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Nuclear News - 3/24/2011
PGS Nuclear News, March 24, 2011
Compiled By: Matthew Kapuscinski

A.  Iran
    1. China Says Dialogue "Right Path" to Address Iran Nuclear Issue, Peoples Daily Online  (3/23/2011)
    2. India for Peaceful Resolution of Iranian Nuclear Issue, Malaysia Sun (3/23/2011)
    3. Iranian Embassy Denies Report on Nuclear Parts, New Straits Times (3/23/2011)
    1. Experts: 3rd North Korea Nuke Test Possible if Dialogue Fails, The Dong-a Ilbo (3/23/2011)
    2. South Korea Calls for North Korea's 'Heartfelt Apology' Over Attacks, Yonhap News Agency (3/22/2011)
C.  Nuclear Safety
    1. Defect Concealed in Fukushima No. 4 Reactor: Engineer, The Japan Times (3/24/2011)
    2. Control Room Power Restored; Pumps Turn to Fresh Water, Yomiuri Shimbun (3/24/2011)
    3. Tokyo Water 'Unfit for Babies' Due to High Radiation, BBC News (3/23/2011)
D.  Nuclear Cooperation
    1. U.S., Russia Exchange Nuclear Data, UPI (3/22/2011)
E.  Nuclear Energy
    1. China to Build Nuclear Plant Using Fourth-Generation Technology in April, Dinakar Sethuraman and Rakteem Katakey, Bloomberg (3/23/2011)
    2. Japan Earthquake: Crisis May Force Up Cost of UK Nuclear, Rowena Mason, The Telegraph (3/23/2011)
    3. Poland May Hold Nuclear Referendum, Says PM Tusk, Reuters (3/23/2011)
    4. Japan Banks May Lend $25bln to Nuclear Operator -Sources, Reuters (3/23/2011)
    5. German Nuclear Panel to Probe Cooling at Plants, Reuters (3/22/2011)
F.  Links of Interest
    1. Swiss Search for Strategy on Nuclear, Imogen Foulkes, BBC News (3/23/2011)
    2. EU Nuclear Regulators Propose Outlines of Reactor 'Stress Tests', Platts (3/23/2011)
    3. Chernobyl Workers Recall Catastrophe as They Watch Fukushima, Tony Halpin, The Australian (3/23/2011)

A.  Iran

China Says Dialogue "Right Path" to Address Iran Nuclear Issue
Peoples Daily Online
(for personal use only)

China said on Tuesday that negotiation and dialogue is the right path to address the Iran nuclear issue, calling on relevant parties to remain patient and take proactive measures to push forward the process.

Li Baodong, the Chinese ambassador to the UN, made the remarks at a UN Security Council meeting on a 1737 Committee report.

Since last December, the six powers -- China, Russia, the United States, Britain, France and Germany, the EU and Iran have held two rounds of talks, during which the participating parties confirmed the basic approach of talking for cooperation and finding common ground and also expressed readiness for continued dialogue, Li said.

At the recent meeting of IAEA (the International Atomic Energy Agency) board of governors, the six powers also expressed their common position of continuing engagement with Iran on the basis of reciprocity and step-by-step approach and of establishing a cooperative relationship with Iran in many fields, Li added.

"China believes as long as all sides remain patient, flexible and pragmatic and take proactive measures to enhance mutual confidence, dialogue and negotiation will make headway," Li said.

The West suspects Iran wants to develop nuclear weapons, while Tehran insists its atomic energy program is peaceful.

As a state party to the Treaty on the Non-Proliferation of Nuclear Weapons (NPT), Iran is entitled to peaceful use of nuclear energy, Li said, adding it should also fulfill its relevant international obligations at the same time.

"We hope that Iran will take initiatives to enhance the international community's confidence in the peaceful nature of its nuclear program," Li said.

He said China will continue to work with all sides in these respects and play a constructive role in this process.

The 1737 Committee is a UN Security Council committee established pursuant to Resolution 1737. It was established on Dec. 23, 2006 to undertake the tasks set out in paragraph 18 of that same resolution. The mandate of the Committee has since been expanded to apply also to the measures imposed in resolutions 1747 (2007) and 1803 (2008) and to the measures decided in Resolution 1929 (2010).

