Uranium trust pits ambitious investors against nuclear power industry

A Canadian investment fund almost singlehandedly launched uranium spot prices into orbit with a buying spree that has put the nuclear power industry on alert.

The spot uranium price for deliveries this month leapt 30.8% over 30 days to $39.75/lb as of 1 p.m. on Sept. 7 — a steep rise for a commodity market that previously saw years of sagging prices, according to data from S&P Global Platts. Market analysts credited Sprott Asset Management LP, a uranium trust formed in July to buy up low-cost uranium on the spot market and hold it for the long-term, for jolting the market with a wave of purchases.

The nuclear power industry, which largely buys fuel on long-term contracts, is not panicking as it can absorb even a one-third increase in price, but the industry is wary that the fund could continue to push up fuel costs.

For Sprott, this is all part of the plan.

"We're just a conduit for investors to express their view, right?" Sprott CEO John Ciampaglia told S&P Global Market Intelligence. "Our job is [to] go out and buy more pounds. If that has a knock-on effect on the price, then I guess indirectly we've got that influence on price discovery."



Big fish, small pond

The thesis Sprott provided to investors was simple: If they were given funding, they would purchase material out of a spot market that was flooded with excess supply following the 2011 nuclear disaster at Fukushima Daiichi in Japan.

Between Sept. 2 and Sept. 7, the trust acquired more than 3 million pounds of uranium on the spot market. As of Sept. 7, the trust held 24 million pounds at a market value of more than US$1 billion.

Sprott's Ciampaglia said the investment outfit learned the power of a single market catalyst during the "meme stock" boom earlier in the year. Retail investors made a coordinated purchase of stock in game seller GameStop and sent the stock price soaring despite no change in the fundamentals of the stock. A silver trust held by Sprott benefited when retail investors moved from specific equities to silver-focused market offerings.

The relatively small size of the uranium market could mean an unpredictable level of explosivity if the investor audience broadened, Ciampaglia said.

"You just can't predict how explosive it could be," Ciampaglia said.

The uranium trust benefited from market conditions improving in nuclear energy, as the world moves toward lower carbon energy sources, said Scott Melbye, executive vice president of U.S.-based miner Uranium Energy Corp. However the "correlation" between the trust's buying activity and the rising price is undeniable, Melbye said.

"Sprott coming in has really been the tipping point. It's been very significant."

Nuclear power is watching

After the Fukushima disaster, nuclear power plant operators experienced lower contracting prices. That trend lasted until the coronavirus pandemic knocked major sources of uranium offline, creating a supply shock that drove up prices and incentivized new investment in the space, though that upward trend calmed when the Sprott uranium trust arrived in July.

Power companies with nuclear reactors said they are not worried about price increases resulting from the trust's buying activity — at least not yet.

The fuel cost associated with nuclear energy is far lower than for coal and natural gas generators, so nuclear plants are "relatively insensitive" to a "bump in the spot price," American Nuclear Society president Steve Nesbit told S&P Global Market Intelligence. For nuclear utilities to feel the pain, prices would need to be an "order of magnitude" larger, even twice as high, Nesbit said.

"It takes a while for it to sink in," Nesbit said.

Utilities are monitoring buying activity by the trust, but "it's nothing that's worrying them at this point," Nima Ashkeboussi, senior director of fuel and radiation safety programs at the Nuclear Energy Institute, said.

"Their views [of Sprott] are still forming. They're watching it very closely," Ashkeboussi said.

Analysts see hard times ahead

Ciampaglia said the fund hoped to drive up the price of uranium, but high nuclear fuel costs in the long run could hurt nuclear power's competitiveness against cheaper forms of renewable power. And the industry already faces a declining market for its product going forward: Nuclear power capacity is expected to shrink by more than 20 GW through 2050, according to the U.S. Energy Information Administration.



The entire global nuclear sector could be constrained from future growth, Morningstar analyst Travis Miller said. While nuclear fuel typically makes up a relatively small percentage of utilities' operational costs, a long-term shift in uranium producers' favor could create an issue for any company looking to expand its nuclear fleet, especially in the face of falling renewable power costs.

If uranium prices continue to rise, that puts nuclear power at a competitive disadvantage to other carbon-free sources of energy, Miller said.

"There's a delicate balance here because in the long-run more supply should lead to lower, more stable prices," Miller added. "But in the short-run, higher prices to bring on that supply is going to be a headwind."

S&P Global Platts and S&P Global Market Intelligence are owned by S&P Global Inc.

Diane Francis: Trudeau's multi-million dollar nuclear deal called out by non-proliferation experts

Scientists fear that the technology used to extract plutonium from spent fuel could be used to make nuclear bombs

Author of the article: Diane Francis
Publishing date: August 13, 2021 

Ottawa has approved and subsidized a project in which a small reactor is run off "recycled" nuclear waste from New Brunswick’s closed Point Lepreau plant. 

PHOTO BY GETTY IMAGES

In May, the Geneva-based International Campaign to Abolish Nuclear Weapons (ICAN) called out Prime Minister Justin Trudeau’s government over a deal he has approved and funded that critics say will undermine the goal of nuclear non-proliferation, according to an article published in the Hill Times and recently republished in the Bulletin of the Atomic Scientists.

The article describes how prominent scientists are concerned about the Government of Canada approving a project, and subsidizing it to the tune of $50.5 million, that’s being developed by a startup called Moltex Energy.

Moltex Energy was selected by NB Power and the Government of New Brunswick to develop its new reactor technology and locate it at the Point Lepreau nuclear plant site by the early 2030s. Moltex is one of several companies that are promoting small, “next generation” nuclear reactors to replace fossil fuels in the production of electricity.

Moltex, a privately owned company that is based in the United Kingdom and has offices in Saint John, N.B., says it will “recycle nuclear waste” from New Brunswick’s closed Point Lepreau nuclear plant for use in its small-scale nuclear reactor. Federal funding and approval was announced on March 18 by Dominic LeBlanc, a New Brunswick MP who serves as minister of intergovernmental affairs.

The scientists dispute the claim that this is “recycling” and are concerned because the technology Moltex wants to use to extract plutonium, a key ingredient in nuclear weapons, from spent fuel could be used by other countries to make nuclear bombs. Decades ago, the U.S. and many of its allies, including Canada, took action to prevent this type of reprocessing from taking place.

