EXCLUSIVE-No Spain nuke waste decision seen before May
Wed, 23 Mar 2011 18:54 GMT
* Nuclear waste dump decision unlikely before May poll
* Government may not raise power prices again this year (Updates with comment, background, adds byline)
By Daniel Bases
NEW YORK, March 23 (Reuters) - Spain is unlikely to decide where to place a facility specially built for storing spent nuclear fuel before local elections in May, Industry Minister Miguel Sebastian said on Wednesday.
But he did indicate power prices, already raised by 10 percent this year, may not rise any further.
In an exclusive interview with Reuters, Sebastian said the nuclear crisis in Japan contributed to an environment of concern and worldwide alarm about nuclear energy.
The ATC, as the waste dump is known in Spanish, would alleviate the pressures building on limited, on-site storage facilities, which the government predicts will be full by 2013.
"We need to explain that (the) ATC is an absolutely risk-free installation, but we need time and probably this is not the best time to take a decision," Sebastian said on the sidelines of an investor conference on Spain sponsored by Bloomberg.
He continued, "Both because of the nuclear shock in Japan and the fact that we have local elections in one month and a half."
Spain has eight nuclear power plants, providing 20 percent of its electricity.
Asked if the long-delayed decision might come before year-end, Sebastian said, "It depends on the atmosphere. We hope that the atmosphere improves because we need the social consensus."
Spain's central government ruled last September that the small town of Zarra was best placed to house the 700 million euro ATC facility on technical grounds. But it has yet to ratify the project amid fierce opposition from the regional government of Valencia.
Regional governments have considerable autonomy in Spain, and Valencia voted unanimously that it will not accept the ATC. Zarra is already home to one nuclear power station.
The International Atomic Energy Agency, the United Nations' nuclear watchdog, has urged Spain to begin building the special facility as 6,700 tonnes of spent fuel rods have accumulated.
The ATC is designed to store the waste for up to 60 years. Highly radioactive waste needs to be stored for many thousands of years, and several underground sites around the world are being considered for long-term projects.
In the aftermath of Japan's earthquake and tsunami, Sebastian said the government is double-checking its nuclear safety measures but in the short-term cannot consider closing these power plants. Their 40-year working lives will start to expire in the 2020s.
POWER PRICES
Sebastian said utilities have increased their power output from their nuclear facilities, which helps to decrease wholesale power prices <SP/BASE> because producers can sell it at a discount to electricity generated by burning gas or coal.
Already this year, Spain increased power prices by 10 percent in an effort to help alleviate the debt burden on the power utilities.
Sebastian said the government is monitoring prices but would not say if more increases were on the way.
"It depends because our renewables system and the good rain this year is allowing us to have a lot of hydro (power), which is cheap. And of course we are using the nuclear plants at even higher capacity than before. We are not very pessimistic about the evolution of the price," he said.
Last year, 35 percent of Spain's power came from renewable sources, including solar and wind in addition to hydro.
Spain's utilities hold some 16.5 billion euros of government-backed debt, known as the tariff deficit, on their balance sheets due to the difference between the cost of generating power and consumer prices.
Sebastian reiterated the government's commitment to securitize this debt and reduce it to zero by 2013.
On Tuesday the government sold around 2 billion euros ($2.85 billion) of FADE ten-year power tariff bonds in the third sale of the securities designed to lower debt levels.
The issue is part of the government's plan to pay utilities like Iberdrola <IBE.MC> and Endesa <ELE.MC> for the deficit.
Industry sources told Reuters the shortfall could grow by another 7 billion euros in 2011. (Additional reporting by Martin Roberts in Madrid)
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