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India for Peaceful Resolution of Iranian Nuclear Issue
Malaysia Sun
(for personal use only)

Expressing support for Iran's right to peaceful use of nuclear energy 'consistent with their international obligations', India has called for intensification of efforts to address the Iranian nuclear issue through peaceful dialogue.

'As a country abiding by all its obligations of international treaties and having strong credentials of non-proliferation, India has taken a consistent stand on the Iran nuclear issue,' India's Permanent Representative Hardeep Singh Puri told the UN Security Council Tuesday.

Like all States, 'Iran is entitled to the right to use nuclear energy for peaceful purposes, and should at the same time restore international confidence to the exclusively peaceful nature of its nuclear activities,' he said.

'To that end, we support intensification of efforts to address the Iranian nuclear issue by peaceful means, through dialogue and negotiation,' Puri said at a briefing on Iran Sanctions Committee.

India also believed that the International Atomic Energy Agency has a central role in resolution of technical issues concerning Iranian nuclear programme.

Calling upon all sides to fully implement the Security Council resolutions, Puri said there should be no violation of the mandated measures.

'At the same time, all efforts should be made to ensure that legitimate trade and economic activities of Iranian entities and those of other countries should not suffer,' he said promising to contribute towards the Sanctions committee's work in that direction as one of its members.

Noting that Iran is part of what has been defined as India's 'proximate neighbourhood', Puri said, 'Iran, located at the crossroads of the Indian sub-continent, Central Asia and Middle East, is an important country and has a role to play in regional issues.'

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Iranian Embassy Denies Report on Nuclear Parts
New Straits Times
(for personal use only)

The Iranian embassy here has denied that parts seized from two containers in a ship that berthed in Port Klang early this month were meant for building nuclear weapons.

The embassy, in a statement released today, said the seized items, which were bound for Teheran from China, were only meant for peaceful nuclear technology.

The embassy also denied that the cargo contained warheads or parts for building weapons of mass destruction (WMD).

“The embassy categorically denies the false and baseless media reports that nuclear warheads and several other parts used to make WMD were found on the ship.

“Iran officials have repeatedly denounced the usage of WMD, as our supreme leader Ayatollah Ali Khamenei has already issued a fatwa that Islam opposed nuclear weapons.

“Teheran has never tried to possess, obtain and build nuclear weapons, and our nuclear programme is solely aimed at peaceful purposes,” said the statement.

It also said that as a member of the International Atomic Energy Agency and a signatory of the Nuclear Non-Proliferation Treaty, Iran has the right to acquire peaceful nuclear technologies.

It was reported that a team from the federal police headquarters’ Criminal Investigation Department boarded the Malaysian-registered ship early this month when it berthed at North Port, and seized the cargo.

It was reported that the seized equipment was listed among several items subjected to controlled and restricted sale to the receiving country by the United Nations Security Council and other international laws.

It was learnt that the crew were unable to produce documentation for the shipment.

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Experts: 3rd North Korea Nuke Test Possible if Dialogue Fails
The Dong-a Ilbo
(for personal use only)

North Korea could resort to conducting its third nuclear test if inter-Korean dialogue fails, experts say.

Under strict international sanctions since sinking the South Korean warship Cheonan and shelling Yeonpyeong Island last year, Pyongyang is apparently using the tactic of using a dialogue offensive while threatening provocations.

Experts say the dialogue offensive could continue for the time being, warning that another provocation could come in the event of no response or the need for internal unity for the North’s hereditary succession plan.

“North Korea will start a dialogue offensive for a while,” Yang Moo-jin, a professor at the University of North Korean Studies in Seoul, said Tuesday. “Unless inter-Korean relations make significant progress and the U.S. provides food aid, the North will adopt brinkmanship tactics.”

“North Korea is likely to attempt aggressive provocations such as long-range missile launches or a third nuclear test, not to mention a provocation in the Yellow Sea.”

Pyongyang has suggested talks on starting additional inter-Korean negotiations by proposing consultations for a joint study on Mount Baekdu’s volcanic activity despite a failed military working-level meeting early last month. Seoul has insisted that bilateral talks are meaningless unless Pyongyang assumes responsibility for the Cheonan and Yeonpyeong attacks.

