Extended operating licenses may slow down renewable energy growth
E.ON AG, RWE AG and other companies that own nuclear power plants in Germany may slow their pace of investment in renewable energy if the reactors are given longer operating licenses, a German energy researcher said.
The utilities typically pay distributors to take their electricity on windy days when wind turbines provide cheaper power and some nuclear output is not needed, Olav Hohmeyer of the University of Flensburg said today at a briefing in Berlin.
At the pace Germany is building new renewable-power plants, utilities face losses of 21 billion euros ($27 billion) to 80 billion euros through mid-century from not being able to operate their atomic plants as often or as profitably as they wish, said Hohmeyer, who was a member of the Intergovernmental Panel on Climate Change that shared the 2007 Nobel Prize.
“The energy concept currently being devised by the German government will determine whether we are able to continue as planned with our huge investment program” in renewable energy, Julia Scharlemann, a spokeswoman at RWE, said in an e-mailed response to questions.
Chancellor Angela Merkel favors extending the operating lifespan of nuclear plants beyond the planned phase-out in about 2022 set by a previous government.
At the same time, investment in wind farms, solar arrays and biomass plants has grown faster than in coal- and gas-fired units and has led to periods of negative prices for electricity — when producers have to pay customers to consume power.
“The implication of keeping atomic power plants running is that renewables, especially offshore wind, will have to slow,” Hohmeyer said today in Berlin.
In an open letter co-signed earlier this month by the heads of utilities E.ON and RWE as well as industrial companies from ThyssenKrupp AG to BASF SE, the executives called on Merkel to show “courage and realism” by ensuring nuclear power and coal remain part of Germany’s energy mix alongside wind, wave and solar power.
Source: Jennifer van Loon, Bloomberg
Germany to ship nuclear waste to Russia
EOn and RWE seek clarity on energy policy
Two of Germany’s largest power utilities – EOn and RWE - have warned of the financial impact of the government’s proposed tax on nuclear fuel, saying that investment in new generating capacity may have to be cut if it is introduced.
Under current legislation, German nuclear power plants are limited by a set of generation quotas that effectively limit reactor lives to an average of 34 years, compared to an economic life of up to 60 years. This has been under review since the general election of September 2009 resulted in a coalition government free from anti-nuclear parties.
“I believe there’s no doubt that in the medium term Germany can’t forego zero- carbon, inexpensive nuclear power if it intends to continue to play a leadership role in Europe’s climate- protection effort and if the economic recovery is to continue.” Johannes Teyssen CEO of EOn |
In its October 2009 coalition agreement, the German government agreed in principle to extend the operating lives of nuclear power reactors. In June 2010, the government passed a cabinet resolution for a tax on the nuclear energy industry. Its purpose is to generate €2.3 billion ($2.8 billion) in tax revenues from nuclear fuel between now and 2014 to help consolidate the federal budget as part of the government’s deficit-reduction plan.
While reporting EOn’s first half results for 2010, CEO Johannes Teyssen said: “There has long been a lack of clarity about the direction of Germany’s energy policy. This needs to change. As the federal government stated, Germany needs a non-ideological, technology-neutral, and market-based energy strategy that includes an environmentally and economically sensible decision on the future of nuclear energy in this country. Only then will Germany make a real start towards its energy future.”
He added, “Ten months after the government’s statement – which we thought signalled a new, pragmatic beginning – Germany’s future energy policy course remains unclear. Important decisions need to be made, including a decision about the future of nuclear energy in Germany. I believe there’s no doubt that in the medium term Germany can’t forego zero-carbon, inexpensive nuclear power if it intends to continue to play a leadership role in Europe’s climate-protection effort and if the economic recovery is to continue. The recent crisis made abundantly clear to what degree Germany’s economic success depends on the competitiveness of its industry, for which a secure, economically priced energy supply is a decisive factor. Nuclear energy is a key component of this energy supply.”
