PBMR

The Pebble Bed Modular Reactor. Remember? It was globally heralded as the perfect nuclear reactor: small, safe and cheap. Dozens would be built in South Africa alone and in 1999 the company expected to sell 30 reactors annually from 2004 on. Sometimes in the public opinion about the nuclear renaissance and new reactor types the PBMR was used if it was already in operation in South Africa or at least under construction.

Now, the South African government announced it is expected to close operations at PBMR (Pty) Ltd. finally 'within a few weeks'  (that is August). The company once planned to build up to 24 165-MW high-temperature gas-cooled reactor modules for state-owned utility Eskom and export the modular HTR worldwide, but hasn't built even the demonstration model.

The government has invested an estimated South Africa Rand 9 billion (US$1.23 billion at current rates) in PBMR Ltd. over the 11 years since it was founded as an Eskom subsidiary. PBMR Ltd. is formally owned by Eskom, the Industrial Development Corp. and Westinghouse, but they have put no equity in the company for several years.

In a July statement, the Department of Public Enterprises, which has responsibility for the PBMR company, said PBMR "has not been able to acquire additional investment in the project since government s last funding allocation in 2007, nor has it been able to acquire an anchor customer despite revising its business model in 2008/09." The company is operating on funds that were left over from the 2007 allocation and has downsized from about 800 staff to about 25. Although the PBMR website doesn't show anything about the current situation, it says there are "no career opportunities at the moment."

The company was set up in 1999 as Pebble Bed Modular Reactor (Pty) Ltd. to develop and deploy German technology it had acquired for small HTRs with coated pebble-shaped fuel elements. Besides British Nuclear Fuels plc (BNFL), Exelon, the largest nuclear fleet operator in the US, also made an early equity investment, and the company was broadly touted as the herald of a new nuclear age for the developing world based on small reactors that could be set up quickly under various site conditions. BNFLs stake was transferred to Westinghouse when the latter was sold to Toshiba. But the PBMR partners never agreed on a new equity structure and the company remained the property of the South African government.

The Department of Public Enterprises believes the R9-billion spent on the PBMR project has not been lost, as the skills developed "will contribute significantly in any future nuclear programs and save the country huge amounts of money in the process".

One of the critics, Stephen Thomas, professor of energy policy at the University of Greenwich in the UK, told the Cape Times that it was clear at least six years ago that the PBMR project was "going badly wrong. Yet the government continued to pour public money into it, indeed about 80 percent of all the money spent on the pebble bed was spent in the past six years"

Tristen Taylor, of Earthlife Africa, said " We hope that this will also mark the end of the South African government's love affair with nuclear energy and that taxpayer funds can now be spent on clean, proven and reliable forms of renewable energy".

Official planning in                                      1998    3-2007            2009

Start construction demonstration-phase        1999    2008/9             2013

Demonstration-reactor ready                         2003    2012                2018

First orders ^_*1                                                       2004    2017                ?

First electricity by first reactor                        2008    2021                ?

*1 In 1998 it was expected that from 2004 on, annually 30 reactors would be ordered

Sources: Nucleonics Week, 29 July 2010 / Cape Times, 10 August 2010
Contact: WISE Amsterdam

On February 8, South African Public Enterprises Minister Barbara Hogan has announced that the Pebble Bed Modular Reactor (PBMR) consortium will be no longer funded from 2013. In a phone call with Bloomberg she said the project has not attracted a long-term investor or customers and South Africa can no longer fund the PBMR. A decision on the future of the technology will be made in August, she said in a statement.

Laka Foundation - It is not yet clear what this budgetary falloff precisely means for the future of the PBMR in South Africa. However, it will be clear that there is not much left of the original ambitious nuclear energy program of South Africa to expand its nuclear production capacity from 1,800 megawatts now to 20,000 MW by 2025. This plan was considered as one of the strategically most important battlefields of the nuclear industries - one of the leading developing countries that many others should follow. The major blow to this plan came when the government declared that it was canceling its plans to build new generation pressurized water reactors (PWR) in December 2008, due to the escalating financial crisis starting from September 2008.

