Nuclear

Moving Forward: Nuclear Still Strong in Europe after Fukushima

Issue 3 and Volume 5.

By Brian Wheeler, Editor

Despite global setbacks following the March 2011 meltdowns at the Fukushima Daiichi nuclear power plant in Japan, the nuclear industry in Europe is gaining speed and opportunities exist for new construction. Historically, nuclear power in Europe has served as an important source of electricity, generating about 30 percent of total capacity.

While new build may commence, Luis Echávarri, Nuclear Energy Agency (NEA) Director-General, said there could be three to four years of delays on decisions regarding nuclear.

“People need to understand what happened at Fukushima, what the implications are, and how this applies to selection of sites and designs that will be established on those sites,” he said.

According to the International Energy Agency’s New Policies Scenario in its World Energy Outlook 2011 report, nuclear power generation in Europe should remain fairly stable in terms of TWh produced. Electricity generation from nuclear is expected to increase from 894 TWh in 2009 to 907 TWh in 2035, with a slight decrease to 872 TWh in 2025. The generation share is expected, though, to decrease from 28 percent in 2009 to 23 percent in 2035, mainly due to the rise of renewable energies from 18 percent in 2009 to 43 percent in 2035.

“In Europe, the new build market is dynamic and Areva is committed to staying very active on this market,” said Jean-Bernard Ville, executive vice president, Areva’s New Builds Business Unit.

Construction continues on the Areva EPR at the Flamanville plant in France. Photo courtesy EDF, Morin Alexis.
Construction continues on the Areva EPR at the Flamanville plant in France. Photo courtesy EDF, Morin Alexis.

Areva is building two EPR units in Europe; one at the Flamanville site in France and one at the Olkiluoto plant in Finland. In March 2012, an important milestone was reached at the Olkiluoto site as the reactor upper internals were lifted into the reactor pressure vessel (RPV), completing the major introduction of the RPV internals. The upper internals support, protect and guide core components, such as fuel assemblies, control rod guide assemblies, and core instrumentation.

“Piping and cabling are moving forward according to plan,” said Jean-Bernard Ville.

Milestones have also been reached on the Flamanville project as the project continues to move forward to achieve commercial operation, planned for 2016.

Building off success in China where Areva is constructing two EPRs at Taishan, Jean-Bernard Ville said Areva has utilized lessons learned for future projects. In Finland, dome lifting at Flamanville took 47 months to complete. In China, Areva completed this milestone in just 24 months.

“Taishan is proof that EPR projects can move quickly thanks to the experienced feedback gained on the three projects, in three different countries, with different safety authorities’ requirements and to a qualified international and experienced supply chain,” he said. “Because of this series effect, Taishan 1 and 2 are moving forward fast and are on schedule and on budget.”

Refueling activities at the Biblis nuclear plant prior to closure. Photo courtesy RWE.
Refueling activities at the Biblis nuclear plant prior to closure. Photo courtesy RWE.

He also said safety checks, or stress tests, on the EPR designs in Finland, France and China have had no impact on the projects’ schedules.

Areva has also signed contracts with EDF Energy in the UK for the construction of two EPR reactors of the Hinkley Point project. At the Franco-British summit in Paris in February, Areva also signed a cooperation agreement with Rolls-Royce to extend the global partnership which covers the manufacturing of components for new nuclear power plants and other nuclear projects in the UK and beyond. As part of the agreement, Rolls-Royce will supply Areva with equipment and technical and engineering services with an objective of £100 million ($157 million) in value for the first of its EPR reactors in the UK, planned to be built at Hinkley Point.

Also at the Franco-British summit, EDF signed a £100 million-plus contract with Kier BAM for site preparations work at Hinkley Point C. EDF said the agreement with Kier BAM is the first major construction contract for preliminary works at Hinkley Point C. EDF will also invest £15 million ($23 million) to establish a national training center in partnership with the Bridgewater College in Somerset.

“We now have a strong platform in place to build on our existing achievements and continue our work,” said Vincent de Rivaz, chief executive of EDF Energy. “This is crucial to the growth agenda in both countries.”

Areva in January submitted commercial and technical bids to Finnish utility Fennovoima for the construction of one EPR in Finland and will submit next July in the Czech Republic its proposal for two EPRs at the Temelin site. To keep up with demand, Areva has hosted Supplier Days in Europe and qualified more than 600 companies across the continent. In March, Areva held a Supplier Day in Finland that entertained more than 100 attendees and 60 companies. Through its Certified Suppliers program, Areva works with local companies prior to project contract awards to ensure requirements, standards and local regulations are well understood. The goal is to help suppliers achieve the highest level of nuclear-grade quality and regulatory compliance.