Experts warn that if the two Koreas waste time on confrontation, the North could resort to provocations.

“North Korea seems to have decided to refrain from provocations for the time being for its ‘party’ next year, when it seeks to become a strong and prosperous country,” said Park Hyeong-jung, senior researcher at Korea Institute for National Unification. “But it could change its position toward provocations if things don’t work out the way it intends to after testing the South through various contacts following the failed working-level military meeting.”

Certain experts say Seoul should be prepared for provocations because Pyongyang could attempt a provocation during its dialogue offensive.

“The six-party talks were about to be resumed right before the Cheonan sinking, and the North also stressed the need for inter-Korean talks before the Yeonpyeong attack,” said Yoon Deok-min, a professor at the Institute of Foreign Affairs and National Security under the South Korean Foreign Ministry. “Since North Korea could attempt a provocation at any time depending on its internal needs, we cannot be complacent.”

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South Korea Calls for North Korea's 'Heartfelt Apology' Over Attacks
Yonhap News Agency
(for personal use only)

A senior security aide to President Lee Myung-bak pressed North Korea on Tuesday to make a "heartfelt apology" for its two deadly military attacks last year, renewing Seoul's demand for a prerequisite to resumption of any inter-Korean exchanges.

Tensions on the Korean Peninsula plummeted to their lowest level in years in 2010 following the North's deadly sinking of a South Korean warship and the bombardment of a southern island.

Military talks intended to ease tensions between the two Koreas broke down last month after the North's representatives refused to accept the South's demand that Pyongyang apologize and take responsible measures for its attacks.

"A heartfelt apology (by North Korea) over the two provocations last year could become a starting point to opening new South-North relations," Kim Tae-hyo, President Lee's deputy national security adviser, told a security forum in Seoul.

North Korea's apology for the attacks and its promise not to repeat such provocations are among the three key conditions that Seoul says Pyongyang must fulfill before the two sides can improve relations. A third demand has been that the North demonstrate its denuclearization commitment through action.

Despite high tensions, Kim said his government is planning to offer humanitarian aid to help children and underprivileged people in North Korea.

"From the humanitarian point of view, the government is pushing for aid for children and the vulnerable in North Korea," Kim said, describing the push as "smart aid."

Tensions on the Korean Peninsula remain high after the Cheonan warship sank last March from a North Korean torpedo attack, killing 46 sailors. In November, the North shelled a South Korean border island in the Yellow Sea, killing four people, including two civilians.

North Korea denies it sank the Cheonan warship and claims its artillery strike on Yeonpyeong Island was in self-defense because it was provoked by the South's live-fire drill near the island.

In response to increasing North Korean hostilities, South Korea's defense ministry early this month unveiled 73-point military reform measures.

The measures called for the South Korean military's early deployment of spy drones and stealth fighters, the streamlining of its command structure for a more efficient armed forces and drastic strengthening of its firepower.

Kim said the reform measures are aimed at prioritizing the heightened combat preparedness against the North's unconventional, "asymmetric" attacks like the sinking of the Cheonan warship and the shelling of Yeonpyeong.

"The most important task for the military is to neutralize North Korea's asymmetric threats with a strategy of proactive deterrence," Kim said.

To increase the effectiveness of deterrence, the South's military needs to equip itself with more attack helicopters and next-generation fighter jets with precision-target capability, Kim said.

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C.  Nuclear Safety

Control Room Power Restored; Pumps Turn to Fresh Water
Yomiuri Shimbun
(for personal use only)

The lights finally came on in the central control room of the No. 3 reactor at the Fukushima No. 1 nuclear power plant Tuesday night after the electricity supply was restored.

On Wednesday morning, workers began trying to activate additional pumps to help flood storage pools for spent fuel rod at the Nos. 3 and 4 reactors with fresh water.

Tokyo Electric Power Co., operator of the nuclear plant which was devastated by the massive March 11 earthquake and tsunami, said supplying power to some meters and gauges in the central control room of the No. 1 reactor showed the temperature inside the reactor was 100 C higher than its design allowed for.

TEPCO said electricity reached the No. 3 reactor Tuesday night, enabling the utility to turn on lights and some instruments and collect various data.

