Brazil Seeks Private Investment from US on SMRs

  • investors2In a visit to the US this week, a key energy official from Brazil said his country is interested in “partnering” with the US investors for development of small modular reactors (SMRs).
  • In a related development, the same official said the county is working on a proposal to open up uranium mining, and oil and gas exploration, in Brazil to private investment.
  • Separately, efforts by the China National Nuclear Corp (CNNC) to ink a deal to build two nuclear reactors in Argentina have stalled out over differences related to financing the projects.
  • Bulgaria has announced a solicitation for investors for the troubled Belene nuclear project while at the same time announcing that Rosatom will be the EPC if financing for it is found.
  • India announced it is willing to reopen talks with Westinghouse for the construction of six 1150 MW AP1000 units there, but as long as the country’s supplier liability law remains in force, it may be just more talk.

Brazil Seeks Investors in Nuclear Energy Projects

While having no development effort of its own for small nuclear reactors (SMRs), Brazil this week reached out to the US for collaboration partnerships. Without providing details, a key energy official, Bento Albuquerque, said this week that a bilateral forum will be set up to discuss energy investment opportunities in nuclear energy, uranium mining, and oil & gas exploration. It’s first meeting is scheduled for April. The minister met with US Energy Secretary Rick Perry in Houston, TX, this week.

Brazil currently has two nuclear reactors and an ongoing effort to construct a third unit, Angra III, a 1400 MW PWR. According to the World Nuclear Association, in November 2018 it was reported that Eletronuclear was negotiating with CNNC and State Power Investment Corp (SPIC), KEPCO, Rosatom, and a consortium comprising EDF with Mitsubishi Heavy Industries to complete the plant.

Recent cost estimates to complete the plant have not been verified by a complete engineering analysis. Part of the reason for this is that construction of the plant, which began nearly a decade ago, has been started and stopped several times by different EPC firms.

Plans for two more nuclear power stations, composed of four 1000MW+ PWR type units each, have been stalled due to a lack of financing. Brazil may be now rethinking its plans for full size nuclear power plants in favor of more affordable SMRs.

Energy Minister Bento Albuquerque, a former navy officer who ran the country’s nuclear program for that service, told the Reuters wire service on 15 March 2019 that Brazil is proposing to open up its state owned nuclear sector to private investment to attract developers of SMRs.

No details were provided as to specific opportunities, sites, or financial arrangements. Brazil may seek financial assistance from the US via the Export-Import Bank if Congress lifts the current limit of $10 million on loans.

Other energy related discussions on Washington covered opening up oil and gas exploration in the coastal waters of Brazil.

All of these opportunities need to be seen in light of the chaotic history of Brazil’s energy sector.

Brazil Nuclear CEO Arrest on Bribery Charges

In August 2015 Federal police in Brazil arrested Othon Luiz Pinheiro da Silva, CEO of Elecrtrobas Termonuclear, which is building the country’s third nuclear reactor, Angra III, on charges he took bribes from construction firms involved in the project. The investigation into the bribes got its start in an unrelated investigation into a massive money laundering scheme in the oil & gas sector.

Standard & Poors said the arrest of the nuclear chief was another “political uncertainty” that caused the rating agency to change Brazil’s credit outlook to negative. US investors sued Electrobas for failing to disclose the arrest of the company’s CEO in April. Bond yields for the firm, reflecting the higher risks associated with the company’s CEO being caught up in a bribery case, rose to 8% by late July 2015.

Elecrobas denied any wrong doing and put the CEO on a leave of absence. He was later arrested and spent two years in jail being released in 2017.

Plans for Future Expansion of Nuclear Energy in Brazil

A review of nuclear energy plans for full size reactors in Brazil by the World Nuclear Association indicates that Brazil has proposed building two new nuclear plants in the northeast and two more near Angra in the southeast. Two sites have been named on a provisional basis. Both would involve three-to-four full size units, most likely PWRs, in the range of 1000 MWe each.

The sites involved include one in the northeast on a large dam on the Sao Francisco River between Pernambuco and Bahia states for up to 6600 MWe, and one in the north of Minas Gerais state in the southeast of the country, inland from Angra, for 4000-6000 MWe.

The cost of six-to-eight units at this size, using an overnight estimate of $4500/KW, comes to $4.5 billion per unit or a total cost of $27 billion to $36 billion most likely spread out over a period of up to two decades. Even so, the total cost is likely out of Brazil’s reach without international financing.

Rosatom’s ‘build-own-operate’ plan, which it is using in Turkey, contemplates cashing out at the 15th year of operation to recover the up front financing, It is unclear whether any other vendor, including China, would offer such favorable terms.

Other vendors who have expressed an interest include China National Nuclear Corporation (CNNC) which would offer a 1000 MW Hualong One, Westinghouse which would offer ther AP1000, and Areva-Mitsubishi offering the Atmea-1. Atomstroyexport has said it would offer the VVER-1000.

Argentina’s Nuclear Deals with China in Question

The NBN market research agency reports that a deal is on the skids for Argentina and China to close on t6erms to build Atucha III–fourth nuclear power plant in Argentina. The news wire said that the deal was at risk of becoming “a pipe dream.”

The two states had agreed that CNNC and Nucleoeléctrica Argentina SA would start construction of a 700MWe CANDU-6 heavy water reactor in 2018, and start construction of a million-kilowatt Hualong One PWR in 2020.

However, NBN now reports that, according to an insider from China National Energy Industry Corporation (CNEIC), the terms contract of this project will not be nailed down because Argentina has not accepted China’s offer.

