After Fukushima: AREVA and the United States – Nuclear Option – or

*In a recent flurry of nuclear criticism, the United States and AREVA have gone on the offensive, declaring a nuclear future, and criticizing Japan and Germany for recent decisions and comments regarding nuclear free energy policies.*

The move will result in higher electricity costs in Germany, with consequences for industry, said Lauvergeon.

It’s hard to see how they will replace the energy, Anne Lauvergeon

<http://topics.bloomberg.com/anne-lauvergeon/>, former chief executive officer of state-run Areva SA, the world’s biggest maker of nuclear equipment, said on BFM Radio.

There’s a sensitivity, a passion about this issue that is unique in Germany, Lauvergeon said. This was a totally political decision, even if polls do show that it was supported by public opinion.

Japanese State Foreign Secretary Chiaki Takahashi said Wednesday a senior U.S. official called for an explanation about Japan’s future energy policy, following Prime Minister Naoto Kan’s recent remarks that the country should aim for a nuclear-free society.

After talks with Thomas Nides, deputy secretary of state for management and resources at the State Department, Takahashi told reporters that the U.S. official asked what Japan plans to do in its energy policy in the near term and long term.

The U.S. official urged Japan to join negotiations for a U.S.-led Trans-Pacific Partnership free trade accord at an early date, but Washington understands Japan has delayed its decision on whether to join the talks in the wake of the March 11 disaster.

Jacques Besnainou, chief executive of the U.S. arm of nuclear giant Areva SA (CEI.FR, ARVCY), said that the world must embrace nuclear power and advocated the continuation of U.S. federal loan guarantees for new nuclear power plants.

To those who think nuclear is dead, I do not agree at all, said Besnainou, speaking at the Columbia University Energy Symposium in New York on Friday. He said that there is no alternative in the U.S., Japan, or in European countries if nuclear power plants are phased out and new ones are not approved.

Nuclear is the cheapest power source, Besnainou said, adding that this is so even if one includes both the cost of building a new plant and then retiring it. Although building a plant might cost between $5 billion and $7 billion, Besnainou said that it then becomes a cash machine.

Whatever our emotions, the facts are stubborn, he said in his speech. But because of the high upfront cost of nuclear, Besnainou said that the U.S. must continue funding federal loan guarantees, which ensure that such projects can get cheap debt.

TEPCO, AREVA, United States = A ________ Waiting To Happen

In what now seems like a completely bizarre scenario, there have been plans in the United States since 2008 for TEPCO, the Japanese utility to be a joint venture partner in expanding MOX fuel nuclear power expansion in Texas. This was to be the first project in the United States to utilize Advanced Boiling Water Reactor technology.

The plan by Nuclear Innovation North America, an 88/12 joint venture of NRG Energy and Tokyo-based Toshiba, is to add two 1,350-MW advanced boiling water reactors at the South Texas nuclear project in Matagorda County, Texas.

Prior to March 2011, by bringing TEPCO in to the expansion project the expected result was safer systems and more efficient processes. After the disaster, the United States did not immediately cut TEPCO out of the situation, but a few months later quietly admitted it was unlikely that TEPCO would be involved in the future.

However, TEPCO is not the only heavily scrutinized international nuclear organization with ties to the Matagorda County Project, and aspirations for other nuclear projects in the United States.

The American energy and electricity market is a strategic market for the AREVA group. It is destined to grow substantially and is also a standard bearer, as energy decisions made by the United States can influence decisions made by other countries and customers.

AREVA’s strong position in the United States is long-standing. The group is currently the leader in the U.S. market for nuclear products and services (ahead of historical leaders such as General Electric, Westinghouse and USEC), not only in terms of sales revenue, which has tripled in 5 years, but also in terms of number of employees. This is the result of a deliberately aggressive strategy.

AREVA intends to strengthen its positions in the enrichment market, specifically through the construction of a uranium enrichment plant on American soil.

In December 2010, the U.S. Nuclear Regulatory Commission (NRC) issued a Final Safety Evaluation Report (FSER) for review of the application to possess and use radioactive material at the Mixed Oxide (MOX) Fuel Fabrication Facility (MFFF) under construction at the Department of Energy’s Savannah River Site near Aiken, SC.

