UK

The UK government is handing French and Chinese utilities tens of billions of pounds of taxpayers' money to build and operate the two Hinkley Point C reactors ‒ lifetime subsidies are guess-work but could amount to around £50 billion.¹ In November 2017, the UK Parliament's Public Accounts Committee said Hinkley Point amounts to a "bad hand" and "the poorest consumers will be hit hardest"² while the UK National Audit Office said Hinkley Point is "a risky and expensive project with uncertain strategic and economic benefits."³

Now the UK government is engineering an equally mind-boggling set of subsidies to persuade Japanese conglomerate Hitachi to proceed with two Advanced Boiling Water Reactors at Wylfa Newydd on the island of Anglesey in north Wales. It seems likely that the Japanese and UK government's will both provide direct financing for the reactors, with the two governments and Hitachi stumping up roughly one-third of the cost each.⁴ All sorts of other sweeteners are being offered to Hitachi by the UK government including loan guarantees and a guaranteed 'strike price' for electricity sold from Wylfa reactors (likely to be lower than the Hinkley strike price but still well above current wholesale rates, and significantly higher than the strike price for off-shore wind farms.⁴)

Thus governments are jumping in where private enterprise fears to tread. Hitachi hasn't found any private-sector partners, and Hitachi itself wants to dramatically reduce its stake in the Wylfa project. You'd think alarm bells would be ringing within the halls of government about the viability and economic logic of the project. Even with all the sweeteners being thrown in its direction, Hitachi has yet to commit to the project.⁵

Hannah Martin from Greenpeace UK said: "No bank, hedge fund or insurer will touch the UK's new nuclear programme with a bargepole. So Hitachi has no option but to ask the government for a taxpayer bailout to keep their collapsing reactor programme afloat. This would leave the British public to carry much of the cost and all of the risk. Any prudent investor would laugh at this request. After the Hinkley debacle, it's vital that the government stops trying to keep our energy policy a secret and presents any offer of a deal to Parliament before the Hitachi board meeting at the end of May. Otherwise it's difficult to know where their generosity to the nuclear industry might end."⁶

The 2010 Conservative Party election manifesto stated that: "we agree with the nuclear industry that taxpayer and consumer subsidies should not and will not be provided – in particular there must be no public underwriting of construction cost overruns".⁷ Now the Conservative government's position is that: "It remains the government's objective in the longer-term that new nuclear projects – like other energy infrastructure – should be financed by the private sector."⁸

Nick Butler noted in the Financial Times that a direct shareholding in the Wylfa project by the UK government will almost certainly be challenged in the courts on the grounds of competition policy and European state-aid rules. The UK is likely to be subject to EU rules at least until the end of the Brexit transition period.⁹

References:

1. Steve Thomas, Sept 2017, Time to Cancel Hinkley', http://www.no2nuclearpower.org.uk/wp/wp-content/uploads/2017/09/Time-to-...

2. World Nuclear Association, 23 Nov 2017, 'British MPs question value of Hinkley Point project', www.world-nuclear-news.org/NN-British-MPs-question-value-of-Hinkley-Poin...

3. Gerard Wynn, 29 Nov 2017, 'IEEFA Update: More Questions on U.K. Nuclear Project', http://ieefa.org/ieefa-update-questions-u-k-nuclear-project/

4. Adam Vaughan, 5 June 2018, 'UK takes £5bn stake in Welsh nuclear power station in policy U-turn', www.theguardian.com/environment/2018/jun/04/uk-takes-5bn-stake-in-welsh-...

5. NucNet, 29 May 2018, 'Hitachi Agrees To Continue Negotiations With UK Over New Nuclear At Wylfa', www.nucnet.org/all-the-news/2018/05/29/hitachi-agrees-to-continue-negoti...

6. nuClear news No.107, May 2018, 'Nuclear Subsidies – We Told You So', www.no2nuclearpower.org.uk/wp/wp-content/uploads/2018/05/NuClearNewsNo10...

7. Dave Toke, 4 June 2018, 'Wylfa: How the Tories are deliberately forgetting their nuclear lessons', http://realfeed-intariffs.blogspot.com/2018/06/wylfa-how-tories-are-deli...

8. Rachel Morison, 4 June 2018, 'U.K. Moves Toward Involvement on $27 Billion Nuclear Plant', www.bloomberg.com/news/articles/2018-06-04/u-k-weighs-taking-stake-with-...

9. Nick Butler, 4 June 2018, 'Stake in nuclear plant would be dramatic change of policy for UK', www.ft.com/content/7ba55ce6-63f3-11e8-90c2-9563a0613e56

It remains unclear whether the four partially-built Westinghouse AP1000 reactors in the US will be completed ‒ and it will probably remain unclear for some months. Westinghouse CEO Jose Gutierrez said the company is working with the owners of the Vogtle and V.C. Summer nuclear plants ‒ Southern Co. in Georgia, and SCANA Corp. in South Carolina ‒ "to find a long-term solution to complete those reactors".¹ Gutierrez said he hopes more reactors get built in the US and that "we hope they do a better job than we did".¹

Southern Co. CEO Thomas Fanning said a decision may not be made on the Vogtle project in Georgia until August.² A decision on the Summer project in South Carolina might be made by the end of June³ ‒ but none of the deadlines associated with the crisis are being met and it's unlikely the fate of the Summer project will be decided this month.

Work is proceeding on the Vogtle and Summer projects, albeit without Westinghouse funding, under interim agreements. The latest agreement to continue work on the Vogtle project expired on June 5 (an agreement extending to June 3 was extended for 48 hours). Presumably there will soon be another announcement extending the interim agreement ‒ or possibly a more significant, decisive announcement on the future of the project. The interim agreement to keep the South Carolina project moving ahead ends on June 26.

Anya Litvak summarized some recent developments in the Pittsburgh Post-Gazette on June 6:⁴

"On May 16, Westinghouse reached a tentative agreement with Southern Co., the parent of the utility that commissioned the Plant Vogtle AP1000 projects in Georgia. The deal called for Southern to take over responsibility for completing the construction. The two parties were supposed to finalize a path forward by Sunday, but they were still negotiating Monday.

"Parallel discussions are ongoing between Westinghouse and Scana Co., which owns the two AP1000 units under construction at V.C. Summer in South Carolina.

"It has been rumored for months that Fluor Corp. and Bechtel Corp., two of the country's largest engineering and construction firms, might be preparing bids to take over the projects in Georgia and South Carolina. Fluor was brought in by Westinghouse more than a year ago to straighten things out after the nuclear firm's ill-fated takeover of the nuclear construction firm that was previously in charge of that effort, Stone & Webster. Bechtel, according to the recently filed financial statements, has also been on the job since at least January, as evidenced by two "staff augmentation contracts," one at each site."

Westinghouse is expected to break its construction contracts with the owners of the Vogtle and Summer projects but would gladly remain involved in some capacity if asked to do so. The owners must estimate the costs required to complete the reactors and then decide whether (and how) to proceed. Possible funding sources include contractual guarantees from Westinghouse's parent company Toshiba, further government subsidies, and ratepayers.

The extension of a federal government tax credit program has been seen as the most likely way of securing federal support for the Vogtle and Summer projects. The extension could translate into about US$2 billion in funding support for each of the projects. But Congress has not supported an extension to date, and if it arrives it may be too late to save the projects.⁵

Toshiba is reportedly prepared to pay about US$3.6 billion towards the completion of the Vogtle plant, payable over at least three years. The agreement is not final and is said to be contingent on a similar agreement between Toshiba and the owners of the Summer plant.⁶ But that US$3.6 billion may not be enough to complete the Vogtle plant.⁷ Likewise, Toshiba's commitment to pay about US$1.7 billion towards the completion of the Summer plant isn't set in stone, and it may not be sufficient to complete the plant.³

There has been speculation that Toshiba may seek bankruptcy protection in Japan, just as Westinghouse has in the US, which would probably be the final straw for the Vogtle and Summer projects ‒ but it remains nothing more than speculation.³

Another possible source of funding to help complete the reactors would be to once again increase power bills in Georgia and South Carolina. Ratepayers are paying in advance for the Vogtle and Summer projects. Georgia Power had collected almost US$1.2 billion by the end of 2016 to pay for Vogtle.⁸ Power prices in South Carolina have increased by 20% since 2009 to pay for the Summer reactors³ and at least US$1.4 billion has been collected.⁹

Public utility commissions would need to approve further rate increases. Numerous increases have been approved as the cost of the reactor projects has escalated time and time again. Ratepayers are fed up, and politicians or commissioners proposing further increases might find themselves out of a job. The Atlanta Journal-Constitution said that funding the two AP1000 reactors in Georgia "may become the most volatile issue of the 2018 campaign for governor, lieutenant governor, Congress, the state Legislature, and perhaps dogcatcher."¹⁰

Given the history of state utility commissions repeatedly approving further imposts on ratepayers, no-one would be surprised if power bills are increased yet again. But there is some push-back. Public Service Commissioner Bubba McDonald said Georgia Power should voluntarily stop billing ratepayers for Vogtle costs, and the Public Service Commission has asked the state attorney general's office for advice as to whether it would be legal for Georgia Power to remove the charge.¹¹ In circumstances where existing charges are being challenged, it will be difficult to increase those charges.

Georgia Power spokesperson Jacob Hawkins said the pay-in-advance model "saves customers hundreds of millions of dollars by reducing financing and borrowing costs"¹¹ ‒ but Georgians and South Carolinians have paid over US$1 billion for reactors that may never be completed. Georgians are paying about US$23 million each month ‒ not far short of US$1 million per day ‒ for reactors that may never be completed.¹²

Kennedy Maize, contributing editor at Power magazine, thinks the projects will be abandoned: "My guess – and it's just that, based on my reading of U.S. nuclear history – is that both Vogtle and Summer eventually will crater. While both utilities enjoy supine state regulators and the ability to earn on construction costs as they are incurred, that will trigger rate shock and political backlash, killing the projects. That's what we saw in the 1980s."¹³

The Atlanta Journal-Constitution summarized some of that unhappy history: "[C]onstruction of Plant Vogtle's first two reactors had provided a vivid example of the potential complications. Plant Vogtle was conceived around 1970, with an original cost estimate of about $660 million. Construction was expected to take about eight years. Then, Three Mile Island happened. Regulations tightened. Demand for materials and interest rates shot up in the 1980s. Construction took 13 years. The final price tag: around $9 billion."⁸

AP1000 reactor plans in the UK

NuGen's plan for three AP1000 reactors at Moorside in the UK has descended into farce. Tom Samson, chief executive of the NuGen consortium, insists the project has "100 per cent backing" from Toshiba¹⁴ and he is "110% certain" the reactors will be built.¹⁵ But Toshiba is 100% committed to selling its stake in NuGen and has no intention of building reactors in the UK or anywhere else ... for reasons that must be all too obvious. The likelihood of the Moorside project going ahead is closer to 10% than 110%. French company Engie recently exited the Moorside project, forcing Toshiba to acquire its 40% stake based on contractual agreements, and previously Iberdrola and SSE exited the project.¹⁶

Samson says there is a "universe of options ... to progress this phenomenal project of national significance".¹⁴ South Korea's Kepco is the most likely saviour, but South Korean interest in NuGen dates from 2013, if not earlier, yet nothing has been agreed ‒ and the recent election of Moon Jae-in as President may complicate South Korean involvement in NuGen. A delegation from China's State Nuclear Power Technology Corporation (SNPTC) visited the UK in May, reportedly to meet NuGen. The Carlisle News and Star reported that "both organisations have not denied that such a meeting will take place."¹⁷ Chinese involvement has raised national security concerns¹⁸ that could scupper any such involvement.

NuGen has set up a 'strategic review' to assess whether the Moorside project can be revived.¹⁹

Meanwhile, David Wright, a director at UK's National Grid, says he is "sure" that the NuGen project will go ahead ‒ his confidence based on discussions with Tom Samson (!). But National Grid recently suspended its £2.8bn (US$3.6bn) project to provide a transmission link to the Moorside site.²⁰

Oliver Tickell and Ian Fairlie wrote an obituary for Britain's nuclear renaissance in The Ecologist on May 18.²¹ They concluded: "[T]he prospects for new nuclear power in the UK have never been gloomier. The only way new nuclear power stations will ever be built in the UK is with massive political and financial commitment from government. That commitment is clearly absent. So yes, this finally looks like the end of the UK's 'nuclear renaissance'. Not with a bang, nor even with a whimper, but with a deep and profoundly meaningful silence. Not a moment too soon."²¹

AP1000 reactor plans in India

World Nuclear News reported on June 2 that six AP1000 reactors planned for the Mithi Virdi plant in the Bhavnagar district of India's northern Gujarat state will now be constructed at the Kovvada site in the southern state of Andhra Pradesh.²² But there's precious little chance of AP1000 reactors being built anywhere in India. Both Toshiba and Westinghouse are exiting the reactor construction industry, and it's doubtful whether another company or utility would take over the project.

No binding contracts have been signed. No-one has any idea where the money might come from to pay for the AP1000 reactors. India's liability law remains an obstacle. And public opposition is still a major obstacle ‒ public opposition goes a long way to explaining the decision to abandon the Mithi Virdi AP1000 project and opposition will be keenly felt in Andhra Pradesh.²³ That is, opposition will be keenly felt if the Andhra Pradesh project gathers any momentum, which seems unlikely for the foreseeable future.

Nuclear Engineering International reported on May 9 that India has asked Toshiba to offer ways to resolve the issue of reactor sales following the bankruptcy of its subsidiary Westinghouse.²⁴ A firm agreement on AP1000 reactors was meant to be concluded by the end of June 2017, but that deadline will come and go without any agreement. Nuclear Engineering International also reported that India is seeking a loan of around US$8‒9 billion from the US Export-Import Bank to part-fund the AP1000 reactors.²⁴ But there is very little likelihood that the Export-Import Bank will provide the funding.

According to a recent Reuters report, India's Cabinet has decided that foreign reactors will not be bought unless such reactors are already in operation elsewhere.²⁵ Likewise, Sekhar Basu, secretary of India's Department of Atomic Energy, said in May that potential foreign reactor suppliers "have to sort out their financial issues before anything can come on the table" and India "will not buy a reactor unless a plant is operating in their own country."²⁶

Some long-delayed AP1000 and EPR projects may be completed in the next couple of years; but even so, plans for AP1000 and EPR reactors in India will likely be scrapped.

In May, India's Cabinet approved a plan to build 10 indigenous pressurized heavy water reactors (PHWR). That decision clearly reflects doubts about the ability of Westinghouse to deliver AP1000 reactors and French utilities to deliver EPR reactors. The plan for 10 new PHWRs faces major challenges²⁷ but suffice it here to note that the PHWR program has more chance of success than the AP1000 or EPR plans.

Suvrat Raju and M.V. Ramana wrote in The Hindu on June 7:²⁸

"Both Areva and Westinghouse had entered into agreements with the Indian government to develop nuclear plants. Areva had promised to build the world's largest nuclear complex at Jaitapur (Maharashtra), while last June, Prime Minister Narendra Modi and U.S. President Barack Obama announced, with great fanfare, that Westinghouse would build six reactors at Kovvada (Andhra Pradesh).

"The collapse of these companies vindicates critics of these deals, who consistently pointed out that India's agreements with Areva and Westinghouse were fiscally irresponsible. If these projects had gone ahead, Indian taxpayers would have been left holding the bag ‒ billions of dollars of debt, and incomplete projects. This narrow escape calls not only for a hard look at the credibility of those members of the nuclear establishment who advocated these deals for a decade, but for a comprehensive re-evaluation of the role of nuclear power in the country's energy mix.

"Therefore, the government's recent decision to approve the construction of ten 700 MW Pressurised Heavy Water Reactors (PHWRs) deserves to be scrutinised carefully. Strictly speaking, there is little that is new in this decision. A list of all the sites where the PHWRs are to be constructed had already been provided to Parliament by the United Progressive Alliance government in 2012. But delays with the first 700 MW PHWRs already under construction, the changed international scenario for nuclear energy, and the ongoing reductions in the cost of renewable energy all imply that these earlier plans are best abandoned."

References:

1. Rebecca Kern, 25 May 2017, 'Westinghouse to Emerge From Bankruptcy Stronger, CEO Says', www.bna.com/westinghouse-emerge-bankruptcy-n73014451517/

2. Peter Maloney, 26 May 2017, 'Southern CEO: Decision on Vogtle's fate not likely until late summer', www.utilitydive.com/news/southern-ceo-decision-on-vogtles-fate-not-likel...

3. David Wren, 11 May 2017, 'Reports of impending Toshiba bankruptcy raise new doubts about S.C. nuclear project', www.postandcourier.com/business/reports-of-impending-toshiba-bankruptcy-...

4. Anya Litvak / Pittsburgh Post-Gazette, 6 June 2017, ''We, Westinghouse, cannot fail': CEO gives fuller picture of business in new documents', http://powersource.post-gazette.com/powersource/companies/2017/06/06/Wes...

5. Sammy Fretwell, 22 May 2017, 'Could losing tax break sink SCE&G's nuclear project?', www.thestate.com/news/local/article151956352.html

6. Tom Hals and Jessica DiNapoli, 15 May 2017, 'Power plant owners limit Toshiba's Westinghouse liabilities: sources', www.reuters.com/article/us-toshiba-accounting-southern-co-idUSKCN18A120

7. Matt Kempner, 25 May 2017, 'Kempner: Radioactive question looms over Georgia's nuclear mess', www.myajc.com/business/kempner-radioactive-question-looms-over-georgia-n...