“The idea is to use the plutonium as fuel for a new nuclear reactor, still in the design stage. If the project is successful, the entire package could be replicated and sold to other countries if the Government of Canada approves the sale,” reads the article.

On May 25, nine high-level American non-proliferation experts sent an open letter to Trudeau expressing concern that by “backing spent-fuel reprocessing and plutonium extraction, the Government of Canada will undermine the global nuclear weapons non-proliferation regime that Canada has done so much to strengthen.”

The signatories to the letter include senior White House appointees and other government advisers who worked under six U.S. presidents and who hold professorships at the Harvard Kennedy School, Princeton University and other eminent institutions.

The issue of nuclear proliferation dates back to 1974, when Canada got a black eye after India tested its first nuclear weapon using plutonium that was largely extracted using the CIRUS reactor, which was supplied by Canada for peaceful uses. Shortly after, other countries attempted to repurpose plutonium from reactors and were stopped — except for Pakistan, which, like India, succeeded in creating atomic weapons.

The Hill Times pointed out that, “To this day, South Korea is not allowed to extract plutonium from used nuclear fuel on its own territory — a long-lasting political legacy of the 1974 Indian explosion and its aftermath — due to proliferation concerns.”

The letter to Trudeau concluded: “Before Canada makes any further commitments in support of reprocessing, we urge you to convene high-level reviews of both the non-proliferation and environmental implications of Moltex’s reprocessing proposal including international experts. We believe such reviews will find reprocessing to be counterproductive on both fronts.”

The scientists’ letter has not yet been answered by the government. However, Canadians deserve to be fully briefed on all this and its implications. They deserve to know who owns Moltex, what the risks are to non-proliferation and why taxpayers are sinking millions of dollars into a project that’s morally questionable and potentially hazardous.

Read and sign up for Diane Francis’ newsletter on America at dianefrancis.substack.com.

Canada’s nuclear future brightens

Although the Canadian and US nuclear industries have shared origins in World War II, their paths soon diverged.

David Kramer

 PDF

 

Physics Today 74, 1, 23 (2021); https://doi.org/10.1063/PT.3.4653

On a windswept field near the shores of Lake Ontario in mid-November, Canadian politicians and nuclear industry executives gathered to announce plans to build the country’s first new nuclear reactor since the early 1990s. A month earlier US Department of Energy Secretary Dan Brouillette and Romania’s Minister of Economy, Energy, and Business Environment Virgil Popescu signed an $8 billion agreement in Washington, DC, that paves the way for the construction of two new Canadian-origin reactors at a nuclear power plant on the Black Sea. Two Canadian reactors are already located there.

The two events highlight differences between the Canadian nuclear industry and its counterpart in the US. As competitive pressures have forced the closure of nuclear power stations and threaten many others south of the border, Canadians are in the midst of major refurbishments to extend the lives of a dozen reactors; another has already been updated. Six other aging reactors are due to be shut down by 2025, and it’s likely that some new nuclear plants will eventually replace them.

Canada’s 19 operating power reactors all have a markedly different design from the light-water reactors (LWRs) that predominate in the US and around the world. Known as CANDUs (Canadian deuterium uranium), they employ heavy water (deuterium oxide) as the neutron moderator and coolant. Should current plans proceed, however, the next Canadian reactor will be of a new type altogether.

Ontario Power Generation (OPG), the provincial government utility that owns the province’s 18 reactors, is to select one of three competing designs for a single small modular reactor (SMR) to be built at its Darlington Nuclear Generating Station roughly 80 kilometers east of Toronto. GE Hitachi Nuclear Energy, X-Energy, and Terrestrial Energy are finalists in the competition, said Ken Hartwick, OPG’s president and CEO. The target date for startup is 2028.

A rendering of a small modular reactor design from SNC-Lavalin. The heavy-water-moderated reactor would produce 300 MW of electricity.

• PPT
|
• High-resolution

Additional SMR orders from Saskatchewan, New Brunswick, and Alberta will follow, predicted Greg Rickford, Ontario’s minister of energy, northern development, and mines and of indigenous affairs. In a December 2019 memorandum of understanding, the four provinces agreed to cooperate on advancing development and deployment of SMRs.

Nuclear power in Canada has always been centered in Ontario, the most populous and industrialized of the 13 provinces and territories. Roughly 60% of the electricity consumed in the province is from nuclear. The only CANDU outside Ontario supplies about one-third of New Brunswick’s electricity. British Columbia, Manitoba, and Quebec have abundant hydroelectric resources, and Quebec, which exports power, closed its only CANDU in 2012, electing to forgo the expense of refurbishment. Alberta, Saskatchewan, and the maritime provinces are more sparsely populated and rely mainly on fossil fuels.

Heavy and light water

Canada’s nuclear program dates to World War II, when the UK relocated its atomic bomb program from Cambridge University to its North American dominion. In Montreal and later at Chalk River Laboratories, about 180 kilometers upstream of Ottawa, British and Canadian scientists were focused on developing a heavy-water-moderated reactor to produce plutonium for the Manhattan Project. The British had brought along a large quantity of heavy water that had been smuggled out of occupied France. The Zero Energy Experimental Pile (ZEEP) at Chalk River, the first operating nuclear reactor outside the US, was a heavy-water design.

Ultimately, the US nuclear bomb development program chose graphite to be the neutron moderator for the reactors that made the plutonium for the Nagasaki bomb. But Canada’s National Research Experimental (NRX) reactor, the successor to ZEEP, was the basis for the heavy-water plutonium and tritium production reactors at DOE’s Savannah River Site, says historian Robert Bothwell, author of Nucleus: The History of Atomic Energy of Canada Limited (1988).

Some of the R&D in support of Hyman Rickover’s nuclear propulsion program for the US Navy was done at the NRX, although the navy chose light water as the moderator and coolant for submarine reactors. President Jimmy Carter, who was then a navy lieutenant, was assigned to assist the cleanup of a 1952 partial meltdown of the NRX, the world’s first major nuclear accident.

The National Research Universal (NRU) heavy-water research reactor began operating at Chalk River in 1957. In addition to developing fuels for CANDUs and conducting materials research, the NRX and NRU produced medical radioisotopes. At times the NRU supplied more than half the world’s molybdenum-99, the precursor to technetium-99m, the most widely used medical isotope. When it was permanently shut down in 2018, the NRU was the world’s oldest operating nuclear reactor. Two dedicated replacement isotope-production reactors at Chalk River, completed by a public–private partnership, were plagued by design faults and were abandoned in 2008.