With the issuance of this report, the NRC is formally acknowledging that AREVA’s proven technology which has been in use for nearly 30 years meets U.S. regulatory requirements. This is a significant licensing milestone for the project, said David Jones, Senior Vice President, Back-end Business Group, at AREVA Inc.

The MFFF will be a major component in the United States’ program to dispose of surplus weapon-grade plutonium. The facility will take surplus weapon-grade plutonium, remove impurities, and then mix it with uranium oxide to form MOX fuel pellets for reactor fuel assemblies to be used in U.S. nuclear power plants.

The facility is expected to begin operations in 2016 and is being built by Shaw AREVA MOX Services, LLC, which is comprised of AREVA and Shaw Environmental & Infrastructure, Inc., a wholly owned subsidiary of The Shaw Group.

AREVA’s Track Record in Japan

On July 11th, AREVA the French nuclear organization released a controversial press statement regarding its decontamination system in place at Fukushima Daiichi. While workers at Fukushima claim that AREVA is not disclosing information required to help understand the instruction manuals, which are written in two different languages. (French and Italian)

AREVA is the only company with a presence in each industrial activity linked to nuclear energy, from mining, to dismantling. The French state owns 91 percent <http://www.bloomberg.com/apps/quote?ticker=CEI:FP> of Areva, and EDF owns a 2.5 percent stake. Multiple scandals and lackluster performance has led to the sacking of top officers at the international nuclear organization.

AREVA has been forced to respond to rising global skepticism of its operations and systems, most recently amplified by the repeated failure of its water decontamination system in use at Fukushima Daiichi. Others have also criticized the organization for only looking to promote the sales of its nuclear technologies, and potential collusion with international governments to downplay the severity of news reports coming out of Japan.

Recently, a few observers have also noted the abnormal response made by the nuclear organization to aid efforts in Japan. On March 16, 2011, AREVA announced it was ready to send equipment and detectors to aid TEPCO to gain control of the Fukushima Daiichi nuclear power plant.

On March 28, AREVA announced it had received another request from TEPCO to examine other difficulties hampering the utilities efforts one of the most critical was the amounts of toxic waste piling up on-site.

Almost a month passed before AREVA announced it would deliver a decontamination unit, to the crippled power plant at Fukushima Daiichi. Areva would set up the water treatment plant, which separates and recovers radioactive particles, at the Fukushima site, the French nuclear operator said in a statement.

Tepco, wants to start using the unit by June, Junichi Matsumoto, a general manager, said at a press briefing in Tokyo.

The treatment unit, was to be provided by Veolia Water, and thought to process 50,000 liters (13,200 gallons) of water per hour, Areva Chief Executive Officer Anne Lauvergeon

<http://topics.bloomberg.com/anne-lauvergeon/> said at a briefing in Tokyo.

This was a bold move by an embattled organization facing looming debts and litigation stemming from other failed projects it has undertaken. The AREVA’s system is basically for the removal of radioactive cesium, and it is not known if it removes any other radionuclides. It was the highest level of contamination that AREVA had ever undertaken to process.

While the Japanese Government and Utilities stressed the urgent need of the water treatment, and placed the water contamination facility is a key component in its road map to success, there were also many statements made that exhibited a certain level of misunderstanding and confusion about the ability and operation processes.

Statements from Japanese Government and Utility

TEPCO’s Matsumoto:

The main purpose of the AREVA’s water treatment system is to remove cesium. I hear that it could also remove other gamma [ray-emitting nuclides?] and metal (such as strontium). However, due to the contractual obligation with AREVA, it is not to be disclosed what other nuclides can be removed and how much. I’m told that is the agreement between TEPCO and AREVA.;

Junichi Matsumoto of TEPCo said, “We don’t know for sure that the system will be operational on June 15. It is possible that the date will be delayed because of the repair. As we haven’t been thoroughly informed of the situation at Fukushima I [regarding the leaks], we don’t know the extent of the necessary repair.”

Statements from AREVA: The contaminated water must be treated rapidly as it is preventing

Tepco from repairing the power plant’s power supply and cooling systems, Areva said in the statement. The unit will sharply reduce the radioactivity levels of the treated water, which could be reused in the power plant’s cooling systems.