8. Russell Grantham and Johnny Edwards, 19 May 2017, 'Plant Vogtle: Georgia's nuclear ‘renaissance' now a financial quagmire', www.myajc.com/business/plant-vogtle-georgia-nuclear-renaissance-now-fina...

9. Sammy Fretwell, 3 June 2017, 'Once-secret records reveal pattern of costly mistakes at troubled nuclear project', www.thestate.com/news/local/article154261279.html

10. Jim Galloway, 26 April 2017, 'The first suggestion of a federal rescue for Plant Vogtle', http://politics.blog.ajc.com/2017/04/26/inside-the-envelope-was-the-firs...

11. Molly Samuel, 6 June 2017, 'Ga. PSC Delays Nuclear Vote, Asks Attorney General To Step In', http://news.wabe.org/post/ga-psc-delays-nuclear-vote-asks-attorney-gener...

12. Pam Wright, 23 May 2017, 'Sinking Into the Vogtle Vortex', http://features.weather.com/us-climate-change/georgia/

13. Kennedy Maize, 20 May 2017, 'Nuclear Farewell?', www.powermag.com/blog/nuclear-farewell/

14. 16 May 2017, 'NuGen chief says Cumbrian new nuclear has Toshiba's '100 per cent' backing', www.newsandstar.co.uk/news/business/NuGen-chief-says-Cumbrian-new-nuclea...

15. ITV, 3 May 2017, 'Exclusive: NuGen CEO 'certain' Moorside will go ahead', www.itv.com/news/border/story/2017-05-03/exclusive-nugen-ceo-certain-moo...

16. Nuclear Free Local Authorities, 4 April 2017, 'As Engie becomes the seventh international energy utility to give up on UK new nuclear build, NFLA say now is the time to move towards a decentralised, renewable energy alternative policy', www.nuclearpolicy.info/news/as-engie-becomes-the-seventh-international-e...

17. Carlisle News and Star, 23 May 2017, 'Chinese investors linked with £10bn Moorside nuclear plant, www.newsandstar.co.uk/news/business/Chinese-investors-linked-with-10bn-M...

18. Matthew Gunther, 15 August 2016, 'Chinese investor in Hinkley Point faces nuclear espionage charges', www.chemistryworld.com/news/hinkley-point-investor-faces-espionage-charg...

19. Cumbrians Opposed to a Radioactive Environment, 17 May 2017, 'NuGen's investment turmoil sparks pylon delay for Moorside new-build', http://corecumbria.co.uk/briefings/nugens-investment-turmoil-sparks-pylo...

20. Jane Gray, 23 May 2017, 'Transmission chief ‘sure' that Moorside will go ahead', http://utilityweek.co.uk/news/Transmission-chief-%E2%80%98sure%E2%80%99-...

21. Oliver Tickell and Ian Fairlie, 18 May 2017, 'Conservative election manifesto signals the end of new nuclear power', www.theecologist.org/News/news_analysis/2988965/conservative_election_ma...

22. WNN, 2 June 2017
http://mailchi.mp/world-nuclear-news/wnn-daily-russia-india-plan-for-kud...

23. 2 June 2017, 'Green clearance for nuclear project in Gujarat withdrawn by NGT, but Govt shifts it to Andhra!', www.dianuke.org/green-clearance-nuclear-project-gujarat-withdrawn-ngt-go...

24. Nuclear Engineering International, 9 May 2017, 'Westinghouse will miss deadline for India deal', www.neimagazine.com/news/newswestinghouse-will-miss-deadline-for-india-d...

25. Geert De Clercq, 3 June 2017, 'France, India to cooperate in fighting climate change', http://in.reuters.com/article/france-india-modi-macron-climatechange-idI...

26. Douglas Busvine, 18 May 2017, 'Foreign suppliers urged to step up as India backs own nuclear design', www.cnbc.com/2017/05/18/reuters-america-foreign-suppliers-urged-to-step-...

27. Dan Yurman, 23 May 2017, 'India Sets New Course for Nuclear Energy with 10 700 MW PHWR', http://neutronbytes.com/2017/05/23/india-sets-new-course-for-nuclear-ene...

28. Suvrat Raju and M.V. Ramana, 7 June 2017, 'Nuclear power: Expensive, hazardous and inequitable', www.thehindu.com/opinion/lead/nuclear-power-expensive-hazardous-and-ineq...

As discussed in Nuclear Monitor #841, Japanese conglomerate Toshiba said on April 11 that there is "substantial doubt about the Company's ability to continue as a going concern". Toshiba's US nuclear subsidiary Westinghouse filed for bankruptcy protection on March 29.

The companies are in crisis because of extraordinary cost overruns building four AP1000 reactors in the US ‒ two each in Georgia and South Carolina. Estimating the scale of the cost overruns is difficult because there is still much work to be done to complete the reactors. A reasonable estimate is that if the reactors are completed, the combined overruns will amount to about US$13 billion.^1,2 Estimates compiled by Reuters put the cost overruns ‒ again assuming that the reactors are completed ‒ at US$3.9‒6.7 billion for the reactors in Georgia and US$11.9 for the reactors in South Carolina, a combined total of US$15.8‒18.6 billion.³

Toshiba wants to sell Westinghouse but can't find a buyer, although profitable parts of Westinghouse's operations might be sold off after a company restructure. Toshiba is also restructuring and selling some of its own businesses to avoid bankruptcy. Toshiba said on April 24 that it will establish its four in-house companies as wholly-owned subsidiaries.⁴ As of October 1, it will split off its Energy Systems & Solutions Company, and the Nuclear Energy Systems & Solutions Division, and transfer them to a newly established company. The other three companies to be established as independent business entities are Infrastructure System & Solutions Company, Storage & Electronic Devices Solutions Company, and Industrial ICT Solutions Company.

The Financial Times reported: "Toshiba is not expected to seek to sell the subsidiaries because the group last month identified that much of the activities done in these four areas as essential to its turnround strategy. But the shake-up will leave the 144-year-old conglomerate, once a proud pillar of the Japanese industrial establishment, as a mere shadow of its former self. Toshiba is planning to sell its Nand memory chip business, the group's flagship technology asset, as well as offload much or all of Westinghouse. The Nand business could raise more than $20bn for the group ‒ and therefore help repair its balance sheet."⁵

Toshiba's stand-off with its auditor

On April 11, Toshiba's auditor PricewaterhouseCoopers Aarata refused to sign off on Toshiba's financial report ‒ Toshiba reported a net loss of ¥647.8 billion (US$5.7bn) for the Oct. to Dec. 2016 quarter. The main sticking point has been Toshiba's accounting in relation to the AP1000 reactors in the US.

Over the past month, Toshiba has been looking for a new auditor.⁶ The other three of the Big Four accounting firms are probably non-starters. Deloitte Touche Tohmatsu and KPMG Azsa have past business ties to Toshiba. So does Ernst & Young ShinNihon, Toshiba's previous auditor. Ernst & Young ShinNihon incurred a fine and reputational damage for failing to detect Toshiba's billion-dollar profit-padding scam from 2008‒2014.⁶

Toshiba is seeking a second-tier accounting firm to sign off on its accounts but the Financial Times reported that only a few such firms have the expertise and the number of auditors needed to handle a group as large as Toshiba.⁶

Any auditing firm that certifies Toshiba's accounts does so at the risk of damaging its own reputation.

Sacking PricewaterhouseCoopers is not a simple option for Toshiba ‒ it would require shareholder approval.⁷ Sacking the auditor could unsettle the Stock Exchange, Reuters reported, but Toshiba "is out of attractive options."⁸

Toshiba has said it will release its figures for the March 2016 to March 2017 fiscal year by mid-May, but that could be extended to June 30. The company says it expects to report a net loss of just over ¥1 trillion (US$8.9bn) for the fiscal year, well over double the estimate of ¥390 billion provided in February.⁹

Stock exchange listing / delisting

Toshiba faces being delisted from the Tokyo Stock Exchange, an outcome that will be all the more likely if it releases unaudited figures for the 2016‒17 fiscal year (as it did for the Oct. to Dec. 2016 quarter). Delisting would create a new set of problems that would make it all the more difficult for the company to survive ‒ big investors would likely sell their stock, financing costs would increase, more lawsuits from shareholders would be expected, the share price would take another hit (it has fallen by 50% over the past six months) and, as Reuters reported, shareholders would be left with "near-worthless paper".⁸ Last but not least, the complete collapse of Toshiba would loom as a real possibility.

The Reuters report continued: "There are three hurdles. First, a Tokyo Stock Exchange review has to conclude managers have fixed long-running shortcomings in internal controls. Second, the company must claw its way out of negative equity by March – hence the 2 trillion yen-plus ($18 billion) sale of its memory-chip business. And third, it must file full-year results promptly: ideally by May 15, late June at the very latest."⁸

A zombie company?

Creditors and investors are nervous. In mid-April, Toshiba lost access to one of its subsidiary's funds after hedge fund Oasis Management went to court to get the subsidiary to take back its cash ‒ ¥87.8 billion (US$771m) ‒ from the parent company.¹⁰ If that trickle becomes a flood ‒ and in particular if the banks call in their loans ‒ Toshiba will be doomed.

The BBC outlined three possible outcomes for Toshiba.¹¹ Firstly, it might become a zombie company like Sharp, TEPCO and many others: loss-making or insolvent companies that should be allowed to fail, but continue to operate because of lenient creditors. The second ‒ and most likely ‒ option is a break-up of the company (the strategy that is already playing out with Toshiba's plan to sell its memory chip business). The third possibility is a complete collapse of Toshiba. "If the chip sale falls through, more accounting irregularities emerge or the banks decide to call in their loans, then all bets are off," BBC business reported Leisha Chi said in an April 16 article.¹¹

Might Toshiba file for bankruptcy protection?

Southern Company, which hired Toshiba subsidiary Westinghouse to build two nuclear reactors in Georgia, is concerned that Toshiba will apply for protection from creditors and relieve itself of the guarantees made on Westinghouse's behalf, sources have told the Wall Street Journal.¹² A Toshiba official reportedly said the best way to save the company could be a filing under Japan's corporate reorganization law, which is similar to US Chapter 11 bankruptcy protection legislation in that it seeks to allow a company to stay in business by relieving it of some obligations. The Toshiba official said the move could free Toshiba of its obligations to Westinghouse and its customers, including its obligations to provide funding to complete AP1000 reactors under construction in the US.

However a Toshiba spokesperson said: "At this moment, we do not have any thought or intention of seeking protection under corporate-reorganization proceedings."¹²

The Wall Street Journal reported:¹²

"A Japanese chapter 11-style filing is only one of several scenarios Toshiba could choose. It presents several downsides: Suppliers could take a hit, hurting the broader economy, and shareholders could be wiped out ‒ though Toshiba's shares are already in danger of being delisted in Tokyo because of accounting problems that emerged in 2015. But the filing would strengthen Toshiba's balance sheet and could allow it to keep its profitable memory-chip business, the Toshiba official said ‒ relieving Japanese government concerns about technology leaks to Chinese or other competitors. A person familiar with Southern's thinking said Japanese creditor banks have significant leverage in deciding what to do with Toshiba, and that their loans would come ahead of other obligations. "We are not first in line," this person said."

Westinghouse and the AP1000 reactors in the US

Westinghouse filed for Chapter 11 bankruptcy protection on March 29, listing assets of US$4.3 billion and liabilities of US$9.4 billion among about 35,000 creditors.¹³

Westinghouse said on March 29 it would no longer spend money on the Vogtle (Georgia) and Summer (South Carolina) AP1000 projects, but reached an agreement with the utilities involved to allow them to pay costs to continue the projects during a 30-day interim period while decisions on the future of the projects are made. That 30-day period was later extended until May 12 for the Georgia project and June 26 for South Carolina.¹⁴

Between April 7 and April 20, about 30 vendors asked Westinghouse to return US$35 million in materials and products ordered for the four reactors in Georgia and South Carolina before the company filed for bankruptcy protection.¹⁵ No doubt other vendors have done likewise since April 20. Many Westinghouse suppliers received letters saying that their invoices for work performed or products supplied before the bankruptcy protection filing could not be paid at this time.¹⁶

Westinghouse plans to complete a restructuring plan by the end of June 2017 and a new business plan by the end of July 2017. The aim is to ring-fence the four AP1000 reactors. Gavin Liu, Westinghouse's president for Asia, said the "rest of the Westinghouse business, the healthy part, which is new plant construction, fuel, service, decommissioning ‒ we anticipate an ownership change."¹⁷ Liu noted that there has been "high interest from the financial community" in the profitable parts of the company's operations.¹⁷

Toshiba would like to sell Westinghouse and keep its profitable businesses ‒ but must instead sell profitable businesses to cover the debts from Westinghouse's nuclear projects. Westinghouse, in turn, would like to rid itself of the US AP1000 reactors projects and keep its profitable operations but must instead sell profitable operations to cover debts from the reactor projects.

No amount of ring-fencing will make the AP1000 problems go away. According to Westinghouse, an additional US$4 billion is required to complete the four reactors (US$2.5 billion in Georgia and US$1.5 billion in South Carolina).¹³ That figure may be an underestimate. Southern Co. CEO Thomas Fanning has said the company needs at least US$3.7 billion needs to complete the two reactors in Georgia ‒ possibly more.^18,19

If the additional costs can be kept to US$3.7 billion, Southern Co. hopes that funding from Toshiba will suffice to complete the reactors in Georgia.¹⁹ Of course, those hopes could be dashed if Toshiba seeks protection under Japanese corporate reorganization laws.

Southern Co. subsidiary Georgia Power is also trying to convince the Georgia Public Service Commission to allow it to recoup further costs from ratepayers in Georgia, but the Commission appears reluctant.¹⁹ Georgian ratepayers have already been paying for the construction of the two AP1000 reactors since 2011, based on provisions of the 2009 Georgia Nuclear Finance Act.^20,21

Tax credits and loan guarantees

The AP1000 reactors in Georgia and South Carolina need to be operating by the end of 2020 to be eligible for a US$18/MWh federal production tax credit. For the South Carolina project, the tax credit would amount to a government subsidy of about US$2.2 billion.²² Relaxation of the 2020 deadline for the tax credits is shaping as an important determinant of the future of the four reactors given the receding likelihood of completing the reactors by then. South Carolina Electricity & Gas recently said it is re-evaluating its timeline for completion of the two reactors in that state because of Westinghouse's "historical inability to achieve forecasted productivity and work for efficiency levels" and in light of Westinghouse's bankruptcy filing.²³

The extension of the tax credits is "absolutely imperative" to the AP1000 projects and "next-up U.S. nuclear projects" according to David Blee, executive director of the US Nuclear Infrastructure Council.²⁴ However an attempt to include a relaxation of the 2020 deadline in a government spending bill recently failed.²⁵ Congressional leadership is reportedly delaying the issue until lawmakers take up tax reform later this year²⁴ ‒ but that could be too late to save the AP1000 projects. Republican senator Lindsey Graham said: "I'm not going to sit on the sidelines and watch the nuclear industry be destroyed. For three years, we've been trying to get these tax credits extended. ... The reactors that are being built are very much at risk."²⁴

If the Vogtle project in Georgia collapses, the federal government is on the hook for US$8.3 billion in loan guarantees. Ryan Alexander, president of Taxpayers for Common Sense, said:²⁶

"The Title XVII program at the Energy Department provides broad authority for it to guarantee loans for early commercial use of advanced technologies if there is a "reasonable" prospect of repayment by the borrower. Loan guarantees are like cosigning a loan. The government (taxpayers) are on the hook for repayment of the loans if the borrower defaults.

"Building a nuclear reactor – two nuclear reactors – is expensive and risky. The amount of risk represented by a particular loan guarantee is measured in the project's "subsidy cost." The higher the risk, the higher the cost that gets assigned to the guarantee. You would think a loan guarantee for a nuclear power plant – the riskiest project of all – would be assessed a pretty high price. It should have been. But the Energy Department guaranteed at least $6.5 billion of the $8.3 billion total at a cost of $0. That is, it recorded no potential liabilities for its guarantee of more than $6 billion in loans for the construction of two nuclear power plants. ...

"While this might mean huge losses for taxpayers, the real tragedy is that financial entanglement with the project could have been avoided altogether. It's not clear what the Department of Energy can do now to mitigate the potential for losses. In the end, the Vogtle mishap could be a very expensive way to learn what we should have known all along – the federal government cannot ignore risk when taxpayers' money is on the line."

The plan for AP1000 reactors in the UK

NuGen was established in 2009 as a consortium between Engie, Iberdrola, and Scottish and Southern Energy. After various twists and turns, Toshiba had a 60% stake in NuGen and Engie the remaining 40% by the end of 2013. In 2014, NuGen announced plans to build three AP1000 reactors at Moorside, near Sellafield in the UK. But Engie has exercised its contractual right to force Toshiba to buy its 40% stake. Toshiba wanted to sell its 60% stake ... and now wants to sell its 100% stake.

