Friday, August 10, 2007

MOX fuel plant breaks ground at Savannah River

The $4.8B facility will convert 34 tons of weapons-grade plutonium to reactor fuel

Construction started this month on the Mixed Oxide Fuel Fabrication Facility at Savannah River, SC. The facility when operational will convert 34 tons of surplus U.S. weapons-grade plutonium into mixed oxide fuel. The plant is part of an agreement with Russia for each country to dispose of 34 tons each of surplus plutonium. There's enough metal in the mix to make 17,000 nuclear weapons according to World Nuclear News.

Government nonproliferation experts are relieved that more weapons-grade material is coming out of circulation. NNSA’s Deputy Administrator for Defense Nuclear Nonproliferation, William Tobey, said,“The start of construction of the U.S. MOX facility helps us fulfill an international nonproliferation agreement and marks a major step forward in our efforts with Russia to dispose of surplus weapon-grade plutonium so that it can never be used again for nuclear weapons,”

The people who will build and work at the plant are overjoyed. Rep. Joe Wilson (R-SC) waxed ecstatically about new facility. Wilson, who sits on a batch of military affairs committees in the House, seems to have no real connection to NNSA, which runs the Savannah River plant, other than the coincidence that it is located in his district.

"The construction of this new facility means more than just a commitment to cleaning up our supply of excess plutonium. It will bring new jobs to South Carolina and provide a readily available supply of nuclear fuel to help meet our energy needs. There is no reason, in a time of increased demand, that we should let a vital energy source sit dormant in the ground."

Not everyone was so thrilled. The Union of Concerned Scientists issued a press release on 8/1 complaining that the $4.8B plant is being kept secret from inspections by the IAEA. Edwin Lyman, a UCS senior scientist, wrote a letter to Energy Secretary Samuel Bodman that the U.S. has an obligation to set an example for other countries by putting the MOX fuel plant under IAEA safeguards. What Lyman wants is for the IAEA to get a look at the facility design six months before the start of construction. Since ground has already broken for the plant, the UCS request has the appearance of seeking to stop work on the facility.

The New York Time reported on August 1st that Laura Holgate, who was director of fissile materials disposition in the Clinton Administration, said that building the plant in South Carolina was, "the least bad option." She said that conversion of plutonium to reactor fuel would be matched by a similar effort by the Russians which would cut the total inventory of weapons-grade plutonium. Without referring to UCS by name, she said that opposition to the plant comes from people who oppose nuclear power in any form.

The new facility will be constructed by Shaw Areva MOX Services. The MOX fuel manufactured by the facility will be used in commercial nuclear reactors in North Carolina and South Carolina generating enough electricity for around one million households for 50 years. The NNSA told World Nuclear News this estimate was based on projections that the MOX fuel would produce 200 billion kWh of electricity. The plant will be operational and producing nuclear fuel on 2016.

Westinghouse moves out on four reactors for China

Plus staking its claims to PBMR reactor technologies and for NGNP

The ink is dry on a contract between Westinghouse and the State Nuclear Power Technology Company of China (SNPTC) to build four AP1000 nuclear plants in that country. The announcement comes one day after Westinghouse announced its acquisition of IST Nuclear (ISTN), a provider of services to South Africa's Pebble Bed Modular Reactor (PBMR) project. The deal with China represents the first ever construction of advanced U.S. nuclear technologies in China. Terms of the deals were not disclosed, but Steve Tritch, Westinghouse CEO, told the news media they will generate more than 5,000 jobs in the U.S.

The first two plants will be built in Sanmen and Haiyang with construction expected to start in 2009. The first plant is expected to startup in 2013. Work started on the four reactors since the framework agreement for the four reactors was signed last March. Engineering design and long lead time procurements for major forgings are already underway.

Westinghouse's deal with ISTN is significant because the firm already owns 22.5% of the firm. The company is managing the development of South Africa's PBMR pilot plant at Koeberg. The deal has a second ring of significance because China is developing its own Pebble Bed plant at Shanghai. China currently has the world’s only operational PBMR plant, which is an experimental research model in Beijing housed at Tsinghua University. South Africa and China already have an agreement in place to collaborate on PBMR R&D. According to South African sources the main objective of the agreement is to pursue development of High Temperature Reactor (HTR) projects in China and South Africa, as well as for the commercialization of these systems.

Both companies intend to design, develop and construct HTR demonstration plants by 2010. Although both technologies use the same pebble fuel concept as a source of heat, there are differences between the power conversion systems. The first series of HTR plants in China will be indirect cycle, steam turbine systems, while the first series of HTR plants in South Africa will be direct cycle gas turbine systems.

