http://www.somdnews.com/stories/12102010/rectop132428_32375.shtml
Michele Kearney's Nuclear Wire - Major Energy and Environmental News and Commentary affecting the Nuclear Industry. Nuclear Activities
Showing posts with label Constellation Energy. Show all posts
Showing posts with label Constellation Energy. Show all posts
Friday, December 10, 2010
EDF seeks U.S. partner French-owned Unistar says its not under foreign control
Though they are searching for a U.S. partner to help build a third reactor at the Calvert Cliffs Nuclear Power Plant in Lusby, executives of foreign-owned Unistar Nuclear Energy made their case Wednesday that they do not need one in order to comply with federal law, which prohibits foreign ownership or control of U.S. nuclear facilities. More at:
http://www.somdnews.com/stories/12102010/rectop132428_32375.shtml
http://www.somdnews.com/stories/12102010/rectop132428_32375.shtml
Monday, December 6, 2010
UniStar, NRC to focus on foreign ownership Rules ban non-U.S. control over nuclear plant safety
UniStar officials plan to meet Wednesday with federal regulators to hash out what could be a stumbling block for the company's plans to build a third reactor at the Calvert Cliffs Nuclear Power Plant: foreign ownership.
Nuclear Regulatory Commission rules "prohibit foreign individuals or entities from controlling safety-related activities at a U.S. nuclear power plant," NRC spokesman Neil Sheehan said. "In other words, a U.S. company, or companies, must retain control over safety-related decisions at U.S. nuclear power plants."
Specifically, the regulation states that "any person who is a citizen, national, or agent of a foreign country, or any corporation, or other entity which the commission knows or has reason to believe is owned, controlled, or dominated by an alien, a foreign corporation or a foreign government, shall be ineligible to apply for and obtain a license," Sheehan cited.
To comply, Eléctricité de France, which acquired Constellation Energy's share of the reactor project this fall, would need to organize UniStar, its U.S. nuclear venture, so that it allows a U.S. company to maintain control of safety-related activities. More at:
http://www.gazette.net/stories/12032010/businew201504_32545.php
Nuclear Regulatory Commission rules "prohibit foreign individuals or entities from controlling safety-related activities at a U.S. nuclear power plant," NRC spokesman Neil Sheehan said. "In other words, a U.S. company, or companies, must retain control over safety-related decisions at U.S. nuclear power plants."
Specifically, the regulation states that "any person who is a citizen, national, or agent of a foreign country, or any corporation, or other entity which the commission knows or has reason to believe is owned, controlled, or dominated by an alien, a foreign corporation or a foreign government, shall be ineligible to apply for and obtain a license," Sheehan cited.
To comply, Eléctricité de France, which acquired Constellation Energy's share of the reactor project this fall, would need to organize UniStar, its U.S. nuclear venture, so that it allows a U.S. company to maintain control of safety-related activities. More at:
http://www.gazette.net/stories/12032010/businew201504_32545.php
Monday, November 15, 2010
EDF Reactor Design Unlikely To Succeed
EDF Reactor Design Unlikely To Succeed
by Staff Writers Washington DC (SPX) Nov 15, 2010 Even if it is propped up with extensive government subsidies or full cost-recovery from ratepayers, the "Evolutionary Power Reactor" (EPR) - which the French government-controlled utility, Electricite de France (EDF) plans to deliver for the troubled Calvert Cliffs-3 project and other sites in the United States - is "in crisis" to such a severe extent that it is likely to be an economic failure, according to a new report released by University of Greenwich Professor of Energy Studies Stephen Thomas. The Thomas report findings have special resonance in the U.S. given EDF's attempt to salvage the Calvert Cliffs-3 nuclear reactor project, which is considered a leading candidate for U.S. loan guarantees backed by American taxpayers.
In addition to Calvert Cliffs-3 in Maryland, the EPR was selected as the reactor design in the U.S. for Bell Bend in Pennsylvania, Nine Mile Point in New York and Callaway in Missouri (latter two applications currently suspended).
Commenting on the new report, Professor Thomas said: "From a business point of view, the right course for EDF and Areva seems clear. They must cut their losses and abandon the EPR now. In the short-term this will require some painful write-offs, for example, of investments in the UK and the USA, but in the long-term, the losses will be much greater if they continue to try to make the EPR work.
"Areva's main business is its reactor servicing and fuel activities and these would be little affected by the abandonment of the EPR. EDF already has too much nuclear generating capacity in France, so not ordering more reactors will save it from unnecessary capital expenditure at a time when it acknowledges its debts are too high."