The firm said a temporary pump sending seawater into the No. 3 reactor core would be replaced by a different pump, which would send in fresh water, by Thursday.

On Wednesday morning, workers suspended some of their efforts at the No. 2 reactor because of high radiation levels at the turbine building, where they had planned to try to connect an external power cable, TEPCO said.

TEPCO is also looking into whether a temporary pump could be powered with external electricity to pour water directly into a spent fuel rod pool at the No. 4 reactor, which has also been cooled down with sprayed water.

TEPCO is exploring the feasibility of using the central control room of the Nos. 3 and 4 reactors as a base for workers to repair and maintain a battery charger room in the facility's basement that provides power to the reactor's control system.

TEPCO would cover the room's walls with lead plates to shield the interiors from high amounts of radiation.

The central control room of the Nos. 3 and 4 reactors is located on the second floor of the central control building, between the reactors' turbine buildings. Precise details of its location are not disclosed, as a security measure against terrorism.

The workers would also check pumps and electrical systems at the reactor buildings, located just west of the turbine buildings.

Under normal circumstances, each control room is staffed around the clock by 11 workers on a two-shift system.

TEPCO said it succeeded between Tuesday night and early Wednesday in supplying electricity to meters and gauges at the Nos. 1, 3 and 4 reactors to collect various data.

Consequently, they found the internal temperature of the No. 1 reactor was rising sharply. To cool it down, they increased the amount of water poured into the reactor to 18 tons per hour.

At 6 a.m. Wednesday, the internal temperature of the No. 1 reactor was in excess of 400 C, much higher than the 302 C intended by its design, but it declined slowly to reach 390 C as of 10 a.m.

The company said fuel rods' temperature had apparently risen after being exposed to the air after the water level in the reactor fell.

Workers had difficulty restoring power at the No. 2 reactor, which was damaged extensively by tsunami following the massive earthquake.

TEPCO said two workers were slightly injured when they tried to set up a temporary switchboard at a common fuel rod storage pool between Tuesday night and early Wednesday.

Pumping operations expand

The utility firm started spraying water around 10 a.m. Wednesday into a spent fuel rod storage pool at the No. 4 reactor with a German-made squeeze pump. On Tuesday, TEPCO sprayed 150 tons of water into the pool with the same machine.

TEPCO has borrowed two more squeeze pumps of a different model but with the same capabilities. The company is considering introducing the two additional pumps to the dousing operation at the nuclear power plant as soon as possible.

The Self-Defense Forces dispatched a CH-47 helicopter to fly over the nuclear plant and measure temperatures at the nuclear reactors shortly before 9 a.m.

A RF-4 reconnaissance plane was dispatched shortly after 9 a.m. to take photos of the damaged reactors with a high-performance camera.

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Defect Concealed in Fukushima No. 4 Reactor: Engineer
The Japan Times
(for personal use only)

The No. 4 reactor at the Fukushima No. 1 nuclear plant may have been relying on flawed steel to hold the radiation in its core, according to an engineer who helped build its containment vessel four decades ago.

Mitsuhiko Tanaka says he helped conceal a manufacturing defect in the ¥20 billion steel vessel installed at the reactor while working for a unit of Hitachi in 1974. The reactor, which Tanaka has called a "time bomb," was shut for maintenance when the March 11 earthquake triggered a tsunami that disabled cooling systems at the plant, leading to explosions and radiation leaks.

"Who knows what would have happened if that reactor had been running?" Tanaka, who turned his back on the nuclear industry after the Chernobyl disaster, said in an interview last week. "I have no idea if it could withstand an earthquake like this. It's got a faulty reactor inside."

Tanaka's allegations, which he says he brought to the attention of the Ministry of Economy, Trade and Industry in 1988, when it was the Ministry of International Trade and Industry, and chronicled in a book two years later called "Why Nuclear Power is Dangerous," have resurfaced after the nation's worst nuclear accident on record. The No. 4 reactor was hit by explosions and a fire that spread from adjacent units as the crisis deepened.

Hitachi spokesman Yuichi Izumisawa said the company met with Tanaka in 1988 to discuss the work he did to fix a dent in the vessel and concluded there was no safety problem. "We have not revised our view since then," Izumisawa said.