Reactor construction never began and likely never will. In April 2017, NuGen said it has put its application for development consent on hold and is "undertaking a strategic review of its options following shareholder and vendor challenges".²⁷ The consortium has written to suppliers to warn them it will have to cut spending, and also plans to order staff who have been seconded to the project from other companies to return to their employers.²⁸

Toshiba (and the British government and others) are hoping that South Korean utility Kepco will buy a stake in NuGen (Toshiba presumably hopes Kepco will buy its entire 100% stake). Kepco has been considering buying a stake in NuGen for some time, but a deal has not been struck. Kepco may prefer to build its APR1400 reactors rather than Westinghouse AP1000 reactors, which would delay the project by several years: the APR1400 design has not been approved by UK regulators whereas the AP1000 design recently received approval.

Some see Kepco's purported interest in building its own reactor technology as a bargaining chip to use in negotiations. Kepco might agree to build AP1000 reactors ‒ or to be the engineering, procurement, and construction manager of Westinghouse-built AP1000 reactors ‒ on the condition that Kepco supplies expensive items like steam generators, turbines, pumps, and other system components.²⁹

A Hinkley Point-style guaranteed 'strike price' per kilowatt-hour might make the project attractive for Kepco, but still the question remains: where will the capital costs for the three-reactor project ‒ which could amount to US$20 billion or so ‒ come from? One pro-nuclear commentator suggests that the project could be revived with a guaranteed strike price plus UK government-issued bonds covering the capital costs.²⁹ The commentator also recommends following through on BREXIT in order to prevent any challenge under EU legislation to the subsidies required to get the Moorside project off the ground (Austria and others challenged the Hinkley Point subsidies).

NuGen chief executive Tom Samson said in early May that the project faces "significant challenges" and that direct government funding is one option on the table. He said: "We already have tremendous support from the government, we look for all opportunities to secure funding for the Moorside project and the government's involvement is one of those areas we'll continue to explore."²⁷

Plans for AP1000 reactors in India

A. Gopalakrishnan, a former Chair of India's Atomic Energy Regulatory Board, has written an opinion piece in The Hindu strongly criticizing plans to contract Westinghouse to build six AP1000 reactors in India.³⁰

Gopalakrishnan wrote:³⁰

"India must not enter into a contract involving billions of dollars with an American company that has already declared bankruptcy. ... Westinghouse going into bankruptcy causes much larger problems than just the financial consequences. With the bankruptcy filing, no creditors will come forward to lend the approximately $7 billion needed to bankroll the India project in the first phase. During the time of the Barack Obama administration, India had hoped to get a U.S. Export-Import (Exim) Bank loan for the Kovvada project. But with Donald Trump assuming the U.S. presidency and Westinghouse perilously in the red, there is little chance that the new American administration will favourably consider an Exim Bank loan for an Indian nuclear project to be technologically executed by a bankrupt U.S. company. Even if the Trump administration is willing, the project is definitely not in the interest of the people of India.

"From personal contacts, I understand that senior and mid-level Westinghouse managers and technical staff have already started looking for other jobs. The company will find itself hard-pressed to handle the completion of the eight AP1000 reactors for the U.S. and China that it is committed to, let alone competently take on and complete a new two-reactor project in Kovvada. Besides, six-eight years from the start of construction, which competent Westinghouse engineering team will be around to help India start up these reactors and provide periodic assistance thereafter? ...

"In view of these difficulties, it is best to completely keep away from agreeing to purchase the Westinghouse AP1000 reactors. In fact, the current status of world energy technology does not warrant the inclusion and consideration of nuclear power of any kind in the energy basket of our nation."

Dr Vijay Sazawal, a former Westinghouse employee who is now a member of the Civil Nuclear Trade Advisory Committee of the US Department of Commerce, also urged caution.³¹ He said: "Basically, Westinghouse has backed out of the contracts in place [in the US] and will renegotiate contracts with those utilities which will have to bear previous cost overruns on their projects. So both Westinghouse and a new potential customer like NPCIL in India will have to be very careful in their financial negotiations in order to ensure that Westinghouse does not back out of its legal and financial obligations if it hits a road bump as it has in its four nuclear power plants under construction in the US and China, with all four plants having exceeded their original cost and schedule commitments."

References:

1. 17 April 2017, 'The Westinghouse Bankruptcy: Test for Chinese Investment in US Infrastructure', www.ippreview.com/index.php/Blog/single/id/405.html

2. Tom Hals / Reuters, 3 May 2017, 'Westinghouse, CB&I spar in court over $2 bln merger dispute', www.reuters.com/article/us-toshiba-accounting-westinghouse-cbi-idUSKBN17...

3. Tom Hals and Emily Flitter, 2 May 2017, 'How two cutting edge U.S. nuclear projects bankrupted Westinghouse', http://uk.reuters.com/article/us-toshiba-accounting-westinghouse-nucle-i... and see also http://fingfx.thomsonreuters.com/gfx/rngs/TOSHIBA-ACCOUNTING/010040WY1YE...

4. World Nuclear News, 24 April 2017, 'Toshiba creates subsidiaries 'to maximise value'', www.world-nuclear-news.org/C-Toshiba-creates-subsidiaries-to-maximise-va...

5. Kana Inagaki, 24 April 2017, 'Toshiba to restructure to protect core businesses', www.ft.com/content/780ae574-28df-11e7-9ec8-168383da43b7
6. Kana Inagaki, 2 May 2017, 'Brave is the auditor that takes on Toshiba's accounts', www.ft.com/content/d5709622-2ef8-11e7-9555-23ef563ecf9a
7. Intellasia, 28 April 2017, 'Toshiba plans to replace auditor PwC after earnings impasse', www.intellasia.net/toshiba-plans-to-replace-auditor-pwc-after-earnings-i...

8. Quentin Webb, 26 April 2017, Unaccountable, www.breakingviews.com/considered-view/toshiba-axing-pwc-would-be-ugly-bi...

9. BBC, 14 Feb 2017, 'Toshiba chairman quits over nuclear loss', www.bbc.com/news/business-38965380

10. 16 April 2017, 'Toshiba: loses access to unit's cash after hedge fund sues', www.4-traders.com/TOSHIBA-CORP-6493713/news/Toshiba-loses-access-to-unit...

11. Leisha Chi / BBC, 16 April 2017, 'Can Toshiba escape the clutches of corporate Japan's zombie hordes?', www.bbc.com/news/business-39585758

12. Takashi Mochizuki, Mayumi Negishi, and Kosaku Narioka, 9 May 2017, 'Toshiba partners brace for possible bankruptcy filing', www.wsj.com/articles/toshiba-partners-brace-for-possible-bankruptcy-fili...

13. World Nuclear News, 28 April 2017, 'US industry on tenterhooks over Westinghouse: NEI', www.world-nuclear-news.org/C-US-industry-on-tenterhooks-over-Westinghous...

14. Augusta Chronicle, 3 May 2017, 'Too important to fail', http://chronicle.augusta.com/opinion/editorials/2017-05-03/too-important...

15. Kristi E. Swartz, 20 April 2017, 'Vendors line up to demand returns from Westinghouse', www.eenews.net/energywire/2017/04/20/stories/1060053327

16. Anya Litvak, 28 April 2017, 'Westinghouse battles trust issues with vendors, customers and employees', http://powersource.post-gazette.com/powersource/companies/2017/04/27/EQT...

17. Reuters, 28 April 2017, 'Westinghouse says will operate normally in Asia, Europe despite Chapter 11', https://finance.yahoo.com/news/westinghouse-says-operate-normally-asia-0...

18. Power Engineering, 4 May 2017, www.power-eng.com/articles/2017/05/southern-company-requests-3-7-billion...

19. Kristi E. Swartz, 5 May 2017, 'Tug of war in Ga. over who controls Vogtle's fate', www.eenews.net/energywire/2017/05/05/stories/1060054108

20. Anne Maxwell, 8 May 2017, 'Georgia Power profits off Plant Vogtle construction despite cost overruns, delays, and contractor bankruptcy', http://wjbf.com/2017/05/08/georgia-power-profits-off-plant-vogtle-constr...

21. Georgia Watch, 'Protect Georgia Power Customers from Massive Cost Overruns', www.georgiawatch.org/issue/protect-georgia-power-customers-from-massive-...

22. David Wren, 27 April 2017, 'SCANA exec: Nuclear plant completion could hinge on extension of federal tax credits', www.postandcourier.com/business/scana-exec-nuclear-plant-completion-coul...

23. World Nuclear News, 8 May 2017, 'Summer plant construction progress continues', www.world-nuclear-news.org/NN-Summer-plant-construction-progress-continu...

24. Andrew Follett, 5 May 2017, 'Congress Gears Up For Showdown Over Billions In Nuclear Tax Credits', http://dailycaller.com/2017/05/05/congress-gears-up-for-showdown-over-bi...

25. Kristi E. Swartz, 4 May 2017, 'Southern turns to D.C. for help to finish reactors', www.eenews.net/stories/1060054028

26. Ryan Alexander 6 April 2017, 'The High Cost of Ignoring Risk', www.usnews.com/opinion/economic-intelligence/articles/2017-04-06/westing...

27. ITV, 3 May 2017, 'Exclusive: NuGen CEO certain Moorside nuclear development will go ahead', www.itv.com/news/border/2017-05-03/exclusive-nugen-ceo-certain-moorside-...

28. John Collingridge, 30 April 2017, 'Toshiba mothballs Cumbrian nuclear power project', www.thetimes.co.uk/article/toshiba-mothballs-cumbrian-nuclear-power-proj...

29. Dan Yurman, 8 April 2017, 'A Modest Proposal to Save NuGen's Moorside Nuclear Project', http://neutronbytes.com/2017/04/08/a-modest-proposal-to-save-nugens-moor...

30. A. Gopalakrishnan, 31 March 2017, 'Say no to Westinghouse', www.thehindu.com/opinion/op-ed/say-no-to-westinghouse-india-must-not-ent...

31. PTI, 30 March 2017, 'Westinghouse bankruptcy unlikely to impact Indo-US N-deal', www.financialexpress.com/india-news/westinghouse-bankruptcy-unlikely-to-...

Hungary – Paks II

The Hungarian nuclear regulator issued the site approval for the Paks II nuclear power plant. The preliminary approval of the environmental permit has been sent to some foreign participants in the EIA procedure (e.g. the organisation Calla in the Czech Republic and Terra Mileniul III in Romania) but only in Hungarian. The responsible authority claims no translation is required under Hungarian law. A court case from Hungarian NGOs, among others Energia Klub and Greenpeace Hungary, against the approval of the environmental permit is pending.

The Hungarian government passed law changes in December 2016, including the possibility for the government, the de facto operator of the Paks II project, which is run from the Prime Minister's office, to divert per decree from licensing conditions for the construction of new nuclear capacity and nuclear waste management. The European Commission is currently investigating this under the allegation of breach of the independence of the nuclear regulator as defined under the Euratom Nuclear Safety Directive. Also, the 7th Review Conference of the Convention on Nuclear Safety at the IAEA in Vienna is discussing the matter.

Finland – Hanhikivi

The Finnish nuclear regulator STUK is currently scrutinising the construction documentation for the Hanhikivi nuclear project of the Finnish-Russian conglomerate Fennovoima. STUK criticised Fennovoima, constructor Rosatom and sub-contractors for having too little capacity to deliver the necessary documentation.

Russia – the floating reactors of the "Akademik Lomonosov"

Rosatom is preparing to load two 35 MW power reactors on board the non-propelled barge "Akademik Lomonosov", which is moored at the Baltic Shipyard in the centre of St. Petersburg, 3.5 km from the Hermitage and 2.5 km from the St. Isaac Cathedral.

Greenpeace Russia, the Yablokov Party and Greenpeace Nordic are urging for a transboundary environmental impact assessment to be made before loading, testing and transport of the barge to its final destination in Chukotka. The transport will lead the barge through the exclusive economic zones and/or territorial waters of most countries around the Baltic Sea.

Slovakia – Mochovce 3,4

The shareholders of Slovenské elektrarne ‒ the Slovak state, Italian utility ENEL and the Czech energy holding EPH ‒ have officially increased the budget for the construction of Mochovce 3,4 with €800 million during their Annual General Meeting in late March 2017. Mochovce 3,4 consists of two Rosatom designed VVER440/213 reactors of the second generation that are not equipped with a secondary containment. The total budget is now €5.4 billion or €5620/kWe capacity, which is comparable to the construction costs of the French designed EPR reactors in Olkiluoto, Finland and Flamanville, France. It is unclear who has to finance these extra costs.

Spain – Santa Maria de Garoña

The Spanish government would like to have the EU's oldest nuclear reactor, the Fukushima type GE Mark 1 reactor at Santa Maria de Garoña, restarted. The reactor was shut down in 2015, when its operator Nuclenor (Endesa / ENEL and Iberdrola) did not see an economic future any longer after necessary upgrades. Political pressure on Nuclenor from the side of the Spanish conservative government has been mounting, however.

On the other side, resistance against a restart in the neighbouring Basque Country is growing. During a session of the Basque Parliament on 5 April 2017, legal steps, among others against the lack of public participation, environmental considerations and comparison with viable alternatives, were prepared with parliament-wide support.

Iberdrola has already made clear that it would rather not restart the aging reactor. Endesa and its owner ENEL have yet to react.

Belgium – Tihange and Doel

On 11 March, around 1,000 people demonstrated in Antwerp against the life-time extension of the Doel 1 and 2 and Tihange 1 reactors, for closure of the crack-ridden Doel 3 and Tihange 2 reactors, and phase-out of the remaining two reactors Doel 4 and Tihange 3 in 2025.

The lack of public participation and environmental impact assessment for the life-time extension of Doel 1,2 and Tihange 1 is currently pending before the Council of State as well as civil court on complaints from Greenpeace. The city of Aachen (Germany) and the State of North Rhine – Westphalia (Germany) have started legal proceedings in Belgium against the operation of Doel 3 and Tihange 2.

On 25 June, a human chain from Tihange to Aachen is to follow the protests from March 11.

Belarus – Astravetz

The government of Lithuania has stepped up its attempts to prevent the construction of the Belarussian-Russian Astravetz nuclear power station just 40 km from the Lithuanian capital Vilnius. Belarus has promised to submit the Astravetz project to a nuclear stress test under supervision of the European Commission and the European Nuclear Safety Regulators Group (ENSREG), in the framework of the European post-Fukushima nuclear stress tests. The watchdog group Nuclear Transparency Watch has asked the European Commission to also facilitate input from civil society in that exercise, as happened during the European stress tests and similar stress tests with European support in Taiwan.

Netherlands – Borssele

The Aarhus Convention Compliance Committee is receiving answers on its last question regarding the lack of proper public participation concerning environmental issues in the decisions leading to the 20-year life-time extension of the Borssele nuclear reactor in 2013. The Committee is expected to finalise its findings in April and submit them to the Meeting of Parties of the Aarhus Convention in September.

In the meantime, the owner of Borssele, EPZ, has sold its grid distribution and water businesses for €900 million. It now has to decide whether this one-off income will be used to operate Borssele with a loss until possibly improved electricity prices might turn a profit in the early 2020s, or to use it to close down the aging reactor.

Decommissioning costs are budgeted at €500 million, but the decommissioning fund currently faces a shortage of over €200 million.

The largest two parties coming out of the Dutch parliamentarian elections in March 2017, VVD and PVV, want to continue operation of Borssele. Potential government candidates D66 and GroenLinks want it closed. The other negotiating party, the christian-democrat CDA, did not mention Borssele in its election programme, whereas another potential government coalition candidate, the Christian Union (CU), would like to see closure.

Czech Republic – Dukovany and Temelín

The Dukovany nuclear power station is gradually receiving permission for 20 years' life-time extension. Austrian NGOs including among others Global2000, ÖkoBüro Wien and the ÖkoInstitut in Vienna have started procedures under the Espoo and Aarhus Conventions against the lack of transboundary EIA with public participation.

A conference of anti-nuclear groups in Germany and the Czech Republic in Munich in March 2017 continued investigations into alleged problems during primary circuit welding work in the Temelín unit 1 in 1993. Greens Fichtelgebirge organiser Brigitte Artmann announced the next steps to allow access for German experts to vital documentation and stated: "As long as we are alive and this issue has not been resolved, it is not closed."

UK – Hinkley Point C, Wylfa and Moorside

The Espoo Convention Implementation Committee found the UK in non-compliance with the Espoo Convention for not notifying other countries of its intention to build the Hinkley Point C nuclear reactors. The UK reacted with a notification to all Espoo Convention parties, and currently, at least the Netherlands, Norway and Germany asked for a transboundary EIA.

The Netherlands and Austria also informed WISE they had been notified by the UK of the intention to build new nuclear capacity at Wylfa in Wales and are awaiting the start of a transboundary EIA procedure. With this, legal complaints from the Friends of the Irish Environment, An Taisce (the Irish Trust), the German member of the Bundestag Greens Sylvia Kötting-Uhl and German citizen Brigitte Artmann, have been successful. The Espoo Implementation Committee even went a step further by calling on the UK to halt construction work at Hinkley Point C until the transboundary EIA has been finalised. Construction work at Hinkley Point has, however, continued with the pouring of the first safety-relevant concrete.

Finland – Olkiluoto 1,2

The aging reactors 1 and 2 at Olkiluoto have received a life-time extension without public participation or an EIA during the decision-making procedures. NGOs are considering legal options.

