by Fiona FleckBONN - Germany's future government, brushing aside warnings from the nuclear industry, said on Saturday it was firm in its resolve to scrap nuclear energy.
Designated economics minister Werner Mueller, a former energy industry manager, told Focus weekly magazine the new government would fulfil its pledge to make nuclear energy a thing of the past.
"I see no necessity for nuclear energy today," the Focus report, released ahead of Monday's publication, quoted Mueller as saying. He said the move was not irreversible and that nuclear power could be reinstated if deemed necessary.
Chancellor-elect Gerhard Schroeder's Social Democrats (SPD) and environmental Greens agreed to abolish nuclear energy in their coalition agreement hammered out this month which was set to be approved at party congresses at the weekend.
But Europe's nuclear industry association, Foratom, on Friday warned that nuclear shutdown could lead to higher energy costs, job losses and more pollution.
Germany's energy chiefs have said that the quicker the new government wants a nuclear shutdown the more compensation it will have to pay, Der Spiegel weekly magazine reported.
Schroeder's new government, which will be sworn in on Tuesday, has not set a timetable pending energy consensus talks with industry chiefs. The talks, which start next month, will seek to agree a timetable in the next 12 months.
If the talks fail, the new government has threatened to force industry's hand with legislation - an option companies say could incur billions of marks in compensation.
"We want to achieve this without the force of the law and without compensation claims," Mueller said.
Juergen Trittin, a Greens leader who will be environment minister, said the new government had a parliamentary mandate and warned industry it could use this to force it to comply.
"We don't have to reach a consensus because we have we have a legislative majority," Trittin told the Greens party congress.
Shares in Germany's main power utilities Viag AG, RWE AG and Veba AG fell last week by as much as four percent after news the parties had agreed to close 19 nuclear plants which provide a third of the country's energy.
Industry chiefs were enraged by their plans.
"If they want to phase out nuclear energy fast, they will have to pay for it," Hans-Dieter Harig, head of PreussenElektra a utility owned by Veba, told Der Spiegel.
"If they give it time, they will pay less," he said.
Harig said closure would not only mean substantial government compensation, but also state funding to develop alternative energy sources. Firms would also expect compensation for their investment in medium and long-term nuclear waste dumps, Spiegel said, ahead of its publication on Monday.
Wilhelm Simson, Viag chief executive, argued that each reactor should be given a life of some 35 years, Spiegel said, meaning the newest plant Neckarwestheim 2 would run until 2024.
Mueller, who is not affiliated to any party and who was a top executive for Veba until a year ago, will be a key negotiator in the energy consensus talks.
National Post p. C7
TORONTO - Shutting down Ontario's nuclear plants should put $7 to $16 billion into the hands of Ontario taxpayers, according to new information released by the Ontario Ministry of Finance at a press conference Monday. This startling conclusion is based on the government's $5 billion valuation of the power plants that the new government-owned generating company -- a successor to Ontario Hydro -- will be inheriting. There's only one way for Hydro's power plants -- including Niagara Falls and other hydro-electric money-printing machines -- to be worth so little. The province's 20 nuclear reactors have a negative asset value.
The new power generation company -- a de facto monopoly for at least 4 years -- includes 68 provincially-owned hydro-electric stations and 28 fossil units. Based on recent sales of non-nuclear stations in other jurisdictions, Energy Probe estimates the worth of the hydro-electric stations to be at least $10 billion -- perhaps as much as $15 billion -- and that of the fossil stations to be no less than $2 billion, and more realistically $6 billion. Combined, they should fetch $12 to $21 billion. For the new generating company to be worth a mere $5 billion, those nuclear assets really represent liabilities of $7 to $16 billion.
To determine the value of Hydro's existing generating assets, the Ministry of Finance has properly excluded historic debts, disposal costs for nuclear waste already created, and decommissioning costs -- liabilities that will total tens of billions more -- because Ontarians are saddled with these costs whether or not the nuclear plants continue to operate. Instead, the Ministry of Finance has examined only the power plants' future operating costs and the expected future revenue from the electricity they would produce.