As for recent moves by EDF in the U.S. market, the Thomas report notes: "While the political wrangling about how much Congress will be prepared to allow the US DOE to offer in loan guarantees, the deteriorating prospective economics for new nuclear reactors and the economic risk they pose to their owners may mean that relatively few loan guarantees are granted.
"The projects most likely to go ahead are those with the 'belt and braces' of Federal loan guarantees and a state regulatory body that commits to allowing the utility to recover its costs from consumers. Calvert Cliffs and Bell Bend would be exposed to the PJM electricity market and therefore could expect no support from the state regulator. If the Calvert Cliffs project does collapse and an existing project, such as Bell Bend cannot be brought in to replace it, it is hard to see how the EPR could survive in the USA."
The Thomas report draws the following major conclusions:
+ Construction has "gone dramatically wrong" at both of the sites in Europe where the EPR is currently being built. As Thomas notes: "The two sites in Europe where EPR is under construction, Olkiluoto and Flamanville, have gone dramatically wrong from the start of construction. It might have been argued that the problems at Olkiluoto were due to the lack of experience of the utility and the inexperience of Areva NP in carrying out the architect engineering. However, the fact that EDF, the most experienced nuclear utility in the world seems to be doing no better at Flamanville suggests the main problems are more related to the build-ability of the design itself than to specific issues at Olkiluoto."
+ The price at which the EPR is being offered is so high that all contests in which the EPR has been bid have either been abandoned (South Africa and Canada) or the contract has gone to a much lower bid from a competitor (UAE). In the report, Thomas explains: "As early as 1995 and again in 1997, there were concerns about the cost of the EPR then expected to be US$2000/kW but when other vendors began to claim they could build plants for US$1000/kW, [Areva] seems to have felt obliged to follow suit. While it did not claim US$1000/kW was possible, it did claim reactors could be built for less than US$1500/kW in 1998 and 2001, less than a quarter of the prices it is now offering a decade later. At US$6000/kW or more, it seems unlikely that EPR will be affordable except where huge public subsidies are offered and/or there is a strong likelihood of full cost recovery from consumers, no matter what the cost is."
+ Potential markets such as the USA, UK and Italy all look problematic. Reactor orders, if placed at all, will be much later than expected. The Thomas report explains: "As the reality of these high costs hits home, it is likely that even markets in which government support for new nuclear orders has been strongest, such as the USA and UK, will find it difficult to support the costs."
+ The process of obtaining safety approval in France, UK and the USA is incomplete and, even if successful, the features needed to achieve regulatory approval may add significantly to costs. The Thomas report points out: "The intuitively plausible notion that a new generation of nuclear reactors, starting without a blank sheet of paper could easily come up with a more rational and cheaper, yet safer design of reactor has been shown to be an illusion by the lengthy and still incomplete process of gaining safety approval. The Finnish and French authorities' decision to allow construction to start before full generic approval had been given looks particularly ill-judged."
+ Professor Thomas said: "From a political point of view, France has invested so much political and financial capital in being the world leader in nuclear technology, such a decision to abandon the design will be politically too painful until it becomes unavoidable. However, for the governments of countries like the USA and the UK, which have invested little political capital in the French nuclear dream, the sensible course is clear: stop all investment of public money in the doomed EPR technology."
Professor Thomas is the author of "Areva and EDF: Business Prospects and Risks in Nuclear Energy" (March 2009) and the co-author of "The Financial Crisis and Nuclear Power" (February 2009). He has been a researcher in energy policy for more than 25 years. Professor Thomas writes particularly on economics and policy towards nuclear power, liberalization and privatization of the electricity and gas industries and trade policy on network energy industries. He is a member of the editorial boards of: Energy Policy; Utility Policy; Energy and Environment; and International Journal of Regulation and Governance.http://www.nuclearpowerdaily.com/reports/EDF_Reactor_Design_Unlikely_To_Succeed_999.html
 The Calvert Cliffs-3 nuclear facility. |
In addition to Calvert Cliffs-3 in Maryland, the EPR was selected as the reactor design in the U.S. for Bell Bend in Pennsylvania, Nine Mile Point in New York and Callaway in Missouri (latter two applications currently suspended).
Commenting on the new report, Professor Thomas said: "From a business point of view, the right course for EDF and Areva seems clear. They must cut their losses and abandon the EPR now. In the short-term this will require some painful write-offs, for example, of investments in the UK and the USA, but in the long-term, the losses will be much greater if they continue to try to make the EPR work.
"Areva's main business is its reactor servicing and fuel activities and these would be little affected by the abandonment of the EPR. EDF already has too much nuclear generating capacity in France, so not ordering more reactors will save it from unnecessary capital expenditure at a time when it acknowledges its debts are too high."