The Bruce Nuclear Generating Station on Lake Huron is the largest nuclear power plant in North America. Its eight CANDU reactors produce 30% of Ontario’s electricity. Four of the reactors are in the foreground; the others are visible in the background.

BRUCE POWER

• PPT
|
• High-resolution

Canada never developed nuclear weapons, but Canadian mines and uranium processing facilities played key roles in the Manhattan Project and in the postwar US nuclear arms buildup. In Port Hope, Ontario, a former radium processing plant now owned by Cameco Corp was converted during World War II to refine high-grade uranium from the Belgian Congo. Today it exports uranium hexafluoride to enrichment plants for peaceful purposes only. It also produces uranium dioxide for CANDU fuel.

The Cold War arms race fueled a boom in uranium mining at Elliot Lake in northern Ontario. Joseph Hirshhorn, whose collection of art now populates the Smithsonian museum that bears his name, made much of his fortune from Elliot Lake. When the US Atomic Energy Commission began cutting back on uranium orders in the late 1950s, the boomtown went bust. Canada is today the world’s second-largest exporter of uranium, all of which is now mined in Saskatchewan’s Athabasca River basin, whose ore has a higher grade than Elliot Lake’s.

As partner in the North American Aerospace Defense Command and a NATO member, Canada once fielded US nuclear warheads on surface-to-air missiles and aircraft, says Tim Sayle, assistant professor of history at the University of Toronto. Canada has been free of nuclear weapons since the early 1980s.

Enrichment not required

With encouragement from the government, the US Navy submarine reactor technology was adapted by US utilities for electricity production. All operating commercial reactors in the US are LWRs. But Canada continued to develop its heavy-water technology. In large part, the CANDU design stemmed from Canada’s inability to manufacture large castings for the pressure vessels that encapsulate LWR nuclear fuel assemblies, says Colin Hunt, cochair of the government and regulatory affairs committee of the Canadian Nuclear Society.

The CANDU reactor core consists of a calandria, an unpressurized vessel of heavy water with hundreds of tubes running through it to contain the nuclear fuel. Whereas LWRs must be shut down every 12–18 months to be refueled, CANDUs were designed to allow on-line refueling. The reactors remain operating as fresh fuel bundles are inserted into the tubes and the spent ones are ejected. LWR uranium fuel must be enriched to around 4% in the fissile uranium-235 isotope, but the CANDU burns naturally occurring uranium fuel containing about 0.7% 235U. That feature eliminates the need for costly enrichment plants or services. And the CANDU can burn other fuels, including thorium, plutonium, and even spent fuel from LWRs.

The first CANDU, at Douglas Point on the shores of Lake Huron, operated commercially from 1968 to 1984. Four larger CANDUs came on line at the Pickering Nuclear Generating Station near Toronto in 1971, and four more units were added there in 1983. Six remain in operation. Twelve more CANDUs were built in Ontario, eight at the Bruce Nuclear Generating Station at Douglas Point and the newest four at Darlington. Today, Bruce is the largest nuclear generating station in North America, supplying more than 30% of Ontario’s electricity.

Outside Canada, CANDUs have been installed in Argentina (1), China (2), India (2), Pakistan (1), Romania (2), and South Korea (4). Following India’s 1974 test of a nuclear weapon, Ottawa ended nuclear cooperation with New Delhi. India went on to build more than a dozen reactors of a CANDU-derived design. Canada’s assertive efforts to sell CANDUs to the UK were unsuccessful. Had the UK bought any, Bothwell says, the CANDU likely would have become a joint venture between the two nations, and the technology might have become the world’s dominant reactor model.

An uncertain future

The aging Pickering reactors, which supply about 15% of Ontario’s power, are scheduled to be permanently closed by 2025. It’s an open question what will replace them. The other major power source in Ontario, hydroelectric, has been fully tapped, says Hunt. Coal-fired generation in the province is prohibited by law, and a recently enacted federal carbon tax of Can$30 ($23) per ton of carbon dioxide, rising to Can$50 in two years, should discourage new natural-gas-fired plants.

Although the province’s electricity demand isn’t growing now, it will likely increase as demand for electric vehicles and hydrogen grows, says William Fox, executive vice president for nuclear at SNC-Lavalin, an architect and engineering firm that holds the rights to CANDU technology.

Created during the Manhattan Project, the Chalk River Laboratories north of Ottawa were home to CANDU heavy-water-reactor development and several research reactors. Now known as Canadian Nuclear Laboratories, the facility is operated by a consortium of companies led by SNC-Lavalin for the federal government.

CANADIAN NUCLEAR LABORATORIES

• PPT
|
• High-resolution

At the federal level, the Liberal-led government of Justin Trudeau has begun considering legislation with the aim of reducing Canada’s carbon emissions to zero by 2050. On 30 November the government announced its intention “to launch an SMR Action Plan by the end of 2020 to lay out the next steps to develop and deploy this technology.” It’s a sign that Liberal members of Parliament have recognized that nuclear power is needed if Canada hopes to meet its 2015 Paris Agreement pledge that by 2030 it will have cut greenhouse gas emissions by 30% from their 2005 levels, says John Barrett, a consultant and former Canadian ambassador to the International Atomic Energy Agency.

Increasing wind and solar energy seems an obvious option to meet Ontario’s future needs. But its leaders have soured on renewables since the previous Liberal provincial legislature’s heavy subsidization of wind energy led to enormous increases in electricity rates. From 2010 to 2016, average home electricity costs rose by 32%, despite a 10% decline in average household electricity consumption, according to Ontario’s Financial Accountability Office. The price hikes, which also caused many industrial operations to flee the province, were a major contributor to the Liberals’ historic rout in the 2018 elections. The current Progressive Conservative provincial government tore up the still-outstanding wind turbine construction contracts, says Hunt.

Importing power from neighboring provinces isn’t an option, Hunt says. Purchasing power from electricity-rich Quebec would put Ontario in competition with New England and New York State and drive up electricity rates further. Quebec’s transmission system was built to export power to the US, so new transmission lines would be required to accommodate interprovincial flow, Hunt says. A further complication is that Quebec’s electricity grid is out of phase with the rest of North America’s: The peaks and valleys of its alternating current flow are asynchronous with the rest of the continent’s. As a result, the power imported by Ontario would need to be converted to DC and then converted back to in-phase AC once across the border.