It looks to me like Westinghouse is positioning itself to be a part of this agreement. Even more to the point is the next development which is the entry of PBMR technologies into the U.S. market.

PBMR to Seek NRC Certification

Pebble Bed Modular Reactor (Pty) Ltd officials told the NRC in July the company plans to submit a reactor design certification by late 2009. So far, according to nuclear trade press reports, the firm has submitted four white papers to the NRC. The subjects of the white papers are: (1) PBMR’s approach to probabilistic risk assessment; (2)the identification of licensing basis events; (3) the classification of structures systems and components; and (4) the defense-in-depth approach. For its part NRC has published a brief list of the major licensing and engineering challenges facing a PBMR application. A key issue for PBMR is the fuel. Another is containment. PBMR plans to submit 15 more papers by the end of 2007. On July 18th PBMR officials met with the NRC to review the first four papers and discuss a target schedule. According to the NRC meeting notes PBMR is seeking an "aggressive schedule" for the reactor certification.

Edward Wallace, PBMR Ltd's senior manager of U.S. programs said the firm is looking to score a double play with the reactor certification effort. In additional to seeking commercial clients, PBMR is pursuing a contract with the U.S. Department of Energy (DOE) to build the Next Generation Nuclear Plant (NGNP). A Westinghouse led team is one of three awarded federal funds to work on a conceptual design. The prototype plant is expected to be built at the Idaho National Laboratory. DOE has also released an RFP with proposals due August 20th for the next round of design work. The firm(s) selected will be expected to establish the safety and functional requirements, and prepare a cost estimate, for a plant to be built and operational by 2021.

NGNP is a significant shift in design in that power conversion to make electricity will be replaced by using the plant's heat to make hydrogen. The process heat could also be used to make steam for oil sands extraction. The hydrogen could be used to process the bitumen to a better grade of oil. Andrew Kadak, a member of the Westinghouse Team, told Platts on July 23rd PBMR Ltd is "leveraging" the basic pebble bed technologies for these purposes. He added that the PBMR technology is at this point the only game in town. He said South African utility Eskom plans to start operating a 165MW PBMR by early 2009.

Postscript - Eskom PBMR Construction Delayed

Construction start-up of the first pebble-bed modular reactor (PBMR) power station at the Koeberg site, near Cape Town, is currently scheduled for 2009. The firm attributes this delay to the regulatory process which is taking longer than originally anticipated.

Construction of the first demonstration plant will take up to four years to complete, since this is the first of its kind in the world. The fuel is the only component which has not been adapted from the original German design, so very few of the components are available off the shelf. Once the firm has the license for construction in place, it can place the orders for the long-lead items. Construction time could then be reduced to about 24 months. The plant will not have a containment structure due its design which uses helium as a coolant and unique fuel elements.

Global warming thaws icy opposition to nuclear energy

What's a megawatt to New Jersey?

The percentage of Americans who believe nuclear energy is an acceptable source of power is up according to a new survey from an MIT political scientist. Stephen Ansolabehere reported 35% of Americans favor increasing the nation's reliance on nuclear energy up from 28% who held that view five years ago. Unfortunately for the nuclear industry, not many of the additional 8% appear to live in New Jersey. There a proposal for a fourth nuclear reactor for Public Service (PSEG) ran into opposition from the NJ Environmental Federation. The group endorses efforts to reduce greenhouse gases, but not with nuclear plants.

Survey says support increasing for nuclear energy

Americans' icy attitudes toward nuclear power are beginning to thaw, according to a new survey from MIT. The report also found a U.S. public increasingly unhappy with oil and more willing to develop alternative energy sources like wind and solar.

In the five years since the last survey, public preferences have remained fairly stable, but the percentage of people who want to increase nuclear power use has grown from 28 percent to 35 percent. That increase in popularity is likely due to concern over global warming caused by carbon emissions from fossil fuels, Ansolabehere said. Moreover, the national survey of 1,200 Americans' opinions on different types of energy indicated growing concern about global warming -- but an apparent reluctance to pay to fight it.

The report, "Public Attitudes Toward America's Energy Options: Insights for Nuclear Energy," was recently published by MIT's Center for Advanced Nuclear Energy Systems. Ansolabehere conducted a similar survey in 2002 as part of the MIT study, "The Future of Nuclear Power."

In New Jersey it's not so clear

According to the Glouster County Times, when Gov. Jon S. Corzine signed into law a measure setting caps for greenhouse gas emissions, Public Service Enterprise Group CEO Ralph Izzo stood with him championing the reform to combat global warming. The company is considering adding a fourth nuclear reactor to its nuclear energy complex in the garden state. While the company hasn't filed an application with the NRC, New Jersey environmental groups aren't waiting for one to voice their opposition.