While optimistic, plans in the UK took a hit in March when Horizon Nuclear Power said it would not pursue new nuclear opportunities in the UK. Horizon, a joint venture established in 2009 by E.ON UK and RWE npower, had plans to invest about $23 billion to build almost 6,000 MW, starting with a new unit at the existing Wylfa site.

“We have made good progress in developing our sites, in particular our lead site at Wylfa, and a strong organization capable of delivering nuclear new build in the UK,” said Horizon Chief Operating Officer Alan Raymant.

Citing a number of factors such as the accelerated phase out of nuclear in Germany, the premium capital associated with major nuclear projects and long lead times and payback periods, the two Germany-based utilities said they will focus on finding a new owner for Horizon.

“It is because of the strength of support for our development work, particularly on the Island of Anglesey, that we continue to believe that nuclear power has an important role to play in the UK’s future energy mix,” said Volker Beckers, CEO of RWE npower. “We are therefore looking to ensure that work on development, including grid connection, can be taken up quickly by other potential investors.”

Horizon was developing two nuclear projects: Wylfa, on the Isle of Anglesey and Oldbury in South Gloucestershire. The Nuclear National Policy Statement in 2011 identified both sites as suitable for new nuclear development.

E.ON said it will continue to invest in projects across the UK and the company’s wider UK plans will be unaffected by the decision not to advance Horizon Nuclear Power.

“E.ON has decided to focus its investment in the UK on other strategic projects that will allow us to deliver earlier benefit for customers and our company, rather than the very long term and large investment new nuclear power calls for,” said Dr. Tony Cocker, chief executive of E.ON UK.

Charles Hendry, the Department of Energy and Climate Change’s Energy Minister, said RWE and E.ON’s decision was clearly very disappointing, but agreed with the two companies that nuclear is still viable in the UK.

“The UK’s new nuclear program is far more than one consortia (sic) and there remains considerable interest. Plans from EDF/Centrica and Nugen are on track and Horizon’s sites offer new players an excellent ready-made opportunity to enter the market,” he said.

Westinghouse Electric Co., which was considered to be a possible reactor supplier for Horizon’s new projects, was also disappointed. Through a company-released statement, Westinghouse said Horizon “made it very clear to Westinghouse that new nuclear plants are hugely important to the energy independence and economic vitality of the United Kingdom as a whole, and especially to the communities targeted for development in North Wales and southern England.

“Although very disappointed with this decision, the Westinghouse resolve and commitment to the United Kingdom and its nuclear industry is unshaken. We strongly believe that the AP1000 technology is ideally suited to the Wylfa and Oldbury sites and elsewhere in the UK and Europe,” the statement read. “We continue to invest in and focus on operational excellence in the execution of our nuclear fuel facilities in the UK, located in central Lancashire.”

NuGen, a UK nuclear company owned by GDF Suez and Iberdrola, in 2009 successfully secured an option to purchase land near Sellafield for the development of a new nuclear plant. The project, on the West Cumbrian coast, was approved by the Nuclear Decommissioning Authority (NDA) and is expected to cost around £70m ($110 million). The Moorside project, as it has been named, in 2011 was confirmed suitable for a new plant by the UK government. NuGen expects to commission the plant by 2023.

Plans are in place to add two EPR reactors at Hinkley Point. Hinkley Point A, shown here, was closed in 2000 and the two units are currently being decommissioned. Photo courtesy Magnox Ltd.
Plans are in place to add two EPR reactors at Hinkley Point. Hinkley Point A, shown here, was closed in 2000 and the two units are currently being decommissioned. Photo courtesy Magnox Ltd.

The UK, in April, also agreed to a Framework on Civil Nuclear Cooperation with Japan. The agreement provides the basis for UK companies to engage in multi-billion pound decommissioning projects in Japan, the Department of Energy and Climate Change said.

The agreement, signed during Prime Minister David Cameron’s first official visit to Japan, says both countries reaffirm their commitment to working together in the field of civil nuclear energy. These include Japanese companies’ technical expertise in new plant design and construction, and the UK’s experience and technology. Both countries will work closely on nuclear safety and share expertise on regulation. The countries will share expertise, experience and technology in the remediation, decontamination and decommissioning of the Fukushima nuclear site. And an annual dialogue will take place between senior UK and Japan officials across the full range of activities associated with civil nuclear energy.