As for recent moves by EDF in the U.S. market, the Thomas report notes: "While the political wrangling about how much Congress will be prepared to allow the US DOE to offer in loan guarantees, the deteriorating prospective economics for new nuclear reactors and the economic risk they pose to their owners may mean that relatively few loan guarantees are granted.
"The projects most likely to go ahead are those with the 'belt and braces' of Federal loan guarantees and a state regulatory body that commits to allowing the utility to recover its costs from consumers. Calvert Cliffs and Bell Bend would be exposed to the PJM electricity market and therefore could expect no support from the state regulator. If the Calvert Cliffs project does collapse and an existing project, such as Bell Bend cannot be brought in to replace it, it is hard to see how the EPR could survive in the USA."
The Thomas report draws the following major conclusions:
+ Construction has "gone dramatically wrong" at both of the sites in Europe where the EPR is currently being built. As Thomas notes: "The two sites in Europe where EPR is under construction, Olkiluoto and Flamanville, have gone dramatically wrong from the start of construction. It might have been argued that the problems at Olkiluoto were due to the lack of experience of the utility and the inexperience of Areva NP in carrying out the architect engineering. However, the fact that EDF, the most experienced nuclear utility in the world seems to be doing no better at Flamanville suggests the main problems are more related to the build-ability of the design itself than to specific issues at Olkiluoto."
+ The price at which the EPR is being offered is so high that all contests in which the EPR has been bid have either been abandoned (South Africa and Canada) or the contract has gone to a much lower bid from a competitor (UAE). In the report, Thomas explains: "As early as 1995 and again in 1997, there were concerns about the cost of the EPR then expected to be US$2000/kW but when other vendors began to claim they could build plants for US$1000/kW, [Areva] seems to have felt obliged to follow suit. While it did not claim US$1000/kW was possible, it did claim reactors could be built for less than US$1500/kW in 1998 and 2001, less than a quarter of the prices it is now offering a decade later. At US$6000/kW or more, it seems unlikely that EPR will be affordable except where huge public subsidies are offered and/or there is a strong likelihood of full cost recovery from consumers, no matter what the cost is."
+ Potential markets such as the USA, UK and Italy all look problematic. Reactor orders, if placed at all, will be much later than expected. The Thomas report explains: "As the reality of these high costs hits home, it is likely that even markets in which government support for new nuclear orders has been strongest, such as the USA and UK, will find it difficult to support the costs."
+ The process of obtaining safety approval in France, UK and the USA is incomplete and, even if successful, the features needed to achieve regulatory approval may add significantly to costs. The Thomas report points out: "The intuitively plausible notion that a new generation of nuclear reactors, starting without a blank sheet of paper could easily come up with a more rational and cheaper, yet safer design of reactor has been shown to be an illusion by the lengthy and still incomplete process of gaining safety approval. The Finnish and French authorities' decision to allow construction to start before full generic approval had been given looks particularly ill-judged."
+ Professor Thomas said: "From a political point of view, France has invested so much political and financial capital in being the world leader in nuclear technology, such a decision to abandon the design will be politically too painful until it becomes unavoidable. However, for the governments of countries like the USA and the UK, which have invested little political capital in the French nuclear dream, the sensible course is clear: stop all investment of public money in the doomed EPR technology."
Professor Thomas is the author of "Areva and EDF: Business Prospects and Risks in Nuclear Energy" (March 2009) and the co-author of "The Financial Crisis and Nuclear Power" (February 2009). He has been a researcher in energy policy for more than 25 years. Professor Thomas writes particularly on economics and policy towards nuclear power, liberalization and privatization of the electricity and gas industries and trade policy on network energy industries. He is a member of the editorial boards of: Energy Policy; Utility Policy; Energy and Environment; and International Journal of Regulation and Governance.http://www.nuclearpowerdaily.com/reports/EDF_Reactor_Design_Unlikely_To_Succeed_999.html
Friday, November 5, 2010
Constellation Energy closes Unistar deal with EDF Baltimore company no longer in new nuclear business
A deal to transfer Constellation Energy Group's stake in a nuclear development company to its French partner, EDF Group, closed Wednesday, according to documents filed Thursday with the Securities and Exchange Commission.
Last month, Constellation agreed to sell its 50 percent stake in Unistar Nuclear Energy to EDF for $140 million, giving EDF sole ownership of the joint venture and its plans to develop a third unit at Calvert Cliffs in Southern Maryland.