"Being there and supporting the reduction of (carbon dioxide) emissions is significant, but it's not going to be done in nuclear," said New Jersey Environmental Federation Program Coordinator Jane Nogaki. "That's replacing one polluting source with another."

The New Jersey chapter of the Sierra Club wants to phase out all nuclear plants in New Jersey. Jeff Tittel, the state director, told the paper, "Instead of investing in nuclear we should be investing in renewables."

Nuclear power currently provides 50% of the electric power in New Jersey. PSEG is getting ready for the relicensing of its plant at Oyster Creek. which expires in 2009 and at Salem 1 and 2 which expire in 2016 and 2020.

Paula DuPont-Kidd, spokeswoman for Valley Forge, Pa.-based PJM, which operates a wholesale electricity market and power grid serving customers in the region, told the paper an array of energy sources are needed to keep up with demand. But especially in New Jersey, she said, new generation or construction is crucial.

"In the eastern region there are a number of plants that are 40 years old and older, and utilities are deciding: Is it economically viable to make upgrades, or does it make sense to retire it?"

"Definitely there is a need in New Jersey," she added. "To us, a megawatt is a megawatt, no matter how it's produced."

NRC faces dust devils at Wyoming hearing

"Generic EIS" on uranium mining gets low marks at kick-off hearing

A public hearing called by the Nuclear Regulatory Commission in Capser, WY, on August 7th on in-situ uranium leaching and uranium milling turned out 120 people who had some questions about the process. NRC is trying to figure out how 14 new in-situ uranium leaching proposals will affect the environment. Wyoming landowners and two Wyoming environmental groups are spun up about the proposals like dust devils racing across the plains.

Uranium companies want to flush uranium out of the subsurface using a series of wells. They describe the operation as having "low impact." Wayne Helli, VP at Ur Energy, told the Casper Tribune the NRC should develop a "generic" environmental impact statement for the process. After that he wants an end to public comment. However, Mike O'Brian, who is a local land use planning official, told the paper, "I hope it's not just the mining company that's doing the monitoring. That's kind of like the fox guarding the hen house."

It got worse. The State of Wyoming weighed in with a complaint and a request, Neither is trivial. Rick Chancellor, head of Wyoming's Land Quality Division in the Department of Environmental Quality (DEQ) complained that his agency had not been formally notified by the NRC about the hearing. He added that Wyoming Governor Dave Freudenthal wants the DEQ to be a "participating agency" in the environmental review. That's bureaucratic talk for demanding a seat at the table in the decision process. Coming from the governor, it answers the question of "where's the beef."

Environmental groups were represented by the Powder River Basin Resource Council and the Biodiversity Conservation Alliance. Both asked for an extension of the comment deadline which is September 4th.

The NRC is expecting numerous applications for new uranium recovery operations in the next two to three years. The generic EIS will address common issues associated with environmental reviews of in-situ leaching and conventional uranium milling facilities located in the western United States. NRC believes there are environmental issues common to both types of facilities. Good luck guys.

Sunday, August 5, 2007

DOE Names Director of Loan Guarantee Program

David Frantz has the financial background to run a successful program, but will OMB let him?

The U.S. Department of Energy (DOE) announced that it is implementing its loan guarantee program by naming David G. Frantz to serve as its Director. Mr. Frantz will report directly to DOE’s Chief Financial Officer and, in this capacity, will manage DOE’s Loan Guarantee office. The loan guarantees will cover clean energy projects, as authorized under Title XVII of the Energy Policy Act of 2005 (EPAct). Projects supported by loan guarantees will include nuclear energy.

Mr. Frantz is currently a Director of Project Finance for the Overseas Private Investment Corporation (OPIC), where he manages a team with worldwide responsibilities for financial transactions. He brings over 30 years of experience in project finance. Mr. Frantz is a decorated Vietnam veteran and has earned two Masters Degrees in international economics and international business and securities studies, respectively from the Fletcher School of Law and Diplomacy at Tufts University in Medford, Massachusetts. He received a Bachelor of Arts Degree and commission in the U.S. Navy from the Virginia Military Institute;and has completed postgraduate work at the Harvard School of Business.

This is the type of financial background that the nuclear industry asked the Energy Dept, to get in a leader for the loan program. The Senate also called for an experienced executive in the financial services field. They got what they asked for, but it may not alter OMB's position which offers the industry far less in covering debt for new nuclear plants than the industry wants.

The House Appropriations Committee eliminated loan guarantees from the FY2008 Energy appropriations bill. The Senate supported the program. On July 6th Platts reported this update.