Kenta Takahashi, an official at METI's Nuclear and Industrial Safety Agency, said he couldn't confirm whether the agency's predecessor, the Agency for Natural Resources and Energy, had conducted an investigation into Tanaka's claims. Naoki Tsunoda, a spokesman at Tokyo Electric Power Co., said he couldn't immediately comment.

Tanaka says the reactor pressure vessel inside the No. 4 reactor was damaged at a Babcock-Hitachi foundry in Kure, Hiroshima Prefecture, during the last step of a manufacturing process that took 2 1/2 years and cost billions of yen. If the mistake had been discovered, the company might have been bankrupted, he said.

Inside a blast furnace the size of a small airplane hanger, the reactor pressure vessel was being treated one last time to remove welding stress. The cylinder, 20 meters tall and 5.8 meters in diameter, was heated to more than 600 degrees, a temperature that softens metal.

Braces that were to have been placed inside during the blasting were either forgotten or fell over when the cylinder was wheeled into the furnace. After the vessel cooled, its walls were warped, Tanaka said.

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Tokyo Water 'Unfit for Babies' Due to High Radiation
BBC News
(for personal use only)

Tokyo's tap water is unfit for babies to drink after radiation from Japan's quake-hit nuclear plant affected the capital's water supply, officials said.

Radioactive iodine levels in some areas were twice the recommended safe level.

People in Fukushima prefecture, where the nuclear plant is located, have been told not to eat certain vegetables because of contamination worries.

Workers have been temporarily evacuated from the plant after black smoke was seen rising from reactor No 3.

Engineers have been trying to cool the reactors and spent fuel rods to avoid a major release of radiation, after power to the cooling systems was knocked out by the earthquake and tsunami.

The authorities are warning people living in Tokyo not to allow babies less than a year old to drink water from the tap.

The level of radiation picked up in tests carried out on Tuesday was more than twice the level that is safe for infants to drink.

But officials have stressed that children would have to drink a lot of it before it harmed them. There is no immediate health risk to others.

The government has also ordered people living in Fukushima not to eat 11 types of green leafy vegetable grown locally that have been contaminated by radiation.

Local producers have been ordered not to send the goods to market, and in the neighbouring prefecture of Ibaraki they have been told to halt shipments of milk and parsley with immediate effect.

The Japanese Cabinet Secretary, Yukio Edano, said: "Even if these foods are temporarily eaten, there is no health hazard.

"But unfortunately, as the situation is expected to last for the long term, we are asking that shipments stop at an early stage, and it is desirable to avoid intake of the foods as much as possible."

He told a news conference that importers of Japanese foods should take a "logical stance".

Hong Kong has banned a variety of food imports.

The Food and Drug Administration in the US said that all milk and milk products and fresh fruits and vegetables from four Japanese prefectures - Fukushima, Ibaraki, Tochigi and Gunma - would be stopped from entering the United States.

Countries including China, Taiwan and South Korea have already been carrying out rigorous checks of Japanese food imports.


The confirmed death toll from the earthquake and tsunami has risen to 9,408, and more than 14,700 people are listed as missing.

An estimated half a million people have been made homeless and some 300,000 people remain in evacuation centres or temporary housing.

Japan has said it will cost as much as 25 trillion yen ($309bn; £189bn) to rebuild the country after the disaster.

Meanwhile, work has been halted at the Fukushima Daiichi plant after black smoke was seen rising from reactor 3.

Radiation levels were reported to be unusually high before the smoke was spotted; they later fell but remain higher than in recent days.

Engineers were earlier forced to halt testing of the electrical system at reactor 2 after radiation levels spiked. There is also concern about the rising temperature at reactor 1.

Power cables have been connected to all six reactors, and lighting has been restored at reactor 3.

The plant's operator, Tokyo Electric Power (Tepco), had hoped to try to power up water pumps to reactor 3 on Wednesday but it is unclear whether that will now happen.

Tepco has said restoring power to all the reactor units could take weeks or even months. Engineers' efforts have been frequently hampered by smoke and spikes in radiation.

On Tuesday, an International Atomic Energy Agency (IAEA) senior official, James Lyons, said he could not confirm that the damaged reactors were "totally intact" or if they were cracked and leaking radiation.