The deal called for EDF to transfer 3.5 million shares it owns, valued around $110 million, to Constellation and give up its seat on the Constellation board. EDF designee Samuel Minzberg has resigned. More at:
http://www.baltimoresun.com/business/bs-bz-constellation-edf-deal-closes-20101104,0,5438442.story
Last month, Constellation agreed to sell its 50 percent stake in Unistar Nuclear Energy to EDF for $140 million, giving EDF sole ownership of the joint venture and its plans to develop a third unit at Calvert Cliffs in Southern Maryland.
The deal called for EDF to transfer 3.5 million shares it owns, valued around $110 million, to Constellation and give up its seat on the Constellation board. EDF designee Samuel Minzberg has resigned. More at:
http://www.baltimoresun.com/business/bs-bz-constellation-edf-deal-closes-20101104,0,5438442.story
Exelon may bid on Vermont nuclear plant
Constellation, Exelon among potential bidders for Vt. plant
Constellation Energy Group, Exelon and NextEra Energy may bid for Entergy's Vermont Yankee nuclear plant, analyst Brian Chin said. Entergy said it was considering selling the plant, months after state lawmakers agreed to its 2012 shutdown. "We will aggressively negotiate with buyers for extension of employment to all current employees as a condition of any sale," Entergy said. Crain's Chicago Business/Reutershttp://www.chicagobusiness.com/article/20101104/NEWS11/101109909/exelon-may-bid-on-vermont-nuclear-plant
Constellation Energy Group, Exelon and NextEra Energy may bid for Entergy's Vermont Yankee nuclear plant, analyst Brian Chin said. Entergy said it was considering selling the plant, months after state lawmakers agreed to its 2012 shutdown. "We will aggressively negotiate with buyers for extension of employment to all current employees as a condition of any sale," Entergy said. Crain's Chicago Business/Reutershttp://www.chicagobusiness.com/article/20101104/NEWS11/101109909/exelon-may-bid-on-vermont-nuclear-plant
Thursday, October 28, 2010
EDF wants to revive loan guarantee process French utility focusing on next steps, including talking with DOE about loan guarantee process
EDF Group indicated Wednesday that the French energy company hopes to renew efforts to secure a federal loan guarantee to help finance the construction of a proposed third nuclear reactor at Calvert Cliffs in Southern Maryland.
This latest development comes after EDF and Baltimore's Constellation Energy Group agreed to a $250 million cash and stock settlement that gives EDF full ownership of their Unistar nuclear development company, which includes the Calvert Cliffs project.
The deal, reached late Tuesday, ends their joint venture and helps mend a relationship that had been strained since Constellation abandoned negotiations this month with Obama administration officials over the federal loan guarantee for the $9.6 billion project.
"The loan guarantee process is an essential step for anyone who wants to build new nuclear in the U.S. market," an EDF representative said. "Now that EDF is the sole owner of Unistar, EDF will be focused on next steps and will, of course, be talking with the [Department of Energy] about the process moving forward."
http://www.baltimoresun.com/business/bs-bz-constellation-edf-calvert-cliff20101027,0,186420.story
This latest development comes after EDF and Baltimore's Constellation Energy Group agreed to a $250 million cash and stock settlement that gives EDF full ownership of their Unistar nuclear development company, which includes the Calvert Cliffs project.
The deal, reached late Tuesday, ends their joint venture and helps mend a relationship that had been strained since Constellation abandoned negotiations this month with Obama administration officials over the federal loan guarantee for the $9.6 billion project.
"The loan guarantee process is an essential step for anyone who wants to build new nuclear in the U.S. market," an EDF representative said. "Now that EDF is the sole owner of Unistar, EDF will be focused on next steps and will, of course, be talking with the [Department of Energy] about the process moving forward."
http://www.baltimoresun.com/business/bs-bz-constellation-edf-calvert-cliff20101027,0,186420.story
Wednesday, October 27, 2010
Click here to find out more! EDF and Constellation announce agreement on planned nuclear reactor in Maryland
Image via WikipediaUnder the deal announced late Tuesday, EDF will acquire Baltimore-based Constellation's 50 percent ownership in the joint venture known as UniStar for $140 million.In addition to sites for Calvert Cliffs 3 and a potential fourth reactor in Maryland, Constellation will transfer to UniStar potential new nuclear sites at Nine Mile Point and R.E. Ginna in New York. More at:
http://www.latimes.com/business/nationworld/wire/sns-ap-us-edf-constellation,0,789311.story
Tuesday, October 26, 2010
Nuclear society president-elect says loan guarantee changes are needed
The president-elect of the American Nuclear Society said the US
Department of Energy's loan guarantee program needs changes if it is to
increase the number of nuclear power plants in the country.