The original plan estimated that the total investment of this project would be USD$14 billion, of which USD$12.5 billion would be financed by China. It would also be supported with low-interest loans, repayment period of 20 years plus an eight-year grace period with an annual interest rate of 4.5%. Earlier estimates, reported by Reuters, put the cost of the project at USD$8 billion.

Argentina reportedly asked for more favorable terms which CNNC said it would not agree to for the project. With the Candu type unit in question, the Hualong One may also be at risk. An effort to restart the stalled negotiations in January 2019 did not move the needle. All parties involved have since declined to make statements to the news media.

Argentina and China had planned to announce a done deal last November when Chinese President Xi Jinping visited the country during a G20 summit in Buenos Aires. China remains a key trading partner with Argentina. (Reuters Factbox).

Bulgaria Announces Start
of Investor Selection For Belene

(NucNet) Bulgarian state energy company NEK announced this week the start of an investor selection procedure for the two-unit Belene nuclear power station project.

NEK said it is looking for an investor for the construction of Belene with options to take a minority stake in a future project company or purchase electricity to be generated by the facility.

The purpose of the call for interest is to gather information about potential candidates. Investor must submit expressions of interest in the next 90 days. The government said it would make a decision within 12 months of receiving the filings.

NEK said Bulgaria will participate in the project company by contributing assets including the licensed site, nuclear island equipment, permits and documentation. Bulgaria paid Rosatom over $600M for these assets after it halted construction in 2012.

According to the call for interest, the station must be operational within 10 years from the signing of an investors’ agreement and its cost must not exceed €10 billion for both units.

NEK reiterated Bulgaria’s position that Belene must be built on a market basis, without state guarantees or long-term electricity purchase contracts. These harsh conditions may put a significant damper on investor interest.

In 2008, Bulgaria ordered two Russian VVER-1000 pressurized water reactor units for Belene, but the project was cancelled in 2012 because of financial and political considerations.

In June 2018, the government formally revived the project following a vote in parliament.

France’s Framatome, China’s CNNC, Russia’s Rosatom and US-based General Electric have already formally expressed an interest in investing or providing equipment and services for Belene. Talks have also been held with South Korea’s Korea Hydro and Nuclear Power.

Bulgarian officials have said that if the country goes ahead with the Belene project, Russia’s Atomstroyexport will be the main contractor.

US And India Revive Talks to Build Six Nuclear Plants

(NucNet) The US and India have signed an agreement confirming their commitment to cooperate on the civilian use of nuclear energy including a proposed construction of six US-supplied nuclear power plants according to a statement by the US Department of State.

The statement issued on 13 March 2019 said that India’s foreign secretary Vijay Gokhale and US undersecretary of state Andrea Thompson signed the agreement in Washington this week, but gave no further details about the nuclear power plant project.

Former US president Barack Obama and Indian prime minister Narendra Modi announced in 2016 that engineering and design work would begin for Westinghouse to build six AP1000s in India in a deal that was expected to be signed by June 2017. The agreement was the result of a decade of diplomatic efforts as part of a US-India civil nuclear agreement signed in 2008. The deal for US entry into India’s commercial nuclear energy market never happened.

The main stumbling block is India’s supplier liability law. As long as it remains on the book, the project will not move ahead. The World Nuclear Association (WNA) profile of India’s civilian nuclear program notes that GE Hitachi (GEH) said February 2014 to NPCIL that it had hoped to commence construction of the first 1594 MWe reactor early in 2015.

However, with no change to the 2010 Civil Liability for Nuclear Damage Act, GEH in September 2015 said it would not proceed with any investment in India until the country’s liability regime was brought into line with the rest of the world. With the GEH left the market. India later said that it wouldn’t have accepted the ESBWR design, which passed an NRC design and safety evaluation, because there was “no reference plant” to build confidence in the ability of GEH to deliver units for India on time and within budget.

India has shown little interest in changing the supplier liability law, due in part to the strong political clout of its coal interests, and has gone ahead with plans to build 10 700 MW PHWRs based on a domestic design and supply chain which favors heavy industry employment.

India has also inked multiple deals with Rostom having successfully commissioned two 1000 MW units at Kudanlulam, broken ground for two more, and has plans in the works for a third set at that site in Tamil Nadu on India’s southern most coastal location.

Six plants at Andhra Pradesh were at one time slated to be GEH ESBWRs, but that was changed to Westinghouse AP1000s. The Westinghouse plants were originally planned to be in Gujarat, PM Modi’s home turf, but anti-nuclear protests there prompted to move to the site on India’s east coast when GEH pulled out.

Westinghouse emerged from bankruptcy in March 2018 with the purchase of some of its nuclear assets by the Brookfield private equity fund. Westinghouse got into financial trouble due to the collapse of the V C Summer nuclear project in South Carolina primarily due to mismanagement by Westinghouse as both the vendor and as the EPC. As a result the firm said that for any future efforts, it would act solely as a vendor and not also take on the EPC role.

Since then it has not booked any new projects. One piece of good news is that by the end of 2018 all four AP1000s built by Westinghouse in China had entered revenue service.

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Dan Yurman ~ For breaking nuclear news follow me on Twitter @djysrv or https://www.twitter.com/djysrv ~ Welcome Page for Neutron Bytes Blog ~ https://neutronbytes.com/2014/08/31/welcome-post/ ~ Email me: djysrv@gmail.com ~ Mobile via Google Voice 216-369-7194 ~ Header Image Credit: http://apod.nasa.gov/apod/ap110904.html ~ ** Emails sent by readers about blog posts are considered to be comments for publication unless otherwise noted. ** ** The content of this blog is protected by copyright laws of the U.S. "Fair use" provisions apply. The RSS feed is for personal use only unless otherwise explicitly granted **
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