01, Aust 8 & 27/1/01, Int'l Herald Tribune 21/3/01.
NEI 23/1/01, NEI Insight January 2001, LA Times 17/2/01; UI NB 01.08, BBC 20/3/01.
ESAA Electricity Supply, Feb 2001.
Honeymoon mine approval deferred.
The federal environment minister has called for further evaluation of aquifer systems before deciding upon approval for mining the Honeymoon uranium deposit in South Australia. The mine will use in situ leaching. In particular Senator Hill expressed uncertainty regarding residues from the uranium recovery process which would be reinjected into the aquifer.
However, at his press conference Senator Hill stated general satisfaction with the ISL process and has accepted departmental advice that other environmental issues were adequately addressed by the EIS process.
Hill media release 1/2/01.
Beverley mine officially opened.
Heathgate Resources' Beverley ISL uranium mine in NE South Australia was officially opened on 21 February, by the state's Deputy Premier. It is on track to produce 1000 t/yr U3O8 for at least 15 years, and exploration on surrounding leases is expected to identify additional reserves.
Heathgate 21/2/01.
Meanwhile, Bruce Power, the British Energy subsidiary which is taking over the 8-unit Bruce nuclear power station in Ontario, has begun a C$ 30 million study on the prospect of restarting units 3 & 4, which were shut down by the previous owners at the end of 1997. A report is expected in the next couple of months. Bruce units 1 & 2 would require new steam generators and are therefore considered beyond economic repair.
Unecan News 16/2/01, CNA Nuclear Canada 16/2/01, Nuclear Europe Worldscan 1-2/2001.
US President disowns CO2 emission cuts.
Citing an Energy Dept study predicting "significantly higher electricity prices", President Bush has disowned a campaign speech where he mentioned regulating power plant emissions of carbon dioxide. "Coal generates more than half of America's electricity supply. At a time when California has already experienced energy shortages and other Western states are worried about price and availability of energy this summer, we must be very careful not to take actions that could harm consumers", Mr Bush said in a letter to four Senators. "I do not believe that the government should impose on power plants mandatory emissions reductions for carbon dioxide, which is not a 'pollutant' under the Clean Air Act."
"I look forward to working with you and others to address global climate change issues in the context of a national energy policy that protects our environment, consumers and economy" he said.
The President's stance is consistent with his campaign position but different from his predecessor's views. European sources have expressed great concern about the US Administration change of policy in the context of climate change negotiations which are due to resume in July.
Bush letter 13/3/01, Wall Street Journal 17/3/01.
US regulators approve enrichment upgrade.
With the imminent closure of USEC's Portsmouth, Ohio plant, which was the only one licensed to enrich up to levels now commonly used by US nuclear power plants, the Paducah plant in Kentucky has been licensed by the Nuclear Regulatory Commission to enrich uranium feed to 5.5% U-235.
NucNet business news 29/01.
Government offloads military high-enriched uranium.
The US Department of Energy has agreed to give 33 tonnes of military high-enriched uranium (of various grades up to 45% U-235) to the Tennessee Valley Authority for its Browns Ferry reactors. The TVA will meet the cost of downblending it to reactor grade. The 33 tonnes is part of 200 tonnes identified in 1996 as surplus.
FreshFUEL 19/3/01, Ux Weekly 19/3/01.
Vermont reactor sale hiccup.
In February state regulators vetoed the sale of the Vermont Yankee reactor to AmerGen Energy (a British Energy - Exelon joint venture) on the grounds that at US$ 40 million it did not reflect "fair market value". In the light of escalating market interest in such sales, the owners have now decided to auction it and have formally terminated the AmerGen sale agreement.
NucNet business news 29/01.
New US energy strategy report.
The US Energy Association has released a consensus study drawing on a wide range of energy-related industry groups to chart elements of a national energy strategy. It sets out six priorities: enhancing proven energy sources, encouraging energy efficiencies, stimulating global energy trade and development, promoting energy technology R&D, balancing energy use with environ-mental concerns, and unifying policy efforts. "Enormous capital investment in all forms of energy" including nuclear is seen as a key to the nation's future, and on the electricity front that means building about 20,000 MWe of new capacity per year to 2020.