Espoo Convention – Meeting of Parties

During the Espoo Convention Meeting of Parties 13‒16 May 2017 in Minsk, Belarus, nuclear issues will receive prominent attention. Lithuania and Belarus are involved in an ingrained battle over the quality of the Astravetz EIA (see above). The NGO CEE Bankwatch is organising a side-event to highlight the lack of environmental impact assessment before decisions on life-time extension of nuclear projects in Ukraine, Netherlands, Belgium, Spain, Czech Republic and elsewhere. A special commission is to come with best practices around nuclear decisions, though draft documents do not address life-time extensions.

Adam Vaughan, energy editor of the British daily newspaper, The Guardian, last month reported on the very expensive consequences of what he characterized as the "flawed tendering process for dismantling old reactors at 12 sites".¹ Vaughan quotes my research colleague, Stephen Thomas, emeritus professor of energy policy at the University of Greenwich, as branding the Nuclear Decommissioning Authority's (NDA) handling of the contract as "an immense screw-up."

I fear it is much worse than that. From my detailed experience of a previous failed management contract agreed by the NDA, also placed with a US company-led consortium, Nuclear Management Partners (NMP), which also led to the early cancelling of the contract, there could well be dubious collusion between the NDA and the then responsible government department (energy and climate change, DECC) under a Labour Government, at the expense of the long-fleeced taxpayers.

The investigator appointed by business secretary Greg Clark to look into this scandal, Steve Holliday, needs to revisit this earlier Sellafield scandal to assess why the public procurement lessons – especially the need for candour and transparency ‒ that should have been learned, were not.

Dr Clark's written statement, made on March 27 – under the surprisingly opaque headline "BEIS Non-Departmental Public Bodies" – revealed that the NDA had decided to terminate its contract with Cavendish Fluor Partnership (CFP) for the management and decommissioning of 12 redundant Magnox sites (including two research sites) which, together with the Calder Hall reactor on the Sellafield site, formed the UK's first fleet of nuclear power stations.

The NDA ran a £6.1 billion tender process from April 2012 which resulted in a 14-year contract being awarded in September 2014 to CFP – a joint venture between the British firm Cavendish Nuclear, a subsidiary of Babcock International, and the US company Fluor Inc.

Clark added that "This decision was approved by the then Department for Energy and Climate Change and HM Treasury (Finance ministry)."

CFP started work on the Magnox estate on 1 September 2014, after which, according to Clark's statement, "started a process to ensure that the scope of the contract assumed in the 2012 tender matched the actual status of the decommissioning to be done on each site – a process known as consolidation."

The statement continued:

"It has become clear to the NDA through this consolidation process that there is a significant mismatch between the work that was specified in the contract as tendered in 2012 and awarded in 2014, and the work that actually needs to be done."

"The scale of the additional work is such that the NDA Board considers that it would amount to a material change to the specification on which bidders were invited in 2012 to tender. In the light of this, the NDA Board, headed by a new Chair and Chief Executive, has concluded that it should exercise its right to terminate the contract on two years' notice. The contract will be terminated in September 2019, after 5 years rather than its full term of 14 years. This termination is made with the agreement of CFP."

The NDA is now expected to establish arrangements for a replacement contracting structure to be put in place when the current contract ends, under the NDA's new Chief Executive, David Peattie.

Clark also revealed that the cost to the British taxpayers would be nearly £100 million, saying:

"In addition I can announce today that the NDA has settled outstanding litigation claims against it by Energy Solutions and Bechtel, in relation to the 2014 Magnox contract award.

"The NDA was found by the High Court in its judgment of 29 July 2016 to have wrongly decided the outcome of the procurement process.

"As part of the settlements, NDA has withdrawn its appeal against the judgment. While these settlements were made without admission of liability on either side, it is clear that this 2012 tender process, which was for a value of up to £6.1 billion, was flawed. The NDA has agreed settlement payments with Energy Solutions of £76.5m, plus £8.5m of costs, and with Bechtel of $14.8m, plus costs of around £462,000 – approximately £12.5m in total.

"These are very substantial costs and had the potential to rise much further if the case had proceeded to trial.

"Taxpayers must be able to be confident that public bodies are operating effectively and securing value for money. Where this has not been achieved such bodies should be subject to rigorous scrutiny.

"I am therefore establishing today an independent Inquiry into the conduct of the 2012 procurement process and the reasons why the 2014 contract proved unsustainable. These are separate issues but both need to be examined thoroughly by an authoritative and independent expert. ...

"This was a defective procurement, with significant financial consequences, and I am determined that the reasons for it should be exposed and understood; that those responsible should properly be held to account; and that it should never happen again."

Earlier contracts

The earlier contracts with the US consortium Nuclear Management Partners (NMP) were awarded in a way that ministers and departmental officials demonstrably tried to circumvent Parliamentary oversight. A Parliamentary debate led by Labour MP Paul Flynn held on 19 November 2008 exposed how the Public Accounts Committee (then under a Conservative chairman) effectively colluded in the deal.³

Flynn was denounced by the then energy minister, Mike O'Brien, for traducing ministers with allegations of "some sort of cover-up." Actually, Mr Flynn's allegations turned out to be under-estimations of calumny.

The Public Accounts Committee only later properly probed the procurement scandal in October 2013, using documents I secured from the NDA ‒ via long-running freedom of information applications ‒ comprising a hitherto secret internal KPMG audit of Sellafield's operations.

The full sorry story is told in a January 2015 article in The Ecologist.⁴

An absurd footnote on the contempt with which these US-led consortia hold the British taxpayers who have funded their so-called management contracts for clean-up and Sellafield remediation comes with the revelation in expenses receipts sent to the NDA by departing NMP executives. A Canadian researcher FOI'd NDA for the expenses claims and obtained the details of how one NMP executive billed £714 for his cat to be transported by taxi cab from Sellafield to Heathrow, en route to the US.

You just could not make it up!

References:

1. 27 March 2017, 'UK nuclear decommissioning debacle costs taxpayer nearly £100m', www.theguardian.com/business/2017/mar/27/uk-nuclear-decommissioning-deba...)

2. Greg Clark (Secretary of State for Business, Energy and Industrial Strategy), 27 March 2017, 'BEIS Non-Departmental Public Bodies: Written statement - HCWS554', www.parliament.uk/business/publications/written-questions-answers-statem...

See also: New Judgment: Nuclear Decommissioning Authority v EnergySolutions EU Ltd (now called ATK Energy EU Ltd) [2017] UKSC 34, UK Supreme Court Blog 11th April 2017, http://ukscblog.com/new-judgment-nuclear-decommissioning-authority-v-ene...

3. www.publications.parliament.uk/pa/cm200708/cmhansrd/cm081119/halltext/81...

4. David Lowry, 19 Jan 2015, 'Sellafield ‒ how the nuclear industry fleeced taxpayers', www.theecologist.org/News/news_analysis/2719912/sellafield_how_the_nucle...

Eight AP1000 reactors are under construction around the world: four in China and four in the US. All of them, in both China and the US, are about three years behind schedule.

A Chinese nuclear engineer told nuclear lobbyist Michael Shellenberger in 2015: "People felt we paid full price for a half-completed design." The result, Shellenberger writes, was three years of delay, higher costs, and a deteriorating relationship between China and Westinghouse.¹ Likewise, the 2016 World Nuclear Industry Status Report noted that the AP1000 projects in China have suffered construction delays and cost overruns, design changes and equipment failure.²

Nonetheless, the four AP1000 reactors in China will very likely be completed.

Whether the four AP1000 reactors in Georgia and South Carolina will be completed is now subject to a 30-day "assessment period" according to Westinghouse.³ Work is continuing during the assessment period.

Costs to complete the four reactors could amount to approximately US$8.5 billion.⁴ The combined cost overruns for the four reactors amount to about US$11.2 billion and counting.⁵

Stephen Byrd from Morgan Stanley anticipates that the total costs of the plants in Georgia and South Carolina, if completed, will be about twice Westinghouse's original estimate.⁶

An April 2 article from the World Nuclear Industry Status Report website summarizes the situation:⁷

"The outcome for the U.S. AP1000 projects is more dire, and abandonment is an explicit option. In the case of the Vogtle project in Georgia, Stan Wise, chairman of the state's Public Service Commission, pointed out that it is "possible ... that Plant Vogtle just doesn't get finished at all. It's a real hit and a real blow to something that we felt like was going to be the very best possible energy choice for Georgia maybe even into the next century". But he also went on to talking about the changes in the energy landscape since the Vogtle plan was initially approved, "with natural gas getting very cheap, and technologies like solar power and batteries improving" and declaring: "If I'd known any of this a decade ago we would have gone a different way".

"[South Carolina's] SCANA chief executive Kevin Marsh, on the other hand, was more bullish: "Our commitment is still to try to finish these plants. That would be my preferred option. The least preferred option, I think realistically, is abandonment". But he has also said that SCANA will evaluate various options during the coming 30 days, including:

• continuing with the construction of both new units;
• focusing on the construction of one unit, and delaying the construction of the other;
• continuing with the construction of one and abandoning the other; and
• abandoning both units.

"Independent analysts have pointed out that not abandoning the project right away could result in "the chaos of bankruptcy and reorganization [leading] to a long period of project restructuring uncertainly and more spiraling costs".

"If either of those projects are abandoned, they would join the ranks of the forty nuclear new-build projects ‒ including 12 Westinghouse reactors ‒ that were abandoned in the United States between 1977 and 1989 at various stages of construction (see Global Nuclear Power Database for details⁸). At the time, several utilities went bankrupt."

No other reactors are under construction in the US and there is no likelihood of any new reactors in the foreseeable future. The US reactor fleet is one of the oldest in the world ‒ 44 out of 99 reactors have been operating for 40 years or more ‒ so nuclear decline is certain.

Will any other AP1000 reactors be built around the world?

In 2015, then Westinghouse chair Danny Roderick said he was "pretty confident" in achieving Westinghouse's goal of winning orders to construct 64 AP1000 reactors worldwide over the next 15 years.⁹ As recently as November 2016, Westinghouse said it had plans to build 30 AP1000 reactors around the world, and Roderick said the company was "very much in the running ... to get up near 50 units over the next 15 to 20 years in China."¹⁰

Those expectations have gone up in smoke.

China

An April 2 article from the World Nuclear Industry Status Report website states: "The idea that Westinghouse might get any more contracts to build nuclear reactors in China seems doubtful, to say the least. As Lin Boqiang, director at the China Center for Energy Economics Research at Xiamen University told Bloomberg News: "The only way Westinghouse can win contracts in China is to demonstrate they can build reactors quicker and cheaper than anyone else in China's market and win hearts with actions, not words. Westinghouse so far hasn't demonstrated such abilities.""¹¹

UK

Toshiba received notice from French company Engie on April 3 that it had exercized its right under a joint agreement to require Toshiba to purchase Engie's 40% stake in the NuGeneration (NuGen) consortium that planned to build three AP1000 reactors at Moorside in the UK.¹² NuGen is "facing some significant challenges", Engie said. Engie anticipates payment of approximately ¥15.3 billion (US$137.5 million) from Toshiba for its stake in NuGen.¹²

Once the transaction is completed, Toshiba will be left with a 100% stake in NuGen. Toshiba noted that Westinghouse's Chapter 11 bankruptcy filing met the definition of an 'event of default' under the terms of its agreement with Engie. That gave Engie the option to sell its stake in NuGen to Toshiba, or to acquire Toshiba's stake, and Engie chose the first option.¹²

Toshiba was hoping to sell its 60% stake in NuGen and is now seeking to sell its 100% stake.

Ironically, just as the Moorside project took a giant leap towards being abandoned, UK regulators announced on March 30 that the AP1000 had successfully completed the Generic Design Assessment process.¹²

Engie is the seventh international energy utility to give up on UK new nuclear build over the past decade, the others being Toshiba, E-on (Wylfa), RWE Npower (Wylfa), Iberdrola (Moorside), SSE (Moorside), and Centrica (Hinkley Point).¹³

While South Korea's Kepco has shown no interest in acquiring a stake in Westinghouse, the utility is interested in acquiring a stake in NuGen.¹⁴ Whether that interest is affected by Engie's withdrawal remains to be seen. Kepco might seek to deploy its APR1400 reactor technology instead of AP1000 reactors, in which case development would be delayed by a further 4‒5 years while the APR1400 is put through a Generic Design Assessment by UK regulators.

In 2015, Toshiba estimated a total cost of ¥1.5 trillion yen (US$13.6bn) for the NuGen project but analysts now believe the cost could be roughly double that amount due to higher labor costs and revised safety standards.⁵

Of course, the cost could be brought down by weakening safety standards and one way to do that would be to abandon AP1000 technology in favour of South Korea's APR1400 design. The APR1400 lacks safety features of AP1000 and EPR designs such as aircraft crash protection.¹⁵

India

Danny Roderick from Westinghouse said in November 2016 that the company was on track to build six AP1000 reactors in India's southern state of Andhra Pradesh and expected a final engineering, procurement, and construction agreement before the end of 2017.¹⁰

But funding had not been secured, India's nuclear liability law remained an obstacle, and the project faced stiff public opposition ... and that was all before the Toshiba / Westinghouse financial crisis began to surface late last year. The project is unlikely to proceed ‒ it is almost impossible according to three industry sources contacted by Reuters in early February.¹⁶ Likewise, a separate, less-developed plan for an additional six AP1000 reactors in India has little chance of progressing.

Toshiba said in mid-February that India's liability legislation ‒ which provides some recourse to sue vendors in the event of an accident ‒ would have to be changed to promote reactor projects in India.¹⁷

Former World Nuclear Association executive Steve Kidd noted in an April 7 article: "India is clearly not set to follow China into a rapid nuclear growth phase. Its targets announced for nuclear generation in the early 2030s look even more unachievable than before, and the Indian industry is becoming inward-looking once again. Its tie-up with Russia on reactors appears sound, but proposed cooperation with Areva, Westinghouse and GE now looks dead in the water after their recent financial disasters."¹⁸

A senior Indian government official reportedly said in early April that the "atomic meltdown" of Toshiba and Westinghouse "is a blessing in disguise", and the Economic Times of India reported that "many in the Indian atomic establishment are silently celebrating this premature death of suitors who were wooing to put tens of atomic plants in India".¹⁹ The argument is that the 'Indian atomic establishment' can take up the slack with new reactors in India and the atomic meltdown "could also provide an opportunity to the country to become a hub for low cost suppliers of nuclear technology".

But in all likelihood, despite the opportunities afforded by the meltdown of its competitors, the Indian atomic establishment will probably continue doing what it does best: building bombs, taking an axe to the global non-proliferation and safeguards regime, and failing to meet its nuclear power targets by orders of magnitude.

References:

1. Michael Shellenberger, 13 Feb 2017, 'Why its Big Bet on Westinghouse Nuclear is Bankrupting Toshiba', www.environmentalprogress.org/big-news/2017/2/13/why-its-big-bet-on-west...

2. World Nuclear Industry Status Report, 2016, www.worldnuclearreport.org/The-World-Nuclear-Industry-Status-Report-2016...

3. Westinghouse, 29 March 2017, Westinghouse Announces Strategic Restructuring, http://www.westinghousenuclear.com/About/News/View/WESTINGHOUSE-ANNOUNCE...

4. Samantha Cheh, 3 April 2017, 'Never-ending misfortunes: Toshiba stuck in the news cycle from hell', http://techwireasia.com/2017/04/toshiba-stuck-newscycle-hell/

5. World Nuclear Industry Status Report, 2 Feb 2017, 'Toshiba-Westinghouse: The End of New-build for the Largest Historic Nuclear Builder', www.worldnuclearreport.org/Toshiba-Westinghouse-The-End-of-New-build-for...

6. 1 April 2017, 'Westinghouse files for bankruptcy', www.economist.com/news/business/21719836-global-nuclear-power-industry-b...

7. World Nuclear Industry Status Report, 2 April 2017, 'Westinghouse: Origins and Effects of the Downfall of a Nuclear Giant', www.worldnuclearreport.org/Westinghouse-Origins-and-Effects-of-the-Downf...

8. http://thebulletin.org/global-nuclear-power-database

9. Reuters, 5 April 2017, 'Toshiba fired Westinghouse chairman two days before bankruptcy filing', www.reuters.com/article/us-toshiba-accounting-westinghouse-idUSKBN1770O6

10. Nikkei Asian Review, 29 Nov 2016, 'Toshiba aims to nail down multiple nuclear orders in China, India', http://asia.nikkei.com/Business/Companies/Toshiba-aims-to-nail-down-mult...

11. World Nuclear Industry Status Report, 2 April 2017, 'Westinghouse: Origins and Effects of the Downfall of a Nuclear Giant', www.worldnuclearreport.org/Westinghouse-Origins-and-Effects-of-the-Downf...

12. World Nuclear News, 5 April 2017, 'Engie gives notice to sell NuGen stake', www.world-nuclear-news.org/C-Engie-gives-notice-to-sell-NuGen-stake-0504...

13. Nuclear Free Local Authorities, 4 April 2017, www.nuclearpolicy.info/news/as-engie-becomes-the-seventh-internationalen...

14. Song Jung-a in, 22 March 2017, 'Kepco rules out buying Westinghouse stake', www.ft.com/content/cd70d392-0ec8-11e7-b030-768954394623

15. Steve Thomas, July 2014, 'Nuclear technology options for South Africa', http://earthlife.org.za/www/wp-content/uploads/2014/09/nuclear-cost_repo...