Hunt believes that no more CANDUs will be built in Canada; he sees the future belonging to SMRs. (See Physics Today, December 2018, page 26.) Though SNC-Lavalin has a large SMR design (see the figure on page 23), Fox believes that large reactors will be needed to replace the 2400 MW that Pickering’s CANDUs now supply. Because the entirety of Canada’s nuclear experience with large reactors has been with CANDUs, Fox is confident that the same technology will be chosen if new conventional-size reactors are ordered.

Smaller SMRs could be ideal for providing electricity to remote off-grid communities in the vast Canadian north. The diesel-generated power they use now is expensive, dirty, and vulnerable to cutoffs of fuel supply during severe winter weather. SMRs also would be an attractive option to provide power to remote mining operations and to produce the steam used in extracting oil from Canadian tar sands, Barrett says. Several 300-MW-sized SMRs could meet Saskatchewan’s needs, he notes.

Compared with the US, Canada has made far more progress on the disposition of nuclear waste. The federal Nuclear Waste Management Organization expects to select the location for a geological nuclear waste repository in 2023. Unlike the US, where the now-abandoned Yucca Mountain location was unsuccessfully forced on Nevada, the waste authority invited site proposals from communities; 22 were received. After each was characterized, two Ontario sites were named finalists: one in farmland about 45 kilometers east of Lake Huron and the other in the exposed rock of the Canadian Shield about 246 kilometers northwest of Thunder Bay.

Updated 4 January 2021: Manitoba, Canada, was mistakenly listed as relying mainly on fossil fuels. Most of the province’s energy is hydroelectric.

 01 JANUARY 2021 • page 23

1. © 2021 American Institute of Physics.
   

Anti-nuclear group blasts UK Gov for talks on building new power plant in Wales

24 Sep 2021 

Wylfa Power Station. Picture: Andrew Woodvine (CC BY-SA 2.0)

An anti-nuclear group has blasted the UK Government for having talks on building another large-scale multi-billion pound nuclear power plant in Wales.

Dylan Morgan, Co-ordinator for PAWB, has reacted furiously to the discussions with US reactor manufacturer Westinghouse to build a new facility on Anglesey.

The UK Government say that the move is part of an effort to reduce the UK’s carbon emissions to net zero by 2050, but according to Morgan it isn’t an effective way to “counter climate change”.

He argues that nuclear power is “slow, dangerous and extortionately expensive”.

According to the UK Government, a new nuclear power plant at the decommissioned Wylfa site could become operational in the mid-2030s and generate power for six million homes.

Dylan Morgan said: “We have an immediate crisis now. Building huge reactors at a nuclear power station take at least 15 years.

“For example, EdF are involved in building their EPR at Olkiluoto in Finland. Comstruction started in 2005 with the boast it would be completed by 2009.

“It still hasn’t been completed in 2021. Nuclear power is slow, dangerous and extortionately expensive. It will do nothing to address the current energy crisis, neither will it be effective to counter climate change.

“The UK and Welsh governments should divert resources and support away from wasteful and outdated nuclear power projects towards developing renewable technologies that are much cheaper and can provide faster and more sustainable solutions to the energy crisis and the challenges of climate change.”

‘Rising energy prices’ 

The new Energy Secretary Kwasi Kwarteng is said to be keen on the idea, amid concern about rising energy prices and the fact that nuclear will only provide 8% of the UK’s energy by 2024.

The project is also being promoted by Welsh Secretary Simon Hart.

Projects over 350MW in size are reserved to Westminster and can be pushed through without the Welsh Government’s consent.

UK Government sources have told the Times that there is now “growing backing” for the idea to go ahead.

An attempt to build a nuclear plant at Wylfa with Hitachi collapsed last September.

“If our current situation shows anything it is that we need more stable home grown, low carbon generation in the UK,” the source said. “This is an important project that we’re very keen to try and get off the ground.”

A nuclear power plant at Hinkley Point in Somerset is already in the works, but has caused controversy as mud has been dumped off the coast of Cardiff.

Wylfa 'plan' based on this US nuclear development in Georgia put forward to UK Government

'Exploratory' discussions are underway over the proposals although US project is delayed and massively over-budget


By Owen Hughes

Business correspondent
12:01, 24 SEP 2021

Plant Vogtle in Georgia where two additional reactor units are going into commercial operation in 2022 (Image: Bechtel)


A nuclear sector consortium “has a plan” to build a large nuclear plant at Wylfa - with UK Government saying “exploratory” talks were taking place.

US firm Westinghouse says the Anglesey site is the “perfect location” for a new nuclear site while partner Bechtel, an engineering giant, has a proposal in place.


The development would be based on a nuclear scheme in Georgia in the United States - although that project has been dogged by long delays and doubled in price from the original cost estimate.

Talking at the Welsh Affairs Committee a senior Government official said initial discussions were taking place with consortiums interested in bullding a nuclear plant at Wylfa.

Horizon/Hitachi withdrew from developing the site after failing to reach a deal with UK Government on funding the project.

Barbara Rusinko, President of the Nuclear, Security and Environment Division at Bechtel, said: “It is regarded as the best site in the UK to build a large scale nuclear power station.

“Our team has a plan to facilitate the build on the most advanced nuclear technology today, the Westinghouse AP1000.

“It is capable of delivering clean power to the latest carbon budget commitments by 2035. It can prove transformational for Anglesey.”

She said it “strengthens the trans-Atlantic security partnership” and unlocks the "economic potential that exists on Anglesey and across Welsh communities".

Plans would be based on Plant Vogtle in Georgia where two additional reactor units are going into commercial operation in 2022.

Those units are to be the first major commercial nuclear reactors built from scratch in the United States in the last 30 years.

But the development has been hit by delays and rising costs.

A general view of the Wylfa Nuclear Power Station. 

Photo by Christopher Furlong/Getty Images) (Image: Getty Images)

Vogtle's two additional units were originally scheduled to be ready in 2016 and 2017 while the cost also has gone from $14 billion to a potential $27 billion final price.

Customers in Georgia will pay 11% extra on energy bills to fund the site.

Ms Rusinko said the failure of Wylfa Newydd demonstrated the need for “more Government intervention” in the UK to get these projects across the line.

She said they had developed an approach to leverage backing and said they needed UK Government to “demonstrate commitment” in the spending review.