Teyssen said, “In this context, we’re quite willing to share the advantages of extending the operating lives of nuclear power stations as long as the state’s share is reasonable in comparison with the additional revenues. But we also warn against the creation of additional financial burdens that would render the operation of nuclear power stations uneconomic and that could even result in urgently necessary investment funds not being available for the environmental transformation of the energy supply. I’ve made it unmistakably clear to policymakers that we consider such a course to be a mistake, both economically and environmentally.”
Speaking of the proposed nuclear fuel tax in its financial report, EOn said: “We must assume that it would adversely impact our pre-tax earnings by about €1.3 billion ($1.7 billion) to €1.5 billion ($1.9 billion) annually.” The company noted, “The introduction of a tax of this size would lead to a marked deterioration of EOn’s debt figures, which may result in significant reductions in our investments.”
“It is unclear at this time whether the tax will be introduced independently of, or in parallel with, the extension of nuclear power plant operating lives,” EOn said. “Depending on how some of the open issues in the energy plan and tax are resolved, individual nuclear power plants could be rendered uneconomic.”
Meanwhile, RWE’s CEO, Jürgen Grossman, echoed Teyssen’s concerns, saying: “Such a tax would substantially diminish our earnings power – and thus our financial scope for investment in renewables, low-carbon power stations and smart grids.” He called for the government to make clear statements about Germany’s future energy policy, saying, “This is urgently needed for our long-term investment plans.”
RWE announced its medium-term goals in February. In a statement the company said: “In view of the growing political risks and burdens, however, RWE will now have to review both its medium-term goals and its investment plans.”
A final decision on changes to the phase-out and the related profit share is expected to be included in the National Energy Plan by October this year, following the initial submissions in July. The relevant ministries are also examining retrofitting requirements for nuclear power plants.
Source: World Nuclear News
NGO: German nuclear power plants lack protection
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| A smokescreen won’t protect nuclear plants from all hazards |
Germany’s nuclear power plants are surrounded by fences and guarded by security personnel. But NGOs say they’re inadequately protected from floods, earthquakes and fire – and possibly also from terrorist attacks by air.
Germany has 12 nuclear power plants with a total of 17 reactor blocks. Nineteen reactor blocks, many of them built in the early 1960s and 1970s, were shut down because they did not comply with current security standards.
Shortly after the 9/11 terrorist attacks on the US, the German government pledged to safeguard local nuclear power plants from terrorist attacks, and commissioned a survey in the US on how to protect the plants against plane crashes and armor-piercing weapons. Proposals included fortifying the reactor blocks’ walls with extra thick two-to-three-meter concrete walls, laying out steel nets and installing smokescreens.
It is not clear, however, whether any of those measures were implemented.
Top secret
The nuclear power plant operators, major electric companies, the Environment Ministry’s supervisory bodies and the Organization for Reactor Safety (GRS) have all remained silent on the issue.
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| Nuclear reactors are vulnerable to flames, floods and earthquakes |
But NGOs like International Physicians for the Prevention of Nuclear War (IPPNW) and Greenpeace have not been as reticent. Both conducted research of their own.
“Not one of the German nuclear power plants is protected from a large aircraft crashing into it,” Tobias Riedl of Greenpeace told Deutsche Welle. “The danger is even more pronounced at older plants, their walls are much thinner, so that even a smaller aircraft crashing could lead to great damage.”
With that in mind, the GRS suggested installing a special device in passenger aircraft that would automatically reroute a plane should it drift from its course while approaching a nuclear power plant. Authorities have declined to comment on whether such devices have been installed.
Worst-case scenario
However, at the Philippsburg plant, 30 kilometers (19 miles) from the city of Karlsruhe, operators have begun to build a smokescreen that would make the area disappear from view behind thick plumes of smoke within 40 seconds.
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| Satellites and GPS can control airplanes |
But smokescreens are not very effective, Riedl said.