16. Geert De Clercq and Kentaro Hamada, 3 Feb 2017, 'Battered Toshiba seeks exit from UK, India in nuclear retreat: sources', www.reuters.com/article/us-toshiba-accounting-idUSKBN15I0VG

17. World Nuclear News, 14 Feb 2017, 'NuGen confirms Toshiba commitment to Moorside', www.world-nuclear-news.org/C-NuGen-confirms-Toshiba-commitment-to-Moorsi...

18. Steve Kidd, 7 April 2017, 'The future of the nuclear sector – is innovation the answer?', www.neimagazine.com/opinion/opinionthe-future-of-the-nuclear-sector-is-i...

19. 9 April 2017, 'Global nuclear giants go bust, should India celebrate?', http://economictimes.indiatimes.com/articleshow/58091514.cms

A footnote in the Parliamentary Bill published on January 26 to authorise Brexit confirmed that the UK intends to leave Euratom as well as the European Union.¹ Up until that point this was a grey area, with disagreements over whether Brexit meant the UK would also have to leave Euratom.

The balance of opinion seemed to confirm that, although Euratom is legally distinct from the European Union, the UK would have leave both once Article 50 was triggered.² This was confirmed at a meeting I attended at the Scottish Government last September when most of the nuclear industry representatives and regulators appeared to be resigned to leaving Euratom. On the other hand, the European nuclear lobby group – Foratom – thought the UK could decide to negotiate to remain a member (or agree some form of associate membership). The EU has numerous association agreements with other countries. For instance Switzerland is an associate member of Euratom and the Ukraine has joined the Euratom Research and Training Programme. A blog on the Euractiv website goes even further saying that the idea that Euratom is included in the exit clause of the Lisbon Treaties is false.³

The decision has wide-ranging implications for Britain's nuclear industry, research, access to fissile materials and the status of approximately 20 nuclear co-operation agreements that it has with other countries around the world. The UK is going to have to strike new international agreements with all these countries to maintain access to nuclear power technology ‒ crucially with the US because several of the UK's existing and planned nuclear reactors use US technology or fuel. A new bilateral agreement will also be needed with the International Atomic Energy Agency. Nuclear co-operation agreements can take considerable time to agree and ratify. It may not be possible to complete them before Britain leaves the EU in 2019.

New reactors in jeopardy?

The concern now in the UK nuclear industry is that leaving Euratom will complicate and delay the UK's plans to build a new generation of nuclear power stations. "The new wave of British nuclear power stations was in jeopardy" said The Times. Withdrawal could cause "major disruption" according to the Nuclear Industry Association (NIA), particularly for Horizon and Nugen, which are developing plans for reactors on Anglesey and in Cumbria because their plans involve co-operation with US nuclear companies. Former Labour MP Tom Greatrex, now chief executive of the NIA, said: "The UK nuclear industry has made it crystal clear to the government before and since the referendum that our preferred position is to maintain membership of Euratom."⁴ Although Horizon, whose reactors would use US nuclear fuel, says it is reassured by the government's commitment to put new regulatory arrangements in place quickly.¹

The Hinkley Point C station in Somerset could also face renewed problems. EDF has warned that Brexit could increase "the costs of essential new infrastructure developments and could delay their delivery". EDF, which also operates Britain's existing nuclear plants, has said it would prefer if the UK stayed within Euratom and that if not it would be "essential that the UK establishes equivalent safeguards arrangements".

"However, if the UK ceases to be part of Euratom, then it is vital the government agree transitional arrangements, to give the UK time to negotiate and complete new agreements with EU member states and third countries including the US, Japan and Canada who have nuclear co-operation agreements within the Euratom framework," EDF said.

EDF is also worried that Brexit will affect the movement of people and delay the delivery of Hinkley Point C.⁵ It could also impact upon its costs. For the reactor builders, being outside the nuclear common market as well as the single market and having no freedom of movement may lead to higher prices if tariffs and customs checks are introduced or if restrictions are imposed on foreign nuclear scientists and engineers.⁶

Nuclear safeguards implications

Leaving Euratom is also likely to add to the workload of the UK's nuclear regulator, the Office for Nuclear Regulation (ONR), which is busy assessing designs for new nuclear reactors including the Chinese Hualong One design. "The main burden of the UK leaving Euratom will be the need for it to cover its nuclear non-proliferation safeguards commitment and for this it will have to either set up a separate, independent agency or bring these treaty responsibilities into the Office for Nuclear Regulation," says nuclear engineering consultant John Large.⁵

The Green Party's only UK MP Caroline Lucas raised the safeguards issue in Parliament last August when she asked the business and energy secretary "what steps would be needed to replace EU Atomic Energy Community safeguards inspectors with International Atomic Energy Agency (IAEA) Inspectors to implement safeguards provisions." The reply did not address the fact that currently international inspections of UK nuclear plants and materials to ensure there is no diversion of materials to military misuse is verified by Euratom on behalf of the IAEA.⁷

A quarter of all time spent on nuclear inspections throughout the EU is carried out in Britain, due to the scale of nuclear fuel fabrication and waste management facilities, such as Sellafield. Without Euratom ONR will need to undertake many more inspections to meet IAEA requirements. The Government will have to find extra cash, but it will struggle to hire and train the necessary new staff especially when ONR is already struggling to keep up with the assessment of several new reactors designs (EPR, AP1000, ABWR and Hualong One).⁶

As proliferation expert Dr David Lowry puts it: "It is now time energy and foreign ministers and their advisors turn their attention to what they are going to do to ensure nuclear safeguards continuity in the UK post Brexit to avoid the UK becoming a nuclear rogue state."⁷

Fusion – nuclear research scientists angry

Membership of Euratom is also a condition for Britain hosting what is currently the largest nuclear fusion experiment in the world. Based at the Culham centre in south Oxfordshire, the Joint European Torus project involves some 350 scientists exploring the potential of fusion power, backed by funding from almost 40 countries in the EUROfusion consortium. According to Nature, scientists are shocked and angry about the Euratom exit.

Depending on whether and how the UK negotiates a way back in to the organization, the move could endanger British participation in the world's largest fusion experiment, the International Thermonuclear Experimental Reactor (ITER) in southern France. It could also curtail operations at the Joint European Torus (JET), a nuclear-fusion facility in Culham. The facility is a half-sized version of ITER which currently receives around €56 million annually from Euratom. Steven Cowley, a theoretical physicist at the University of Oxford who until last year was director of the Culham Centre, described the decision to leave Euratom as "bonkers".⁸

According to the trade union representing nuclear scientists, the Culham Centre signed a €283m contract in 2014 for running the Joint European Torus facility until 2018, with similar contracts expected in the future. This accounts for more than a quarter of the overall European Fusion Programme budget over the same period ‒ a budget funded in part by the Euratom Horizon 2020 programme. The UKAEA also brings Euratom money directly to the region and UK industry by winning ITER (global fusion project) contracts.⁹

Wider impact in Europe

The political impact in the EU remains equally unclear. Britain has been one of Europe's most active supporters of nuclear power. Brexit could tip the balance of member states towards an anti-nuclear majority. The complications around the UK withdrawal from Euratom could also put a spotlight onto the Euratom Treaty itself, whose legal status and many of its functions are out of step with the modern EU and may once again lead to calls for it to be abolished.⁶

Euratom Mark II

The UK secretary of state for exiting the European Union, David Davis, told parliament on 31 January 2017 that the UK will seek an alternative agreement with the International Atomic Energy Agency (IAEA) if it fails to negotiate "some sort of relationship" with the European Atomic Energy Community (Euratom) during Brexit negotiations.¹⁰

The idea of a new pan-European nuclear group is also being floated, according to former conservative MP Tim Yeo who chairs the trade group New Nuclear Watch Europe. The successor group is envisaged as a wider Europe-based pro-nuclear club including the 27 European Union member states as well as countries outside the bloc that are also developing new nuclear power plants. As well as the UK, the group could include Turkey, Ukraine, Belarus and potentially Russia.¹¹

Time for reform

The UK nuclear establishment is going to have its work cut out to make sure that Brexatom does not add to the delays in its proposed new nuclear reactor programme already in prospect as a result of financial problems at EDF, Areva, Toshiba, Engie and Hitachi.¹²

There will be widespread support for efforts to avoid any hiatus in the safeguarding of the huge quantity of fissile material in the UK. But as Hans-Josef Fell, president of the Energy Watch Group and a former member of the German parliament for the Greens points out the UK's exit from Euratom should be seen as an opportunity. It's a clear sign that it is possible for anti-nuclear countries like Austria, Ireland and Germany to unilaterally leave the Treaty – even a unique chance to dissolve Euratom. He says the core task of Euratom is to support the nuclear industry. After Chernobyl and Fukushima ending that support is long overdue.¹³

The UK Nuclear Free Local Authorities (NFLA) recently pointed out that it sees "the Euratom Treaty as one of the most direct ways the nuclear industry has promoted nuclear power in Europe over the past 60 years. It has often been the inside track from which pro-nuclear governments have ensured support for nuclear power within the European Commission."¹⁴

For instance, in 2014 the European Union's Competition Commissioner Margrethe Vestager had less leeway in evaluating the UK's Hinkley Point C financial support scheme than it would have done for a non-nuclear project because of the Euratom Treaty, which is meant to support and encourage investment in nuclear projects where needed. "This means that if member states choose to invest in nuclear energy, the Euratom's objective to facilitate that investment becomes an objective of common interest that the Commission should take into account in its state aid assessment," she said.¹⁵

So the Commission approved the UK Government's plans to subsidise Hinkley Point C despite the fact that even the UK government itself expects solar and wind power to be cheaper than new nuclear power by the time Hinkley Point C is completed.¹⁶ Not surprising then that the NFLA sees "this as an ideal time for a major and all encompassing reform of the Euratom Treaty to take account of the changed energy market in the EU, where renewable energy is rapidly expanding and nuclear power is in decline."¹⁴

References:

1. FT, 26 Jan 2017, www.ft.com/content/fe3b50a4-e3e1-11e6-8405-9e5580d6e5fb

2. nuClear News No. 89, www.no2nuclearpower.org.uk/nuclearnews/NuClearNewsNo89.pdf

3. Euractiv, 16 June 2016, http://democracy.blogactiv.eu/2016/06/16/euratom-after-brexit-votes-uk-w...

4. Times, 27 Jan 2017, www.thetimes.co.uk/edition/business/britain-quits-european-nuclear-body-...

5. Guardian, 27 Jan 2017, www.theguardian.com/business/2017/jan/27/uk-exit-eu-atomic-treaty-brexit...

6. Antony Froggatt in The Conversation, 30 Jan 2017, http://theconversation.com/brexatom-the-uk-will-now-leave-europes-nuclea...

7. David Lowry, 27 Jan 2017, http://drdavidlowry.blogspot.co.uk/2017/01/how-brexit-britain-could-beco...

8. Nature, 27 Jan 2017, www.nature.com/news/researchers-shocked-at-uk-s-plan-to-exit-eu-nuclear-...

9. FT, 5 Feb 2017, www.ft.com/content/d3d780bc-e7b5-11e6-893c-082c54a7f539

10. Nucnet, 2 Feb 2017, www.nucnet.org/all-the-news/2017/02/02/uk-could-seek-alternative-agreeme...

11. Telegraph, 4 Feb 2017, www.telegraph.co.uk/business/2017/02/04/britain-proposing-wider-europe-b...

12. www.no2nuclearpower.org.uk/news/campaign-update/nuclear-industrys-dead-c...

13. Energy Post, 5 July 2016, http://energypost.eu/brexit-offers-chance-finally-put-end-euratom-treaty/

14. NFLA Press Release, 30 Jan 2017, www.nuclearpolicy.info/news/nfla-uk-decision-withdraw-euratom-could-halt...

15. Politico, 11 January 2017, www.politico.eu/article/hungary-nuclear-approval-expected-thanks-to-uk-a...

16. Guardian. 11 August 2016, www.theguardian.com/environment/2016/aug/11/solar-and-windcheaper-than-n...

Why has Hinkley Point C been approved, despite huge costs and public outcry? Dr Phil Johnstone summarizes a new report, 'Understanding the Intensity of UK Policy Commitments to Nuclear Power,' raising questions about British transparency and democracy.

As Hinkley Point C received the green light to go ahead, research published by the Science Policy Research Unit at the University of Sussex shows how intense British Government attachments to nuclear submarines help drive a strong bias in UK energy policy in favour of nuclear power.

This is despite nuclear power being recognised in the Government's own detailed analyses to be expensive and otherwise "unattractive" compared to other low carbon options.

The report ‒ 'Understanding the Intensity of UK Policy Commitments to Nuclear Power' ‒ documents strongly-held views in UK defence policy, that nuclear-propelled submarines form a crucial military capability. Yet these are arguably the most complex engineered artefacts in the world, not easy for a country with a declining manufacturing base to build and maintain.

On the military side, we found strong fears that without continued commitment to civil nuclear power, the UK would be unable to sustain the industrial capabilities necessary to build nuclear submarines.

"We systematically examined a range of different possible reasons for official UK attachments to nuclear power", said report co-author Emily Cox. "None of these are satisfactory to explain the intensity of support for nuclear power maintained by a variety of UK Governments. It seems that pressures to continue to build nuclear submarines form a crucial missing piece in the jigsaw."

"The Government's own data shows the UK to be blessed with abundant, secure and competitive renewable energy resources", said report co-author Professor Andy Stirling, "in a world turning much more to renewables than nuclear power, Britain might be expected to be taking a lead in these new technologies".

Yet a greater priority in UK policy making appears to lie in maintaining 'nuclear submarine capabilities'. Parliamentary Select Committee Reports and many other policy documents on the military side reveal intense pressures for strong Government support for skills and training, design and manufacturing and research and regulatory capabilities linking with the civil nuclear industry.

The report shows that these military pressures reached a peak in the crucial period 2003-2006 – with many new policy measures following on since then spanning civil and military sectors. During that same period, UK energy policy underwent a dramatic U-turn that has remained unexplained until now – from a view of nuclear power as "unattractive", to a commitment to a "nuclear renaissance".

What this research suggests is that British low carbon energy strategies are more expensive than they need to be, in order to maintain UK military nuclear infrastructures. And without assuming the continuation of an extremely expensive UK civil nuclear industry, it is possible that the costs of Trident would be significantly greater.

The report illuminates many important cross-overs between UK submarine and civil nuclear supply chains. One defence policy document even considers the possibility to 'mask' some of the costs of nuclear submarine capabilities, behind spending on civil nuclear power.

"What is remarkable about this pressure for a nuclear bias", said Andy Stirling, "is that it is well documented on the military side, yet remains completely unacknowledged anywhere in official UK energy policy documentation. This raises serious questions about the transparency and accountability of decision making in this area – and the quality of British democracy in this regard".

The report ‒'Understanding the Intensity of UK Policy Commitments to Nuclear Power' ‒ is posted at www.sussex.ac.uk/spru/newsandevents/2016/publications/submarines or direct download: https://www.sussex.ac.uk/webteam/gateway/file.php?name=2016-16-swps-cox-...

This article was originally published on the University of Sussex website.

The French and the Chinese may be celebrating the UK's decision to press ahead with the Hinkley C 'nuclear white elephant', writes Oliver Tickell. But the deal is a disaster for the UK, committing us to overpriced power for decades to come, and to a dirty, dangerous, insecure dead end technology. Just one silver lining: major economic, legal and technical hurdles mean it still may never be built.

On September 15 the UK's energy department ‒ the Department for Business, Energy & Industrial Strategy ‒ announced the go-ahead for the controversial Hinkley Point C (HPC) nuclear power plant in Somerset.

Only weeks ago Prime Minister Theresa May's government delayed the signing of the deal with EDF to confirm its subsidy package which is likely to cost UK energy users anywhere from £30 billion to over £100 billion (€35‒117b; US$39‒130b) for 35 years after it opens.

The surprise move was widely welcomed due to a broad range of concerns about the HPC project, including:

• its very high cost, more than double the current wholesale power price and far more than the current cost of even high-cost renewable power from offshore wind;
• security concerns over China's involvement in core UK infrastructure;
• the lack of any single example of a working EPR reactor anywhere in the world;
• the severe delays, cost overruns and technical problems at all EPR construction sites;
• and the low value of HPC's contribution to UK energy supply in the new decentralised 'smart grid' era.

Pre-announcement spin indicated that the HPC deal would be subject to a number of "significant conditions" that would address these problems. But in the event energy secretary Greg Clarke is giving the go-ahead for HPC to almost precisely the same deal that was on the table before. The only difference to be found in the energy department announcement is that arrangements have been put in place to allow the Government to "prevent the sale of EDF's controlling stake prior to the completion of construction, without the prior notification and agreement of ministers."

In particular, the price remains unchanged.

Great for France, China ‒ but what about the UK? The Brexit effect

Mrs May is known to have come under strong pressure from both French and Chinese governments to give HPC the go-ahead. Both governments have strong interests in seeing the project going ahead.

In the French case, the EPR reactor has cost EDF and Areva ‒ both companies controlled and mostly owned by the French state ‒ uncountable billions of euros. Four EPRs are under construction, in France, Finland and China. All are running very late and billions of euros over budget, while the French reactor at Flamanville may never open due to a faulty reactor vessel.

That means that HPC represents France's last chance to present the EPR as a viable reactor for the lucrative nuclear export market, re-establish credibility, and regain value for its so far utterly failed investment in the EPR.

