TWiN 55 - Will Russia Benefit from the Ignalina-2 Shutdown?

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British Investment in Nuclear Energy Pays Off Big - Again!

Back in 2003 British Energy was in trouble and the UK government stepped in to bail them out with a 1.5 billion BSP aid package. The utility's troubles were compounded by financial deregulation of the electric energy market and low gas prices. British Energy's nuclear plants were having a tough time competing on the market with gas burning power plants.

But what a difference five years makes. The UK government is considering the sale of its 35% stake in the company, and bidding is expected to go as high as 11 billion BSP, about seven times their original investment, a 730% return on investment in 4.5 years! Share prices of their stock have risen similarly from under 20 pence per share to over 700 pence over the same period.

There are at least 6 companies in the bidding: EDF and Suez of France, EoN and RWE of Germany, Vattenfall of Sweden, Iberdrola of Spain; and Britain’s Centrica.

Why the interest? The sale includes properties where existing nuclear plant are located, and those are prime locations for new nuclear plants that will built under the UK's plan to expand nuclear energy's role in meeting energy demands and reducing greenhouse gas emissions. Owners like EDF will have an advantage in getting their respective reactor technologies built.

Nuclear Plants Continue to Operate Safely Through 5.2 Magnitude Earthquake

On April 18^th an earthquake with a magnitude of 5.2 on the Richter scale rocked the Midwestern USA . While the quake was centered in southern IL, it was easily felt by people as far away as Indianapolis and Detroit. Nuclear plant in the area entered their respective emergency plans as a precaution and conducted the necessary inspections. Not a single plant encountered any difficulty whatsoever. While a few units were shutdown for refueling, most were running at the time and continued to run after the event.

This earthquake was considerable less intense than the one that struck Japan last year. The Richter scale is a logarithmic scale, so each increase in one number means ten times the ground acceleration. The earthquake that struck Japan's Kashiwasaka nuclear plant last year measured 6.8 .

Will New Jersey Get In the Game?

It seems like every week we hear of another utility announcing they are exploring the possibility of building new nuclear units, even in states where the political climate is decidedly anti-nuclear. New Jersey is the latest; on one hand they are opposing a license extension for the Oyster Creek pant, and on the other Governor Corzine released a draft energy policy that includes a new look at nuclear plant licensing, siting, and financing. It's all part of an initiative to meet the state's booming energy demands while complying to commitments to reduce greenhouse gas emissions.

The Governor wrote in the plan, "A business as usual energy policy risks enormous economic and environmental consequences. In contrast, an energy policy that focuses on producing and using energy as wisely as possible greatly reduces these consequences and positions us to be a strong competitor in the global economy."

PSE&G, the owner of the Salem Hope Creek nuclear plant in southern New Jersey, said they are reviewing the possibility of adding a new nuclear unit at that three-unit site.

Anti-nuclear environmentalists criticized the plan because they said it does not place enough emphasis on wind and solar energy.

Russia to Power Lithuania When Ignalina-2 Shuts Down

This week Russia announced plans to build a 2.3 GW nuclear plant in Kaliningrad, and offered 49% percent of the plant's output to foreign investors.

This is an interesting decision because Kaliningrad is a Russian enclave on the Baltic sea that is geographically 200 miles separate from the rest of Russia. There were fewer than half a million inhabitants there, and typically 500,000 customers would use only a little more than half a gigawatt. This means Rosatom plans to use about 1/4 of the plant's output locally, market 1/4 of the output themselves, and share 1/2 the output with co-owners of the plant. The most likely customers would be Poland and Lithuania which surround Kaliningrad on three sides. The forth side is the Baltic sea.

Poland is very dependent on Russian gas for energy, and have been in talks with other countries to partner in the construction of a nuclear plant. Lithuania has one nuclear reactor, Ignalina-2, that produces 70% of their electricity. However, this plant is being forced to shut down in 2009 by an agreement with the EU. This will put Lithuania at the mercy of Russia for gas and oil. Ignalina-2 is the only RBMK reactor still operating outside of Russia.

So it seems Russia is strategically placing this new unit where its output can be used when Ignalina-2 shuts down.