Thwarting the public funding to the PBMR has been welcomed by environmental groups. The South African director of the WWF climate change program said that for a long time the nuclear industry has received more state support than the renewable energy industry. He hopes that this cut in funding signals a policy commitment to investing in renewables.

The Pebble Bed Modular Reactor (PBMR) is a small type of a high-temperature gas-cooled reactor. It was expected in 1998 that work on construction of a PBMR Demonstration Power Plant at Koeberg would begin in 1999 and be complete before 2003 to allow commercial orders soon after. Eskom projected that the market could be about 30 units per year, about 20 of which would be exported. When the project was started in 1999 by the state-run power utility Eskom Holdings Ltd. and South Africa’s Industrial Development Corp. - owning together 85% of the PBMR (Pty) Ltd. - it was intended to build 24 PBMRs, each generating 110 MW(e). In March 2007, a PBMR (Pty) Ltd spokesman admitted that construction on the demonstration plant could not start before late 2008 or early 2009. And this turns out to be a highly optimistic estimate, again. In September 2009 experts expected that canceling the PWR program will delay the planned commercialization of the PBMR by up to four years to 2020. In the same month, on September 11 (2009), addressing the World Nuclear Association Annual Symposium in London, UK, Jaco Kriek, CEO of the PBMR company, said that South Africa’s PBMR Demonstration Power Plant (DPP) project has been indefinitely postponed due to financing constraints. He said the PBMR company has had to adopt a new business model “to reduce the funding obligations on the South African government.” Now, the company says it will reorganize and fire as many as 75 percent of its 800-strong workforce.

According to Uranium Intelligence Weekly (quoted in Nuclear Monitor 681) the projected costs of the 165MW(e) PBMR Demonstration Power Plant and the building of the pilot fuel plant at Pelindaba has recently doubled to some US$3 billion. These figures include the building of the fuel plant to manufacture the pebbles, as well as the building of demonstration plant, but do not cover the reactor's operations, decommissioning, waste disposal or insurance costs. Other sources (Bloomberg) mention that South Africa has spent US$970m. on the PBMR over the past eleven years. According to the anti-nuclear Pelindaba Working Group, the PBMR has already cost taxpayers over R16 bn (US$1.5 bn).

For the upcoming fiscal period, some US$470,000 (R3.6m.) has been set aside by the South African government, followed by US$490,000 (R3.8m.) for fiscal year 2011/12 and US$520,000 (R4.0m.) for 2012/13.

Earlier, on February 9, the PBMR company announced that Algeria had shown “a keen interest” in South Africa's pebble bed technology, and that a “high-level delegation” from Algeria had visited the country to “pursue the involvement in the field of nuclear, including showing a keen interest in the country's PBMR technology”. According to CEO Jaco Kriek, Algeria’s interest in PBMR technology “opens a real opportunity for two African countries to co-operate on nuclear.” South Africa has a long relationship with Algeria on co-operation in the field of nuclear energy and research. Kriek said that he would therefore very much welcome Algerian Atomic Energy Commission’s involvement in the PBMR Company.

So, despite the very precarious position of his company the CEO keeps on dreaming in finding partners to complete (or at least continue)  the PBMR project..

Sources: Bloomberg, 18 February 2010: “S. Africa Halts Funding to Pebble Bed Nuclear Project”/ Engineering News (S-Africa), 17 February 2010: “State scales back PBMR spending, to end allocations by 2013” / Nuclear Monitor 681, 18 December 2008: “ESKOM cancels PWRs: Major blow to nuclear expansion” / Business News, 9 February 2010: “Algeria eyes pebble-bed” / Independent Online, 18 February 2010: “PBMR company 'running out of money' “

Contact: Pelindaba Working Group, pelindabanonukes@gmailcom

Eskom, South Africa's state-owned utility, has reported a record annual loss and has warned of a funding gap for an expansion program needed to prevent a repeat of the blackouts the country experienced in 2008. The company, which supplies about 95% of South Africa's electricity and more than 60% of Africa's, reported a loss of 9.7 billion rand (US$ 1.25 billion) for the year that ended 31 March. In the previous year, Eskom made a loss of 210 million rand (US$ 27 million).

