(December 24, 2004) The European Renewable Energies Federation (EREF) has initiated action before the European Commission in Brussels calling for an investigation into whether a planned project to construct the first nuclear power plant in Europe for decades has been made possible only with extensive state aid in violation of EU competition and other rules and regulations.
(620.5659) Dr. Fouquet - The action is aimed at the proposed construction of a nuclear power facility in Finland by the Teollissuuden Voima OY (TVO) group claimed to cost a fixed price of EUR 3.2 billion (US$4.1 billion) and involves a broad coalition of public and private financial and industrial participants, clients and supporters. (See also WISE/NIRS Nuclear Monitor 600.5563 "Financing New Nuclear Power Plants" and 612-613.5620 "Finnish Nuclear Madness")
In an action filed with the EU Commission on 14 December, EREF, a non-profit organisation based in Brussels which represents small independent producers of renewable energy and other support groups throughout the EU, called attention to what it regards as extensive non-compliance with EU law.
The letter filed by EREF called attention to possible infractions of EU state aid, export credits, procurement, safety and other regulations and requests the European Commission to investigate. The document lists German, French, Swedish and Finnish entities in probable violation of EU laws and the governments in those countries for having authorised such illegal transactions.
The widespread and complex transactions involve the Finnish Power Company, a Franco-German industrial enterprise and public and private financial or export credit guarantee institutions in both countries and probably Sweden. Specifically cited are TVO, AREVA, Framatome-ANP, Siemens, Bayerische Landesbank (German Public Bank), COFACE French Export Agency) and SEK (Swedish Export Agency). The Swedish involvement is especially noteworthy since Swedish governments and parliament in the past decades and to date, as well as Germany, have decided to follow a policy of phasing out nuclear energy.
It also underlines that, contrary to EU law, such incidents of state aids in the form of low interest loans, export credit and other advantages are not reported in advance to the EU authorities for examination nor in connection with the authorisation procedure according to Article 41 Euratom Treaty.
The EREF complaint to the EU Commission charges "serious and orchestrated concertation and action" aiming "to reduce economic risks related to the projects...to a level which is unheard of in any power plant deal or any energy supply since liberalisation of the energy market in 1996." Without the numerous acts of assistance to the project, the complaint continues, "which have to be seen in the overall context of discrimination and distortion of the European energy market, this project could not have happened at the guaranteed purchase price and TVO could not sell the future electricity at the envisaged and already subscribed low electricity price."
The complaint by the renewable energy industry concludes that "structured energy distortions by the involvement of state authorities," in this project, "undermine any level playing field and render access to the electricity market on the ground of fair market conditions for any other electricity supplier impossible, creating respectively maintaining a distorted market." It reasons that the proposed price for the project's electricity would amount to dumping.
It calls on the EU Commission authorities for competition, internal market and energy to open an internal investigation despite the fact that the previous Commissioner for Energy had publicly referred to the project positively.
The action is aimed simultaneously at challenging perceived infractions to European and other rules and regulations that, if carried out, would provide unfair and uncompetitive advantage to a project and energy source that would otherwise not be competitive or economically viable. Despite the claims of its supporters and beneficiaries, these unfair and illegal advantages conferred on the project a large number of sometimes hidden privileges unavailable to renewable and other competing energy sources and projects.
The development could be regarded as a crucial test of whether nuclear power is a viable energy source in the future without massive aid and benefits that are not available to other energy sources and which so distort the objective of a liberalised, open and fair European energy market that it calls the entire system into question.
The main support schemes questioned as state aid in this complaint are:
- A syndicated loan:
Bayerische Landesbank (BLB) gave, in 2003 or early 2004, a EUR 1.95 billion (US$2.5 billion) syndicated loan (more than 60 % of the whole fixed price) with interest of just 2.6% to the Finnish company TVO for the purchase of the Framatome ANP 1600 MWh EPR (European Pressurised water Reactor) at fixed price of EUR 3.2 billion (US$4.1 billion). The transaction in question is a syndicated revolving credit of EUR 1.95 billion with two tranches maturing in 2009 and 2011 respectively given to TVO by Bayerische Landesbank for purchase of this fixed price turn-key contract. The other banks involved are Handelsbanken, Nordea, BNP Paribas and JP Morgan.
- A generous export credit guarantee
The French Government budget via COFACE (French Export Credit agency) gave over EUR 610 million to AREVA, the French public parent company of Framatome/ANP, paid from budget reserved for non marketable risks and designed for deals in countries with high political and economic instability
- A generous financial support
By SEK from Sweden to the TVO project, which has up to now never been publicly detailed or specified by the Swedish Authorities but mentioned in the annual 2003 report of SEK
- Price dumping
The FRAMATOME ANP tender offer with the above fixed price constitutes price dumping thus distorts the market. It is evident that real costs will be much higher than EUR 3.2 billion. Already mandatory supplementary security demands by the Finnish nuclear authorities will increase costs substantially. Increased material costs such as for steel will also add to the burden. The International Energy Agency (IEA) had already in 2003 questioned the economic viability of this project. IEA emphasised that Olkiluoto 3 (the Finnish plant) will be "the first atomic reactor ever built in a deregulated market, which can cause unforeseen problems". The report also stressed that all over the world atomic energy projects have exceeded the calculations planned and they have not been able to keep to the planned building schedules. [1]
- A special transaction between TVO and Finnish communal authorities to long term obligation to purchase this electricity at a specific price violates, in EREF's view, EC public procurement rules.
For EREF it is evident that Finland was chosen as a necessary test ground for a new push towards nuclear power at all cost, especially at a dumped fixed price offer by Framatome ANP to TVO in Finland.