She said they needed investment in “front end design” that would be funded by the UK Government to “jump start” Wylfa.

David Durham, President of Energy Systems at Westinghouse, said it was the “safest reactor in the world” and designed specifically to deal with “station blackout” where all alternative electric connections are severed, as happened with Fukushima.

He said it was unlikely to ever see nuclear builds that weren’t part of a regulated market backed by state or national governments.

He said one of the reasons nuclear is expensive is that “everything needs to be precise” due to the safety issues.

He said even with Government support they “assumed” substantial risks and weren’t putting all costs and risks on UK Government and British tax and electricity bill payers.

Lindsay Roche, Director of Government affairs at Westinghouse UK, said the “geography and geology” of the area make Wylfa a “perfect site”.

She said it would be a modular build approach with work spread across North Wales and further afield.

This would reduce the number of construction roles based on Anglesey but also ease the pressure on the island’s infrastructure over that build period.

She said UK Government had a chance to be “ahead of the game” on nuclear or rely on international markets and import power.

Ms Roche said there had been “good discussions” with UK Government and they were asking for “modest funding” (tens of millions) to take the first steps forward.

She added: “This is a project that can level up the economy, impact the regional economy of Anglesey, North Wales and North West England.”

Declan Burke, director of nuclear projects and development at the Department of Business, Energy and Industrial Strategy, (BEIS), said the previous offer to Horizon/Hitachi had been a one third equity stake to underwrite financing and providing a strike price for 35 years of £75 (per MWh) - but they could not reach a commercial agreement.

He added that although a very significant offer had been made to Hitachi/Horizon there was a point ministers were “not willing to go beyond despite us all very much wanting that project to work”.

Horizon Nuclear Power signs at Wylfa Newydd 

(Photo by Christopher Furlong/Getty Images) 

He said they remain in regular contact with them as site owners but understood they were “moving into different areas” making it unlikely they would revive their own interest in Wylfa Newydd.

He said the discussions with new developers were so far were “exploratory” so they can learn more about the proposals and how they could be funded.

Responding to a question from Aberconwy MP Robin Miller over potential liability for taxpayers, he said the cost to taxpayers and consumers was “front and centre of our minds" and were part of those exploratory talks with potential developers.

He added: “We absolutely think nuclear would be a very critical part of Net Zero but it does need to work for the taxpayer perspective as well.”

He said they were looking at the Regulated Asset Base model where revenue is made by the investors while construction is taking place due the huge cost and long period of capital investment.

This would come from consumers and/or taxpayers ahead of the plant being completed.

He said calibrating the funding mechanism gives confidence to investors and protects the consumer as well.

Uranium: what the explosion in prices means for the nuclear industry

September 24, 2021

It is a year since Horizon Nuclear Power, a company owned by Hitachi, confirmed it was pulling out of building the £20 billion Wylfa nuclear power plant on Anglesey in north Wales. The Japanese industrial conglomerate cited the failure to reach a funding deal with the UK government over escalating costs, and the government is still in negotiations with other players to try and take the project forward.

Hitachi’s share price duly went up 10%, reflecting investors’ negative sentiment towards building complex, highly regulated large nuclear power plants. With governments reluctant to subsidise nuclear power because of the high costs, particularly since the 2011 Fukushima disaster, the market has undervalued the potential of this technology to tackle the climate emergency by providing abundant and reliable low-carbon electricity.

Uranium prices long reflected this reality. The primary fuel for nuclear plants was sliding for much of the 2010s, with no signs of a major turnaround. Yet since mid-August, prices have surged by around 60% as investors and speculators scramble to snap up the commodity. The price is around US$48 per pound (453g), having been as cheap as US$28.99 on August 16. So what lies behind this rally, and what does it mean for nuclear power?

Uranium price

Trading Economics

The uranium market

The demand for uranium is limited to nuclear power production and medical equipment. Annual global demand is 150 million pounds, with nuclear power plants looking to secure contracts roughly two years ahead of use.

While uranium demand is not immune to economic downturns, it is less exposed than other industrial metals and commodities. The bulk of demand is distributed across some 445 nuclear power plants operating in 32 countries, with supply concentrated in a handful of mines. Kazakhstan is easily the largest producer with over 40% of output, followed by Australia (13%) and Namibia (11%).

Workers in Kazakhstan processing uranium oxide. 

NOT WEARING HAZARD SUITS OR OTHER RADIOACTIVE PPE

Reuters/Alamy

Since most mined uranium is used as fuel by nuclear power plants, its intrinsic value is closely tied to both current demand and future potential from this industry. The market includes not only uranium consumers but also speculators, who buy when they think the price is cheap, potentially bidding up the price. One such long-term speculator is Toronto-based Sprott Physical Uranium Trust, which has bought nearly 6 million pounds (or US$240 million worth) of uranium in recent weeks.
Why investor optimism may be rising

While it is widely believed that nuclear energy should play an integral role in the clean energy transition, the high costs have made it uncompetitive compared with other energy sources. But thanks to sharp rises in energy prices, nuclear’s competitiveness is improving. We are also seeing greater commitment to new nuclear power stations from China and elsewhere. Meanwhile, innovative nuclear technologies such as small modular reactors (SMRs), which are being developed in countries including China, the US, UK and Poland, promise to reduce upfront capital costs.

Combined with recent optimistic releases about nuclear power from the World Nuclear Association and the International Atomic Energy Agency (the IAEA upped its projections for future nuclear-power use for the first time since Fukushima) this is all making investors more bullish about future uranium demand.

The effect on the price has also been multiplied by issues on the supply side. Due to the previously low prices, uranium mines around the world have been mothballed for several years. For example, Cameco, the world’s largest listed uranium company, suspended production at its McArthur River mine in Canada in 2018.

Global supply was further hit by COVID-19, with production falling by 9.2% in 2020 as mining was disrupted. At the same time, since uranium has no direct substitute, and is involved with national security, several countries including China, India and the US have amassed large stockpiles – further limiting available supply.
Hang on tight

When you compare the cost of producing electricity over the lifetime of a power station, the cost of uranium has a much smaller impact on a nuclear plant than the equivalent effect of, say, gas or biomass: it’s 5% compared to around 80% in the others. As such, a big rise in the price of uranium will not massively affect the economics of nuclear power.

Yet there is certainly a risk of turbulence in this market over the months ahead. In 2021, markets for the likes of Gamestop and NFTs have become iconic examples of speculative interest and irrational exuberance – optimism driven by mania rather than a sober evaluation of the economic fundamentals.

