French cuts could delay new nuclear power plants in Britain
Mail on Sunday, 23 December 2012
Britain’s multi-billion pound nuclear building programme could face long delays because of cutbacks at EDF Energy’s parent company in France.
For more than a year, EDF has said that it plans to spend £14 billion on two reactors at a new plant at Hinkley Point, Somerset.
But the company has still not confirmed it will go ahead with the work and it now has revised the decision to ‘the earliest possible date’.
Confirmation is not expected until March at the earliest, if at all. Delays had been caused by issues negotiating agreement with the British Government over price guarantees. But now the parent company, which is state-owned, is under pressure from the French government to cut costs.
Details will be made known when the group releases its full-year earnings in February.
EDF chief financial officer Thomas Piquemal said the firm would prioritise French investment in the year ahead, raising the possibility of a delay in its nuclear projects in Britain.
He said: ‘It’s still too early to decide on the British plans, as all the conditions for the investment aren’t met.’
A Government spokesman said: ‘The final decision is a matter for the company and the Government is happy to work to its timetable.’
Meanwhile, EDF’s partner on the programme, Centrica, which owns British Gas, is unlikely to go ahead with any investment.
EDF is still in talks with Chinese nuclear firms to take part in its programme.
Is nuclear power necessary for solving climate change?
- guardian.co.uk, Friday 21 December 2012 13.08 GMT
EDF declines comment on China nuclear probe report
PARIS | Tue Dec 25, 2012 12:44pm GMT
Several French news websites cited a forthcoming article in satirical weekly Le Canard Enchaine, due to appear on Wednesday, as saying that French finance-ministry inspectors had begun an inquiry into the terms of the China agreement.
"We have no reaction," a spokeswoman for EDF said, adding she had not seen the forthcoming article. The French finance ministry was unavailable for comment.
The bad news from Flamanville
By Vaiju Naravane
The Hindu, December 22, 2012
French electricity giant EDF, the engineer, constructor and operator of the Areva-designed EPR nuclear reactor (F3) being built in Flamanville, northern France, has announced a steep hike in the cost of the reactor, from an initial €3.3 billion in 2005 to a dizzying €8.5 billion this year. A revised estimate issued two years ago had put the cost at €6.5 billion.
Work on the reactor is already behind schedule by four years and optimistic estimates say it could go on stream in 2016 at the earliest with costs expected to rise even further by then. Normally, the first of a series turns out to be the most expensive since it is the first project to be translated from paper to concrete reality and costs tend to decrease as the equipment becomes tried, tested and streamlined.
In the case of EPR, however, that logic appears to have been turned on its head. Flamanville (F3) is not the first but the second of the series to be built, the first being Olkioutou in Finland, which is also running several years behind schedule and is expected to start operating in 2014. Not a single EPR of the four being built is currently operational, although Areva keeps assuring the Indian government that the two under construction in China, Taishan I and II, are “running at cost and on schedule”.
Not that surprising, considering there are 9000 Chinese workers doing 10-hour shifts, seven days a week. But the Chinese appear to be on track also because they fought hard and obtained a total transfer of technology. Not so India, which refused this option. Therefore, the engineer/contractor mix under the overarching umbrella of the NPCIL remains fuzzy. What is worrying in the EPR story is not just the roll-on effect the huge jump in cost will have on the Indian purchase but the massive challenges posed by the complexity of design, construction and maintenance.
The first week of December was a nightmare for EDF. The Italian energy giant Enel announced it was ending its cooperation with EDF on the EPR in Flamanville and on five other projects. “We have decided to exercise our right of withdrawal and are ending the strategic partnership reached by the two groups in 2007,” an Enel communiqué said.
Enel received €613 million plus interest on December 19. EDF will thus recover all its rights in the EPR project at Flamanville including any future commercial gains that might acrue. Enel explained in its communiqué that Flamanville had seen delays and cost increases. This combined with a drop in the demand for electricity and an uncertain future for investments in the nuclear sector in France prompted its decision to withdraw. Another influential factor was the decision by Italy to eschew nuclear power, the communiqué said.
In France this exponential price hike has the ecologist lobby up in arms. “Is it worth building this reactor at all? It appears to be a bottomless financial pit and the cost of construction, which has nearly trebled from the initial €3.3 billion will eventually translate into an unacceptable hike in energy prices. This is sheer folly,” said Cecile Duflot of the French Green Party who is Minister for Housing.