The deal also offers EDF a very high return on investment of over 10% based on the expected construction cost of £24 billion (€28b; US$31.3b), making it (and UK energy consumers) a valuable 'cash cow' for the highly indebted company for many decades to come.

China is also intent on capturing its share of the global export market for nuclear power and HPC is its 'way in' to it. As part of the deal, Chinese nuclear company CGN is to get preferential treatment to build a new nuclear power station at Bradwell in Essex to its new, untested 'Hualong' reactor design that it intends to promote to international buyers.

So, plenty of good reasons for China and France to want to progress the deal. But what's in it for the UK? Answer: Brexit. By sucking up to France, the government hopes to win over France as an ally in negotiating a better deal for the UK in Brexit negotiations.

And as far as China is concerned, the UK is desperate to reach a trade deal with what is now by some measures the world's largest economy and a major exporter to the UK. In particular the UK is seeking tariff-free access to the fast-growing Chinese economy for UK manufactures, and the powerful financial services industry.

We can be sure that both countries leaders and ministers put the frighteners onto Theresa May and her entourage at the recent G20 summit to go ahead with HPC ‒ and that she succumbed to that pressure at enormous cost to the UK, failing to win even the smallest concession on price.

Widespread condemnation

The UK's craven acceptance of the disastrous HPC deal was been widely condemned. Simon Bullock, senior climate campaigner for Friends of the Earth said: "Hinkley is a project from a dying era, which would saddle Britons with eye-watering costs for decades, and radioactive waste for millennia. Renewables, smart grids and energy storage are the fleet-footed mammals racing past this stumbling, inflexible nuclear dinosaur. The PM should act in Britain's interests and invest in a renewable, non-nuclear electricity grid ‒ it will give us more jobs and less pollution, at lower cost. This is blatantly the wrong decision from the PM."

Caroline Lucas, co-leader of the Green Party, said: "It is truly absurd that the Government plans to plough billions of taxpayers' money into this vastly overpriced project, and has done so without informing Parliament of the true costs. It is even more absurd that they are doing so at the same time as reducing support for cheaper, safer and more reliable alternatives. Instead of investing in this eye-wateringly expensive white-elephant, the government should be doing all it can to support offshore wind, energy efficiency and innovative new technologies, such as energy storage."

Even Labour's energy spokesman Barry Gardiner ‒ who has supported HPC against the wishes of Labour leader Jeremy Corbyn under pressure from big unions ‒ complained that the price was "far too high" and that the guaranteed price of £92.50 per MWh (in 2012 British pounds ‒ adjusted for inflation for 35 years after HPC opens) should be "tapered".

But Lucas retorted: "Labour's position on Hinkley is deeply disappointing. On the one hand they say that they want a decentralised energy system, yet they now back the building of this hugely overpriced, centralised piece of energy infrastructure. If Corbyn is serious about building an energy system for the future then he should reverse his party's support for this antiquated energy source."

It still might never happen

But despite the announcement there remains considerable uncertainty as to whether HPC will actually be built ‒ among them legal challenges in the European Court to the unbelievably generous subsidy package for the project which appears to be incompatible with the EU's 'state aid' regulations.

In addition both EDF and CGN, poised to take a 33.5% share in HPC, are unlikely to commit significant further capital to HPC until the Flamanville situation is resolved, and there is at least one working EPR to demonstrate that the design is constructable and operable ‒ something that is still years away.

The highly risky (if potentially very profitable) project is also widely opposed within EDF as if it fails to ever generate power, or to operate reliably, it is likely to bankrupt EDF. Also the company has yet to line up the £16 billion (or more) it will need to finance its share of the project.

"This decision is unlikely to be the grand finale to this summer's political soap opera," said Greenpeace executive director John Sauven. "There are still huge outstanding financial, legal and technical obstacles that can't be brushed under the carpet. There might be months or even years of wrangling over these issues. That's why the Government should start supporting renewable power that can come online quickly for a competitive price."

Richard Black, director of the Energy and Climate Intelligence Unit, added: "Despite this being called a 'final decision' to build Hinkley C, other hurdles, including technical and legal challenges, may well lie ahead for the project. French trade unions don't like it, nor do some of the likely candidates for the French Presidential Election next year, EDF's finances are not the healthiest, and the French nuclear regulator is examining flaws in steel used for a similar reactor being built in France. So it may turn out not to be quite as 'final' as it looks now."

Reprinted from The Ecologist: www.theecologist.org/News/news_analysis/2988131/hinkley_c_nuclear_goahea...

African nuclear commission takes shape.
Afcone, a new commission to coordinate and promote the development of nuclear energy in Africa, is set to become fully operational after key founding documents were finalized and adopted. South Africa has agreed to host the commission. The African Union (AU) established the African Commission on Nuclear Energy (Afcone) in November 2010, following the entry into force of the African Nuclear-Weapon-Free Zone Treaty in July 2009, which required the parties to establish a commission for the purpose of ensuring states' compliance with their treaty obligations and promoting peaceful nuclear cooperation, both regionally and internationally. 
At a meeting in Addis Ababa on 26 July, the elected commissioners adopted the rules of procedure, structure, program of work and budget of Afcone. The commission will focus on the following four areas: monitoring of compliance with non-proliferation obligations; nuclear and radiation safety and security; nuclear sciences and applications; and, partnerships and technical cooperation, including outreach and promotion of peaceful uses of nuclear energy. The meeting agreed to a budget of some US$800,000 per year for the period 2012-2014. It also agreed on a scale of assessment for contributions to Afcone's funding. South Africa is currently the only African country to operate nuclear power plants for electricity generation, but several others - including Egypt, Ghana and Nigeria - are considering building such plants. Namibia, Niger and South Africa are major uranium producers, accounting for about 15% of world output in 2011. Other African countries have significant uranium deposits, with some having prospective uranium mines.
World Nuclear News, 13 August 2012

Koodankulam: Clearance for fuel loading.
The People's Movement Against Nuclear Energy (PMANE) condemns the undemocratic and authoritarian decision of the Atomic Energy Regulatory Board (AERB) to grant clearance for the 'Initial Fuel Loading' and 'First Approach to Criticality' of Unit-1 of the Koodankulam Nuclear Power Project. 
Even as the country is awaiting the Madras High Court's judgment on a batch of petitions that have challenged the legality and appropriateness of the Environmental Clearance granted to the Koodankulam project, this decision amounts to contempt of court and outright insult of the rule of law in our country. More interestingly, the AERB has given assurance to the Madras High Court that the post-Fukushima taskforce's recommendations would be fully implemented in all the nuclear installations in India and that no fuel loading decision at the Koodankulam nuclear power project would be taken until then. The current permission to load fuel is a gross violation of that commitment made at the Court and the sentiments of the struggling people.
This attitude and functioning style, however, is very much in congruence with the undemocratic, authoritarian and anti-people nature of the atomic energy department. The political parties and leaders in India, especially in Tamil Nadu, the civil society leaders and the media must take a stand and protect the interests of the 'ordinary citizens' of India and reassert the rule of law in our country. 
The struggling people will do whatever democratically possible to oppose the  authoritarian and illegal decision of the Indian nuclear establishment.
Press release, The Struggle Committee PMANE, 10 August 2012

No permanent resettlement Chernobyl Exclusion zone in next 20 years.
Despite earlier reports, the exclusion zone around the Chernobyl nuclear plant remains unfit for habitation, said Dmytro Bobro, the acting head of the State Agency for the Chernobyl Zone. Short visits to the exclusive zone are not banned, and up to 10,000 visitors arrive there on memorial days, he said at a press conference in Kyiv. Concerning people who returned to the zone of their own accord and live there, relatives are allowed to come and see them for not more than five days, but if a longer term is requested, they are placed under radiological control, he said.
Experts said at a press conference on August 15 that part of the 30-kilometer exclusion zone around the Chernobyl nuclear power plant and Chernobyl itself are already fit for living. Chernobyl could be opened to personnel working under the Shelter project to construct the new confinement shelter. These people work in shifts now. 
But a few days later, Bobro said that some 200 square kilometers in the total area of 2,000 square kilometers are relatively safe. "But again, there is no infrastructure there, and the territory has "contaminated spots" and should not be populated, although it could be sown with crops to be used as biological fuel," he said. Humans could return to this territory in about 30 years. But if rehabilitation measures are taken, people would be able to come back even earlier to an area of 200 or even 500 square kilometers, he said. "Half of the exclusion zone will remain unfit for habitation forever as it is contaminated with plutonium isotopes," Bobro said.
Interfax, 17 August 2012 / ForUm, 17 August 2012

South Africa: develop 'Plan B'.
South Africa should work on a ‘Plan B’ if nuclear build proves too costly, the newly released National Development Plan 2030 asserts. The plan, which was handed to President Jacob Zuma on August 15, acknowledged that the Integrated Resource Plan (IRP) for electricity proposed that new nuclear energy plants be commissioned from 2023/24. But it also argued that South Africa needed a “thorough investigation” of the implications of nuclear energy, including its costs, financing options, institutional arrangements, safety, environmental costs and benefits, localisation and employment opportunities, and uranium-enrichment and fuel fabrication possibilities.
The National Nuclear Energy Executive Coordinating Committee (NNEECCa), which was set up late last year, had its inaugural meeting in early August, when it began deliberation on the findings of a so-called ‘integrated nuclear infrastructure review’. The review is a self-assessment of the country’s readiness to proceed with a new nuclear build and reportedly covers 19 areas. But the 26-member National Planning Commission (NPC) argued that an alternative plan be developed in the event that sufficient financing was unavailable, or timelines became too tight. The NPC did not say which entity or organ should conduct the cost/benefit analysis, only that one should be completed ahead of any decision to proceed to a procurement phase. The analysis should also not be confined to the economics of the project and should include social and environmental aspects.
Engineering News (South Africa), 15 August 2012

Sellafield: record number of hotspots found on beaches.
A record number of radioactive hotspots have been found contaminating public beaches near the Sellafield nuclear complex in Cumbria, according to a report by the site's operator. As many as 383 radioactive particles and stones were detected and removed from seven beaches in 2010-11, bringing the total retrieved since 2006 to 1,233. Although Sellafield insists that the health risks for beach users are "very low", there are concerns that some potentially dangerous particles may remain undetected and that contamination keeps being found. Anti-nuclear campaigners have called for beaches to be closed, or for signs to be  erected warning the public of the pollution. But the government's Health Protection Agency (HPA) has said "no special precautionary actions are required at this time to limit access to, or use of, beaches". But it also pointed to a series of "uncertainties" in the beach monitoring that could lead to its risk assessment being reviewed. The latest equipment might miss tiny specks that could be inhaled, it said, as well as buried alpha radioactivity that "could give rise to a significant risk to health if ingested".
Adding to the attempts to down play the radioactive state of the beaches, the official monitoring of the coast has been deliberately abandoned - at the specific request of some local authorities - during the peak periods of school and public Bank Holidays for fear of alarming the tourists.
The Guardian, 4 July 2012 / CORE press release, 4 July 2012

In a move that overturns one of the major contractual obligations of Sellafield’s overseas reprocessing customers, the UK’s Department of Energy and Climate Change (DECC) has announced a deal that will see German-owned plutonium already stored at Sellafield transferred into the UK stockpile rather than being repatriated to German utilities as required under the original contracts.

These contracts, in which customers committed to having their spent nuclear fuel reprocessed in the Thermal Oxide Reprocessing Plant (THORP), specifically required the physical repatriation of recovered plutonium to the country of origin. Such contracts, until now, have been robustly defended by Government as being sacrosanct with no leeway for renegotiation.

In what many will see as a significant U-turn by Government on customers’ obligations, the new deal will inevitably raise questions as to why, with a click of a computer mouse, similar arrangements cannot now be made for other foreign owned materials stockpiled at Sellafield, thus eliminating the need for further contentious shipments of highly radioactive materials to be undertaken to overseas customers. These stockpiled materials include the vitrified high level waste (HLW) scheduled for repatriation to Germany and at least 12 tons of Japanese-owned plutonium.

The 13th July 2012 announcement by DECC’s Minister of State for Energy Charles Hendry refers to ‘around 4 tons’ of German plutonium being involved in the deal, some of which had previously been earmarked for conversion to mixed oxide (MOX) fuel in the now defunct Sellafield MOX Plant (SMP). For commercial and security reasons, details of the ‘financial benefits’ to the UK under the new arrangement are not disclosed but are considered by the Government to be sufficient to pay for the estimated costs of managing the plutonium long-term in the UK.

The commercial arrangements of the deal – agreed between the Nuclear De-commissioning Authority (NDA), Fran-ce’s Areva and the German utilities – will allow the utilities to take ownership of an equivalent tonnage of plutonium held at French reprocessing facilities, and to have MOX fuel fabricated in France for their reactors in advance of Germany’s approaching national reactor shut-down. In a move that clearly recognizes the political, security and logistical problems of physically transporting prime terrorist material to Europe, this paper-swap of German plutonium holdings to the UK stockpile also fits conveniently into the Government and NDA’s ‘prefer-red option’ of reusing plutonium in the form of MOX fuel, even though the NDA appears to be having second thoughts with its belated appraisal of GE Hitachi’s PRISM fast breeder reactor to consume the plutonium as an alternative to its reuse as MOX fuel.

The new deal hastens the end the German utilities’ less than happy ex-perience of dealing with Sellafield and THORP. When the plant opened in 1994, Sellafield had secured over 1400 tons of spent fuel reprocessing business from Germany – the plant’s second largest overseas customer.

By 2005 however, when the ban on spent fuel transports from Europe came into force and with some contracts al-ready cancelled, a total of just 850 tons of German spent fuel had actually been delivered to Sellafield. Originally scheduled for completion by 2010, some of this spent fuel still awaits reprocessing today. With other European customers, German utilities have in the past voiced their frustration at Sellafield’s inability to make THORP work properly and vented their anger at the additional reproces-sing costs they consider to have been unfairly passed on to them over the years. 

Whilst DECC’s announcement does not make it clear whether the ‘around 4 tons’ swapped under the new deal accounts for Sellafield’s total holdings of German plutonium, figures from international sources suggests that it does not. They show, for example, that the reprocessing at THORP of 850 tons of German spent nuclear fuel would have resulted in a total of just over 7 tons of plutonium being recovered - including at least 4.5 tons of fissile material. Of this 7-ton total, a small quantity will already have been returned to German customers via a shipment of 4 MOX fuel assemblies from Sellafield in 1996 containing 120kg plutonium, and a further shipment of 16 MOX fuel assemblies - expected to be made in the near future - containing around 450kg of plutonium. The former MOX was fabricated at Sellafield’s MOX Demonstration Facility (MDF – the forerunner to SMP) and the latter at SMP.

Further, in May 2008, an estimated 300kg of plutonium (in dioxide powder form) was shipped from Sellafield to France as repayment for French plutonium used in making MOX fuel orders that had been subcontracted to France by the failing SMP. Of these subcontracted orders a number are confirmed to have been for German utilities and this 2008 shipment is likely therefore to account for a further amount of plutonium having been repatriated to Germany. At most, this shipment together with the 2 MOX shipments would account for a total of up to 875kg of plutonium having been exported from Sellafield’s 7-ton German stockpile. With a further 4 tons now ’exported’ under the new deal, there would appear to be at least 2 tons of German-owned plutonium still remaining at Sellafield.

Source: CORE Briefing 2/12, 15 July 2012
Contact: Cumbrians Opposed to a Radioactive Environment (CORE), Dry Hall, Broughton Mills, Broughton-in-Furness, Cumbria LA20 6AZ, U.K.
Tel: +44 1229 716523
Email: info[at]corecumbria.co.uk
Web: www.corecumbria.co.uk

The Times reported on July 15, that, according to “well placed industry sources”, EDF Energy wants a subsidy of £2.8 billion (US$3.6bn or 3.5bn euro) a year for the next 25 years to build two new nuclear reactors at Hinkley Point in Somerset, England at a cost of £14 billion. The French, mostly state-owned company, will only build the two European Pressurised Water Reactors (EPRs) with huge subsidies, paid for through fixed levies on electricity bills.

In May the UK Government published a Draft Energy Bill see (Nuclear Monitor 750, June 1) which details plans for so-called Electricity Market Reform. The proposals include the introduction of a complicated support mechanism for low carbon electricity called “Contract for Difference” (CfD). Basically if the market price for electricity falls below a guaranteed “strike price” the nuclear or renewable energy operator would be paid the difference, but would also have to pay money back if the electricity price goes above the strike price. The Government doesn’t expect the Energy Bill to be passed into legislation until towards the end of next year, and strike price rates won’t be finalized until then.  However, under the terms of the draft Bill, the government can issue a likely strike price in advance of formalizing the rate and introducing CfD in 2014.

EDF Energy and its junior partner Centrica want to make their final investment decision on Hinkley before the end of 2012. So talks have begun between the Department of Energy and Climate Change (DECC) and the two companies to provide them with some firmer guarantees in order to make sure plans for Hinkley Point go ahead. With RWE and E.ON having recently dropped their UK nuclear plans, EDF Energy has the Government over a barrel, and will no doubt be telling DECC what strike price it wants before going ahead – in effect writing its own subsidy cheque from the electricity consumer.

According to The Times, EDF says it needs about £165 per megawatt hour (£/MWh), almost four times the existing wholesale price of electricity, if it is to go ahead. This works out at a subsidy of £68 billion over 25 years, or an average of about £50 extra a year on every household bill. 