Normally the processing is done at small volumes, and you have carefully controlled chemistry, Areva Representatives said: Here you have massive volumes and a very heterogeneous chemistry?

Honestly it’s hard to say how it will work, said Patricia Marie, an Areva spokeswoman. We hope everything will be fine.

Details about the water processing system were not to be disclosed, due to the contractual obligation.

The following is the summary of the answers given by TEPCO and government officials [regarding the AREVA’s system] during May 19 press conference:

NISA’s Nishiyama:

In building the water processing system, the details of the system needs to be reported [to NISA] in order to ascertain the safety. The details would include the types of nuclides to be treated. We would have to further consider how to deal with the non-disclosure issue in the agreement.

PM Assistant Hosono:

I didn’t know that [the details were not disclosed]. All I paid attention to was radioactive iodine and cesium, but there are other radionuclides. Is AREVA saying there is no data on other radionuclides?

Or is saying there is such data but not willing to disclose? I’ll confirm [with AREVA?]. The data should be made public. If AREVA doesn’t have information on other radionuclides [other than iodine and cesium], I would like to request the company to run the system, obtain the data, and then disclose the data.

Under normal circumstances, Areva’s system can decontaminate 50 tons of water per hour. But experts admit that it is hard to predict just how efficiently the system will handle water that contains not only radioactivity, but also debris, oil and salt. Water might need to be treated numerous times, not just once, before it can be dumped into the ocean.

In June a race to complete the construction of the treatment system before contaminated water would not spill over kept the operators on their toes.

The decontamination system wasn’t put into operation until nearly 3 months after the disaster, has experienced multiple failures and shut-downs, and is only processing a fraction of the advertised estimate. The water that has been processed through, is still yielding higher radiation levels than the system was supposed to yield after decontamination.

Operating the water purification system costs approx $2,585 USD per tones, to process 500,000 tones a low estimate of what can potentially accumulate will cost over 1.3 billion dollars alone.

From Mainichi Shinbun

<http://mainichi.jp/select/today/news/20110528k0000m040071000c.html?inb=tw>Japanese

(10:45PM JST 5/27/2011):

On May 27, TEPCO released the result of the cost calculation for the treatment system for the highly contaminated water in the turbine buildings and other locations at Fukushima I Nuke Plant, and it was 53.1 billion yen. It would be 210,000 yen [US$2,585] per tone and the cost would be borne by TEPCO. There was a rumor that the treatment cost would be several tens of trillion yen, but it was denied by TEPCO.

The water system failed in the initial test runs, and more than 10 leaks were identified. Further testing showed that one of the 4 subsystems was malfunctioning, and no water was going through it at all. Upon investigation on June 12, TEPCO found the valve that was supposed to open and close automatically was not working.

There were also reports of operator errors in operating the facility, one situation involved employees manually closing a valve that lead to a safety valve rupturing, and releasing over 6 tones of contaminated water.

On June 17th, a full hot run started, pushing the system to decontaminate higher levels of contamination, despite the failures during the 25 hours of testing.

On June 20th, the pumps shut down automatically when too much water passed through them. This was the 6th time in 10 days that the system had stopped.

A press release on June 22nd about the AREVA system test operation showed that the decontamination system was working at 40% of its expected capacity. However, AREVA’s system had reduced radioactive cesium to about 1/6,700 (Decontamination Factor of 6,700) after Kurion, making the entire system reduction at slightly over 1/100,000.

It was later discovered one of the problems was that the examples were written in Italian and French, severely hindering operations. When workers would contact AREVA for clarification, they claimed that the organization wouldn’t respond due to national security.

On July 11th, AREVA released a press statement on their website claiming that the decontamination system had reached a milestone of 18,000 tons of highly radioactive waters treated to date, and other extremely contentious points.

https://1.bp.blogspot.com/-7ClEM7PswK4/Tin_RlpzKSI/AAAAAAAAEe8/aODV4pWHlRw/s1600/AREVA.png

In contrast to the actual reports from Japan, it appears to many experts in Japan that AREVA’s systems have not performed to the standards required to keep the situation under control, and on track to complete the project to bring the disaster site under control

How large of a role will AREVA play in the future of nuclear power in the United States? Areva, whose finances <http://www.bloomberg.com/apps/quote?ticker=CEI:FP>have been hurt by construction-cost overruns at a reactor in Finland since 2005, raised 5.2 billion euros in 2009 and 2010 by selling its power-grid unit, as well as stakes in a large share of minority interests and bonds.