The utility foresees a funding shortage of some 80 billion rand (US$ 10 billion) for its expansion program aimed at reducing the risk of power shortages. In January 2008, as domestic supply reached its limit, South Africa suffered crippling blackouts and electricity exports to neighbouring Botswana and Zimbabwe were stopped. This led to a wider grid failure affecting Zambia.

In August 2009, Bobby Godsell, chair of the utility, noted, "We need to mobilize greater equity resources to fund the build program. The government has already provided 60 billion rand (US$ 8 billion) in a loan with equity characteristics. Government revenues are likely to be severely constrained in the near future. We need to find other sources of expansion funding, perhaps in the form of a development bond that will enable South Africans to invest in the expansion of our country's energy system."

"The capital costs of our build program have escalated considerably," Godsell added.

"Prior to the recent global economic crisis, construction costs were escalating worldwide and across all industries. The global recession has created new market circumstances."

And the nuclear program?

In early 2007, Eskom's board approved a plan to boost electricity output to 80 GWe by 2025. This included the construction of 20 GWe of new nuclear capacity, which would see the contribution of nuclear energy grow to 25% from the present 5%. The plan for the nuclear new-build program would kick-start with up to 4 GWe of pressurized water reactor (PWR) capacity, to be constructed from about 2010 with commissioning in 2016. Five sites in the Cape Province were under consideration, although the most likely initial site (Nuclear-1) would be that of Koeberg, the site of South Africa's only existing nuclear power plant. The Nuclear-1 project was established after the very ambitious scenario for development and construction of the Pebble Bed Modular Reactor (PBMR) failed to meet even the most modest time schedule.

Having already made "considerable progress" in the process to procure a PWR, Eskoms board of directors decided in December 2008 not to proceed with the project due to ‘the magnitude of the investment’; the companies own financial constraints and the global economic situation. The investment was increasingly impossible to justify, with a plunging rand, global lines of credit frozen, and a new government with potentially different priorities.

On September 11, addressing the World Nuclear Association Annual Symposium in London, UK, Jaco Kriek, CEO of the PBMR company, said that South Africa's pebble bed modular reactor (PBMR) Demonstration Power Plant (DPP) project has been indefinitely postponed due to financing constraints. He said the PBMR company has had to adopt a new business model "to reduce the funding obligations on the South African government."

Sources: World Nuclear News, 28 August 2009 / Nuclear Monitor 681, 16 December 2008: ‘Eskom cancels PWRs; major blow to nuclear expansion’ / World Nuclear News, 11 September 2009
Contact:  CANE, Coalition Against Nuclear Energy South-Africa, Tel: +27-72 628 5131, Email: caneoffice@cane.org.za

South-Africa: PBMR Ltd. in trouble.

 According to a PBMR Ltd press release, the global financial crisis and related impact on funding – particularly on the South African electricity utility Eskom – has prompted the Pebble Bed Modular Reactor company to "consider near-term market opportunities based on customer requirements  to service both the electricity and process heat markets", as they call it. Basically it wil be a shift towards non-power options. One of the considerations is the modification of the design planned for the Demonstration Power Plant project at Koeberg near Cape Town to also service potential customers such as the Next Generation Nuclear Plant (NGNP) project in the US, which is funded by the US Department of Energy, oil sands producers in Canada (to produce the temperature and associated pressure needed to extract bitumen from oil sands) and the South African petro-chemical company Sasol (to either produce process steam and/or hydrogen to upgrade coal products). Another potential application is the use of the PBMR’s waste heat for desalination.