"We continue to see radiation coming from the site... and the question is where exactly is that coming from," Mr Lyons told a news conference.

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D.  Nuclear Cooperation

U.S., Russia Exchange Nuclear Data
(for personal use only)

A senior U.S. official confirmed Russia and the United States have begun exchanging nuclear stockpile information under the new arms reduction treaty.

Rose Gottemoeller, assistant secretary of state for arms control, said the U.S. Nuclear Risk Reduction Center sent its database to Russia last weekend, the Russian news agency RIA Novosti reported Tuesday.

The database transmitted to the Russians included information on missiles, launchers, heavy bombers and warheads, she said.

The new arms control agreement between the United States and Russia was signed in April 2010 and replaces the expired START 1 agreement.

The new treaty, which came into force Feb. 5, calls for the first information exchange to take place within 45 days and on-site inspections to begin after 60 days.

The treaty trims the arsenal of both nations to 1,550 nuclear warheads from the current ceiling of 2,200.

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E.  Nuclear Energy

China to Build Nuclear Plant Using Fourth-Generation Technology in April
Dinakar Sethuraman and Rakteem Katakey
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China will start building a nuclear power plant next month using fourth-generation technology that may be less susceptible to meltdown than Japan’s damaged Fukushima Dai-Ichi plant.

The “world’s first high-temperature, gas-cooled reactor” will be installed at Rongcheng in Shandong province, Cui Shaozhang, deputy general manager at Huaneng Nuclear Power Development Co., a unit of China Huaneng Group Corp., the nation’s largest power group, said in an interview yesterday in Singapore.

“There are differences between the Japanese and Chinese reactors,” Cui said. “Japan’s Fukushima plant was using old technology while Chinese reactors are more advanced.”

Japan is trying to prevent a meltdown at Fukushima, where the oldest reactor started operating in 1971, after cooling systems were knocked out by a 9.0-magnitude earthquake and tsunami on March 11.

The Rongcheng plant will use helium, an inert gas, in its cooling system, and reactor cores will be able to withstand temperatures exceeding 1,600 degrees Celsius (2,912 degrees Fahrenheit) for several hundred hours without melting down, China Business News said this week.

“The Chinese government has encouraged us with the pre- condition of safety and efficiency,” Cui said.

New Technology

China, planning to build more nuclear reactors than any other country, said on March 16 it suspended approval of all new atomic projects until a safety review is carried out. The country’s existing reactors use second-generation technology, the official Xinhua News Agency said on July 22.

“This fourth-generation reactor will make cooling totally independent of external power sources, making it much more safer,” said Jerzy Grynblat, nuclear business director at Sundbyberg, Sweden-based consultant Scandpower AB, said in Singapore today. “Developing new technologies where safety will be increased is very significant after what happened in Japan and countries re-looking their nuclear future.”

China Huaneng, China Nuclear Engineering Corp. and Tsinghua University are joint investors in the 200-megawatt Rongcheng demonstration project, according to Huaneng’s brochure. China National Nuclear Corp., the country’s biggest atomic plant builder, last July reported a successful test of an experimental reactor using fourth-generation technology.

China started operating its first commercial nuclear station in 1994. It currently has 14 reactors in operation, 26 under construction and 28 planned, according to data on the World Nuclear Association’s website.

Rising Capacity

The nation’s nuclear power capacity may reach 40 gigawatts by 2015 and exceed 70 gigawatts by 2020, Han Wenke, head of energy research at the NDRC, said in June. China had 10.82 gigawatts of nuclear power capacity at the end of 2010, the state-owned China Electricity Council said in February.

The nuclear industry has developed several generations of reactors starting with the first in 1950-60s, according to the World Nuclear Association’s website. There’s no such reactor today outside the U.K. The second generation units are used in the U.S. and France while early generation-3 reactor designs have been operating in Japan since 1996, according to the WNA.

“Generation IV designs are still on the drawing board and will not be operational before 2020 at the earliest,” it said. “Late 3rd generation designs are now being built.”

China’s fourth-generation helium gas-cooled reactor was designed and constructed by Tsinghua University of China, according to a research paper by Shouyin Hu on the IAEA website.