Dr. Dörte Fouquet of the Kuhbier sprl law firm, Brussels, presented the complaint on EREF's behalf.
Contact: for further enquiries contact Dr. Fouquet at fouquet@kuhbier.com
Tel: +49.I7l.8352573 or +32.2.6724367 (office)
Turkey to get three EPRs?!
Despite the fact that the European Pressurized water Reactor is an untried an untested reactor design yet to be made into a prototype, Turkey's Ministry of Energy has reportedly briefed journalists that the country will seek to build not one but three EPRs. Although, there has been no official confirmation of the deal as yet, Turkey is believed to have been offered a special deal on price - just as with Finland.
Associate Professor Dr. Tanay Sidki Uyar, President of EUROSOLAR Turkey, Vice-President of World Wind Energy Association, board member of Black Sea NGO Network and head of the energy section at Marmara University told the WISE/NIRS Nuclear Monitor that Turkey did not need nuclear power. According to the professor, Turkey's solar, wind, small hydro, geothermal and biomass potential is such that it could provide up to four times the existing inefficiently used energy demand.
Turkish NGOs have expressed horror at the reports of their government importing nuclear disaster to their country and have quickly reactivated the Platform Against Nuclear Power to engage the public and secure their involvement in the fight against this new nuclear threat.
It is thought that the Turkish Prime Minister made the deal with Paris on a visit in July. Turkey has already bought 36 Airbus aircraft from Paris and the additional purchase of three nuclear reactors is alleged to have won Turkey France's support in its efforts to gain entry into the European Union.
Prof. Dr. Uyar by email, 22 December 2004; Réseau "Sortir du nucléaire" by email, 17 December 2004
An Appreciation: Ted Taylor: Scientist, Man of Conscience: 1925-2004
On 28 October, Dr. Theodore B. Taylor died of coronary artery disease complications. He was 79 and had lived in Wellsville, New York. He will be greatly missed by those who were privileged to have known him.
Dr. Taylor was first known as the brilliant young theoretical physicist at Los Alamos National Laboratory who conceived of, and designed, small, efficient atomic bombs. In addition to designing nuclear arms for use as battlefield weapons, he co-developed the TRIGA research reactors still operating at universities. Following the Soviet Union's launch of Sputnik 1, Dr. Taylor directed Project Orion, to develop a space vehicle powered by nuclear devices for peaceful space exploration. The Limited Test Ban Treaty of 1963, however, prohibited the essential testing for the project. His transformation from nuclear weapons enthusiast to outspoken nuclear energy critic accelerated in following years.
He came to understand that his "suitcase bombs" were changing the nature of the Cold War. International fears were that the US and USSR might use their powerful missile-delivered weapons of true mass destruction, devastating vast areas, initiating Nuclear Winter. Taylor later said, "The real driving force in the nuclear arms race is the weaponeers," observing that they had only to present glowing expectations for every new weapon to obtain approval and funding. Dr. Taylor's development of compact portable bombs created a different kind of nuclear threat: the dangers of nuclear proliferation. He distinguished between hazards of active and "latent" proliferation, the latter inherent in the entire nuclear production system. He warned that the fuel chain, from mining to waste isolation, for military and "peaceful" purposes, held endless possibilities for penetration of safeguards and theft of bomb materials. He also realized that thefts of fissile materials and construction of small "home-made" atomic bombs posed an ever-increasing threat of uncontrollable proliferation: future criminals and ideologically-driven terrorists would find small-scale crude devices - "dirty bombs" - effective and irresistible.
In 1965, Ted Taylor received, among many honors, the prestigious Ernest Orlando Lawrence award for his "Outstanding contributions to the design of nuclear weapons" and "role in development of TRIGA research reactors." He served in the Defense Department and as Deputy Director of the Defense Nuclear Agency. But soon thereafter he became an outspoken, and knowledgeable, critic: a critic condemning his own creations. From his intrigue with the potential for good that he thought atomic energy held, he became deeply concerned about explosive growth of both weapons and commercial applications of the atom. He concluded that his country "is prepared...to launch nuclear weapons that would kill millions of innocent bystanders," adding, "...this is... mass murder that cannot be justified under any conditions."
He worked successfully with local and national groups to prevent new, unlined soil trenches for so-called "low-level" radioactive targeted for Western New York and around the country in the late 1980's and 1990's.
A quiet, mild-mannered man, he continued to advise fellow scientists, presidents, and the public on risks of future nuclear terrorism, on the vulnerabilities of nuclear power plants, and on the kinds of nuclear safeguards nations would need in the future. He formed his own consulting firms, analyzing the consequences of global warming and the impending decline in availability of fossil fuels, and became an ardent proponent of the necessity to develop reliance on alternative energy sources.
The writer John McPhee profiled Ted Taylor in his acclaimed study, The Curve of Binding Energy: A Journey into the Awesome and Alarming World of Theodore B. Taylor, first published in The New Yorker magazine. Dr. Taylor's many publications included The Restoration of the Earth (with C.C. Humpstone, 1973); Nuclear Theft: Risks and Safeguards" (with Mason Willrich, 1974); and Nuclear Proliferation Motivations, Capabilities and Strategies for Control (with T. Greenwood and H.A. Feiveson, 1977).
In the mid-1980s, on a frigid day in Washington near the White House, a group of anti-nuclear activists gathered to support a fast for peace by a fellow scientist. At the margin of the crowd stood Dr. Taylor, a sombre expression of infinite sadness on his face. He said he feared President Reagan would reject any arms control agreement in his upcoming meeting with Secretary Gorbachev. Few people on earth understood so well the importance of nuclear control and a non-proliferation treaty. Late in his life, he told a colleague, "I am searching for the truth as long as I can."
NIRS