The report comments on the policy inconsistency of having environmental credits available to energy producers which adversely affect air quality but not to nuclear and hydro sources which don't. The report will be submitted to the World Energy Council as the US contribution to policy development internationally.
NEI Nuclear Energy Overview 26/2/01
Bipartisan Bill in US Senate to boost nuclear energy.
The Nuclear Energy Electricity Assurance Act proposes allocating US$ 406 million to support nuclear energy production, encourage new plants, promote waste solutions and streamline regulatory procedures. Meanwhile two of USA's leading technology chiefs based in Silicon Valley have weighed in to affirm that nuclear energy is the "only solution" to California's electricity crisis. The CEOs of Sun Microsystems and Intel Corp both acknowledged that their views might be politically incorrect, but unreliable power supplies were unacceptable and nuclear power's environmental and cost attributes made it a necessary part of any US energy policy.
In another development, the US Dept of Energy has called for submissions on the deployment of small nuclear power plants (up to 50 MWe) for isolated communities.
NucNet news 79 & 80/01.
Rostov unit 2 is about four years behind it, and its start up is likely to be preceded by Kalinin-3 and Kursk-5. Balakovo-5 will apparently be next. Progress with Sosnovy Bor-1 near Leningrad, Russia's first new-generation advanced reactor, is less clear.
NucNet news # 56/01.
Russia reactivates two reactor projects.
Plans to construct unit 4 of the Beloyarsk nuclear power station at a cost of US$ 1.2 billion have been revived. The reactor will be a BN-800 fast breeder type, to go alongside the BN-600 which started up in 1980 and is now the world's only operating commercial-scale fast reactor. The new reactor will burn both civil and weapons-grade plutonium and is expected to be completed in 2009. (Plans for similar units for the South Urals site at Chelyabinsk/Ozersk, several hundred kilometres south of Beloyarsk, were postponed last year.)
In 1997 the Russian government announced that it had authorised the construction of a 1200 MWe nuclear power station near Vladivostok, in the Pimorie region on the Sea of Japan, with the cost of the plant being covered by sales of electricity to nearby China. The regional government has now restarted a feasibility study into the proposal (for 1300 MWe), following President Putin's sacking of the governor earlier this year because of the regional energy crisis. The new plant is to be capable of withstanding severe earthquakes.
NucNet news # 485/97, 47 & 92/01, NEW 5-6/98.
Finnish PM hits nuclear critics.
Finland's Prime Minister Mr Lipponen, whose government is currently considering an application to build Finland's fifth nuclear power unit, has described moves by some countries to give up the option of using nuclear power as being "economically absurd". He also dismissed "terrorist statements and boycott threats" against Finland from some anti-nuclear groups. Meanwhile the Olkiluoto municipal council has voted 19-8 in favour of the new reactor being constructed alongside two others there.
NucNet news 97/01.
European Parliament accepts nuclear transports.
Members of the European Parliament have backed (by 410 votes to 73) a report on the transport of nuclear materials, notably high-level wastes and spent fuel which is routinely moved between reactor sites, reprocessing plants and waste sites. The report, presented by the chairman of the parliament's transport committee, makes it clear that the transport of radioactive materials in the EU is both "safe and well-regulated".
Transport of high-level waste to the Gorleben repository in Germany resumed at the end of March, following considerable political negotiation with interested parties. The German Environment Minister supports the waste disposal, but rank and file Greens do not, and demonstrations resulted.
NucNet news 88/01.
BNFL to quit hexafluoride production.
Coincident with ceasing production of Magnox fuel there in 2006, BNFL intends to shut down its 6000 tU/yr conversion plant at Springfields, UK. Meanwhile, BNFL has sold its uncommitted conversion capacity to Cameco, who will take over all its marketing of uranium hexafluoride. Due to the depressed market, the plant has run at about 5000 t/yr over the last two years. This leaves four major converters in the market: Cameco, Converdyn, Comurhex and Russia's Electrol, with combined capacity of about 63,000 tonnes U per year.