China Huaneng Group aims to produce about 35 percent of its electricity using cleaner technology by 2020 to cut pollution, President Cao Peixi said March last year. The company plans to reduce coal consumption per kilowatt-hour of electricity by about 10 percent by 2020, he said.

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Japan Banks May Lend $25bln to Nuclear Operator -Sources
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Japan's largest banks are in talks to provide up to $25 billion in emergency loans to Tokyo Electric Power to shore up its finances and rebuild its power network following a disaster at one of its nuclear plants.

Tokyo Electric, Asia's largest utility, is waging a desperate battle to cool reactors at its Fukushima-Daiichi powerplant which were crippled by the powerful earthquake and tsunami on March 11 and have leaked radiation.

The disaster knocked out about 20 percent of Tokyo Electric's operating thermal and nuclear generation, forcing it to implement rolling blackouts set to last months until it can secure alternative sources of power.

Highlighting the uncertainty over its financial prospects, the company -- known for its rich and steady dividends -- said on Wednesday that it was now not sure what its annual dividend would be, erasing its prior forecast for a payout of 60 yen per share.

Sumitomo Mitsui Financial Group , the utility's main lender, is expected to provide more than 500 billion yen in loans out of an emergency package that could total 2 trillion yen ($25 billion), sources with direct knowledge of the matter said.

Mitsubishi UFJ Financial Group and Mizuho Financial Group are considering loans of 200-500 billion yen each. Sumitomo Trust and Banking and other major trust banks are also expected to offer funds, the sources said.

The loans would be used to fix damaged plants and for other reconstruction efforts and may be extended to the utility as early as this month, according to the sources, who were not authorised to speak publicly about the matter.

"Interesting, as one suspects that the government has implicitly guaranteed the survival of TEPCO as a regulated entity if all these institutions are willing to accept the risk," said Penn Bowers, an analyst at CLSA Asia-Pacific Markets in Tokyo.

"Given the amount of cash on the balance sheet, I am surprised at the urgency of talks but certainly the need to prevent a crisis of confidence could be seen as necessary to keep recovery efforts stable," he said.

Tokyo Electric, which provides power to about one-third of the Japanese population, had 432 billion yen in cash and equivalents at the end of December and 7.5 trillion yen in outstanding debt, according to its financial statements.

Of its $64 billion in outstanding bonds, the company is due to repay $4.8 billion this year, and another $5.6 billion in 2012, underscoring the importance of refinancing to meet its funding needs.

Last week, credit ratings agency Standard & Poor's cut its long-term and short-term ratings on TEPCO by one notch to "A+" and "A-1" respectively. Moody's also cut the firm's long-term rating by two notches to "A1."

The spread of Tokyo Electric's bonds over Japanese government bonds expanded to about 100 basis points at their peak from 7 or 8 basis points before the quake, pushing them into oversold territory, a senior fund manager said.

"The general perception of the market now is that the situation at Tokyo Electric's Fukushima Daiichi plant is settling down gradually," said Nobuto Yamazaki, the head of fixed income at asset manager Diam Co Ltd.


At the six-reactor Fukushima-Daiichi plant, engineers are battling to cool the reactors to contain further contamination and avert a meltdown.

But even if TEPCO is able to regain control of Fukushima-Daiichi, it faces lengthy repairs and inspections at other nuclear facilities and will have to burn more oil and gas to make up for the nuclear shortfall, eating away at its finances.

In addition to the destroyed Fukushima-Daiichi plant, Tokyo Electric's Fukushima-Daini plant is also out of action, along with some 18 percent of the company's thermal power capacity.

Damage to plants, lines and networks in the most affected northeast of the country is expected to linger, raising the prospect of blackouts during the peak summer demand season.

Tokyo Electric has said it would likely be able to secure 54 gigawatts of supply by summer, up from around 35 gigawatts now, as it restores some of the damaged thermal plants and brings on other plants that were mothballed or down for maintenance.

When the company announced third-quarter results in January, it said that every one percent fall in its nuclear power utility rate would trim its annual profit by 11 billion yen in the form of increased fossil fuel costs.

CLSA's Bowers says its fuel costs could rise by 700 billion yen in the financial year to March 2012 "given the change in fuel mix - the ability to pass this through will be the key long-term factor for funding."