The uranium price surge also appears to be catching the attention of transient investors. There are indications that shares in companies and funds (like Sprott) exposed to uranium are becoming meme stocks for the r/WallStreetBets community on Reddit. Irrational exuberance may not have explained the initial surge in uranium prices, but it may mean more volatility to come

‘Sell dogecoin, buy uranium!’ rafapress

We could therefore see a bubble in the uranium market, and don’t be surprised if it is followed by an over-correction to the downside. Because of the growing view that the world will need significantly more uranium for more nuclear power, this will likely incentivise increased mining and the release of existing reserves to the market. In the same way as supply issues have exacerbated the effect of heightened demand on the price, the same thing could happen in the opposite direction when more supply becomes available.

You can think of all this as symptomatic of the current stage in the uranium production cycle: a glut of reserves has suppressed prices too low to justify extensive mining, and this is being followed by a price surge which will incentivise more mining. The current rally may therefore act as a vital step to ensuring the next phase of the nuclear power industry is adequately fuelled.

Amateur traders should be careful not to get caught on the wrong side of this shift. But for a metal with a half life of 700 million years, serious investors can perhaps afford to wait it out.

Authors

Edward Thomas Jones
Lecturer in Economics, Bangor University

Danial Hemmings
Lecturer in Finance, Bangor University

Simon Middleburgh
Reader in Nuclear Materials, Nuclear Futures Institute, Bangor University



Bangor University provides funding as a member of The Conversation UK.

Russell: China goes after low-hanging coal fruit, the real challenge is at home

Reuters | September 23, 2021 

Coal. (Image from Pxhere, CC0)

(The opinions expressed here are those of the author, Clyde Russell, a columnist for Reuters.)


President Xi Jinping’s promise to end China’s financing of overseas coal-fired power plants was broadly welcomed by environmentalists, but the move should be seen as a first step rather than a major effort to mitigate climate change.

The Chinese leader used an address at the United Nations to state his country, the largest emitter of gases associated with climate change, would halt financing of coal-fired projects and boost help to developing countries to switch to cleaner renewable energy.

Given China is the largest financier of such projects, and an earlier commitment from Japan and South Korea to exit coal power projects, the move does call into question the viability of a large chunk of the world’s planned coal-fired plants.

Global Energy Monitor (GEM), a U.S.-based group that tracks coal power globally, told Reuters that 44 coal plants slated for an estimated $50 billion in Chinese financing could be impacted by the decision.

The pro-renewables think tank, Institute for Energy Economics and Financial Analysis (IEEFA), said a review of coal power proposals in countries with significant project pipelines indicates 56% of the total capacity is being supported by China.

Among countries with large Chinese support for coal power projects are Indonesia, where about 54% of the 18 gigawatts (GW) of planned plants have Chinese backing, and Bangladesh, where 88% of about 10 GW are supported by Beijing.

It’s worth noting that several of these planned projects were already in difficulty prior to Xi’s announcement, with high costs relative to competing renewable technologies and battery storage, climate change concerns and domestic opposition to rising air pollution.

A massive rally in seaborne thermal coal prices to near all-time highs, and a similar spike in rival fossil fuel liquefied natural gas (LNG), will also undermine the case for coal-fired projects based on imported supplies, given the ever-present risk of price volatility, especially as the world transitions to cleaner energy.

Thus it is likely Xi’s commitment has sounded the death knell for many outstanding projects around the world because alternative financing outside of direct government support will be hard to find.

China’s own plants key

The question then becomes whether this is enough to make much difference to the outlook for coal-fired power.

If all the planned projects with Chinese backing are cancelled, this would remove about 50 GW from the coal-fired pipeline.

According to GEM data there are 296.66 GW of coal projects in the announced, pre-permitted and permitted phases globally, so the Chinese-financed total amounts to about one-sixth of these. And more than half of them, or about 163 GW, are inside China itself.

Of countries that aren’t reliant on Chinese financing, only India has a significant pipeline of coal plants, with 20.7 GW in the announced, pre-permitted and permitted stages.

What the numbers show then is that if Xi really wanted to make a difference to the pipeline of coal-fired power plants, he has far more to do at home that he has internationally.

China has 96.68 GW of coal-fired generation under construction, more than half the global total, and has 1,047 GW operating, which is almost exactly half of the world’s capacity.

China’s operating coal fleet is also roughly four times bigger than the fleets of either of the next two biggest coal-reliant countries, India with 233 GW and the United States with 232.8 GW.

U.S. coal generation is likely to continue its rapid de-commissioning in coming years, especially considering the decarbonisation commitment of President Joe Biden.

There is also a question over Indian coal-fired power given many of the existing power plants can’t compete economically with renewables. Recent history has shown that coal is the first to exit the system in periods of soft power demand.

Overall, China’s announcement that it will stop funding coal power projects overseas is a positive development in mitigating climate change. The real game-changer, though, would be a commitment to ending its pipeline of domestic coal-fired plants.

(Editing by Tom Hogue)

China energy body urges support for coal, oil firms to build clean power

09/24/2021 

BEIJING (Reuters) - China's National Energy Administration (NEA) on Friday proposed providing support for coal and oil companies to build solar power and other clean energy generation projects with their current resources.

In a draft set of guidelines on deeper reform of the energy business environment, the NEA called for the promotion of integrated natural gas power and renewable energy projects, as well as coordinated development of fossil and renewable energy.

President Xi Jinping this week said China would stop building new coal-fired power stations overseas in Beijing's latest climate pledge, but the fossil fuel still accounts for the bulk of China's domestic energy consumption.

The NEA also advocated improvements in the long-term contract mechanism between energy companies and major energy users in order to ensure stable supply, without specifying what should be done.

The energy regulator said filing procedures for new energy projects should be simplified to promote the low-carbon transition.

"Power supply companies should strengthen power quality management... effectively reduce the time, frequency and impact of power outages," said the NEA.

The draft was released as companies from metal smelters to fertiliser makers have had to reduce production due to power rationing in several Chinese regions.

It is open to public feedback for 30 days.

(Reporting by Min Zhang and Tom Daly; Editing by Hugh Lawson)

'Coal Is Dead': New Global Pact Announced After China's Bold Step

"Consigning coal to history is crucial to avoiding catastrophic climate change."