The current program "is in need of reform," Eric Loewen said Monday at a
Nuclear Energy Insider-sponsored conference in Charlotte, North Carolina,
citing Constellation Energy's withdrawal earlier this month from consideration
for a loan guarantee for a planned reactor project in Maryland.
The government's offer of a $7.5 billion loan guarantee with an attached
fee of $880 million shows the program needs revisions, Loewen said.
"The Office of Management and Budget has set terms and conditions [that]
may destroy the project's economics and prevent the project from going
forward," he said. More at:http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Nuclear/8107310
Monday, October 18, 2010
* Nuclear power in America Constellation's cancellation America’s nuclear renaissance is mighty slow in coming
Feds must fix loan-guarantee program to accelerate nuclear revival
The White House Office of Management and Budget's "ridiculous formulaic approach" doomed Constellation Energy's plan to expand the Calvert Cliffs nuclear plant in Maryland, according to The Economist, citing the Nuclear Energy Institute. Unless the federal government fixes its loan-guarantee program, it is unlikely that new nuclear plants will qualify in states without regulated energy markets, The Economist argues. The Economist
The White House Office of Management and Budget's "ridiculous formulaic approach" doomed Constellation Energy's plan to expand the Calvert Cliffs nuclear plant in Maryland, according to The Economist, citing the Nuclear Energy Institute. Unless the federal government fixes its loan-guarantee program, it is unlikely that new nuclear plants will qualify in states without regulated energy markets, The Economist argues. The Economist
Constellation asks $1 for stake in nuclear plant
Constellation: EDF can buy stake in Md. nuclear project for $1
Constellation Energy Group is prepared to sell its share of the Calvert Cliffs nuclear project to Electricite de France for $1, said Michael Wallace, chief operating officer of Constellation. The company said it would request $117 million in reimbursement costs for the Maryland project. "Market forces have worked against us," including weak natural gas prices and escalating construction expenses, Wallace added. Bloomberg Businessweek/The Associated Press
Constellation Energy Group is prepared to sell its share of the Calvert Cliffs nuclear project to Electricite de France for $1, said Michael Wallace, chief operating officer of Constellation. The company said it would request $117 million in reimbursement costs for the Maryland project. "Market forces have worked against us," including weak natural gas prices and escalating construction expenses, Wallace added. Bloomberg Businessweek/The Associated Press
Friday, October 15, 2010
More to Constellation Pullout Than Fiery Letter Indicates
By Nancy E. Roth, Managing Editor
Reliable industry sources have told FCW that the high credit subsidy fee Constellation Energy criticized in a scalding letter to the U.S. Department of Energy last Friday by no means represents all of the company’s motives in withdrawing from discussions of a loan guarantee in support of its Calvert Cliffs new-build project.
More at:
http://fuelcycle.blogspot.com/2010/10/more-to-constellation-pullout-than.html
Reliable industry sources have told FCW that the high credit subsidy fee Constellation Energy criticized in a scalding letter to the U.S. Department of Energy last Friday by no means represents all of the company’s motives in withdrawing from discussions of a loan guarantee in support of its Calvert Cliffs new-build project.
More at:
http://fuelcycle.blogspot.com/2010/10/more-to-constellation-pullout-than.html
Thursday, October 14, 2010
EDF, Constellation Ties Worsen Over $2 Billion Plant Option
EDF seeks to purchase Constellation's stake in U.S. nuclear venture
Electricite de France has offered to acquire the shares that Constellation Energy Group holds in their joint U.S. nuclear power venture. EDF also said it is prepared to proceed with the construction of a third reactor at the Calvert Cliffs facility in Maryland on its own. Bloomberg (10/14) , Bloomberg Businessweek/The Associated Press
Electricite de France has offered to acquire the shares that Constellation Energy Group holds in their joint U.S. nuclear power venture. EDF also said it is prepared to proceed with the construction of a third reactor at the Calvert Cliffs facility in Maryland on its own. Bloomberg
Wednesday, October 13, 2010
O'Malley, Other Officials Work to Save Nuclear Reactor Project
Md. governor seeks to revive Constellation's nuclear project
Maryland Gov. Martin O'Malley held discussions with Electricite de France executives in an effort to salvage plans to build a third reactor at Constellation Energy's Calvert Cliffs Nuclear Power Plant, said Shaun Adamec, a spokesman for the governor. Constellation last week informed the Department of Energy that it cannot proceed with its bid for a $7.5 billion federal loan guarantee for the project because the proposed terms and conditions were unworkable. O'Malley was "very surprised and disappointed at Constellation pulling out of what was almost universally perceived as a near-complete process," Adamec said. Southern Maryland Online/Capital News Service (Maryland)
http://www.somd.com/news/headlines/2010/12596.shtml
Maryland Gov. Martin O'Malley held discussions with Electricite de France executives in an effort to salvage plans to build a third reactor at Constellation Energy's Calvert Cliffs Nuclear Power Plant, said Shaun Adamec, a spokesman for the governor. Constellation last week informed the Department of Energy that it cannot proceed with its bid for a $7.5 billion federal loan guarantee for the project because the proposed terms and conditions were unworkable. O'Malley was "very surprised and disappointed at Constellation pulling out of what was almost universally perceived as a near-complete process," Adamec said. Southern Maryland Online/Capital News Service (Maryland)
http://www.somd.com/news/headlines/2010/12596.shtml
Constellation Nuclear-Loan Pullout Tests Obama Resolve to Revive Industry
A U.S. loan-guarantee program is testing how much risk the Obama administration is willing to take to revive the nuclear-power industry.