Although the ministry doesn't say it in so many words, its valuation of the new company can only mean that the nuclear plants will be running losses in future. If Mike Harris believes his finance minister, and wants to enhance shareholder value, he should phase out the nuclear units as quickly as possible to cut his losses.
Mike Harris would be well advised not to put too much trust in the estimates from his finance minster, or his energy minister or the financial experts at Ontario Hydro. The only competent valuators of the province's power assets are bidders in the marketplace.
By failing to restructure Hydro properly -- which requires breaking up the generating monopoly and selling the system in a configuration that would fetch the highest price -- Harris is squandering the province's crown jewels. The nuclear plants have been a horrible mistake -- they should never have been built -- but that's no reason to compound the error.
In fact, some of the nuclear assets, in competent hands, could be worth billions, perhaps as much as the $7 to $16 billion nuclear hole the government wants us to accept. British Energy, the privatized owner of the UK's nuclear system, has purchased a plant in the U.S. -- one of the units at Three Miles Island -- and has been scouting around for other purchases -- most recently New Brunswick's Point Lepreau. It planned to put money on the table to buy into the Ontario fleet but, inexplicably, the monopolists at Hydro said no.
If Harris needs proof of his government's incompetence at establishing fair prices, he need look no further than Monday's announcement. Hydro assumes - and the finance ministry accepts -- that all its nuclear units (except for Bruce 2) will operate at high production for 40 year service lives and that future payments will cover the total liability, now estimated at $19 billion. If the nuclear units are closed after 25 to 30 years of production -- as experience with reactors in Ontario and elsewhere in the world suggests - then Ontario Hydro should be reporting a current liability for nuclear waste disposal and decommissioning that's twice as high.
Ministry of Finance officials haven't decided if the generation company's new debts will be subordinate to the old debt. The new generation company will be financed with $1.8 billion in new private sector debt, unguaranteed by the provincial government, and $3.2 billion in equity held by the province. Getting a good return on this equity is important in discharging the liabilities remaining with the province for outstanding guaranteed bonds, overpriced power purchase contracts with independent producers, and nuclear waste disposal and decommissioning costs. If the new generation company pays the government ahead of its unguaranteed debt obligations, the public is likelier to get its money back. Alternatively, taxpayers are at risk of losing their capital and the generation company will be able to further deficit finance its nuclear ventures.
ReutersLONDON - A pro-nuclear lobby on Friday criticised a decision by Germany's future government to phase out nuclear power stations saying the move would lead to higher energy costs, job losses and environmental damage.
Foratom, Europe's Brussels based nuclear industry trade association, issued a statement through the nuclear news agency NucNet in response to the agreement reached between Chancellor-elect Gerhard Schroeder and his coalition partners the Greens.
"Such a position will make obsolete four decades of scientific and technological efforts, while simultaneously raising electricity prices and increasing greenhouse emissions," said Wolf-J Schmidt-Kuster, general secretary of Foratom.
A senior official from Schroeder's Social Democrats (SPD) said this week the new government was likely to start phasing out Germany's nuclear power stations in 2000.
Foratom said the only result of such a decision would be higher energy prices for industry and a greater dependence on imports.
Foratom said Germany had 19 power reactor units, eight of them among the top ten worldwide in terms of operating performance. It said there was no reason why they should be closed before the end of their life spans.
"If implemented, this decision will send a signal to the rest of the EU that Germany no longer wishes to lead in high technology industrial competence, as it directly threatens 40,000 highly skilled jobs," Foratom said.
On the environmental front, the statement said the German government had pledged to reduce emissions of greenhouse gases by 21 percent from 1990 levels by 2010.
Foratom said Germany's nuclear sector saved 150 million tons of carbon dioxide which would otherwide be emitted by conventional power generation.
"If these nuclear plants were to be closed by the year 2010, other German industry would be required to make even more severe reductions in its industrial capacity to compensate. Hydro-power cannot be expanded and renewables, although already heavily subsidised, simply cannot fill the gap in baseload long-term reliable electricity supply," the statement said.
PARIS - France's Green environment minister said on Friday she was worried that Germany's new government would try to fob off its nuclear waste on France if it pulled out of nuclear power.