“The UK has a wealth of expertise and experience in the area of nuclear decommissioning and waste management. I am in no doubt that cooperation with Japan in these areas will bring mutual benefits,” said Hendry. “This agreement will open up opportunities for UK firms to work with Japanese industry and to continue to share the UK’s world-class expertise, just as we did in the aftermath of Fukushima.”

According to the Sunday Express, a UK-based newspaper, State Nuclear Power Technology Corp. in China is in talks with Toshiba to bid up to $10 billion to take over Horizon Nuclear Power.

In April, Magnox Limited, owned by EnergySolutions, said it will close Reactor 2 at Wylfa following 40 years of operation.

“Reactor 2 has operated safely over the last four decades and this is a credit to the workforce who have maintained and operated the site in a safe and compliant manner. We can confirm that it will be shutdown on the 30th April and we will now focus on continued generation for Reactor 1,” said Stuart Law, Wylfa Site director.

Magnox said efforts will now focus on optimizing generation on Reactor 1, which is allowed to operate until 2014. A decision by the Office for Nuclear Regulation (ONR) on the transfer of partially used fuel from Reactor 2 to Reactor 1 is expected in the summer.

Owned by the NDA, the Wylfa site is the only Magnox site still generating power after the closure of the Oldbury station in February (See page 33). The Wylfa plant is also the largest and last reactor of its type to be built in the UK, according to Magnox.

“The income generated by the plant’s operation has been extremely valuable in supporting the NDA’s mission to decommission the UK’s first generation of civil nuclear sites,” said Brian Burnett, Head of Program for the Nuclear Decommissioning Authority. “We will continue to support efforts to maximize the operating life of Reactor 1 within the currently agreed timeframe.”

Finland utility Teollisuuden Voima Oyj (TVO) in March started the bidding process for the Olkiluoto 4 (OL4) project as a part of the bidding and engineering phase.

“Together with the potential plant supplier alternatives we have now started engineering to clarify that the plant types to be offered to us meet Finnish safety requirements and can be implemented in Olkiluoto,” said Janne Mokka, senior vice president, OL4 Project.

The utility has selected five reactor vendors to submit bids to construct the plant. Under consideration are Areva with an EPR plant type, GE Hitachi (GEH) with an ESBWR plant type, Korea Hydro and Nuclear Power with an APR1400 plant type, Mitsubishi Heavy Industries with an APWR plant type, and Toshiba with an ABWR plant type.

TVO said there is a construction site already for the new unit in Olkiluoto as well as power plant infrastructure that supports the project. At present, there are more than 50 people working at the OL4 project.

GEH said the invitation to submit a bid to TVO came after the two companies in February signed a licensing feasibility study.

“We are already working with our project partners and mobilizing the supply chain to prepare an extremely competitive, attractive and comprehensive proposal to support TVO’s technology, schedule, and budget requirements,” said Danny Roderick, senior vice president of new plant projects for GE Hitachi Nuclear Energy.

In November 2011, GEH signed a memorandum of understanding with Fluor Corp., to jointly bid on the OL4 project. The two companies will host their own supplier symposium in May, with the assistance of FinNuclear, to identify local Finnish suppliers to participate in the OL4 bid and create jobs in Finland.

FinNuclear’s purpose is to promote Finnish companies’ general preconditions, cooperation, competences, international profile in manufacturing, construction and service activities in the nuclear energy field.

Bids for the new nuclear unit at Olkiluoto are expected at the beginning of 2013.

GEH and Fluor have also entered into a MOU for the ESBWR pursuit in Poland for Polska Grupa Energetyczna S.A. Polska Grupa Energetyczna in 2011 announced the names of the three potential NPP sites. Choczewo, Gaski and Zarnowiec, PGE said at the time, will undergo simultaneous, detailed surveys and site characterization work over the next two years. The results of the surveys and site characterization work will allow for the selection of the final site for the first Polish nuclear power plant. PGE plans to build two 3,000 MW plants, with start-up of the first unit taking place by the end of 2023.

To help citizens understand the use of nuclear power in a country that does not generate any electricity from nuclear and relies heavily on coal, the Ministry of Economy in March launched a nation-wide information and education campaign. PGE said the campaign will last two years, with a main goal of getting Poles intrigued about nuclear.

Upper internals introduction in the reactor pressure vessel at Olkiluoto. Photo courtesy Areva.
Upper internals introduction in the reactor pressure vessel at Olkiluoto. Photo courtesy Areva.