Ecologist EuroMP Daniel Cohn-Bendit called for abandoning the project altogether.
Another influential physicist, Bernard Laponche, who worked on the early French nuclear reactors as an engineer attached to the Atomic Energy Commission, also decried the costs and pleaded for “the integration of the real cost of nuclear energy” in electricity tariffs. “The Flamanville (FA3) site is poorly administered and its construction presents numerous anomalies and weaknesses, inadmissible for such a gigantic project and one which is potentially dangerous,” he told the newspaper Le Monde. Worse, the cost of the reactor is expected to rise even further after 2016, when it is supposed to go into service.
The construction work is being closely monitored by the French Nuclear Safety Authority (ASN), which has made several dozen requests for changes and improvements. Construction has often been found to be shoddy, carried out by untrained or poorly trained workers, imported from those parts of Europe where labour costs are low. There have been two deaths and several injuries on the site. And EDF has yet to begin work on the sensitive core of the reactor. Even with cheap, hard-working labour the project is five years late and 80 per cent over budget. Is there something wrong with the EPR?
The French Institute for Radio Protection and Nuclear Safety (IRSN) which carries out on-site inspections at Flamanville (FA3) said in its report: “During the inspections, deviations to the project’s technical specifications or to the rules of the art were pointed out by IRSN. Those deviations cover various items, such as concrete fabrication, concrete pouring methodology, lack of reinforcement in some structures, unadapted welding procedures of the containment leaktight steel liner and unsatisfactory treatment of concreting joints. The analysis of those problems has revealed flaws in the organisation of the contractor’s teams together with an unsatisfactory control of the contractor’s activities by EDF.”
Concerns over safety
EDF has struggled to cope with building and safety setbacks at the project. Safety authorities raised concerns over welding quality and shut down the site after holes and crevices were found in badly poured cement. “EDF said costs rose partly because the plant is the first of its kind, citing the need to develop a new boiler design, meet regulatory and safety demands and carry out engineering studies,” Businessweekmagazine reported.
EDF’s problems at Flamanville are making another French company, Areva, the designers of the reactor, distinctly jumpy. In a press conference on December 13, Areva’s CEO Luc Oursel defended the EPR saying “We have learnt our lessons from the difficulties we have encountered and we do not hide them. Therefore we bring a certain guarantee in relation to delays and construction.” Areva’s aim is to sell at least 10 more EPRs by 2016. Mr. Oursel admitted that the cost of the still pending Finnish EPR OL3 will “be close to that of the EPR at Flamanville” or €8.5 billion. The EPR had just received certification in Britain and Areva is hoping to sell EPRs in Poland, Saudi Arabia, South Africa, The Netherlands and Sweden, he said.
Areva indicated that EDF’s new cost estimate did not reflect the price of an EPR reactor in the series offered in the market today. “The French reactor has not benefited from experience gained on the Finnish construction project for reasons of industrial organisation and schedule,” the Paris-based nuclear generator builder said in a statement. But Areva’s own experience with building the EPR as a turnkey project in Finland is none too bright. The Olkiluoto 3 reactor was originally scheduled to be completed in 2009 at a cost of € 3 billion. It has run into a series of construction delays and cost overruns and Areva has booked more than €3.2 billion of provisions on the project. The plant won’t be ready for regular power production until 2014.
Debate on energy
The warning about Flamanville’s spiralling cost comes less than a week after France began a debate on energy. The government says it will set up a road map for lowering the country’s reliance on atomic power.
The costs have risen so steeply because the nuclear industry has wished to build bigger and more powerful reactors each time. Starting with the early 300 MW reactors, the industry is now aiming for 1650 MW giants. Which means more robust construction, better safeguards and backups. The economies of scale have not played in favour of the nuclear industry. Building bigger and stronger has meant not just marginally more expensive but much more expensive. And maintenance costs too are far higher as a consequence of the power to be generated.
Nuclear experts say that the real costs of building reactors are not properly reflected in energy tariffs, since the design and construction come from state coffers and are an indirect tax paid by the consumer. Similarly the cost of dismantling or phasing out reactors and the disposal and stockage of nuclear waste are not calculated in the tariff but are an indirect tax paid by the consumer.
The delays and cost overruns at FA3 are likely to make private investors wishing to invest in nuclear power nervous and uneasy. The complexity of the EPR pushes up construction risks, which in turn increases the cost of capital. With yet another delay at FA3, nuclear power just got even more expensive.