“Tests have shown that planes can be controlled via GPS and satellites, but there is no way you can deactivate the GPS coordinates,” he said. “Smokescreen concepts don’t take the problem seriously and would not increase safety.”
Henrik Paulitz of IPPNW said that a plane crash was just one danger; any kind of fire was a real threat.
“Flames that approach a nuclear plant, a fire in a transformer that prompts the disconnection of the reactor from the national grid – all that can lead to the ultimate worst case scenario,” he said.
The threat of natural disasters
Earthquakes can be a problem, too, Paulitz said. The Biblis B plant in the state of Hesse was not equipped for earthquakes of the magnitude that could occur in the region, he said.
Flooding also posed a problem: “That’s a threat because the nuclear power plant might have to be disconnected from the power grid, and that can go wrong,” Paulitz said.
The law obliges nuclear power plant operators to upgrade their security measures – but only in so far as the cost and effort are reasonable.
A 1989 GRS study says that a major accident in German nuclear power plants can be expected once every 33,000 years.
Source: Wolfgang Dick & Nancy Isenson, DW-World
German plants needed until 2042 according to lawmakers
Germany must keep its nuclear power plants operating for two decades beyond a planned phase-out in 2022 to buy time for developing substitute renewable energy sources, a lawmaker in Chancellor Angela Merkel’s party said.
Merkel’s Christian Democrats are pushing for the 20-year extension as she prepares to announce a nuclear revival strategy in September, Michael Fuchs, the CDU’s deputy leader in parliament, said yesterday in an interview.
“A 20-year extension is realistic — an infrastructure for renewable power isn’t built overnight,” said Fuchs in his office in Berlin. “This is about pragmatism and not about a dogmatic attachment to nuclear power. We need affordable power as we strive to fulfill our climate goals.”
Calls by CDU lawmakers to let reactors run until about 2042 are at the longer end of proposals being considered by an independent commission that’s due to publish its findings this month. Merkel says she’ll partly base her decision on the commission’s assessment of power prices if some of the 17 remaining reactors operate between four and 28 years longer.
Backed by industry and the states of Bavaria and Baden- Wuerrtemberg, coalition lawmakers are pushing Merkel to opt for giving plants longer operating lives. Horst Seehofer, Bavaria’s prime minister, this month called for the reactors to be run “indefinitely.” The state has five nuclear plants and none should close unless there are safety concerns, Seehofer said.
Nuclear Opposition
Free Democrat Economy Minister Rainer Bruederle has said he backs an extension of nuclear power of about 15 years, while CDU Environment Minister Norbert Roettgen has said that only a “moderate” extension should be considered. Atomic energy is “not the energy of the future,” Roettgen told Sueddeutsche Zeitung newspaper on July 30.
“We’re seeing jostling now for influence as Merkel comes close to spelling out Germany’s new energy mix”, said Claudia Kemfert, chief energy analyst at Berlin’s DIW economic institute in an interview today. “The stakes are very high, from investment in renewables to utilities’ profit outlooks.”
The combined profit of Germany’s four biggest energy companies, E.ON AG, RWE AG, EnBW Energie Baden-Wuerttemberg AG and Vattenfall Europe AG stands to grow by about 6.4 billion euros ($8.5 billion) for each year they run atomic plants longer, according to a July 29 DIW report.
The opposition Social Democrats and the Green Party, which made the nuclear phase-out accord law under former Chancellor Gerhard Schroeder in 2002, oppose extending nuclear power.
Biggest Power Market
Germany, Europe’s largest economy and biggest power market, derives about 23 percent of its electricity from nuclear power, including half of its so-called base-load on which industry and consumers draw around the clock. Renewable energy delivers another 14 percent of power, a share which Merkel wants to push to 30 percent by 2020.
“That’s only possible if we speed up research and investment in smart grids and storage capacity for wind and solar power,” said Fuchs.