The Senate's no-cap approach would enable DOE to offer loan guarantees large enough to benefit new reactor projects. Last month the House Appropriations panel that controls DOE spending recommended a $7 billion allocation for the entire loan guarantee program in FY-08 and excluded nuclear from the list of eligible projects. The subcommittee action was later approved by the House Appropriations full committee. But Nuclear Energy Institute officials, who went to the subcommittee to make their case, estimated that nuclear projects might need up to $25 billion in loan guarantees in FY-08, according to Richard Myers, NEI's vice president of policy development.

Position is an executive appointment, but here are some questions anyway

In this position Mr. Frantz is not subject to Senate confirmation hearings. It is an executive appointment. However, in the spirit of inqiury, here's some questions I'd like to pose to him. It's too bad he's already under the government's policy directives because I doubt he could answer frankly at this point.

So, readers are welcome to offer their own answers via comments. Note that all comments are moderated which is necessary to stop spam and off-topic content.

Q1: The nuclear energy is generally aligned around a position that the guarantees authorized by Title XVII of the Energy Policy Act of 2005 should cover 80% of the cost and 100% of the debt. The draft loan guarantee regulations released by the Department of Energy in May limit loan guarantees to 90% of the debt which the industry and its investment banks say is unworkable. What level do you think the guarantees should be set at or should the industry be supported with guarantees at all?

If there are no loan guarantees, will any new nuclear plants be built? For instance Constellation Energy in Maryland told the Baltimore Sun in July that if the guarantees are not available it will not build any new nuclear plants.

Q2: The American Council on Global Nuclear Competitiveness, a nuclear industry organization, is advocating that the loan guarantees be set at 80% of the cost and 100% of the debt, and, also that the federal guarantee program be expanded to cover other types of nuclear facilities including
* Uranium mills, processing plants, conversion, and enrichment facilities
* Reactor component fabrication facilities
* Used fuel reprocessing facilities
* Education and training programs for plant designers, craft workers, engineers, and operators.

Do you think expansion of the loan guarantees to cover these areas is good public policy for the U.S. or not and why?

If yes, is it politically feasible? If no, why should the U.S. do about its gaps in manufacturing of nuclear plant components and a lack of a trained workforce even for its existing plants?

Q3: Should the U.S. use loan guarantees to develop a strong program of exports of nuclear technologies to advance the nation's goal for nonproliferation of nuclear weapons?

Q4: Some states, such as Florida, allow utilities to recoup construction costs as the nuclear plant is being built? Does this give these states an inherent advantage over others? Will "rate-based" state like Florida come out winners relative to other states under this scenario? Is this a useful model for other states? Why or why not?

Q5: If Congress does not approve loan guarantees for new plants, will U.S. investment banks shift investment priorities to new nuclear plants in other countries leaving a gap in available capital if Congress changes its mind at a later date? What impact, if any, would this scenario have on the prospects for new nuclear plants?

Q6: Should fees for loan guarantees cover just the administrative costs of the program or should they form an "insurance pool" to cover potential defaults? Should the costs of the fees be passed on to consumers? Should there be any fees at all?

Q7: If Congress does not pass a "workable" loan guarantee program, will it cause the manufacturing base for heavy forgings in the U.S. to atrophy? What impact, if any, would this scenario have on the prospects for new nuclear plants?

Q8: Should there be a cap on the total amount of loan guarantees allowed to be offered by the government? With more than two dozen plants on NRC's short list of expected licensing applications, the total demand for investment could be as much as $125 billion. At 80% of the cost and 100% of the debt, the demand for loan coverage could be $100 billion. If there should be a cap, what number do you suggest and why?

Q9: Should loan guarantees be limited to "innovative" or "advanced" nuclear reactor technologies and denied to conventional reactor designs such as those currently approved by the NRC? If so why or why not?

Send those cards and letters in now!

GNEP $16M Award to Four Consortia

The Department of Energy announced on July 30th that four consortia have been selected to receive up to $16M. They will develop conceptual design studies, cost estimates, and preliminary schedules for building a spent fuel recycling center and advanced reactor under the Global Nucelar Energy Program (GNEP). Thge consortia are led, respectively, by AREVA, EnergySolutions, GE-Hitachi, and General Atomics.

Last May Clay Sell, Deputy Secretary of Energy, announced that a total of $60M would be available over the next two years for these types of projects. That assumes Congress doesn't stop the program. So far support for GNEP in both the House and the Senate has been lackluster at best. The House cut the administration's request by nearly 75% and the Senate cut it by more than 50%. If a conference committee splits the difference, funding in FY2008 will be somewhere between $150M-180M.