Constellation Energy Group Inc. said last week it was pulling out of talks on a $7.5 billion loan guarantee to build a reactor at its Calvert Cliffs facility in Maryland. The estimated $880 million the company would have to pay the Treasury Department was “shockingly high,” Chief Operating Officer Michael Wallace said in an Oct. 8 letter to the Energy Department.
The administration offered terms no better than Constellation could get from private investors, said Christine Tezak, a senior energy and environment analyst for Robert W. Baird & Co., a Milwaukee-based brokerage.
“The fact that there seems to be a focus that these projects be very low in terms of financial risk seems counterproductive,” Tezak said in an interview yesterday.
The Energy Department has authority to provide $18.5 billion in guarantees to nuclear-power producers, serving effectively as a co-signer to help utilities get financing. The only award so far was to Southern Co. of Atlanta and its partners, which are getting an estimated $8.3 billion in federal backing for a project in Georgia. Southern hasn’t disclosed an estimate of the cost for its federal guarantee. More at:
http://www.bloomberg.com/news/2010-10-12/constellation-nuclear-loan-guarantee-pullout-tests-obama-s-taste-for-risk.html
Constellation Energy Group Inc. said last week it was pulling out of talks on a $7.5 billion loan guarantee to build a reactor at its Calvert Cliffs facility in Maryland. The estimated $880 million the company would have to pay the Treasury Department was “shockingly high,” Chief Operating Officer Michael Wallace said in an Oct. 8 letter to the Energy Department.
The administration offered terms no better than Constellation could get from private investors, said Christine Tezak, a senior energy and environment analyst for Robert W. Baird & Co., a Milwaukee-based brokerage.
“The fact that there seems to be a focus that these projects be very low in terms of financial risk seems counterproductive,” Tezak said in an interview yesterday.
The Energy Department has authority to provide $18.5 billion in guarantees to nuclear-power producers, serving effectively as a co-signer to help utilities get financing. The only award so far was to Southern Co. of Atlanta and its partners, which are getting an estimated $8.3 billion in federal backing for a project in Georgia. Southern hasn’t disclosed an estimate of the cost for its federal guarantee. More at:
http://www.bloomberg.com/news/2010-10-12/constellation-nuclear-loan-guarantee-pullout-tests-obama-s-taste-for-risk.html
Tuesday, October 12, 2010
Bingaman: Collapse of nuke plant deal shows need for ‘green bank’
Sen. Bingaman seeks federal "green bank" for low-carbon projects
Constellation Energy's decision to abandon an expansion plan for its Calvert Cliffs nuclear plant in Maryland underscores the weaknesses in the federal loan-guarantee program for clean energy, said Sen. Jeff Bingaman, D-N.M. The company said that it chose to shelve the project rather than agree to onerous conditions set by the Office of Management and Budget on a $7.5 billion federal loan guarantee. To help improve the loan-guarantee program, Bingaman is calling for the formation of a federal "green bank" that would offer financing services for low-carbon projects. The Hill/E2 Wire blog 
Constellation Energy's decision to abandon an expansion plan for its Calvert Cliffs nuclear plant in Maryland underscores the weaknesses in the federal loan-guarantee program for clean energy, said Sen. Jeff Bingaman, D-N.M. The company said that it chose to shelve the project rather than agree to onerous conditions set by the Office of Management and Budget on a $7.5 billion federal loan guarantee. To help improve the loan-guarantee program, Bingaman is calling for the formation of a federal "green bank" that would offer financing services for low-carbon projects. The Hill/E2 Wire blog
Monday, October 11, 2010
Fertel: Federal loan-guarantee program in "serious need of reform"
Nuclear Energy Institute President and CEO Marvin Fertel said that the federal loan-guarantee program from clean-energy projects needs to undergo some serious changes if it is to be be effective. The statement came after Constellation Energy would not go forward with an expansion of its Calvert Cliffs nuclear plant in Maryland because of the proposed terms of the federal loan guarantee. "For the nuclear energy industry, one of the most significant challenges involves accurately determining the credit cost of the loan guarantees," said Fertel. Read more
EdF charges Constellation pulls out of US reactor project
EdF charges Constellation pulls out of US reactor project
by Staff Writers Paris (AFP) Oct 9, 2010 French electricity generator EDF said Saturday it was shocked and disappointed that Constellation Energy has decided to pull out of a project to build a nuclear power plant in the US state of Maryland. "EDF is extremely disappointed and shocked to learn that Constellation has unilaterally decided to withdraw from the Calvert Cliffs 3 project," the company said in a statement.
