Wednesday, 7 February 2007

Who will build your nuclear power plants?

The fifth nuclear power plant in Finland is being built by a French company Areva. Areva is the leader in the field design and manufacturing of nuclear power plants.

Areva wasn't always called Areva NP. It was called Framatome ANP (a German-French nuclear industry group), until it's name change to Areva last year.

Framatome, while undoubtedly an expert in its field, has had some setbacks with some of its past projects.

A case in point is the is nuclear fuel waste depository in Ukraine. It is seriously behind the initial schedule, over the original budget and according to Kiev sources mis-constructed in a way that calls into the question the contractor's professionalism.

When visiting Chernobyl last year, the locals following the situation explained that not all of the fuel waste rods fit inside the silos constructed for them and that the building of the depository had been suspended in 2003, due to "significant defects". Areva countered by saying, they'd been kept in the dark by Chernobyl power plant management and that it was an outrage that their world-class leading expertise was being attacked. The latest information suggests that Chernobyl is trying to oust Areva and replace them with Holtec (USA) for the completion of the depository.

Another interesting piece of information concerns a Hungarian nuclear plant that suffered a serious level 3 incident in April, 2003 due to inadequate water circulation in nuclear fuel washing well. This equipment was built by Framatome. The plant manager insisted, that the the removal of the fuel in the incident be performed by a Russian company TVEL, not AREVA.

The new Olkiluoto EPR plant under construction by AREVA is already one and a half years behind schedule and may not even produce the amount of electricity at targeted price level, according to third party research.

Finland is concidering building a sixth nuclear power plant, even though the fifth plant (based on Areva's much touted EPR design) is yet to be completed or proven in practice. Even though the construction of the 6th plant would probably have to go through a standard competitive bidding process, it would likely go to Areva as well.

Now, a lot of pressure is on Areva. It has to complete the EPR at Olkiluoto as it is a showcase for them. Then again, they know that the whole world will be ordering a lot of new nuclear power plants in the coming years. This looks inevitable, when one considers the combined effects of both peak oil and global warming.

So, on one hand Areva has to build a good plant and show other potential clients that it works. On other hand, it can't risk the profits. "A rock and a hard place" comes to mind. This probably applies to other design & construction companies in the field as well. Areva is merely an example here, due to their world leading position.

In summary, a lot of new nuclear power plants are in the pipeline for various countries and they will be: built under extreme competitive pricing pressures, heavily subsidized, under tight deadlines and "new & improved" (read:untested) designs. This is not necessarily a good thing considering nuclear risks, so it's probably wise to stay alert and active on these issues.

On the flip side of the coin, it is fair to ask: what alternatives do we have? Russian natural gas? Dirty coal? The options are not many and even the troublesome supply of nuclear fuel may not be enough. In addition, it seems that not every country holds a right to generate peaceful nuclear energy.