Seven countries on Friday pledged they would cease building new coal power plants. 

(Photo: Shutterstock)

JULIA CONLEY

September 24, 2021

Just two days after Chinese President Xi Jinping announced the world's largest coal producer would stop funding overseas coal projects, seven countries on Friday pledged they would also cease building new coal power plants—the latest sign one of the world's dirtiest energy sources is on its way out.

"I call on more countries to come forward and sign up to this compact ahead of COP26, and play their part to limit global warming and keep 1.5 degrees alive."
—Alok Sharma, COP26

Chile, Denmark, France, Germany, Montenegro, Sri Lanka, and the U.K. signed the No New Coal agreement at the U.N. High-level Dialogue on Energy in New York, where officials this week aimed to gather more support for the pact at the U.N. Climate Change Conference (COP26) in November.

“Development of new coal-fired power plants must stop this year to achieve net zero emissions by 2050," said Dan Jørgensen, the Danish Minister of Climate, Energy and Utilities, in a statement. "That is why I am thrilled that we stand together with fellow ambitious countries with the aim to end construction of new coal-fired power plants. This energy compact is an important step on the way for a complete phase-out of coal power and consigning coal power to history at COP26. I encourage all governments to join this very important initiative."

According to the International Energy Agency (IEA), all emissions from coal power plants—the world's largest source of carbon emissions—must be eliminated by 2040 in order to keep the heating of the planet below 1.5C.

The No New Coal agreement requires countries to immediately stop approving permits and end new construction of "unabated coal-fired power generation projects by the end of the year," according to Bloomberg.

Noting that the seven countries signed on to the pact following Xi's announcement—which is expected to eliminate 40 gigawatts of new coal power and avoid as much as 235 million tons of carbon emissions—the climate action group 350.org said the agreement is a clear sign that "coal is dead."

"China’s decision is pretty much the end of public financing for coal,” Chris Littlecott, associate director of fossil-fuel transition at climate think tank E3G, told Bloomberg.
The No New Coal agreement comes four years after more than 40 countries signed onto the Powering Past Coal Alliance, which requires a commitment to phase out existing coal operations as soon as 2030 as well as a pledge to halt construction of new plants.

Alok Sharma, a U.K. lawmakers and president of COP26, applauded the countries' "bold leadership to cancel coal through the No New Coal Power Compact, demonstrating the positive impact that countries working closely together can have in generating climate action," noting that transitioning away from coal and towards renewable energy technology has increasingly been shown to be cost-effective as well as vital for the survival of the planet.

"Consigning coal to history is crucial to avoiding catastrophic climate change," said Sharma. "The cost of clean renewable technologies continues to fall, making coal expensive and uncompetitive. I call on more countries to come forward and sign up to this compact ahead of COP26, and play their part to limit global warming and keep 1.5 degrees alive."

The No New Coal initiative, along with China's announcement, has put countries around the world "on notice," Littlecott said.

"Governments can have confidence in committing to no new coal," Littlecott said. "The No New Coal Power Compact provides a space for them to step forward together."

Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.

UN Launches Pledge to Stop Building New Coal Power Plants


Akshat Rathi
Fri, September 24, 2021

UN Launches Pledge to Stop Building New Coal Power Plants

(Bloomberg) -- Seven countries have signed a pledge initiated by the United Nations to stop building new coal power plants, with the aim to gather more signatures before the global climate summit COP26 in Glasgow next month.

The No New Coal agreement is the latest attempt to try and piece together a global phase-out of the dirtiest fossil fuel. UN Secretary General Antonio Guterres wants to end the pipeline of new plants this year, while COP26 President Alok Sharma has said his goal for the summit is to “consign coal to history.” Chile, Denmark, France, Germany, Montenegro, Sri Lanka and the U.K. signed the latest pledge.

“Moving away from coal is not a death knell for industrialization, but rather a much better opportunity for green jobs,” said Damilola Ogunbiyi, chief executive officer of the UN-backed international organization Sustainable Energy for All. That’s “what will drive other countries to join,” she said.

A separate initiative launched in 2017, called the Powering Past Coal Alliance, sets a higher bar. It includes 41 countries that have committed to phasing out existing coal operations as soon as 2030 in many cases, on top of promising not to build new plants. An additional 40 nations outside the alliance don’t have a single coal power plant in the pipeline, according to environmental think tank E3G.

That means more countries were ready to commit to not building new coal plants, but not all were ready to phase out existing operations. The No New Coal pact adds a missing step in the ladder for such nations by allowing them to make an easier pledge in the hope that it will ultimately accelerate the end coal.

In the run up to COP26, a number of such voluntary alliances are being created. Last week, the U.S. and European Union launched the Global Methane Pledge that aims to reduce emissions of the super-warming gas by 30% within a decade. Last month, Denmark and Costa Rica launched the Beyond Oil and Gas Alliance seeks to end the extraction of oil and gas by midcentury.

The patchwork of alliances targeting dirty sources of energy or specific greenhouse gases is a far cry from the systematic, orderly energy transition that the world needs. Rather, it’s an acceptance of the political reality of climate diplomacy that has to accommodate countries’ different stages of development.

Burning coal for electricity generation contributes to about a third of the world’s total carbon-dioxide emissions. With cleaner sources of power, such as solar and wind, becoming cheaper to build and operate, the case for ending coal keeps getting stronger. All emissions from coal power plants should end by 2040 if the world is to keep warming below 1.5 degrees Celsius, according to the International Energy Agency.

That’s a deadline Chile plans to meet. “We have an ambitious phase-out plan for all coal power plants,” said Juan Carlos Jobet Eluchans, the country’s minster of energy.

The No New Coal pact got a boost before its launch, with President Xi Jinping telling the UN general assembly this week that China will stop building coal power plants abroad. He didn’t provide details, but the announcement could mean an end to about 40 gigawatts of new coal power plants. That would avoid as much as 235 million tons of emissions, according to Global Energy Monitor. Xi’s pledge came after similar commitments from the only other remaining major financiers of overseas coal power plants — Japan and South Korea — earlier in the year.

“China’s decision is pretty much the end of public financing for coal,” said Chris Littlecott, associate director of fossil-fuel transition at E3G. “Private investors now face all of the risks of investing in coal on their own.”

The pipeline of new coal power plants has collapsed globally over the past decade. Since 2015, the world has canceled 1,175 GW of coal power plants—about the same size as China’s existing coal fleet, according to E3G—and thus avoided billions of tons of carbon dioxide that would have been dumped annually.