Earlier, Constellation Energy had said it was unable to obtain a workable US federal loan guarantee for their joint venture, Unistar, to build the third generation reactor.
EDF said they had been "at the finish line" in the loan guarantee process and that Constellation had withdrawn "in spite of our repeated efforts to substantially decrease their exposure and risk to the project."
Constellation Energy said the federal loan guarantee application had not been withdrawn, but that its cost as calculated by the US government's Office of Management and Budget was "unreasonably burdensome and would create unacceptable risks and costs for our company."
No decisions have been made regarding the future of Calvert Cliffs 3, Constellation Energy added.
EDF charged, however, that Constellation was well aware of the consequences of its actions for the future of Calvert Cliffs 3, which it called a project of "monumental importance to Maryland" that would create 4,000 new jobs.
EDF, in which the French state holds an 85-percent stake, added it "remains committed to pursuing new nuclear in the U.S."
The French company has ambitions to build four third-generation European Pressurised Reactors (EPR) in the United States.
Analysts said Thursday that EDF's managers had expressed readiness to look for new US partners if its partnership with Constellation Energy collapsed.
 |
Earlier, Constellation Energy had said it was unable to obtain a workable US federal loan guarantee for their joint venture, Unistar, to build the third generation reactor.
EDF said they had been "at the finish line" in the loan guarantee process and that Constellation had withdrawn "in spite of our repeated efforts to substantially decrease their exposure and risk to the project."
Constellation Energy said the federal loan guarantee application had not been withdrawn, but that its cost as calculated by the US government's Office of Management and Budget was "unreasonably burdensome and would create unacceptable risks and costs for our company."
No decisions have been made regarding the future of Calvert Cliffs 3, Constellation Energy added.
EDF charged, however, that Constellation was well aware of the consequences of its actions for the future of Calvert Cliffs 3, which it called a project of "monumental importance to Maryland" that would create 4,000 new jobs.
EDF, in which the French state holds an 85-percent stake, added it "remains committed to pursuing new nuclear in the U.S."
The French company has ambitions to build four third-generation European Pressurised Reactors (EPR) in the United States.
Analysts said Thursday that EDF's managers had expressed readiness to look for new US partners if its partnership with Constellation Energy collapsed.
Sunday, October 10, 2010
Constellation Energy Decision Underscores Need to Revamp Loan Guarantee Program for Clean Energy Projects
Constellation Energy Decision Underscores Need to Revamp Loan Guarantee Program for Clean Energy Projects
Washington, D.C.—The following is a statement by Marvin S. Fertel, president and chief executive officer at the Nuclear Energy Institute, on the announcement by Constellation Energy that it cannot move forward with the loan guarantee process regarding UniStar Nuclear Energy's Calvert Cliffs 3 loan guarantee application because the proposed terms and conditions are unworkable.“Constellation Energy’s action is further recognition that the federal government’s loan guarantee program for clean energy sources is in serious need of reform. Absent changes advocated broadly by the low-carbon energy sector, the loan guarantee program approved by Congress in 2005 faces significant challenges that will limit its effectiveness. For the nuclear energy industry, one of the most significant challenges involves accurately determining the credit cost of the loan guarantees.
“Borrowers receiving loan guarantees for nuclear energy projects are expected to pay the cost associated with those guarantees, but the formula used by the Energy Department and Office of Management and Budget (OMB) to determine this cost is seriously flawed. This fault will continue to hamper both nuclear energy and renewable energy project development—exactly the opposite intention of Congress when it passed the 2005 law.
“In today’s economy, there are challenges associated with financing large-scale energy projects. Nonetheless, these facilities are essential if our nation is to meet our goals for clean energy and future economic development, as evidenced by the bipartisan support of Congress and national labor and business organizations for Calvert Cliffs 3 and other nuclear power plant projects.