CDU and FDP lawmakers will try to agree a new energy-policy as soon as parliament returns from the summer recess on Sept. 6, said Fuchs. Merkel’s Cabinet aims to sign off on the proposals by the end of that month, he said.
Source: Bloomberg
Fusion reactor faces delays and budget problems
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| ITER could be the first energy-efficient nuclear fusion reactor |
ITER involves a multinational effort to harness energy produced through nuclear fusion. This week, partner countries are meeting to push for progress amid massive cost overruns and project delays.
For decades, physicists have eyed nuclear fusion as a new wellspring of safe and limitless energy. The process involves the fusion of hydrogen to produce helium – and huge amounts of energy, reproducing the reactions that take place on the sun.
In 2005, the European Union and Japan, South Korea, China, Russia, India and the United States joined forces to test fusion as a real, workable source of power. The ITER project involves the construction of a massive experimental nuclear fusion reactor in southern France.
The device is designed with a huge, tire-shaped vacuum chamber that uses giant magnets to contain hydrogen and is heated to 150 million degrees Celsius. In its plasma state, hydrogen nuclei can fuse to create helium and energy.
The cost of the reactor was initially estimated at 5 billion euros – and expected to be finished in 2018.
But keeping the project under budget and on schedule has become increasingly difficult. According to new figures, the reactor would be ready for operation by 2026, at the earliest. And ITER’s price tag stands to triple – from 5 billion to 15 billion euros. The price of raw materials has skyrocketed – and building the reactor would require special steel and other metals.
“The initial planning for ITER was strictly budgeted,” said Hartmut Zohm, a scientific fellow at the Max-Planck Institute for Plasma Physics in Garching, Germany.
“And they realized the details are more complicated – and can cost a bit more.”
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| The fusion reactor would be ten times hotter than the sun’s core |
Trouble at the top
As a multinational project, ITER has also faced management difficulties. “One problem with ITER is that it has seven partners all over the world – so it’s a pretty slow process,” Zohm said.
Moreover, each partner state is interested in using domestic industries to supply parts for the project – and that means several companies from different countries are producing the same components.
“When one partner doesn’t produce the same part and instead it comes from several partners and has to be put together – that’s inefficient and leads to additional costs,” he added.
ITER’s new management should help streamline efforts to get the project off the ground. Germany’s Federal Minister of Education and Research Annette Schavan has defended the significance of ITER but said the government can’t afford to write it a blank check.
The EU is required to cover half of ITER’s costs – and making up additional funding shortfalls means curtailing other research initiatives or tapping into unused portions of the budget. Continued…
Read more: Deutsche Welle
EOn and CEA signs R&D agreement
German energy group EOn and French national nuclear energy commission the CEA have signed a framework agreement on future cooperation in nuclear energy research and development. The CEA has also signed a cooperation agreement with French car maker Renault.
The agreement with EOn “provides the basis for new research projects focused on the future use of nuclear energy, which are in both CEA’s and EOn’s interest,” according to the press release issued by both EOn and the CEA. It will cover projects relating to so-called second generation nuclear reactors - most of the world’s currently operating nuclear power fleet – as well as third generation plant construction projects that are currently underway and future reactors and options for fourth generation fuel cycles, which according to the two bodies are expected to reach technical maturity for commercial use by the middle of this century.
Under the cooperation agreement, EOn will gain access to the CEA’s research results, while the CEA will expand its European focus. It will also be able to include types of reactors in its research program that are planned or operated outside France.
In addition to several other European cooperation projects, the two companies are already partners in the European Sustainable Nuclear Energy Technology Platform (SNETP) and in various communities of interest under the European Commission’s Strategic Energy Technology Plan.
Advanced nuclear reactors, of which third generation plants are an example, include standardised, simplified designs and extensive use of passive, or inherent, safety features to deliver long, reliable operating lives with enhanced safety at lower capital costs and with lower fuel consumption than second generation reactors. The first third generation reactors, GE-Toshiba-Hitachi advanced boiling water reactors (ABWRs), started up in Japan in the 1990s, with two more starting in 2004 and 2005. Third generation plants are under construction in various locations in Finland, France and China.