"I would be hostile to the idea that, unable to send the waste back, we might find ourselves in the position of having to build long-term storage facilities in France, to be paid for by French citizens," Environment Minister Dominique Voynet, who heads France's Greens party, told the French daily Liberation.
The problem with nuclear waste arises because Germany reprocesses its spent fuel at the La Hague plant in northern France, run by state-owned nuclear firm Cogema.
Thousands of tonnes of German waste are now stored at La Hague, all of which must be returned to Germany under a 1991 law. Germany has yet to instal a long-term nuclear dump and faces considerable domestic opposition in doing so.
Should Germany refuse to take back the waste, "this would become the subject of negotiations," she said.
If Germany did finally pull out of nuclear power, that would also pose a problem for the plant itself, which derives 20 percent of its revenues from Germany, she added.
Voynet said she wanted Paris to move in the same direction as the new German government. The Bonn coalition agreement between Social Democrats and German Greens calls for an end to nuclear power, although it sets no concrete date.
But Voynet said the task would be more controversial and more difficult for France because it has a strong pro-nuclear lobby and depends on nuclear plants for 80 percent of its power.
"I would like to see obsolete plants gradually replaced by non-nuclear equipment that is friendlier to the environment and more efficient," she told the newspaper.
Among alternative energy sources she mentioned natural gas and coal, should France be able to develop the technology to make it burn cleanly.
Asked whether her views were in line with those of other members of France's left-wing government, she said she did not believe that Socialist Prime Minister Lionel Jospin had "an ideological attachment to nuclear power".
"I realise that no other country in the world is as dependent as France on nuclear power. France is changing direction, but slowly and cautiously."
By Hilary Hylton
AUSTIN, Texas - A Texas commission voted late last week to deny a crucial permit for a proposed nuclear waste dump near the U.S.-Mexico border, making it unlikely the controversial facility will be built.
The dump was opposed by environmentalists and the Mexican government, who said the site at the west Texas town of Sierra Blanca, 16 miles (26 km) from the Rio Grande, was not safe because of a nearby geological fault.
The three-member Texas Natural Resource Conservation Commission, the state's environmental regulators, voted unanimously against the dump. Chairman Barry McBee said there were enough doubts about the facility's safety to deny an operating license.
"There is insufficient direct evidence about the fault. Without that we cannot truly get a sufficient picture of how it would perform," he said.
The decision was welcomed by Mexican Environment Minister Julia Carabias, who said: "This underscores the good neighbour policy which the Mexican government has been demanding for several months from the United States and opens the way for an atmosphere of collaboration for the well-being of the frontier zone.
"It's a triumph for the Mexican people and the government, which together opposed the project," she added in a news conference at the Mexico City airport.
The commission's decision was a serious blow to the proposed dump, but not a final one. Supporters, who include Texas' largest utility companies, said they would likely ask for a rehearing by the commission within the next 45 days.
"I'm surprised and disappointed. The science showed this was a good site," said Lawrence Jacobi, general manager of the Texas Low-Level Radioactive Waste Disposal Authority, the state agency that selected the proposed site.
The commission's vote was greeted by cheers from opponents, who have waged a long battle against some of the state's most powerful economic interests. They had accused dump supporters of "environmental racism" because Sierra Blanca is a poor and mostly Hispanic town.
"I feel my prayers have been answered. I was bracing myself for another defeat," said Maria Mendez, a 66-year-old Sierra Blanca resident - one of the few in the town of 500 who opposed the dump. Most wanted it because it would bring jobs and money.
Sierra Blanca is in a harsh and sparsely populated region about 90 miles (144 km) east of El Paso, Texas.
David Duggins, a spokesman for the state's utilities, said the only place that nuclear waste could now be stored was at a dump in South Carolina. He told the commission that "Texas has an obligation, a moral and legal obligation" to construct its own facility.
The dump, utilizing concrete canisters buried 16 feet underground, would have stored radioactive waste from hospitals, industry and nuclear power plants in Texas, Maine and Vermont, the latter two of which would have paid $55 million to Texas. The U.S. Congress and President Clinton approved the compact between the states this summer, which many thought would clear the way for the dump's final permit.