“Clearly, the loan guarantee methodology used by the Executive Branch inflates the credit subsidy cost well beyond the level required to compensate the federal government for the risk taken in providing the loan guarantee. The Calvert Cliffs 3 project was quoted an unrealistically high credit subsidy cost, which ignored the project’s strong credit metrics and the robust lender protections built into the transaction.
“The formula used for all clean energy projects eligible for loan guarantees limits the estimate of recovery rate to 55 percent, significantly lower than the recovery estimate in the credit assessment of the Calvert Cliffs project by an independent rating agency. The 55-percent recovery rate is an arbitrary number, and bears no relationship to recovery rates observed over several decades for regulated electric utility debt or project finance debt.
“Consistent with the Federal Credit Reform Act, NEI believes that the most accurate and equitable process for calculating credit subsidy costs is a detailed, project-specific assessment. The current approach—which relies on standard assumptions applied to all technologies, with limited project-specific flexibility—cannot produce accurate results, and will not support the development of clean energy technologies in such a manner that the risk to the federal government is fully offset by fees paid by the borrower.
“It is vitally important that credit costs be calculated accurately. If current practices continue, DOE and OMB will continue to produce inflated credit costs. Project sponsors, in turn, will abandon otherwise creditworthy energy projects, and the nation will forego the clean energy and thousands of well-paying jobs represented by these facilities. As I said in testimony on this issue before the Senate Energy and Natural Resources Committee in September, there must be drastic changes in the method for calculating credit fees for nuclear and renewable energy projects. Only with these changes can the loan guarantee program operate efficiently and effectively for all clean energy technologies that are eligible.”
To read testimony from Sept. 23 by Marvin S. Fertel before the Senate Energy and Natural Resources Committee on the federal government’s loan guarantee program, visit http://www.nei.org/publicpolicy/congressionaltestimony/september-23-2010.
Monday, September 27, 2010
Blog Post: Bloomberg: Constellation, EDF in Negotiations to Save Nuclear Venture
Electricite de France SA and Constellation Energy Group Inc. are in talks to avoid the collapse of their U.S. nuclear venture, Bloomberg News reported on Friday, citing two people with knowledge of the discussions.
The Baltimore-based Constellation is due by December to decide whether or not to exercise a put option to sell non-nuclear plants to EDF for up to $2 billion -- a move that EDF would view as likely to jeopardize their relationship and a venture to develop new nuclear projects.
The talks began in the past two to three weeks and the companies expect to come to an agreement within the next month, one of the people told Bloomberg.
Constellation spokesman Larry McDonnell declined to comment on the put option with Europe's biggest utility, while Carole Trivi, an EDF spokeswoman, also declined to comment.
Full story at http://www.bloomberg.com/news/2010-09-24/edf-constellation-are-said-to-be-in-talks-on-saving-u-s-nuclear-venture.html
The Baltimore-based Constellation is due by December to decide whether or not to exercise a put option to sell non-nuclear plants to EDF for up to $2 billion -- a move that EDF would view as likely to jeopardize their relationship and a venture to develop new nuclear projects.
The talks began in the past two to three weeks and the companies expect to come to an agreement within the next month, one of the people told Bloomberg.
Constellation spokesman Larry McDonnell declined to comment on the put option with Europe's biggest utility, while Carole Trivi, an EDF spokeswoman, also declined to comment.
Full story at http://www.bloomberg.com/news/2010-09-24/edf-constellation-are-said-to-be-in-talks-on-saving-u-s-nuclear-venture.html
Nuclear training facility opened Will provide training for technicians
Md. college opens training center for nuclear technicians
The College of Southern Maryland has opened its Center for Nuclear Energy Training, a two-year program that will award associate degrees to graduates who qualify as nuclear technicians. Constellation Energy Nuclear Group, which runs the Calvert Cliffs facility in Maryland, financed the program. The curriculum will "ultimately provide the expertise needed to achieve employment in an industry that leads to jobs paying good wages and keeps jobs from being outsourced," said Wilson Parran, president of the Calvert County Board of County Commissioners. Southern Maryland Newspapers Online
The College of Southern Maryland has opened its Center for Nuclear Energy Training, a two-year program that will award associate degrees to graduates who qualify as nuclear technicians. Constellation Energy Nuclear Group, which runs the Calvert Cliffs facility in Maryland, financed the program. The curriculum will "ultimately provide the expertise needed to achieve employment in an industry that leads to jobs paying good wages and keeps jobs from being outsourced," said Wilson Parran, president of the Calvert County Board of County Commissioners. Southern Maryland Newspapers Online
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