Generation IV reactors are being developed by an international task force for deployment between 2020 and 2030. Six types are currently being studied, all of which operate at higher temperatures than today’s reactors and represent advances in sustainability, economics, safety, reliability and proliferation resistance.
Renault and CEA to cooperate
The CEA has also signed a new research and development agreement with French car manufacturer Renault to work together on cleaner vehicles and sustainable mobility for all. The agreement follows on from previous joint studies which have identified areas of possible synergy. Under the new three-year agreement, Renault will aim to achieve “technological breakthroughs” to offer cleaner, widely affordable vehicles, while the CEA will provide “input and suggestions”.
The CEA’s full title is the Commissariat a l’Energie Atomique et aux Energies Alternatives, and according to CEA chairman Bernard Bigot the agreement fits well with its aims. “This strategic cooperation with Renault perfectly illustrates the CEA’s new mission in the field of alternative energies,” he said.
Source: World Nuclear News
Large nuclear tax for German operators
The German Ministry of Finance has envisaged an additional €2.3 billion ($2.8 billion) per year ‘windfall tax’ on nuclear operators as part of the 2011 Federal Budget and its financial plan up to 2014.
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| RWE has had to juggle generation rights for a chance to operate Biblis A under a new political regime |
The government has justified the additional tax on the basis of the extra profits earned by the nuclear operators, following increased electricity prices as a result of the additional costs of carbon emissions in the sector borne by fossil fuel users.
According to the German Finance Ministry the charge “will be necessary, as part of an overall energy concept, to prolong the operational life of nuclear power plants.” At a time when Germany is looking for tens of billions of euros in budget savings, the ministry said that the money will be used to meet nuclear decommissioning and final repository costs.
German nuclear power plants are currently limited by a set of generation quotas that effectively limit reactor lives to an average of 34 years, compared to a economic life of up to 60 years. This has been under review since the general election of September 2009 resulted in a coalition government free from anti-nuclear parties. In the meantime, German nuclear utilities like EOn and RWE have been looking at opportunities to invest in new nuclear reactors elsewhere in Europe such as Bulgaria, Finland, Italy and the UK, where they founded the Horizon joint venture to build up to 6000 MWe in new capacity.
The German government has concluded that changes to the phase-out, dubbed ‘life extension’, will require the nuclear operators to ’share’ a relatively large proportion of the additional earnings derived from nuclear life extensions. The potential €2.3 billion nuclear tax is thus not being linked to changing the phase-out but positioned instead as a tax on nuclear fuel and therefore an additional cost for the nuclear operators to bear.
| Give and take
While nuclear faces fees to reduce its competitiveness, other forms of energy are subsidised. German coal production has been supported since the 1980s by between €2.5 billion and €7.9 billion per year while renewables receive feed-in tarrifs amounting to €5 billion per year from consumers and government. |
A final decision on changes to the phase-out and the related profit share is expected to be included in the National Energy Plan by October this year, following the initial submissions in July.
Neil Beddall, an analyst at Barclays Capital said that he considers this step as negative for the industry, adding that EOn and RWE are likely to be affected the most.
“Having in mind that these companies reported financial results for the year of 2009 of, respectively, €9.2 billion and €8.6 billion, I do not believe that the tax will reduce the credit quality of any of the German nuclear operators, including EnBW and Vattenfall Europe,” Beddall said.
However, the new plan is likely to have an impact on free cash flow in the industry, at a time when it is not clear whether austerity measures introduced across Europe, led by Germany and France, would have an impact on the economic recovery and respectively on energy demand for 2010 and 2011.
Furthermore, if the plan is approved, other countries could adopt similar measures on all utilities, or on target nuclear and renewable power generators, as they benefit from increased electricity prices arising from carbon dioxide costs.