According to Jaco Kriek, CEO of PBMR (Pty) Ltd, discussions are underway with suppliers to put certain contracts on hold "to prevent unnecessary spending", although he emphasises that no contracts have been cancelled. But is is clear that business is not running smoothly (nothing new one can argue). The development of the PBMR is way behind schedule and in December Eskom cancelled the construction of pressurized water reactors (see Nuclear Monitor 681, 18 December 2008).

Press release PBMR Ltd, 5 February 2009

Japan: Nuclear industry rebuked for misleading advertising.

On 25 November 2008 the Japan Advertising Review Organization (JARO)  sent a letter to the Federation of Electric Power Companies of Japan  (FEPCO) regarding a complaint concerning an advertisement placed by  FEPCO in a Japanese magazine in April 2008.

The complaint claimed that the following words in FEPCO's advertisement  were incorrect and inappropriate: "Nuclear power ... is a "clean way of producing electricity", which  does not release CO2 when generating electricity." The complaint pointed out that these words could mislead consumers.

JARO judged that the word "clean" does not fit well with nuclear   energy. It said that many consumers would have misgivings about the  claim that nuclear energy is "clean", on the sole grounds that it does  not emit CO2 during electricity generation, when there is no  accompanying explanation about safety or radioactive waste. JARO  recommended that claims that nuclear energy is "clean", without  adequate explanation of safety and the effect of nuclear energy on the  environment, should not be made in future.

For most people JARO's conclusion is plain common sense, but it is   refreshing to see the nuclear industry rebuked by an advertising watch  dog for misleading advertising. JARO's letter was supposed to be confidential, but it was reported in  the media.

CNIC, 6 February 2009

Asian Development Bank Energy Policy Paper.

The Asian Development Bank will maintain its current policy of non-involvement in the financing of nuclear power generation. That is the conclusion in the Banks's Energy Policy Paper, published in January 2009. ADB writes (page 30/31):  "Nevertheless, in spite of its sustainable and operational benefits, nuclear power development faces a number of barriers, such as public concerns related to nuclear proliferation, waste management, safety issues, high investment costs, long lead times, and commercial acceptability of new technologies. Overcoming these barriers is  difficult and open public debate will be required to convince the public about the benefits of nuclear power. MDBs have traditionally avoided financing nuclear power plants. In the context of the former Soviet Union states, the EBRD¹s current energy policy includes financing safety measures of nuclear plants, decommissioning and environmental rehabilitation, and promoting an efficient nuclear regulatory framework. In view of concerns related to nuclear technology, procurement limitations, proliferation risks, fuel availability, and environmental and safety concerns, ADB will maintain its current policy of non-involvement in the financing of nuclear power generation."

http://www.adb.org/Documents/Policies/Energy-Policy/W-Paper-Energy-Polic...

Pakistan: Khan released from house-arrest.

On February 6, a Pakistani court freed Abdul Qadeer Khan from house arrest, lifting the restrictions imposed on him since 2004 when he publicly confessed to running an illicit nuclear network. Khan, 73, considered in the West as a rogue scientist and a pariah who sold technology to North Korea, Libya and Iran, is revered as a national hero in Pakistan for his role in transforming the country into a nuclear power.

The ruling to set him free seemed as much a political decision as a legal one, intended to shore up support for the government of President Asif Ali Zardari, which has been derided in the Pakistani press as being too close to the U.S. The government has been under intense domestic pressure to free Mr. Khan, and that outweighed the backlash that Mr. Zardari knew the action would cause in Washington. The ruling was accompanied by a secret agreement between Mr. Khan and the civilian government, the contents of which were not disclosed, which may continue to place restrictions on him. It was not entirely clear whether Mr. Khan would be free to leave the country.

The Foreign Ministry said Pakistan had investigated Khan's past proliferation, shared its findings with the IAEA, and put in tight controls to prevent anything similar from happening again. "A. Q. Khan is history." The US State Department condemned the move: “He’s still a proliferation threat. We’re very troubled by this.”

