Areva’s reactor division in play

In an effort to stave off the likely consequences of a huge debt burden, the French government appears to be testing the waters for a plan to sell off the company’s reactor division. Two of the government’s leading ministers weighed in on the idea this week.

Segolene Royal, the Energy Minister, is looking at forcing a merger between Areva and EDF which is also a state-owned enterprise. At the same time, Royal also stopped a plan by EDF to raise electricity rates by 5% adding to the slide in the firm’s stock price.

Emmanuel Macron, the Economy Minister, also said that the government is considering having EDF take control of Areva’s nuclear reactor business.

Phillippe Knoche, the new CEO at Areva, gave a response which sounds like a French version of “not so fast.” He told a committee in the French parliament that while it is plausible that EDF could take a majority stake in Areva, “there are other solutions.” However, he didn’t offer details. He did mention that there are “industrial and financial constraints.”

Knoche recently said the firm’s new strategy is to focus on the nuclear supply chain rather than taking on entire new builds of the 1600 MW EPR design which so far has proven to be a far more complicated and more costly enterprise for Areva’s customers and which likely cost it new business.

Turkey’s parliament ratifies new reactors at Sinop

In a historic vote the Turkish parliament authorized the government to proceed with a 4.8 Gwe, four reactor project at a site near Sinop on the country’s Black Sea coast. Ownership of the power station will be based on a consortium compose of Mitsubishi and Itochu from Japan, GDF Suez from France, and the state power utility EUAS which will have a 35% equity stake.

The reactors will be 1100 MW Atmea design which is the result of a joint effort by Mitsubishi and Areva.

Separately, Turkey has ordered four Russian 1200 MW VVER reactors from Rosatom in a built to own/operate agreement at a site near Akkuyu on the country’s southern Mediterranean coast. The project has not yet broken ground in terms of construction.

A third power station, possibly to be located near Turkey’s border with Bulgaria, is reported to be considering a new design from China’s SNPTC for several 1400 MW units based on the (four) Westinghouse reactors now under construction in China. A technology transfer agreement gives SNPTC the right to build the larger design for export.

Bulgaria blinks on Kozloduy 7

The new Bulgarian government still wants new nuclear reactors, but admits it doesn’t have the means to pay for them. Westinghouse, which had been warily negotiating with the previous government for a reactor deal, confirmed that any agreements that had been discussed previously on the table.

The company said in a statement that the plan for a deal had “expired,” but that it was keeping the lines of communication open for a 7th reactor in Bulgaria a project which is said to be worth $7.7 billion.

The Bulgarian government wants Westinghouse, which is owned by Toshiba, to front the cost of the unit. It’s an unlikely scenario for several reasons.

One of the foremost is that Toshiba probably does not trust the Bulgarians to be able to provide the political stability need to keep promises for rates and other financial arrangements over the expected 60 year life of a reactor. Another is that Rosatom considers Bulgaria to be within its political sphere of influence and could create all kinds of troubles for a new build led by Westinghouse.

However, Bulgaria is not keen on getting a new reactor from Roastom due to the collapse of the Belene project for which Bulgaria is seeking $1.3 billion in reparations from Russia.

Russia is also working on a deal to build two new reactors in Hungary. It has run into potential difficulties regarding nuclear fuel contracts with the EU in Brussels which could make things difficult for the Hungarian utility that would run the plants. How much of this is politics by the EU and, how much is a market share tug of war over who will provide the fuel, remains to be seen.

Russia hits the social security piggy bank for Finland project

NucNet reports Russia has transferred 57.5 billion roubles (€925 million) from its sovereign wealth fund into the Russian state nuclear corporation Rosatom for the construction of Finland’s planned 1200 MW nuclear power station Hanhikivi-1.

In January 2015, Russia’s Cabinet of Ministers approved up to 150 billion roubles (€2.4 billion) to be taken from the fund for the nuclear project being developed by Fennovoima. Rosatom acquired a 34% stake in Fennovoima through a Finland-based subsidiary named RAOS Voima Oy in March 2014. Hanhikivi-1 will be based on Russia’s AES-2006 VVER Generation III+ pressurized water reactor design.

Questions had been raised about whether Rostatom is over extended given the collapse of oil and gas revenues, combined with western sanctions against Russia over its incursions in Ukraine. The project is being kept afloat financially by raising capital from Russia’s version of its state-controlled social security pension program.

Japan court rejects anti-nuclear effort to stop use of MOX fuel

A district court in the Saga province rejected a lawsuit that sought to stop a plan by the Kyushu Electric Co. to re-start its Genkai Unit 3 nuclear reactor in southwestern Japan. The court wrote that the “case for danger has not been proven.” It is the first court ruling in Japan on the issue of safety of MOX fuel.

The court said that the lawsuit was deficient because its technical case was based on another reactor design that is substantially different than the Genkai plant. The reactor began using MOX fuel in 2009. Kyushu Electric told the Nuclear Regulatory Authority it wants to restart the reactor later this year.

According to the World Nuclear Association, about 40 reactors in Europe (Belgium, Switzerland, Germany and France) are licensed to use MOX, and over 30 do use it.

In Japan 10 reactors are licensed to use it. These reactors use MOX fuel as about one third of their core, but some will accept up to 50% MOX assemblies. Japan plans to increase that number to about 16-18 of its reactors once they are restarted.

Separately, Kyushu said it hopes to restart two reactors at Sendai in this August. The first would restore 890 MW to the national grid. The government would like to see faster progress on reactor restarts and said it had hoped the units would be online by June.

Japan’s METI ministry sets energy targets

Japan will rely on nuclear energy for more than 20% of its total power output in 2030, a level that is one third lower than 30% before the Fukushima nuclear accident in March 2011, according to the powerful METI agency.

The Economy, Trade and Industry Ministry (METI) said it plans to secure the share of the “base load” stable power sources of nuclear energy, coal and water at an international standard of about 60%. Renewables could make up 40% of intermittent power sources. However, Japanese utilities have rebelled against government mandates for use of solar and wind power because their highly variable coming and going makes it difficult to keep the power distribution grids stable.

METI said that the 20% figure is a minimum number due to the difficulty of boosting coal beyond 30% and hydro beyond 9% of baseload.

In a related development, the ruling Liberal Democratic Party adopted a proposal to boost nuclear power to 60% of baseload which would envision a massive nuclear reactor construction program. Japan got half that number, or 30% of baseload, from nuclear prior to the Fukushima accident.

Japan has long had a de-facto plan for a “plutonium economy” based on recycle MOX fuel and eventually one that would use fast reactors. However, the Fukushima crisis, and its inability to make a reprocessing plant work, have thwarted those ambitions.

All nuclear power plants are offline in Japan due to safety concerns in the wake of the Fukushima accident. The government has committed to restarted 24-26 of the 48 units this year, but it has been a slow process due to new documentation requirements from the Nuclear Regulatory Authority. The nation’s nuclear utilities have had problems meeting them.

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