Five-year credit default swaps for insuring against a Tokyo Electric default hit a record high of 373 basis point on March 17. The spread has since tightened to close at 245 on Monday, reflecting some progress in containing the crisis.

"We don't have a problem with cash at hand, but as we see a need for large funds in next financial year (beginning on April 1), we are procuring funds as needed," said Hajime Motojuku, a TEPCO spokesman, declining to elaborate.

A spokeswoman for Sumitomo Mitsui Banking Corp, the core commercial banking unit of SMFG, declined to comment on transactions with a specific client but said the bank would like to give "maximum support for TEPCO as its main lender".

A spokesman for MUFG said the bank has been approached by TEPCO for loans but details have not been decided yet. A Mizuho spokesman said he could not comment on individual transactions.

Shares of TEPCO ended down 4.5 percent at 1,049 yen, underperforming a 1.7 percent fall in the benchmark Nikkei average . The stock has lost about half of its value since the quake, cutting its market value to less than $22 billion.

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Japan Earthquake: Crisis May Force Up Cost of UK Nuclear
Rowena Mason
The Telegraph
(for personal use only)

The chief executive of RWE Npower has warned that it could be forced to delay plans to build UK plants, especially if any major safety changes prompted by Japan's atomic disaster push up the cost of reactors.

Volker Beckers also told the Future of Utilities conference the UK's new nuclear power stations are already expected to slip behind schedule by "three to six months" as a result of the Sendai earthquake.

UK regulators had been expected to approve the design for new reactors in June, but this may now take until late 2011 because of further checks.

"If [the regulatory decision] is delayed then we will see delays as well, so we expect that final investment decisions will be later in the same way," he said.

RWE is planning to build the UK's third new nuclear station by about 2020 with fellow German utility E.ON. The first two stations are due to be completed by EDF and Centrica by 2018.

The concerns about new nuclear come as the chief executive of a major UK power company warned that the crisis in Japan combined with a new tax on fossil fuel generation will create "massive pressure on Britain's whole power system in around 2015".

Speaking on condition of anonymity, the senior industry figure said coal-fired stations may have to close three to five years earlier than planned because of the "carbon price support" tax due to be announced in the Budget on Wednesday.

A third of Britain's coal plants will already have to close under European regulations by 2015, which is already expected to cause strain on power supply.

The power boss predicted the rest of the UK's coal plants will at the same time be severely affected by the tax while they are trying to raise money for improvements.

"It is getting very difficult to persuade investors to fund new projects," the executive said. "Especially given what's going on in Japan, we can't just carry headlong into [the carbon price support] this early".

The new tax may be introduced as soon as 2013, although it will not incentivise new nuclear until 2018.

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Poland May Hold Nuclear Referendum, Says PM Tusk
(for personal use only)

Poland currently gets more than 90 percent of its energy from polluting coal, which hampers its drive to reduce carbon emissions. It also wants to reduce its reliance on natural gas imports from Russia.

Westinghouse, a U.S.-based unit of Japan's Toshiba, Areva, EDF and GE Hitachi Nuclear Energy are competing to provide technology for the Polish nuclear project.

Some 65 percent of Poles believe nuclear plants should be built in Poland and 30 percent are opposed, according to an online survey of nearly 13,000 people conducted by the portal and released on Wednesday.

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German Nuclear Panel to Probe Cooling at Plants
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Environment Minister Norbert Roettgen said on Tuesday that Germany's Nuclear Safety Commission will focus on issues including emergency power supply and cooling systems when it reviews all the country's atomic power stations.

Chancellor Angela Merkel also said Germany's state premiers would meet on April 15 to discuss an accelerated move to renewable energy following the Japan crisis.

Merkel and Roettgen were speaking after they met chiefs of the five states which host atomic power stations for a second time since the government suspended its nuclear policy for three months and ordered seven older plants closed during the moratorium.

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F.  Links of Interest

Chernobyl Workers Recall Catastrophe as They Watch Fukushima
Tony Halpin
The Australian
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EU Nuclear Regulators Propose Outlines of Reactor 'Stress Tests'
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Swiss Search for Strategy on Nuclear
Imogen Foulkes
BBC News
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