The civilian government had eased the restrictions placed on the scientist in 2004. Right from the time of Khan's confession, the US has been persistently demanding permission to question him on his alleged proliferation activities. Pakistan has been equally consistent in denying this permission.

New York Times, 6 February 2009 / AP, 8 February 2009 / The Hindu, 9 February 2009

ITER could cost twice as much as budgeted.

According to the British newspaper The Guardian, the experimental ITER fusion reactor could cost twice as much as governments had planned for. The project, which absorbs almost half of Britain's energy research budget (!), will test complex machinery needed to make the world's first operational fusion power plants. ITER was originally planned to cost €10bn, but the rising price of raw materials and changes to the initial design are likely to see that bill soar. The warning came as scientists gathered in Finland to unveil the first component of the reactor, which will effectively act as its exhaust pipe. The reactor is currently expected to take nearly 10 years to build and is scheduled to be switched on in 2018.

The Guardian (UK), 29 January 2009

Ukraine to join International Uranium Center.

The Russian government has approved a request by the Rosatom corporation for Ukraine to join the international uranium enrichment project set up by Russia and Kazakhstan. The International Uranium Enrichment Centre would see uranium from member countries enriched at Angarsk in Russia under international supervision. The scheme is not yet finalised, but in theory it would offer member countries assured supplies of nuclear fuel under some sort of arbitration by the International Atomic Energy Agency (IAEA). An additional possibility is that such a scheme would take back highly-radioactive used nuclear fuel from client countries for reprocessing and recycling or for permanent storage.

The concept of an international fuel cycle has come to the fore in recent years partly due to suspicions that Iran's uranium enrichment facilities were once part of an undeclared nuclear weapons program. Countries that agree to abide by the global non-proliferation regime and within which the IAEA is confident nuclear power is only used peacefully would be guaranteed supplies of uranium fuel. The theory is that those countries would never need to develop their own uranium enrichment or reprocessing facilities, which otherwise could potentially be misused for weapons production.

The international uranioum project is only one of the several Multilateral approaches, the US GNEP (Global Nuclear Energy Partnership) and the IAEA Fuel Bank, being two other initiatives.

World Nuclear News, 10 February 2009

Spain: no new reactors. 

On January 21 Spain reaffirmed its policy of not commissioning new nuclear power plants a day after its biggest utility unveiled plans to build them in Britain, while repeating pledges to boost renewables and save energy.  "There will be no new nuclear plants," Spain Industry Minister Miguel Sebastian told journalists when asked to comment on Iberdrola's joint venture with British companies to build nuclear power stations.  Sebastian noted that Spanish energy consumption per head was 20 percent above the European average. "Saving 20 percent would be the equivalent of doubling the number of nuclear power plants. It seems easier and cheaper to me," he said. "Furthermore, it (saving) is immediate, whereas nuclear plants take 15 years. There is no controversy, no waste or security problems, nothing," he added.

Spain's government has said it may extend the working lives of the country's eight ageing nuclear power plants. Operating permits for seven of the plants are up for renewal between this year and 2011, or well within the mandate of Jose Luis Rodriguez Zapatero's Socialist government. Spain's nuclear power plants supply about 7,300 megawatts and wind farms now have the capacity to generate more than 16,000 MW due to a boom in renewable energy, (but in practice provide less).

Reuters, 21 January 2009

New Nuclear madness in Britain.

The UK Nuclear Decommissioning Authority (NDA) has  announced that it expects to nominate land near Sellafield, Wylfa, Oldbury and Bradwell, for  consideration under the Government’s Strategic Siting Assessment (SSA) process to identify sites suitable for nuclear new build. Whilst the NDA is not proposing to develop new nuclear plants itself and will not seek planning permission, it expects to nominate land into the SSA process in order to enhance the value of its land and in turn generate income which will help fund the decommissioning programme.

NDA, 23 January 2009