But Mexican officials, including President Ernesto Zedillo, lobbied hard against the permit in meetings with Texas Gov. George W. Bush. So powerful were sentiments in Mexico that a group of Mexican congressmen staged a hunger strike to protest the dump.
Bush, considered a front-runner for the Republican presidential nomination in 2000, cautiously took no stand except to say that the dump would not be allowed if it was unsafe.
He said the decision would be left to the resource commission, whose members are all Bush appointees.
By Pavel Polityuk
KIEV - The head of Ukraine's state nuclear company Energoatom late last week called on leading industrial nations to fulfill promises to help fund construction of nuclear power stations to allow the crippled Chernobyl to be shut down.
"There is a presidential decision - we must stop the station (Chernobyl) but only if the memorandum (of understanding between Ukraine and the G7) is fulfilled," Nur Nigmatulin told reporters in Kiev.
"It didn't make economic sense to switch Chernobyl station on after its explosion in 1986, but it makes even less sense today to shut the station down."
Chernobyl's fourth reactor exploded in 1986, sending a poisonous cloud of radioactive dust billowing over Ukraine, Russia and Belarus in the world's worst civil nuclear disaster.
Millions of people were affected by the catastrophe. Ukraine says more than 4,300 people died as a direct result of the accident and many thousands more are now ill.
The Soviet Union restarted the three remaining reactors, but only one remains active today after a 1991 fire in the second reactor and the complete shut down of the first in 1997.
Ukraine and the Group of Seven (G7) wealthy industrial nations signed a memorandum in 1995 in which Ukraine promised to shut Chernobyl by 2000 in exchange for aid to construct two new nuclear reactors to replace lost capacity.
The former Soviet republic, which depends on its five nuclear power plants for roughly half its energy needs, is pressing the West to cough up the funds for the new reactors before it closes Chernobyl.
It is also struggling to scrape up the funds to keep existing nuclear reactors supplied with fuel, Nigmatulin said.
Nigmatulin said Ukraine has been covering most of its nuclear fuel needs with Russian fuel paid for by the United States in return for Ukraine giving up its Soviet-era nuclear arsenal, the world's third largest, to neighbouring Russia.
But that supply is due to come to a halt at the end of this year. "1999 will be very difficult for us because we will not be getting any more of the compensation fuel which has saved us for the past four years," Nigmatulin told Reuters.
"This is an issue about Ukraine's energy security and we hope the state will give us about $100-$150 million to buy nuclear fuel for next year," he said.
Nigmatulin said the total cost of fuel for the five nuclear power plants for next year would be about $250-$300 million, all of which would have to be bought from Russia. Ukraine's nuclear power plants use Russian-made reactors, which use only Russian-made nuclear fuel.
Ukraine is already deep in debt to Russian natural gas monopoly Gazprom, on which it relies almost exclusively for gas supplies. Gazprom says Ukraine owes it about $1 billion.
Ukraine's nuclear power reactors will reach the end of their safe lifespan by about 2010, but financial problems are likely to force Kiev to look to Russia again for replacement nuclear equipment.
By Jodi Bizar
SIERRA BLANCA, Texas - Most people would balk at having a nuclear dump in their backyard, but most people don't live in the impoverished and isolated Texas town of Sierra Blanca.
Abandoned by the railroads 30 years ago, the town of just 500 people sits in the arid desert of West Texas, waiting for a ticket out of poverty.
Many residents hope that ticket will come on Thursday when the Texas Natural Resource Conservation Commission will decide whether to grant a license for a proposed nuclear dump near the town to store low-level radioactive waste from hospitals, electric utilities and universities in Vermont and Maine.
Contracts to handle the waste are valued at over $50 million, and some of that money would go to the town.
But the project, to be developed at a site less than 20 miles (32 km) from the U.S.-Mexico border, has sparked a long-running diplomatic dispute with Mexico and upset a coalition of Democratic politicians, environmentalists and some local residents.