BNFL 9/2/01, Ux Weekly 12/2/01.
British Energy to maintain nuclear share.
Following a prominent story in a British newspaper, British Energy has said that it is first of all aiming to extend the working lives of its nuclear plants (where safe and economic), and secondly considering how to replace them, with nuclear as a real option. Economic criteria will be paramount, but climate change concerns and steeply-escalating gas prices mean that while new nuclear plants cannot immediately be justified in UK, in the longer term they could be and furthermore "British Energy is clearly best placed to develop new nuclear generation plans".
The company welcomed the newspaper editorial line on nuclear power's role in combating global warming and its acknowledgment that "nuclear is the only realistic alternative to fossil fuels". The paper had drawn attention to BE's need, in 10-20 years, to replace its gas-cooled reactors and called for government encouragement "of a new generation of nuclear power plants in Britain". BE's Chairman designate had earlier said that BE was determined to play its part in a "nuclear renaissance" in UK.
BE 5/3/01, NucNet insider 4/01.
Record French nuclear electricity production.
Electricite de France last year had record production levels from its 58 nuclear reactors, together with improvements in safety and unit performance. Output increased 5.4% to 395 billion kWh, unit availability factor exceeded 80% (with the newer large units being 85% and 95%), production costs per kWh fell, while safety performance improved. EdF is seeking a 20% reduction in production cost per kWh from 1998 to 2002. So far it has achieved 7%, as debt levels drop and output increases. Nuclear power provides about 75% of France's electricity.
NucNet business news 26/01.
French abandon laser enrichment.
The French atomic energy commission (CEA) has announced that development of the SILVA atomic vapour laser isotope separation process will cease by 2003. The CEA is to resume R&D work on gas centrifuge technology that was suspended in 1983, when research efforts turned to laser enrichment. As with the US AVLIS counterpart, SILVA proved 'difficult to implement and had an uncertain commercial future'. This ends work on atomic laser separation, leaving the field to Australia's SILEX, which is a molecular processes, now at prototype stage.
UI News Briefing 1.07, cf UIC briefing paper # 33.
British Energy teams up with wind power.
British Energy, the main UK nuclear power utility, has formed a joint venture company with Renewable Energy Systems Ltd to build offshore wind turbines around the UK mainland coast. The new company, Offshore Wind Power Ltd has made a pre-qualification application for access to the UK seabed out to the 19 km territorial limit. RES is the largest UK wind energy developer, with over 1100 MWe capacity on its books in several countries, including the world's largest wind farm of 280 MWe being built in Texas.
The joint venture expresses a natural alignment of non-carbon electricity production, and will tap into £89 million of subsidies now available from the UK government under its greenhouse-related Renewables Obligation, funding up to 40% of plant costs, plus a further £300 million announced in March. The UK Dept of Trade & Industry is said to be considering investment of more than £6 billion in offshore wind farms to achieve 1.8% of the nation's electricity production from wind by 2010.
Industry estimates suggest that an east coast offshore wind farm would comprise up to 30 turbines each of 3 MWe and operating at 20% capacity factor, hence generating nearly 60 million kWh per year, about 0.2% of BE's output. Two 2 MWe turbines 90 metres high have already been built offshore Northumberland.
BE 15/2/01, ENS 16/2/01, APG Nuclear Issues 2/01.
TEPCO reaffirms reactor program.
Major Japanese utility TEPCO has deferred plans for 12 major fossil fuel power plants, but has made it clear that it will maintain schedules for four nuclear plants, partly on account of greenhouse considerations.
NucNet business news # 14/01, UI NB 01.07.
Delay threatens Japanese MOX use.
The governor of Fukushima prefecture has stalled plans by Tepco to load mixed oxide (MOX) fuel into local reactors because of the utility freezing work on non-nuclear power plants in the prefecture. He has called for a lengthy review of nuclear power policy for the prefecture, despite the fact that all regulatory requirements for the MOX use have been met. The delay also threatened plans to load MOX at plants in another prefecture, where approval was contingent upon not being the first to do so. Japan's utilities plan to load MOX in 16 to 18 units over the decade, and MOX use with associated reprocessing of spent uranium fuel is a fundamental part of the country's energy policy.