As a result, according to the Barclays Capital’s analysis of the situation, the new move will bring uncertainty in the European nuclear sector, whereby Electricité de France, GDF-Suez, Vattenfall, Fortum, Iberdrola and Endesa could all be impacted.
Source: World Nuclear News
Germany to make nuclear decision by autumn
* Experts need time for consumption, energy mix scenarios
* Coalition aims to avoid vote in Bundesrat
Germany’s government will delay a long-awaited decision on extending the lives of some nuclear plants until the autumn, a leading member of Chancellor Angela Merkel’s conservatives said on Tuesday.
The government had planned to make a decision in July, but experts drawing up a national energy strategy, including plans for the nuclear branch, have indicated they need more time to calculate future energy consumption and energy mix scenarios.
“Being careful is more important than speed,” said Peter Altmaier, a leader of Merkel’s conservatives in the lower house of parliament.
Merkel’s conservatives and her Free Democrat (FDP) coalition partners have vowed to change a law passed about 10 years ago by the Social Democrats (SPD) and Greens, now in opposition, which envisages phasing out nuclear power in Germany.
Nuclear power accounts for about a quarter of Germany’s total capacity, and the four main operators — RWE (RWEG.DE: Quote), E.ON (EONGn.DE: Quote), Vattenfall Europe [VATN.UL] and EnBW (EBKG.DE: Quote) — have scaled back expectations of windfall profits from an extension.
In another potential delay, the Justice Ministry is still working out how long the lives of nuclear plants can be extended without requiring a vote in the Bundesrat upper house. Continued…
Source: Reuters Africa
GdF Suez and EOn to explore Italian nuclear power development
France’s GdF Suez and EOn of Germany have agreed to jointly explore opportunities in Italy’s nuclear power sector. The companies have signed a memorandum of understanding (MoU) focusing on the current and developing market for new nuclear energy in the country.
EOn and GdF Suez said they will examine all the key issues related to new investment in nuclear power plants, such as technology, locations and industrial partnership. They will also “engage dialogue with the national and local authorities on mechanisms to promote a stable, clear and predictable regulatory environment.”
In a joint statement, EOn and GdF Suez said: “Through this agreement, Italian nuclear new build will benefit from the backing of two companies with extensive experience in operating nuclear power stations and resources, and skills to deliver new nuclear plants.”
EOn and GdF Suez said that, as in other nuclear projects, they are also in favour of a strong cooperation with local utilities, as well as with large consumers in Italy.
Klaus Schäfer, CEO of EOn in Italy said: “Nuclear is one of the ways for Italy to rebalance energy generation in the next fifteen years while ensuring security of supply, reducing carbon emissions and keeping energy as affordable as possible. The introduction of new nuclear power, alongside cleaner fossil fuels, renewables and energy efficiency, will be vital going forward.” He added, “If the conditions in the Italian Market continue to develop in the desired direction, our cooperation with GdF Suez might contribute to the constitution of a further consortium in the future.”
Stéphane Brimont, president and CEO of GdF Suez Energy Europe, commented: ”The memorandum of understanding between EOn and GdF Suez is a first step of our cooperation to deliver an early, substantial and vital contribution for the re-entry of nuclear power in Italy.” He noted, “To move forward we need the completion of the well advanced regulatory framework, a strong industrial partnership open to Italian and other European partners and a competitive process to access to suitable nuclear sites.”
Italy phased out nuclear power after a referendum in 1987 but legislation finalised in 2009 has placed nuclear back at the forefront of the country’s plans, calling for 25% of Italy’s electricity to be nuclear generated by 2030.
Italy’s major utility, Enel, formed a partnership with Electricité de France (EdF) in August 2009 for a joint venture investigation towards building four 1650 MWe EPR units in the country. If new build proves feasible, separate project companies will be set up to build, own and operate the new power plants.
Source: World Nuclear News