Mexico's Foreign Ministry said in statement late on Tuesday that the government had sent a diplomatic letter to the U.S. State Department, calling for the Sierra Blanca project to be relocated.
Mexico has complained bitterly for over two years about the plan to locate the dump near the border, but the protests have had little effect in Washington, where the U.S. Congress and President Bill Clinton approved the facility this summer.
Environmental groups such as Greenpeace have also protested the project, but the problem facing its U.S. opponents is simple - many people in Sierra Blanca want the dump.
"It will provide a stable tax base and an economic benefit for the town," said Doyle Gaither, chairman of the board of the Bank of Sierra Blanca.
He said the project could bring in about $1 million a year for the county, more than its total current budget. "There's no library, no health centre, no fire department here. These are things that could be built with that money," he said.
Opponents say a geological fault line runs through the site and it could cause groundwater contamination on both sides of the border because it lies over an aquifer.
They accuse state officials of "environmental racism," dumping waste in a remote area populated by mostly poor Hispanics. "It's obvious that life on the border does not count the same way as life somewhere else," said U.S. Representative Silvestre Reyes, a Democrat from El Paso.
Michael Rose, who owns a local restaurant, said clean air was about the only thing Sierra Blanca had going for it and the dump would take even that away.
"The town is so small it can't defend itself. If you count all the dogs and the cats, there can't be more than 550 to 600 of us. That's why they're putting it here. We can't defend ourselves," he said.
Three decades ago, Sierra Blanca had a population of about 3,000 people, but the railroads stopped using the tracks that still run through the town and people began leaving.
It certainly needs an economic boost now. Unemployment is at about 10 percent and the town has only a few streets, three or four restaurants and three or four stores.
"People need jobs here, and in most cities companies are offered tax credits and the cities will build them roads and sewers so they'll bring in jobs," said Steve Gibbs, president of the Bank of Sierra Blanca. "If we tried that in Sierra Blanca it would break our schools. We can't compete."
The dump would initially bring about 30 jobs to town and its supporters believe more would follow in the years ahead.
And most people believe assurances that the dump will not pose a health threat.
"I worry some what it might do to the environment, to our kids, but the experts for 10 years now have assured us that it will be safe," said Ana Padilla, a housewife. "All the county politicians and the leaders in town seem to think it's a good idea, so I guess I'm with them. I'm for it."
Ann Schuessler, a saleswoman at a craft store called Sunset Coyote Gallery, said she believed the dump was safe and was a necessary means of disposing of the waste.
"Everybody in the country says 'Not in my backyard.' Well I could say not in my backyard either, but I'll take it because I know it's for the good of the country."
Sierra Blanca has even been an issue in the gubernatorial race in Texas between incumbent Gov. George Bush, who says he supports it only if it is proven to be safe, and his Democratic opponent Garry Mauro, who is firmly opposed and believes it is "an affront to Mexico."
LONDON - British Nuclear Fuel's plan to open a controversial 300 million pound nuclear reprocessing plant was given a green light by the Environment Agency on Friday.
Building work finished at the plant in 1997 but opposition, part of which centred on the economic viability of the plant, delayed the granting of an operating licence.
The Sellafield Mox Plant (SMP) is designed to reprocess plutonium used at nuclear power stations by mixing it with uranium and turning it into mixed oxide fuel (MOX) used by power plants.
BNFL has said it believes the MOX plant has the potential to make hundreds of millions of pounds in profit for the state-owned group.
A review undertaken on behalf of the Environment Agency concluded that the economic benefit would be not less than 100 million pounds and might exceed 300 million pounds for the duration of the plant's lifetime.
Opponents to the MOX plant said there was no economic justification since the report did not take into account the 300 million pound building cost.
The Environment Agency said it was "dissatisfied" that the cost-element could not be factored into the equation.
"BNFL's application to operate the MOX plant was made after the plant had been built and after the capital cost had been incurred. Hence the Agency was not given the opportunity of considering the full economic case before construction began. The Agency is seeking a change in legislation to prevent similar situations occuring in the future", the Environment Agency said in statement.
The Environment Agency has also proposed new discharge authorisations at Sellafield.