In America, AREVA is a market leader in automation and information systems designed for electricity transmission and distribution. 65% of major utilities use one or more products produced by AREVA’s T&D division.

Areva SA <http://www.bloomberg.com/apps/quote?ticker=CEI%3AFP>and the Saudi Binladin Group signed a partnership agreement in January 2011 in the nuclear and solar power industries, the French company’s Chief Executive Officer Anne Lauvergeon <http://topics.bloomberg.com/anne-lauvergeon/>said in Riyadh

<http://topics.bloomberg.com/riyadh/>. Paris-based Areva is the biggest supplier of nuclear reactors, while Saudi Binladin is a diversified construction company with headquarters in the Saudi port ofJeddah <http://topics.bloomberg.com/jeddah/>.

The MOX project takes shape at Savannah River

Another DOE project undertaken by AREVA is the ongoing construction of a MOX fuel fabrication facility at the Savannah River site near Aiken, South Carolina, in partnership with the SHAW Group. This project is part of an agreement between the United States and Russia to decommission 34 metric tons of surplus defense-grade plutonium in each country by recycling it for civilian uses.

The facility’s design draws heavily on AREVA’s expertise developed at its La Hague and MELOX plants. Construction work began in summer 2007 and production is due to begin in 2016. Four test assemblies which were manufactured by AREVA at the Cadarache plant in 2004 23 and 2005 are currently fueling the Catawba power plant (North Carolina), operated by Duke Power. Feedback has been very positive (EUROFAB project).

Construction of Savannah River MOX plant (South Carolina)

Key figures for AREVA in the United States

. Almost 1.7 billion dollars in sales revenue in 2006 (tripled in 3 years).

. More than 5,000 employees.

. 42 sites, both industrial and commercial, in 20 states.

. Supplier of almost half of all steam generators, pressurizers, and reactor vessels head replacements.

. CANBERRA, the AREVA subsidiary specialized the supply of nuclear measurement solutions for safety and security and the world leader in its field, has been present in America since 1965.

. AREVA controls 25% of the American market for PWR fuel.

. Almost 50% of all nuclear waste transportation is handled by TN

International, an AREVA subsidiary

Highlights

– In 2007, AREVA provided services during scheduled outages at more than 30 U.S. PWR and BWR power plants.

– AREVA controls a significant part of the market for the maintenance of primary pumps and motors. To optimize service quality, it has invested 12 million dollars in the construction of a pump and motor maintenance workshop in Campbell County (State of Virginia).

– Also in 2007, AREVA replaced 1 steam generator and 2 reactor vessel heads.

– Since 2003, AREVA has manufactured 8 steam generators to replace existing equipment. It also holds 50% of the market for the manufacture and replacement of heavy components, such as steam generators, reactor vessel heads and pressurizers.

– AREVA supplied engineering services to support operating license extensions for more than 50% of all U.S. power plants.

Several utilities have already chosen EPR technology. 7 projects are underway, including:

– Constellation: Calvert Cliffs (Maryland) and Nine Mile Point (New York)

– Amarillo power: Amarillo (Texas) (2 units)

– Ameren: Callaway (Missouri)

– AEHI (Alternate Energy Holding): Bruneau (Idaho)

– PP&L: Susquehanna (Pennsylvania).

200 million dollars have been invested and a dedicated team of 325 engineers and 55 technicians have been mobilized for this certification application.

The next steps are:

– NRC analysis of the application and back-and-forth technical discussions, with a decision expected around 2010. In the interval, reviews in Finland and France should facilitate the NRC’s work.

– Construction over a period of 5 years.

– Start-up of the first EPR in 2015.

Highlights

– AREVA leads the transmission system management market.

– Two thirds of American utilities use AREVA products for their transmission networks.

– Close collaboration between AREVA and suppliers of renewable energy solutions — mainly wind power — to ensure their connection to electricity grids.

– In 2006, AREVA was contracted by PJM to guarantee the reliability of an interconnection system linking over 6,000 substations and supplying 51 million people across 14 states in the United States.

