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Recent developments with links to updated WNA Public Information Service Papers. For previous items from Weekly Digest see archive menu.  

10 October 2014

 EU Commission agrees to UK plans for new nuclear capacity
After 12 months investigation, the European Commission has set an important precedent in finding that revised UK plans to support the construction and operation of a new nuclear power plant at Hinkley Point in Somerset are in line with EU state aid rules. The price support for electricity from the plant over 35 years, a key part of the UK electricity market reform, was found to address a genuine market failure. Similar provisions already apply automatically to renewables.

In the process of the investigation the UK agreed to modify significantly the terms of the project financing, by raising the fee to be paid by the developer to the UK Treasury in relation to a guarantee on its commercial debt. Also as soon as the operator's overall return on equity exceeds the rate estimated at the time of the decision, any gain will be shared with the public entity supporting the long-term wholesale electricity price. This support is through a contract for difference (CfD). This gain-share mechanism will be in place not only for the 35-year support duration as initially envisaged, but for the entire 60-year lifetime of the project. Moreover, if the construction costs turn out to be lower than expected, the gains will also be shared. Consumers will simply pay the prevailing deregulated market price in any case.

The UK Nuclear Industry Association (NIA) said the EC decision showed that the agreement between EdF and the government was "a fair deal and a fair price." "Put simply - the government has designed a market framework to transform the energy supply towards a low carbon and affordable system. This means all low-carbon projects have a CfD and a strike price. The Hinkley price of £92.50/MWh should be compared with the offshore wind farm price of £155/MWh, and £120/MWh for a large solar farm," the NIA said.

The WNA said that "The Electricity Market Reform is an innovative approach to encourage the decarbonisation of the electricity supply system in a deregulated market. The decision will be welcome by all those planning new nuclear build projects in the EU and similar markets." Several EU countries are very interested in adopting elements of the UK policy.

EdF Energy now needs to make a final decision on proceeding with the £16 billion Hinkley Point C project. (Including financing, the EC put the cost at £24.5 billion.) Two Areva 1600 MWe EPR reactors are planned. EdF announced in October 2013 that while it would retain 45-50% of the project, two Chinese companies, CGN and CNNC, would take 30-40% of it between them, Areva would take 10%, and other interested parties might take up to 15%. The French government holds 85% of EdF and 80% of Areva, the Chinese companies are wholly government-owned.
WNN 8/10/14. UK

Spanish reactor gets 10-year life extension
The Trillo nuclear power reactor has been given a 10-year life extension to November 2024 by Spain’s regulator. It is owned 51% by Iberdrola and 23% by Endesa, and operated by a joint operating company, CNAT. All of Spain’s operating reactors are now licensed to 2020 or beyond.
WNN 10/10/14. Spain

Other papers significantly updated in the WNA Information Library (see WNA web site): Energy analysis of power systems, Conversion, Cooperation in nuclear power, Russia NP, Russia fuel cycle, Sweden, Australian U, World U mining production 2013.

3 October 2014

 Political deal in Sweden puts nuclear plants under a cloud
The junior coalition Green Party in the impending new government has persuaded its Social Democrat partner to set up an energy commission charged with phasing out nuclear power in the country. The outgoing centre-right governing coalition of four parties had agreed in 2009 that new reactors could be built to replace ageing ones. Social Democrat leader Stefan Lofven then had said that nuclear power would be needed for "the foreseeable future", though the Greens campaigned to have two of Sweden's reactors closed in the next four years. The Social Democrats got 31% of the vote in the recent election, and the Greens 7%. Public opinion polls in the last few years show steady majority (over two thirds) support for nuclear power.

The parties said in separate, but identical statements that nuclear power should be replaced with renewable energy and energy efficiency. The goal, they said, should be at least 30 TWh/yr of electricity from non-hydro renewable energy sources by 2020, compared with about 18 TWh/yr now. In 2012, 63.5 TWh came from nuclear power, and 79 TWh from hydro.

The two parties said that nuclear power "should bear a greater share of its economic cost", despite the fact that Sweden already has a unique high tax specifically on nuclear power (about €0.67cents/kWh), and waste management is fully factored in to running costs at €0.24 cents/kWh.