In Germany, Chancellor Angela Merkel in March 2011 ordered the closure of eight of the country’s nuclear power plants, six of which were operational and the other two were in outages.

After the closures, the share of nuclear power in electricity generation went down from 22.4 percent to 17.6 percent, and can be expected to be about 16 percent in 2012. The action left nine reactors operating and removed about a third of the county’s nuclear power generation from the grid (around 8,300 MW of capacity).

“In 2012 the full effect of the decommissioning will be felt in nuclear generation,” a spokesperson for the German Atomic Forum said.

In August, the new atomic law went into effect. The new law includes a timeframe for the decommissioning of the remaining nine nuclear power plants in operation by Dec. 3, 2022, with the first of the remaining nine expected to close in 2012.

“Given that there is no political support for nuclear power in Germany anymore, it is apparently set to disappear in the coming years,” the German Atomic Forum concluded.

To make up for lost generation, in 2011 new wind installations in Germany grew 30 percent. The country installed 2,007 MW of wind capacity bringing the total to 29 GW of wind power generation.

“Germany’s decision to abandon nuclear power is having profound effects on the wind energy industry. Growth rates in the onshore segment were strong last year, the policy framework has been improved, and the offshore market ready to take off,” said Anne Braeutigam, wind energy expert at Berlin-based Germany Trade & Invest.

RWE, Germany’s second largest power provider, in 2011 said the closure will cost the company millions of Euros. As a result of the phase-out, RWE shut down both reactors at the which generated about 2,400 MW.

RWE Chief Executive Juergen Grossmann on April 19 said the German utility filed a legal complaint against the government’s nuclear exit bill at the Constitutional Court, according to Platts. RWE, in February 2012, filed a complaint against the 13th amendment to Germany’s Atomic Energy Act in 2011, which details the shutdown of all nuclear power generation in Germany.

E.ON, Germany’s largest power producer and operator of nuclear plants in both Germany and Sweden, also filed a separate similar complaint in November 2011. Both utilities said the nuclear phase-out decision has harmed their proprietary rights since they had to shut down the reactors earlier than planned, according to The Wall Street Journal.

The German Association of Energy and Water Industries (Bundesverband der Energie- und Wasserwirtschaft – BDEW) told Bloomberg that utilities and investors plan to spend as much as $79 billion (60 billion euros) to build and modernize power plants in Germany to make up for the nuclear exit. The BDEW said a total of 84 projects will have a combined capacity of over 42,000 MW. Of the 84 projects, 23 will be offshore winds farms; 29 gas-fired plants; 17 coal-fired stations and 10 hydropower pump stations.

“The reality is that the replacement of nuclear is going to be, in short- and medium-term, from coal and gas,” said Echávarri.

Due to Germany being well-connected to the grid with other central European countries, Echávarri said Germany will increase its import of electricity from other countries.

Electricity in “Germany will be more expensive; CO2 emissions will increase, but Germany will have a supply of electricity,” he added.

Although there is no political support for nuclear in Germany and power generated from nuclear is set to disappear, the German Atomic Forum said the nuclear industry and related issues, including decommissioning and waste management, will remain for a much longer time.

“It is to be expected, too, that nuclear research will maintain its level for a long time given the long-term role of nuclear power in many countries in Europe and the world,” the German Atomic Forum said.

Similar to Germany, in May 2011 the Federal Council in Switzerland decided to gradually phase-out the use of nuclear power generation. Switzerland is currently home to five reactors generating about 40 percent of the country’s electricity. The Federal Council said existing nuclear power plants should be decommissioned at the end of their operational lifespan and not be replaced by new nuclear, which would result in the shutdown of all nuclear generation by 2034.

The Federal Department of the Environment, Transport, Energy and Communications (DETEC) said the exit from nuclear is “feasible and that its economic impact will be limited.” In April, DETEC said an analysis by the Federal Energy Office found the exit could cost the country up to $33 billion in costs attributable to the decision to not build new nuclear due to significant investments needed in renewable energy to make up for lost generation.

“It is sure that nuclear power will be an important part of the European energy mix in the future due to the unique position of nuclear as a competitive carbon-free technology that contributes significantly to grid stability,” the German Atomic Forum said.

The European Commission also recognizes the use of nuclear as part of a low-carbon energy mix, giving European countries an opportunity to add nuclear as an integral part of their energy and climate strategies for power generation.

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