By Robert S. Elliott
BUENOS AIRES - Bid terms for privatising Argentina's nuclear plants should be ready next month and a plan for private management of the Yacyreta hydroelectric dam sealed by year-end, the nation's energy chief said.
"I think in November we'll be able to give the privatisation terms of the nuclear plants," Energy Secretary Alfredo Mirkin told Reuters.
Mirkin declined to say how much Argentina hopes to make on the sale, although in the past the government has mentioned a sum of $250 million.
"A main priority is finishing up the Atucha II plant, which will require an investment of about $690 million," said Mirkin.
Under the terms of a draft government decree detailing the privatisation process of Argentina's three nuclear power stations, a concessionaire would be required to finish Atucha II within six years of assuming control. The plant, 85 percent finished when construction stopped in 1995, has an estimated useful life of 40 years once complete.
The other two plants, Atucha I and Embalse, are at full throttle and produce 11 percent of Argentina's electricity. The plants are gauged to operate another 18 years.
The privatisation process will create a new firm, Genuar SA, to hold the exclusive concession to operate and maintain the facilities.
A lone concessionaire will take over the power stations for 45 years by buying 89 percent of Genuar's stock. Ten percent of the stock will go to employees and 1 percent will stay in government hands.
Turning to the $8.5 billion Yacyreta hydroelectric project, Mirkin said a plan to pass over its management and operations to private hands should be worked out between dam co-owners Argentina and Paraguay within three months.
"We're talking with our associates in Paraguay and we think by the end of this year we will have a firm process ready," said Mirkin.
Yacyreta's 20th and final turbine was recently inaugurated, but the massive dam is still incomplete as its water level reaches 76 meters rather than the original design of 83 meters. It is running at 60 percent capacity and is forecast to produce 12,000 gigawatt-hours of energy this year.
Completion of the dam will be bid out separately from the management and operations, Mirkin said.
"This will be a process of advances incorporated in stages," he said.
Previously Mirkin had pinned an $800 million price tag on finishing Yacyreta.
The dam, which sits on the Parana river around Ituzaingo and Ayolas, was supposed to be completed inside six years at a price tag of $2.5 billion. Fifteen years after construction began, it has saddled Argentina with $6.328 billion in debt.
By Soeren Linding Jakobsen
COPENHAGEN - Two Danish windmill makers, together accounting for about half of all new windmills sold worldwide in 1997 and 1998, expect the market to go on growing strongly in the next few years.
The pace of growth could be up to 40 percent annually over the next five years, NEG Micon chief executive Jens-Erik Kristensen told Reuters in an interview.
"I foresee growth rates of 25-30 percent per year, maybe even up to 40 percent," he said.
BTM Consult, a leading independent windpower consultancy, has forecast average annual growth of 21 percent per year in the next half decade.
The cost of windmill-generated electricity may also go on falling by about 10 percent per year, making unsubsidised windpower competitive with coal in a few years, Kristensen said.
Unlike coal and most other forms of energy production, windpower causes no pollution and the only major objections to its expanded use are that the gigantic mills are seen by some as noisy eyesores.
"In a year or two a whole new world will open up when we will be able to compete on equal terms," Kristensen said.
In 1997, NEG Micon supplied 20 percent of new windmills installed globally.
Johannes Poulsen, chief executive of rival Vestas, whose market share was 25 percent last year, said in a separate interview that the market would grow by "substantially more than 20 percent" in 1999 after growth of a little over 20 percent this year.
"It is difficult to imagine that the overall market would not grow," he said, citing faster than expected growth in Spain and probably too in the United States.
In China, prospects were promising, Poulsen said.
But the outlook for 2000 and beyond was hard to forecast and depended on the development of large offshore windmill parks, he said.
These could generate up to 200 megawatts, making windpower attractive to major utilities.
Both NEG Micon and Vestas expect 1998 sales to increase by some 35 percent, indicating they would increase their respective market shares.
In Denmark, a windpower frontrunner, windmills generated seven percent of electricity consumption in 1997. In some regions in neighbouring northern Germany the figure is over 10 percent.