If translated into government policy, this will be the second time Sweden has resolved to phase out nuclear power. The first was in 1980 when a referendum canvassed three options for phasing out nuclear energy, but none for maintaining it. Parliament then embargoed further expansion of nuclear power and aimed to close the 12 reactors by 2010, but this decision was overturned in 1991 following pressure from trade unions. In 1995 a parliamentary energy commission reported that a complete phase-out of nuclear power by 2010 would be economically and environmentally impossible. A compromise resulted in two reactors closing and the others getting a reprieve to run for at least 40 years. The lost capacity of 1200 MWe was replaced by uprates to the remaining ten units totalling some 1600 MWe. In mid 2010 parliament approved in principle the construction of new reactors on existing nuclear power plant sites, and state-owned Vattenfall has been making plans for the Ringhals site.
WNN 1/10/14. Sweden


Other papers significantly updated in the WNA Information Library (see WNA web site): Reactor table, China NP, Russia fuel cycle, US nuclear policy

26 September 2014

 Russia lines up major nuclear power project for South Africa
Following a similar agreement last November which made no mention of finance, Russia’s state corporation Rosatom has signed an agreement with South Africa’s energy minister to pave the way for building up to 9.6 GWe of nuclear capacity (eight 1200 MWe reactors) by 2030. The SA minister said that “This agreement opens up the door for South Africa to access Russian technologies, funding, infrastructure, and provides proper and solid platform for future extensive collaboration." It is expected to involve some $10 billion in local supply chain provision. The Nuclear Energy Corporation of SA later said that the new agreement "initiates a preparatory phase for the procurement process for the new nuclear build in South Africa” and that similar agreements are envisaged with other vendor countries – presumably dependent upon offers of finance. These agreements clearly put Russia as a front runner in providing a substantial part of South Africa’s program.

Russia has 14 reactors planned or under construction in export markets for each of which it is providing at least 80% (usually 85%) of the finance: in Belarus, Hungary, India, Bangladesh, Vietnam and Turkey.
WNN 23/9/14. South Africa

Construction start on third reactor in UAE
Following 12 months preparation and receiving a construction licence, the Emirates Nuclear Energy Corporation (ENEC) has poured the concrete base for the Unit 3 reactor containment building of the Barakah nuclear power plant. Unit 1 is already more than 57% complete and due to connect to the grid in 2017, unit 2 is year behind it.
WNN 25/9/14. UAE

European Commission set to approve UK plans
After nearly a year’s deliberation the European Commission seems set to approve the UK government’s plans to structure its electricity market so as to encourage new nuclear power plants, and in particular, Hinkley Point C, comprising two 1670 MWe Areva EPR units. Hinkley Point C is the flagship of Britain's energy policy, and along with other low-carbon options is to be financially supported by the country's new contract for difference (CfD) scheme, essentially a long-term electricity price. These CfD arrangements apply to all low-carbon technologies, but nuclear power attracts the attention of the EC: rules exist that allow state aid for renewables, but there is no such rule for nuclear power and so support for nuclear projects must be agreed on a case-by-case basis. The EU Competition Commissioner says he will recommend approval next month, but the Energy Commissioner says he will question the matter, which may need to be put to a vote.

The EU decision will have major implications for the Horizon and NuGen nuclear projects in UK and also more widely in Europe, as several countries, notably Poland and Czech Repiblic, are seeing the UK energy market reform as a model.
WNN 23/9/14. UK


Other papers significantly updated in the WNA Information Library (see WNA web site): China NP, India

19 September 2014

Large new reactor design gets approval in USA
GE Hitachi’s 1600 MWe Economic Simplified BWR (ESBWR) has been awarded design certification by the US Nuclear Regulatory Commission nearly a decade after first application. It leverages proven technologies from the GE Hitachi Advanced BWR, which has been operating in Japan since mid 1990s, but simplifies the design and utilizes passive safety features and natural circulation principles for decay heat removal. It has lower building costs than the ABWR due to modular construction, lower operating costs, 24-month refueling cycle, and a 60-year life. There are plans to build it in USA and in India. It is the fourth large reactor design to gain generic NRC approval since new procedures in the early 1990s.
WNN 17/9/14. Advanced reactors

UAE approves construction of Barakah units 3 & 4
The United Arab Emirates (UAE) Federal Authority for Nuclear Regulation (FANR) has approved an application to build two additional Korean-designed APR1400 pressurized water reactors at Barakah. After two years the first one is now 57% complete and is due on line in mid 2017. The new construction licence was granted following an 18-month regulatory review. The Emirates Nuclear Energy Corporation (ENEC) has stepped up efforts to develop a skilled Emirati workforce both for construction and to staff later operation of the four reactors. ENEC anticipates that it will need to employ over 2500 people by 2020, and aims for 60% of those to be Emiratis.
WNN 16/9/14. UAE

Correction: In the 12/9 item about UK, Sir David King said that the UK energy policy could ideally result in some 45-50% of UK electricity coming from nuclear power by 2050.

Other papers significantly updated in the WNA Information Library (see WNA web site): S.Korea, Japan, Fukushima, Australia, Economics, Nuclear liability insurance, Russia fuel cycle