The No New Coal pact is a big step for some signatories. “Sri Lanka has been debating whether to build new coal plants for a few years,” said Christine Shearer of Global Energy Monitor, which tracks coal power plants globally. “If countries like Pakistan and Malaysia join, then we can really start to see the end of new coal plants.”

Still, there won’t be a significant reduction unless China, which is home to more than half of the world’s pipeline of new coal power plants, stops using the fuel. Xi didn’t address the domestic issue in his remarks to the UN.

China’s pledge to kick the coal habit comes at a critical moment for the planet

The devil will be in the details, but ending investments in overseas coal shows Beijing takes the climate crisis seriously

Sam Geall is CEO of China Dialogue and associate fellow at Chatham House

A power station in Hefei, Anhui province, China, in 2011. The country has pledged to stop building new coal-fired power projects abroad. 

Photograph: Jianan Yu/Reuters

Fri 24 Sep 2021

“China will step up support for other developing countries in developing green and low-carbon energy,” said China’s president, Xi Jinping, at the United Nations on Tuesday, “and will not build new coal-fired power projects abroad.”

It was a short, ambiguous and not entirely unexpected sentence, but it came at a critical moment. UN-led climate talks in November at Cop26 in Glasgow will represent the first opportunity since the signing of the 2015 UN Paris agreement for countries to ratchet up the commitments in their pledges, known as nationally determined contributions (NDCs). Countries need to increase their NDC ambitions by five times if the world is to reach the goal of not warming by more than 1.5C above pre-industrial levels. Xi’s announcement, which effectively amounts to the end of international public financing for coal power, seems to match the ambition necessary for this moment.

The pledge speaks to a major fault line in the pre-Cop26 debates. China’s belt and road initiative – the grand plan to enhance trade and connectivity across much of the developing world, creating foreign markets for Chinese industrial overcapacity – was heavily weighted towards high-carbon infrastructure. On the presidential campaign trail last year, Joe Biden made sure to point this out. “China … and their belt and road proposal,” he said, “they’re taking the dirtiest coal in the world mostly out of Mongolia and spreading it all around the world.”

So, what does Xi’s statement mean? The announcement fell on the first anniversary of China’s pledge to make the economy climate neutral by 2060, either by eliminating greenhouse gas emissions entirely or balancing them with carbon removal. He also announced it unilaterally, at the UN general assembly, and thus tied it irrevocably to his personal political legacy. But questions remain: how will this coal phase-out be implemented? What is the fate of coal power projects that are already planned or under construction? What is the scope of the word “build”? Does it include an end to international financing for coal, too? What about Chinese labour or engineering on a domestic project? Does it cover private companies, or only state-owned enterprises and banks?

In the absence of clear answers, we might look to the effect of the 2060 announcement, a year ago. In short: it was huge (Climate Action Tracker found that the pledge alone lowered global warming projections by 0.2–0.3C, the largest single projected change it has recorded), and it did matter. Policies and sectoral roadmaps have been fleshed out in the intervening year. Slogans (“1+N”; “30-60”), which are an important part of Chinese governance, were set. And China’s vice premier, Han Zheng – also in charge of a fearsome central inspection team, with authority to swoop in and censure bodies that step out of line – took the helm of a climate “leaders group” overseeing the net-zero goal.

Progress hasn’t been straightforward: China’s system isn’t smoothly technocratic, and there is a push and pull between core and periphery, incumbent and challenger industries. Things could be moving faster – particularly when it comes to phasing out China’s domestic coal fleet. China’s 14th Five Year Plan, for 2021-2025, will reduce the carbon and energy emitted per unit of economic output, and increase the share of renewables in its energy mix, but it does not commit the country to a carbon emissions or coal usage cap, as domestic environmentalists had hoped for. Its 2030 carbon “peak year” is relatively easy to achieve, and while China is known to “under-promise and over-deliver” on climate goals, the lack of ambition in domestic decarbonisation in the near term is a signal that the country is hedging things, in part due to an uncertain economic environment.

Yet this week’s announcement suggests, importantly, that China is willing to stay the course on climate diplomacy, despite rising geopolitical tensions, particularly with the US. The two economies together account for about 40% of global emissions and were, before the election of Donald Trump, a linchpin of climate cooperation. While foreign policy observers like to characterise China’s engagement on climate change as a “point of leverage” to force concessions in other arenas, Tuesday’s pledge shows that it is willing to move forward with decarbonisation unilaterally. In other words, high tensions with the US, which have continued with the Biden administration, do not appear to have weakened Beijing’s climate resolve.

China’s climate action ultimately reflect its self-interest. Political elites are aware of the country’s vulnerabilities with regards to global heating – its impacts on food and water security, and in chronic environmental stresses and natural disasters, as seen tragically this summer in Zhengzhou. Policymakers also recognise that climate action aligns with domestic economic priorities. China’s low-carbon industrial policy has positioned the country as the leading global supplier of clean technologies; the country has strengthened its energy security through electrification and decarbonisation; and it has used the shift away from polluting industries to move the economy “up the value chain” – towards innovation and services.

In the process, it has scored a soft-power win on the world stage, and at relatively low cost: the short-term pain may have industry insiders grumbling, but the economics of energy point towards renewables. China, at this point, is the last man standing on coal finance. Since 2013, China, Japan and South Korea provided 95% of that financing, with China the largest share, supplying $50bn, accounting for about 56GW of installed capacity. Japan and South Korea withdrew their support at the US-hosted Climate Leaders Summit in April.

So, perhaps it is low-hanging fruit, and China could start reaching higher up the tree. But we shouldn’t forget the other part of Xi’s sentence – his focus on supplying “green and low-carbon energy” for developing nations. This certainly won’t go unnoticed in the global south, where support from Europe and North America has been left wanting in recent years. The $100bn in climate finance promised for developing countries by rich nations at Paris has not materialised; access to vaccines continues, rightly, to be a point of tension; and countries are being implored to do more to address “loss and damage” – measures, such as compensation, required when vulnerable nations face devastating climate risks and adaptation is no longer possible.

There’s a lot of that fruit going unpicked. Another positive consequence of Xi’s announcement, therefore, would be if rich countries took it as a stimulus to start properly demonstrating their solidarity with the people in the world most badly affected by the climate crisis.