Construction of Vogtle nuclear-power plant in US face difficulties
Energy Business Review, 26 December 2012
The construction of Vogtle project in Georgia, US, the first newly licensed nuclear-power plant in the country, has come across problems and might be delayed years behind schedule.
Bill Jacobs of GDS Associates, who is monitoring the project, has advised the Georgia Public Service Commission that due to unsatisfactory performance by the project team, construction of the plant was falling behind schedule.
Jacobs has advised the regulators to be prepared for a potential delay of two to four years.
Initially, the first reactor of the two-reactor plant was scheduled to begin operation in 2016, but now it is expected to go online in 2017.
Being constructed at a cost of $14bn, the new plant is being considered to mark the revival of the US nuclear industry, reported The Wall Street Journal.
The nuclear facility will be constructed by a consortium that includes Shaw Group and Westinghouse Electric Company.
The plant will include a new type of nuclear reactor and employ a modular construction method to reduce construction time and cost.
Located in Burke County, close to Waynesboro, Georgia, the Vogtle project is a two unit nuclear power plant.
The plant's each unit includes a Westinghouse pressurized water reactor, a General Electric turbine and electric generator. Once fully operational, each unit can produce about 1,200 MW of electricity, for a combined capacity of 2,400 MW.
The plant will be operated by Southern Company on behalf of several utilities.
Toshiba to sell stake in atomic power arm
By Ben McLannahan in Tokyo
FT, December 27, 2012 1:43 pm
Toshiba, the Japanese conglomerate, is seeking to offload a big stake in its Westinghouse atomic power unit amid global uncertainty over demand for nuclear reactors.
Speculation over a sale had mounted since October, when Toshiba announced that Shaw Group of the US, from which it bought a controlling stake in Westinghouse Electric six years ago, would exercise an option to sell it another 20 per cent, bringing Toshiba’s total holding to 87 per cent.
On Thursday, responding to media reports, Toshiba spokesman Toru Ohara confirmed that the company was in discussions with “several” parties. He said that Toshiba wanted to retain a majority stake, and was looking for “positive synergies” with long-term partners.
The sharp rise in Toshiba’s shares on Thursday, against a flat market, suggests that investors in the company would welcome reduced exposure to an industry in a state of flux.
Anti-nuclear sentiment after the Fukushima Daiichi meltdowns in Japan, coupled with cheap shale gas primarily in North America, mean that reactor builders in developed markets cannot rely on growth at home.
In emerging markets such as China, meanwhile, doubts have emerged over the pace of nuclear plant development as the economic slowdown means there is less incentive for utility companies to invest.
The outlook for Toshiba, Japan’s largest builder of nuclear plants, is particularly murky. All but two of the country’s reactors remain offline after being shut for regular safety checks following the crisis at Fukushima last March, when a tsunami knocked out cooling systems. The recently elected government led by prime minister Shinzo Abe has said it would look to restart any reactors deemed safe by inspectors, but the timetable for doing so remains unclear.
The Fukushima disaster “changed the basic assumptions of the nuclear-power business model”, Hiroaki Nakanishi, president of Hitachi, told reporters in November.
Radiation fear keeps Fukushima kids indoorsGovernment figure shows that children are getting fatter due to lack ofoutdoor exercise.
PTI (Press Trust of India) Tokyo, December 27, 2012
Children in nuclear disaster-hit Fukushima are getting obese due to lack of outdoor exercise amid daily exposure limitations due to radiation fears after last year’s nuke tragedy, a Japanese government report said.
The preliminary health report showed an increase in children from kindergarten to high school age who weighed 20 per cent more than the standard as per their height.
Fifty-six per cent of public schools in Fukushima had curtailed outdoor activities during school time as of June last year to minimise exposure to radiation released from the crippled Fukushima No.1 atomic plant, Kyodo news agency reported.
According to the prefectural board of education, such restrictions were still in place at 71 elementary and junior high schools this September. It is believed schools based the amount of time they allowed kids to spend outdoors on local atmospheric radioactive fallout readings.
The obesity trend was noticeable among early elementary school students, with the rate among first-graders standing at 9.7 per cent, up 4.7 percentage points from the previous survey in 2010 through March 2011. For ninth-graders, the rate was 11.5 per cent, up 0.6 point, while that for high school seniors stood at 14.1 per cent, up 1.4 points, according to the survey based on health checkups conducted between April and June this year.PTI