Let’s not forget that the Coalition Agreement between the Tories and Liberal Democrats pledged to not subsidize nuclear power.(1) Despite this, the Secretary of State for Energy and Climate Change, Liberal Democrat Ed Davey, now seems to be prepared to agree a high strike price with the nuclear industry, whilst pretending the Government is not planning to subsidize dangerous new reactors at all.

The Times says the Government has warned EDF Energy, and its junior partner Centrica, that nuclear power subsidies must be lower than offshore wind power, but EDF is arguing that the giant new offshore wind projects planned for the North Sea will cost £180/MWh, making nuclear slightly cheaper. In fact currently under the UK Renewables Obligation, offshore windfarms now being installed are being paid around £135 per MWh. According to senior lecturer on Energy Policy at Birmingham University, David Toke, EDF has been forced to come clean on nuclear costs, so now it is making dubious claims about offshore wind.(2) A Government and Industry taskforce set up to reduce offshore wind costs says offshore wind costs can be reduced to £100/MWh by 2020.(3)

Ed Davey says “nuclear will not receive a higher price than comparable gene-ration technologies whether they be renewables or indeed gas generation once its emissions have been abated by carbon capture and storage.”(4) If it is more expensive to get electricity from new nuclear power stations than offshore wind then the government’s commitment to nuclear will become dif-ficult to maintain – we might as well just build more offshore wind farms.(5)

Toke asks “will the British Treasury sign off on this plan to increase average British electricity prices by 8 per cent for 25 years to produce 6 per cent of UK electricity from nuclear power?” The Government claims that energy bills will have to go up whatever we do. Its answer to this was supposed to be The Green Deal. But this now looks incre-asingly unlikely to deliver the savings to consumers promised. The plan is to offer Green Deal loans of up to £10,000 to help consumers insulate their homes and reduce fuel bills, but the interest charged will be at the usual rate of around 7.5%. So consumers will have to spend £22,000 to pay the loan back over 25 years requiring households to deliver energyefficiency savings of £900 a year to cover the cost of annual loan repayments.(6)

In contrast, in Germany, where nuclear power is being phased out by 2022, loans at very low interest rates of 1-2%, have helped insulate over 2m homes, employing 200,000 people a year in the process, and German homeowners can borrow up to €75,000 to give them a very cosy and efficient home indeed. (7)

Greenpeace and WWF wrote to The Times pointing out that the costs of nu-clear power are going up not down. The EPRs at Flamanville and Olkiluoto are now £2.7 billion and £2.6 billion over-budget respectively. The huge subsidy of £2.8 billion per year being sought for two reactors at Hinkley was in stark contrast to another fight within Whitehall over levels of support for onshore wind power with the Treasury pushing for a reduction in support for wind power that would save less than £20 million per year. (8) (The Treasury lost the battle, but only after DECC made concessions on gas).

EDF denied that it was negotiating for a strike price of £165/MWh. It said it expects to reach a transparent agreement with the Government that is fair and balanced. It will show that nuclear is affordable and cost-competitive. (9) The Nuclear Industry Association (NIA) said “if it were true, the figure of £165/MWH would make new nuclear virtually untenable. Fortunately, it is not true. Ra-ther, it is spectacular speculation.” (10) But NIA does not speculate on what the real price might be.

The cost of the EPR being built at Flamanville, has already doubled to €6 billion (about £4.5 billion) from €3 billion and the project is four years behind schedule. Flamanville-3 is the reference design for the UK EPR. At £5 billion, Ian Jackson of Chatham House estimates that EDF would need £91.50/MWh just to break even on a Hinkley Point reac-tor. In addition to breaking even, EDF is expecting to earn a return on its invest-ment which would bump the final strike price up to about £148/MWh. Other analysts, notably Peter Atherton of Ci-tibank, have publicly projected a strike price of between £150 and £200/MWh.(11) The Financial Times says a person close to the negotiations on the level of government support energy companies should receive reckons that EDF Energy and Centrica will need a price of at least £100/MWh – more than double the present wholesale power price of about £41/MWh – to justify the huge investment needed in new nuclear plants. He said the upper limit of any such support would be about £130-£140/MWh – the cost of electricity generated by offshore wind farms. “If you can’t do [nuclear] for that price, then you might as well build more wind farms”. (12)

David Toke says the Government could hardly set the strike price any higher than £100/MWh because this is the figure the Treasury wants offshore wind power to come down to. This would be a soft landing for a policy retreat. The Government may say that £100/MWh is profitable for nuclear power, but it is unlikely to lead to any being built. Lots of rumors, hopeful stories, yes, because the British Government (and the nuclear industry) does not want to admit that nuclear power is a dead duck.(13) 

The latest news is that the chief execu-tive of General Electric, has described nuclear power as so expensive com-pared with other forms of energy that it has become “really hard” to justify. (14) And now EDF says it is considering looking for more partners for its UK nuclear projects to help it share costs and limit its debt burden – an admission perhaps that French state owned industry is no longer able to afford the huge nuclear costs on its own.(15)

Sources:
(1) Spinwatch, 22 May 2012 www.spinwatch.org/-articles-by-ca-tegory-mainmenu-8/67-nuclear/5501-when...
(2) David Toke’s Green Energy Blog, 16 July 2012 http://realfeed-intariffs.blogs-pot.co.uk/2012/07/its-official-nuclear-p...
(3) Offshore Wind Cost Reduction Task-force Report, June 2012 www.bwea. com/pdf/publications/Offshore_Task_ Force_Report.pdf 
(4) Liberal Democrat Voice, 20 April 2012 www.libdemvoice.org/there-will-be-no-public-subsidy-for-nu-clear-28150.h...
(5) Left Foot Forward, 18 July 2012  www.leftfootforward.org/2012/07/lea-ked-report-nuclear-energy-ed-davey/ 
(6) Business Green, 17 July 2012 www. businessgreen.com/bg/news/2191949/exclusive-which-warns-of-green-deal-s-devastating-impact-on-efficiency-efforts (7) Guardian, 24 May 2012 www. guardian.co.uk/environment/damian-carrington-blog/2012/may/24/green-investment-bank-energy-efficiency 
(8) The Times, 18 July 2012 www. thetimes.co.uk/tto/opinion/letters/arti-cle3478465.ece 
(9) The Times, 19 July 2012 www. thetimes.co.uk/tto/opinion/letters/arti-cle3479871.ece
(10)NIA Blog,  18 July 2012 http://uknu-clear.wordpress.com/2012/07/18/lies-damned-lies-and-speculat...
(11) i-Nuclear, 19 July 2012 www.i-nu-clear.com/2012/07/19/edf-says-repor-ted-strike-price-of-165mwh-...  
(12) Financial Times, 23 July 2012 www. ft.com/cms/s/0/3dda6692-d29d-11e1- 8700-00144feabdc0.html 
(13) David Toke’s Blog, 24 July 2012 http://realfeed-intariffs.blogspot.
co.uk/2012_07_01_archive.html 
(14) FT, 30 July 2012 www.ft.com/cms/s/60189878-d982-11e1-8529- 00144feab49a,Authorised=false.html 
(15) Reuters, 31 July 2012 www.reuters. com/article/2012/07/31/edf-results-idUSL6E8IV2LX20120731

Contact: Pete Roche
Email: rochepete8[at]aol.com
Web: www.no2nuclearpower.org.uk

The Nuclear Decommissioning Authority’s (NDA’s) strategic review has confirmed what has been expected for a while. The Thermal Oxide Reprocessing Plant (THORP) in Cumbria, England, will complete it reprocessing contracts (both UK and overseas) and then close. However, signs that the NDA has little confidence in predicting the closure of the magnox reprocessing plant are evident in documents published in July.

THORP's reprocessing contracts should be completed by 2018, at which time THORP would cease reprocessing activities and enter a post-closure and clean out phase prior to decommissioning. Any remaining spent AGR fuel from UK reactors, including any future arisings, will be placed into interim storage pending a decision to dispose of it in a geological disposal facility.

There are, however, a number of ‘performance risks’ that could impact on the delivery of the strategy. In other words, THORP might break down, which would be no great surprise given past experience. The NDA had previously expected to complete reprocessing contracts at THORP in 2010, but operational difficulties both in THORP and in downstream support plant, had delayed the completion of that work. Operational difficulties could result in the reprocessing of less than the currently planned amount of spent fuel by late 2018. The NDA says: “We believe, therefore, we should con-tinue to examine alternative options so that we can manage these risks to the delivery of our strategy.”

The NDA says keeping THORP open significantly beyond 2018 would require a major, multibillion pound investment program with like-for-like replacement of many support facilities with little or no prospect of significant new business and hence a return on this investment.

Magnox reprocessing
If THORP does shut in 2018, it would mean that by then all site reprocessing will have ceased because Magnox reprocessing (at the so called B205 plant) was suppose to end the year before. But serious doubts about this has been raised by NDA itself. The Magnox Operating Plan (MOP9) and accompanying Strategy Position Paper reveal how the NDA has been forced into a ‘pick and mix’ approach because of what it describes as the inconsistent and unpredictable performance of the plant and associated facilities. 

When the last operating plan MOP8, published in 2010, had projected a plant closure in 2016, the date was based on a ‘single assumed’ annual throughput being achieved. Continuing poor performance however resulted in an almost immediate extension of the closure date to 2017, and even this is now is deemed to be ‘increasingly unrealistic’. MOP9 now tentatively suggests at least 2 closure dates (or something between the two) for B205 by assuming two different annual reprocessing rates – an upper bound of 740 tons per year and 450 tons per year lower bound. Put in context, the latter rate tallies almost exactly with the average throughput achieved annually by B205 over the last 5 years of operation, whilst the upper bound of 740 tons per year has not been achieved for 8 years.

As the NDA publications show, 3800 tons of magnox fuel remained due for reprocessing as at April this year - 3000 tons held in reactor/dry storage and 800 tons in pond storage at Sellafield or reactor sites. Reprocessing the 3800 tons of magnox fuel remained due for reprocessing, at 740 tons per year would see a 2017/18 closure of the reprocessing plant whereas, at 450 tons per year, reprocessing would continue to 2020 at least. Added to this workload is the 44 tons of metallic fuel from the Dounreay Fast Reactor (DFR), with transports to Sellafield expected to begin from Scotland this year. MOP9 recognises that the addition of this fuel could impact on the overall MOP program but confirms that, with priority given to magnox fuel, reprocessing the DFR fuel will not be allowed to significantly extend the pro-gram without a strategy review.

Though a number of initiatives to improve reprocessing performance are incorporated in a Magnox Throughput Improvement Plan (MTIP) set up last year, the NDA acknowledges that if improvements do not materialize, the annual throughput rate of 450 tons for B205 would ‘seem a reasonable value to select’ and will result in a 2020 end to reprocessing. If implemented, it will result in further years’ of radioactive discharges to the environment from the reprocessing plant at levels that pose an added threat – denied by the NDA - to meeting the already jeopar-dized international treaty targets on marine pollution signed up to by the UK Government at the OSPAR convention in 1998. At greatest risk would be the target of concentrations of radioactivity in the marine environment being ‘close to zero’ by 2020.

In operational terms, this ‘reasonable value’ of 450 tons per year represents a significant downgrading of reprocessing targets made by the NDA just 5 months ago in a supplement to its much vaun-ted Sellafield Plan. Described as ’the first credible and underpinned lifetime plan for the Sellafield site’, it projected throughput rates for magnox reprocessing from 2012 to 2017 which ranged from 650800 tons per year. Given the well documented frailties and problems of the ageing reprocessing plant and associated facilities – and its recent track record - these projections were patently incredible and appear to have been plucked from thin air rather than being based on a professional appraisal of the plant’s operational capabilities.

Although a large proportion of the 10,000 strong Sellafield workforce is employed on reprocessing, the anticipated number of job losses is not as great as first expected due to more focus on removing Sellafield’s high-hazard risks and increased NDA financial resources to accelerate decommissioning pro-jects. It is also possible that the government will eventually give the go-ahead for a second Mox plutonium recycling plant.

Source: NuClear News 42, July 2012 / CORE Press release, 20 July 2012
Contact: Cumbrians Opposed to a Ra-dioactive Environment (CORE), Dry Hall, Broughton Mills, Broughton-in-Furness, Cumbria LA20 6AZ, U.K.
Tel: +44 1229 716523
Email: info[at]corecumbria.co.

On July 28 the UK Government stunned the energy industry when it announced a further review of the proposed Hinkley Point nuclear power station just a few hours after EDF's Board meeting in Paris agreed to approve the 'Final Investment Decision'. Executives at EDF had been expecting the Government to sign a subsidy deal for the £18 billion (US$23.4b) plant the following day. Greg Clark, the UK Business and Energy secretary, said that he needed until September to study the subsidy contract.

150 VIPs had been invited to Hinkley Point in Somerset in the West of England on Friday to celebrate the go-ahead for a third nuclear power station on the site. But on Friday morning the marquee was being packed away and the guests were nowhere to be seen. A delegation from the China General Nuclear Power Corporation (CGN) which had already flown into Britain expecting to sign the finalised documents to allow them to invest around one third of the project's cost, turned around and went straight back to China.

We may never know exactly what has gone on behind the scenes but it is clear that EDF had moved its final investment decision forward from September in order to bounce the new UK Government into giving its approval quickly before mounting problems become even more obvious to everyone.¹

Stop Hinkley spokesperson Roy Pumfrey said: "Much of the media seems to think this is just a temporary pause and that Hinkley Point C will eventually go ahead, but if Theresa May gives this scheme just a cursory glance she will see that we are being asked to buy a pig in a poke."

According to the Financial Times² the head of EDF, Jean-Bernard Lévy gave his fellow board members only two days to read 2,500 pages of contracts for a deal which one investment analyst described as "verging on insanity".³

The decision to review the project has been attributed by some to security concerns about Chinese involvement in the sector expressed by Mrs May's chief of staff, Nick Timothy. The Stop Hinkley Campaign has itself expressed concerns in the past about making nuclear deals with a country with such a poor health and safety record.⁴

Writing on the Conservative Home website last October, Timothy said the Hinkley deal could lead to the Chinese designing and constructing a third nuclear reactor at Bradwell in Essex. Security experts – reportedly inside as well as outside government – are worried that the Chinese could use their role to build weaknesses into computer systems which will allow them to shut down Britain's energy production at will.⁵ For those who believe that such an eventuality is unlikely, the Chinese National Nuclear Corporation – one of the state-owned companies involved in the plans for the British nuclear plants – says on its website that it is responsible not just for "increasing the value of state assets and developing the society" but the "building of national defence." MI5 believes that "the intelligence services of … China … continue to work against UK interests at home and abroad."

Mandiant, a US company that investigates computer security breaches around the world, looked into the operations of just one Chinese cyber espionage group, believed to be the Second Bureau of the People's Liberation Army of China, or 'Unit 61398'. Mandiant found that Unit 61398 has compromised 141 different companies in 20 major industries. There were 115 victims in the United States and five in the UK. The intellectual property stolen included technology blueprints, manufacturing processes, test results, business plans, pricing documents, partnership agreements, and emails and contact information.⁶

Timothy said "evidence like this makes it all the more baffling that the British Government has been so welcoming to Chinese state-owned companies in sensitive sectors. The Government, however, seems intent on ignoring the evidence and presumably the advice of the security and intelligence agencies. But no amount of trade and investment should justify allowing a hostile state easy access to the country's critical national infrastructure. Of course we should seek to trade with countries right across the world – but not when doing business comes at the expense of Britain's own national security."⁶

EDF's future threatened

Perhaps of more immediate concern is that a go-ahead for Hinkley could threaten the future of the company itself. EDF is a company in a very precarious financial situation. The ratings agency, S&P, postponed a decision to downgrade its credit rating when the UK Government announced the review.⁷ EDF has €37 billion (US$41b) of debt. The collapse in energy prices pushed earnings down 68% in 2015. The company needs to spend €50 billion (US$55.4b) upgrading its network of 58 aging reactors by 2025. It is scrambling to sell €4 billion (US$4.4b) of new shares and €10 billion (US$11.1b) of assets to strengthen its balance sheet. EDF is also expected to participate in the €5 billion (US$5.5b) bailout of Areva, the bankrupt developer of EPR technology, by taking a 75% stake.⁸ About the last thing it needs is a new €15 billion (US$16.6b) millstone around its neck.⁹

Roy Pumfrey said: "The EDF Board should take the opportunity presented by this pause to see that its Nuclear SatNav has taken the Company down a dead end; it's only a matter of time before we hear that voice saying "At the next opportunity, turn around!"'

He continues: "Perhaps most disappointing if not unexpected has been the reaction of the big UK Union leaders. Whilst confessing themselves 'baffled' by the government's 'bonkers' decision, they should ask why the French union leaders representing EDF's own workers were (and are) solidly and vocally opposed to HPC. This project involves a reactor which many of EDF's own staff regard as unconstructable, selling off the family silver to fund it and putting EDF and therefore their own livelihoods at risk."

Over recent months several different alternatives to building Hinkley Point C have been detailed.¹⁰ Most recently consultancy firm Utilitywise has described the proposed nuclear station as an "unnecessary expense". Energy efficiency measures could save the equivalent amount of electricity along with £12bn.¹¹

Roy Pumfrey said: "This Government review of Hinkley Point C provides us with a wonderful opportunity to turn Somerset into a sustainable energy hub for England. The alternatives would be better for jobs, better for consumers, would reduce the mountain of dangerous waste we don't know how to deal with and save Somerset from a decade of disruption caused by one of the biggest construction projects in the world. The sooner EDF and the UK Government come to their senses the better."