– In February 2007, AREVA won a contract with Northeast Utilities to supply 14 high voltage transformers as part of a major reinforcement project for grid in northeastern America.

Georgia Transmission Company featuring AREVA T&D 550 kV circuit breakers

Other Interesting AREVA data:

In 2007, AREVA was connected to Gaddafi and Libya when they signed three contracts to provide nuclear power in Libya.

France began speaking to potential partners in 2009 with the intention to sell as much as 15 percent of the company to Kuwait, Japan’s Mitsubishi Heavy Industries Ltd.

http://www.bloomberg.com/apps/quote?ticker=7011:JP and the sovereign fund of Qatar.

Areva Chief Executive OfficerAnne Lauvergeon

<http://search.bloomberg.com/search?q=Anne%20Lauvergeon&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja>originally aimed to raise 3 billion euros in the capital increase to help fund spending on equipment, plants and uranium mines to fend off competition and sell more reactors and fuel in Europe, China and India.

Areva also faces 1.4 billion euros in claims from TVO for the delays at the Finnish plant, while Areva is suing its customer for 1 billion euros. Areva SA Chief Executive OfficerAnne Lauvergeon <http://search.bloomberg.com/search?q=Anne%20Lauvergeon&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja>said the company’s planned Finnish nuclear reactor will be built in seven and a half years. She spoke in an interview on RTL radio.

Areva and state-owned Nuclear Power Corp. of India Ltd. signed agreements for the construction of two reactors at a $9.3 billion price tag, the first of a series of six at Jaitapur in western India, the French nuclear company said in a statement to help meet soaring energy demands in Asia’s second- fastest growing major economy.

The deals include fuel supply for 25 years, the Paris-based company said. The agreements set conditions for Areva to supply nuclear islands, which include reactor vessels and steam generators, as well as related services, and allow both sides to accelerate several partnerships between Areva and the Indian nuclear industry, the French company said.

Areva, will work with Indian companies to prepare for the construction of the two reactors from early 2011,&quot; Chief Executive OfficerAnne Lauvergeon

<http://search.bloomberg.com/search?q=Anne%20Lauvergeon&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja>told reporters. She said the contract, which will also include the supply of uranium fuel, will be worth about 7 billion euros.

French PresidentNicolas Sarkozy

<http://search.bloomberg.com/search?q=Nicolas%20Sarkozy&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja>told reporters at a joint press conference with Indian Prime Minister Manmohan Singh

<http://search.bloomberg.com/search?q=Manmohan%20Singh&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja>in

New Delhi that there was no limit to the countries’ nuclear cooperation, and that today’s pact, the first between the two nations, would eventually be expanded to six reactors. We propose a total partnership for the civil nuclear sector, he said.

Areva http://www.bloomberg.com/apps/quote?ticker=CEI:FP signed a 10-year contract worth about $3.5 billion to provide 20,000 tons of uranium to China. The French nuclear company also signed an agreement with CNNC to build a nuclear-waste processing plant in China.

China is building reactors faster and at a lower cost than the rest of the world. State ownership of the industry guarantees capital and relatively quick approvals of new plants. Low-cost labor and experience in major infrastructure projects, whether power plants or subway systems, also help.

Chinese nuclear builders’ grasp of the technology is very worrying for European companies, Areva Chief Executive OfficerAnne Lauvergeon

<http://search.bloomberg.com/search?q=Anne%20Lauvergeon&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja>told a hearing at the French Senate in Paris. She also said Chinese companies are more efficient.

The third-generation reactor designed by Areva is being built in France, Finland and China at varying budgets and construction schedules. Once considered key to the success of France’s atomic exports, the design has been criticized as too big and costly after the country lost to a Korean group for a $20 billion order in the United Arab Emirates last year.

Westinghouse designs are being used for four reactors now under construction. Areva has sold two latest-generation reactors now under construction. Areva Chief Executive OfficerAnne Lauvergeon

<http://search.bloomberg.com/search?q=Anne%20Lauvergeon&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja>told the French Senate in November 2010 that she expected another deal on two more.

Posted by Lucas Whitefield Hixson

<http://news.lucaswhitefieldhixson.com/2011/07/after-fukushima-areva-and-united-states.html>>

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