NucNet news # 65/01.
India's nuclear plants unperturbed by earthquake.
The two Kakrapar nuclear reactors, some 300 km from the epicentre of the Gujarat earthquake in January, continued to operate normally throughout. In common with other such plants they are designed to withstand earthquakes, with automatic shut down in extreme conditions.
NucNet news # 32/01.
The convention defines spent fuel management as all activities related to handling or storing it, excluding off-site transport, while the waste management definition is wide. The convention establishes a comprehensive reporting system. It includes military wastes if and when these are transferred to the civil sector, or at government discretion.
NucNet news # 98/01.
Global warming concerns firming.
The science behind the politics of global warming took a step forward and also ratcheted up concerns with the release of a draft report in January. The report, from the UN's Intergovernmental Panel on Climate Change (IPCC), brings forward the science of climate change by five years.
Among its findings:
The observed changes are attributed almost entirely to increasing concentrations of greenhouse gases caused by human activities, offset to some extent by other human effects:
The report concludes that there is new and stronger evidence that most of the warming over the last 50 years is attributable to human activities and that these influences will continue to change the atmosphere and hence the climate throughout the 21st century.
Two further IPCC reports have been released since, dealing with ecological impacts and how to respond to the emerging scientific consensus. The text that considers response measures highlights the contribution of low-carbon energy supply systems. The use of nuclear power plants is put forward, along with extension of their operating life-time, and wind energy, hydropower and other other low-emitting energy sources are commended.
IPCC Shanghai draft 21/1/01.
Chernobyl clarification.
The UNSCEAR 2000 report had a 106-page Annex on Chernobyl, which was reported briefly in UIC Newsletter # 4/00. An earlier report by another UN body, the OCHA, was reported in #3/00. In the light of continued quoting of the earlier, non-expert report, attention is drawn to the 6 June 2000 covering letter to UN Secretary General from the Chairman of UNSCEAR: "I write to you as Chairman of the United nations Scientific Commission on the Effects of Atomic Radiation (UNSCEAR), which .....[is the UN body] with a mandate from the General Assembly to assess and report levels and health effects of exposure to ionizing radiation. The Committee has taken note of a publication by the UN Office for the Coordination of Humanitarian Affairs (OCHA) entitled Chernobyl - a continuing catastrophe. This report is full of unsubstantiated statements that have no support in scientific assessments." He goes on to draw attention to Annex J of the UNSCEAR report.
CNTS RSH web site, Annex J is Appended to UIC Chernobyl briefing paper.
Sweden selects copper for waste encapsulation.
Sweden has selected copper as the metal to encapsulate its spent nuclear fuel when deep geological disposal starts in 2015. The canisters, made of oxygen-free copper which has been developed over the last 15 years, will have a guaranteed lifespan of 100,000 years and an expected endurance of much more. The initial phase of the program involves some 4000 casks, each of 15 tonnes and holding 2 tonnes of spent fuel.
TradeTech NMR 23/2/01.
# 7 - International status of nuclear power
# 65 - Nuclear power reactors
# 64 - The nuclear fuel cycle
# 51 - Transport of nuclear materials
# 53 - Uranium and Depleted Uranium
# 33 - Uranium enrichment
# 42 - Mixed oxide fuel (MOX)
# 18 - Plutonium
# 17 - Radiation & the nuclear fuel cycle
# 6 - Occupational safety in uranium mining
# 14 - Safety of nuclear power reactors
# 22 - Chernobyl & Soviet reactors
# 48 - Three Mile Island 1979
# 16 - Advanced reactors
# 5 - Safeguards to prevent nuclear proliferation
# 58 - US nuclear power industry
# 3 - Canada's uranium production
# 45 - India & Pakistan
# 62 - Nuclear Power in Russia
# 35 - Smoke detectors & Americium
See also Uranium Exchange graphs
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