Anti-Hinkley Tories

Perhaps most interesting amongst recent events has been the emergence of Conservative figures calling on the government to call time on the Hinkley proposals. The think-tank Bright Blue, whose advisory board includes former ministers Francis Maude and Nicky Morgan and former energy minister Greg Barker, has said the government needs a new "plan A". The group stresses that its position is not necessarily endorsed by all members of the organisation, which includes more than 100 parliamentarians. "The Government should abandon Hinkley C – pursuing it in light of all the evidence of cost reductions in other technologies would be deeply irresponsible," said Ben Caldecott, associate fellow, Bright Blue. "We need a new 'Plan A'. This must be focused on bringing forward sufficient renewables, electricity storage, and energy efficiency to more than close any gap left in the late 2020s by Hinkley not proceeding. This would be sensible, achievable, and cheap." Zac Goldsmith, also a Bright Blue member, has welcomed the government's rethink.¹²

Caldecott, writing on the Conservative Home website, said "we seem to be re-entering reality, there is an opportunity to develop a new 'Plan A' … A range of technologies can easily fill the envisioned capacity that Hinkley would have provided in the late 2020s had it been successfully delivered on the current (and already significantly delayed) construction schedule. They can also do this much more cheaply. Cancelling Hinkley would provide greater certainty for investors in other technologies thereby encouraging investment in new capacity today."¹³

He said the price of onshore wind is already much cheaper than nuclear (£85/MWh today and expected to fall to £60/MWh by 2020), with large-scale PV (expected to fall to £80/MWh by 2020) and offshore wind (expected to fall to £80/MWh by 2025) set to do the same – all well before Hinkley would start to receive its staggeringly high guaranteed and index-linked £92.50/MWh.

He goes on to say that Bright Blue will be publishing specific recommendations on energy efficiency soon, and that small modular nuclear reactors are very unlikely to be commercially available at all, let alone before the 2030s in any scalable, cost-competitive or politically acceptable way. They are too uncertain in terms of likelihood and cost for us to place too much faith in them yet, apart from perhaps investing in more R&D. "Blind faith in new nuclear and shale gas have yielded precisely zero for UK security of supply, despite constant rhetoric to the contrary, and yet more punts in high risk areas would not be prudent."

Take action

Friends of the Earth – Scotland is asking people to write to Theresa May to express opposition to Hinkley Point C going ahead: http://act.foe-scotland.org.uk/lobby/StopHinkley

Greenpeace UK is asking supporters to sign a petition to Chancellor Philip Hammond to help convince him to abandon the project and back renewable energy instead: https://secure.greenpeace.org.uk/page/s/osborne-dont-waste-billions-nuclear

This is an expanded version of an article published in nuClear News No.87, August 2016, www.no2nuclearpower.org.uk/nuclearnews/NuClearNewsNo87.pdf

References:

1. Times 30 July 2016 www.thetimes.co.uk/article/29a3176a-55c4-11e6-917c-b7a493d07de7

2. FT 1 Aug 2016 https://next.ft.com/content/5439a6d2-57fa-11e6-9f70-badea1b336d4

3. Guardian 7 March 2016 www.theguardian.com/business/2016/mar/07/hinkley-point-nuclear-plant-edf...

4. www.stophinkley.org/PressReleases/pr150922China_File.pdf

5. Times 16 October 2015 www.thetimes.co.uk/tto/news/politics/article4587446.ece

6. Conservative Home 20 October 2015 www.conservativehome.com/thecolumnists/2015/10/nick-timothy-the-governme...

7. Reuters 29 July 2016 http://af.reuters.com/article/commoditiesNews/idAFL8N1AF6W0

8. Times 7 May 2016 www.thetimes.co.uk/edition/business/sparks-to-fly-as-edf-board-faces-cri...

9. The Street 25 April 2016 www.thestreet.com/story/13542318/1/edf-can-t-affordhinkley.html

10. Stop Hinkley 16 May 2016 www.stophinkley.org/PressReleases/pr160516.pdf See also Environmental Research Web 6 Aug 2016 http://blog.environmentalresearchweb.org/2016/08/06/nuclear-prospects/

11. Edie 1 August 2016 www.edie.net/news/6/Energy-efficiency-would-be-cheaper-than-Hinkley/30645/

12. Solar Portal 29 July 2016 www.solarpowerportal.co.uk/news/conservative_think_tank_turns_back_on_hi...

13. Conservative Home 30 July 2016 www.conservativehome.com/platform/2016/07/ben-caldecott-lets-seize-this-...

Fukushima's Stolen Lives: A Dairy Farmer's Story 

An English translation of a book by Mr Hasegawa Kenichi, a dairy farmer from Iitate Village in Fukushima, has recently been published and is available on Kindle and iBooks. Hasegawa-san is a strong community leader who has been an important voice for the rights of local citizens, and a regular speaker on Peace Boat voyages, at conferences and field visits including during the Global Conference for a Nuclear-Free World, and in other speaking tours overseas including to Australia and the EU Parliament in Brussels.

Hasegawa-san describes in the book how most of the people in the Japanese village of Iitate ‒ including very young children ‒ continued to live in their homes for more than two months following the Fukushima disaster in March 2011.

Hasegawa describes the catastrophe and its consequences in simple, direct, and clear prose. Weaving together stories about the experiences of Iitate's residents, Hasegawa is a witness to the truth of what life was like immediately following the accident ‒ as he suffered with the knowledge that his children and grandchildren had been exposed to radiation, as he lost all of his cattle, and as he endured the suicide of a fellow dairy farmer and friend.

This is the story of Iitate, but it is also the story of Hasegawa-san, a man who had a lot to lose: a beautiful village steeped in natural history and time-honored traditions, a working dairy farm, a lovely home shared with his extended family, a close-knit community, and colleagues whom he considered close friends. Ultimately, the accident at Fukushima Daiichi ‒ in concert with the profit-minded "nuclear power village" and failures of leadership at every level of government ‒ not only took, but contaminated, all of it: the farm, the fields, the milk, the water, the harvest, the home, and a cherished way of life.

Through it all, Hasegawa pursued the truth by meeting with journalists and taking his own radiation readings. He made sure that the residents in his hamlet of Maeta got what they needed ‒ whether it was bottled water, or reliable information. He confronted lies and hypocrisy in the leadership where he found it. Ultimately, he took a leading role in preserving the interests of everyone and everything he cared about.

Since the evacuation, Hasegawa has organized people from all over Fukushima, including nearly half the population of Iitate, with the goal of getting justice from TEPCO.

Hasegawa-san's ebook is available for US$8 from www.amazon.com/dp/B01GYBERT8

Wanted: someone, anyone to operate Japan's Monju fast reactor

Japan's Nuclear Regulatory Authority (NRA) demanded in November 2015 that a new operator should be found to operate the Monju fast-breeder reactor. The new operator would replace the Japan Atomic Energy Agency (JAEA), a quasi-government organization which was not competent to operate the reactor according to the NRA. Hiroshi Hase, chair of the NRA, said: "We haven't seen acceptable improvements. We cannot fully trust the current organization."

But six months have gone by and a new operator is nowhere in sight. "We are exploring many different options for who will operate the reactor ‒ either a new entity or an existing company," said a government official recently.

Makoto Yagi, chair of the Federation of Electric Power Companies of Japan, said Monju's design is quite different from normal power reactors and utilities don't have the requisite expertise.

Last November, the Ministry of Education, Culture, Sports, Science and Technology (MEXT) warned that if a replacement operator for Monju cannot be found, the future of the reactor should be fundamentally reviewed, including the possibility of decommissioning it.

Monju has operated for only 250 days in its 20-year history. The World Nuclear Association provides this warts-and-all summary of Monju's history:

"A key part of Japan's nuclear energy program, Monju initially started in August 1995, but was shut down only four months later after a serious incident. About 700 kilograms of liquid sodium leaked from the secondary cooling loop and, although there were no injuries and no radioactivity escaped plant buildings, this was compounded by operator attempts to cover up the scale of the damage."

"Monju was allowed to restart in May 2010 after JAEA carried out a thorough review of the design of the plant, as well as safety procedures, which were shown to have been inadequate. However, the reactor's operation was again suspended in August 2010 after a fuel handling machine was accidentally dropped in the reactor during a refuelling outage. The device was eventually retrieved almost one year later.

"In November 2012, it was revealed that JAEA had failed to conduct regular inspections on almost 10,000 out of a total 39,000 pieces of equipment at Monju. Some of these included safety-critical equipment. In January 2013, the NRA ordered JAEA to change its maintenance rules and inspection plans. However, following a review of JAEA's performance since then, the NRA found that the agency has failed to formulate and adhere to a strict inspection schedule."

Likewise, Nuclear Engineering International made no attempt to put a positive spin on Monju's track record in an October 2015 article:

"In 2013, NRA ordered JAEA to ban test-runs after more than 10,000 maintenance errors had been found, many involving the facility's piping system. Further safety oversights were subsequently discovered, and in late August some 3000 of errors were found in the safety classifications of the equipment and devices at the reactor during NRA's regular inspection which is conducted our times a year. Some of the errors dated back to 2007, suggesting that previous government inspectors had also overlooked the operator's mistakes. ... NRA officials told a meeting on 30 September that they were unable to grasp the exact nature of the problems, because of JAEA's poor handling of the data."

In addition to lax safety standards, security has been lax at Monju. Reports in 2013 and 2014 said that fencing was inadequate, regular checks to ensure the security of equipment were not conducted appropriately, rules were violated regarding visitors inside areas containing nuclear material, and that the JAEA said that computer hackers may have stolen private data including internal e-mails and training records.

Japan continues to expand its stockpile of 48 tonnes of separated plutonium (10.8 tonnes in Japan, 20.7 tonnes in the UK and 16.3 tonnes in France) and it continues to advance plans to start up the Rokkasho reprocessing plant in 2018. Rokkasho would result in an additional eight tonnes of separated plutonium annually.

If Japan abadons Monju ‒ and with it the broader aspiration of developing fast reactors ‒ the only remaining civil use for the plutonium would be the limited use of MOX in light-water reactors.

In response to the latest episode of the Monju saga, Allison MacFarlane, a former chair of the U.S. Nuclear Regulatory Commission, offered this sarcastic comment on fast reactor technology: "Many countries have tried over and over. What is truly impressive is that these many governments continue to fund a demonstrably failed technology."

www.bloomberg.com/news/articles/2016-05-31/nuclear-holy-grail-slips-away...

www.world-nuclear-news.org/RS-New-operator-sought-for-Japans-Monju-react...

http://www3.nhk.or.jp/nhkworld/english/news/nuclearwatch/20151208.html

www.neimagazine.com/news/newsjapan-regulator-criticises-monju-operator-4...
www.japantimes.co.jp/news/2013/11/06/national/nuclear-watchdog-warns-mon...

http://enformable.com/2014/01/computer-control-room-monju-fast-breeder-r...

UK nuclear power program: a litany of broken promises

Prof. Stephen Thomas from the University of Greenwich analyses the ongoing controversy over the planned Hinkley Point C nuclear power project in the UK in an article published in Energy Policy.

Thomas summarizes:

"In 2006, the British government launched a policy to build nuclear power reactors based on a claim that the power produced would be competitive with fossil fuel and would require no public subsidy. A decade later, it is not clear how many, if any, orders will be placed and the claims on costs and subsidies have proved false. Despite this failure to deliver, the policy is still being pursued with undiminished determination. The finance model that is now proposed is seen as a model other European countries can follow so the success or otherwise of the British nuclear programme will have implications outside the UK.

"This paper that the checks and balances that should weed out misguided policies, have failed. It argues that the most serious failure is with the civil service and its inability to provide politicians with high quality advice – truth to power. It concludes that the failure is likely to be due to the unwillingness of politicians to listen to opinions that conflict with their beliefs. Other weaknesses include the lack of energy expertise in the media, the unwillingness of the public to engage in the policy process and the impotence of Parliamentary Committees."

Thomas provides the following table comparing earlier promises regarding the British nuclear power program (and Hinkley in particular) and actual agreements:

Stephen Thomas, 2016, 'The Hinkley Point decision: An analysis of the policy process', Energy Policy, Volume 96, pp.421–431, www.sciencedirect.com/science/article/pii/S0301421516303044

Karlamalyi Walk in Western Australia

Martu Traditional Owners recently led a 140 km, week-long walk to protest against Cameco's proposed uranium mine at Kintyre in Western Australia. Cameco has received conditional government approval to proceed with the mine, but the project has stalled because of the low uranium price.

Kintyre was excised from Karlamilyi National Park ‒ WA's biggest National Park ‒ in 1994. The area still has National Park values ‒ an intricate desert water network and a number of endangered and vulnerable species including the rock wallaby, mulgara, marsupial mole, bilby and quoll. The area includes permanent water holes, ephemeral rivers and salt lakes.

Over 50 artists, activists and Traditional Owners participated in the Karlamalyi Walk. Along the way, stories were told about the land: where water is sourced, where the animals and the plants are, where traditional burial and hunting grounds are located, and why mining on this land must not go ahead.

Aboriginal Traditional Owners are concerned the project will affect their water supplies as well as 28 threatened species in the Karlamilyi National Park. Nola Taylor said the mine represented a threat to the health of people in her community. "It's too close to where we live, it's going to contaminate our waterways, we've got our biggest river that runs right past our community," she said.

"They (Cameco) told me it would be safe, they said all that but we had a cyclone go through here a couple of years back, and for me I have seen what has happened to the river and the water that is in there. I'm going to walk with the rest of the community to fight and stop the uranium mine that's going to go ahead," Taylor said.

Curtis Taylor, a Martu man and filmmaker, is not convinced the waste can be stored safely. "We had assurances given to us by the company but everyone still has that worry, if there was a flooding event that maybe tailings would go into the river," he said.

Joining the walk was Anohni, the Academy Award-nominated musician from Antony and the Johnsons. She said: "It's a huge landscape – it's a really majestic place. It's really hard to put a finger on it but there's a sense of presence and integrity and patience, dignity and perseverance and intense intuitive wisdom that this particular community of people have. There is almost an unbroken connection to the land – they haven't been radically disrupted. They are very impressive people – it's humbling to be around these women. In many regards, I think the guys who run Cameco are desolate souls, desolate souls with no home, with no connection to land, with no connection to country."

From August 7 until September 7, the Walkatjurra Walkabout will be held in Western Australia to protest against the proposed Yeelirrie uranium mine, also owned by Cameco.

Traditional Owner Kado Muir said: "Walkatjurra Walkabout is a pilgrimage across Wangkatja country in the spirit of our ancestors so together, we as present custodians, can protect our land and our culture for future generations. My people have resisted destructive mining on our land and our sacred sites for generations. For over forty years we have fought to stop uranium mining at Yeelirrie, we stopped the removal of sacred stones from Weebo and for the last twenty years we have stopped destruction of 200 sites at Yakabindie. We are not opposed to responsible development, but cannot stand wanton destruction of our land, our culture, and our environment. We invite all people, from all places, to come together to walk with us, to send a clear message that we want the environment here, and our sacred places left alone."

More information:

www.walkingforcountry.com/karlamalyi-walk/

www.ccwa.org.au/kintyre

www.walkingforcountry.com/walkatjurra-walkabout/

France: Protest at Bure nuclear waste dump site

On June 19, about 200 people established a protest camp in the forest of Mandres-en-Barrois, a short distance from the Bure site where French government agency ANDRA plans to build a high-level nuclear waste dump.

Protesters successfully established the camp, and have maintained a continuous presence since June 19. Fences that surround the construction site were removed, and barricades were built on the path to the site. Protesters plan to maintain the camp indefinitely and to do all they can to stop work at the site, but they will need ongoing support ‒ especially when police attempt to uproot them.

Major deforestation and land clearing operations have recently been carried out by ANDRA despite local opposition.

Protesters said in a statement:

"Today, on Sunday, 19th, 2016, we have temporarily freed the communal woods of Mandres-en-Barrois from Andra's yoke with its CIGEO nuclear garbage dump. In front of our great wooden pavilion, assembled where the first steps of deforestation were taken, we, resisting inhabitants from here and other places, NGOs, collectives, declare the Woods of Mandres occupied!"

"Today we are occupying this forest to physically oppose ourselves to its being annexed by ANDRA. We are occupying it because we cannot stand to hear the crash of trees being uprooted, because their razor blade wire fences, their mercenaries and big dogs will not stop us from resisting. We are occupying it to stop the territory from being stolen away from the people by the hungry hands of nuclear industry.

"We are occupying this forest in order to prevent the beginning of works for CIGEO. We know that nothing in the shiny corridors of Parliament can stop the dump being dug, that only a territorial struggle can do it.

"We are occupying this forest with another type of life, joyful, inventive, collective, against nuclear society and its world of military and private security guards, of smiling experts and quiet dosimeters, a world set to exploit the ground and its people as much as possible. Where they want to deforest, we are building shelters. Where they raise wire fences, we open paths. Where they are manufacturing a desert of solitude and resignation, we are claiming our joy together, while resisting. So now, all summer, everyone must come to Bure to stop CIGEO!"

More information:

http://en.vmc.camp

https://twitter.com/hashtag/occupybure