Saturday, February 2, 2008

Florida Power, Xcel, plan nuclear expansion

Two for new nukes

After plans for two nuclear plant projects evaporated last week, it was interesting to see two new proposals appear on the boards. Florida Power & Light want two major additions at Turkey point and Xcel is looking for investors to add more nuclear generating capacity. It seems that bad news and the good in the nuclear industry comes in twins.

FP&L pitches regulators for Turkey Point expansion

Florida Power & Light (NYSE:FPL) told regulators in that state this week that it wants to add two new nuclear reactors to its Turkey Point site. The Miami Herald reported that Wade Litchfield, an attorney for FP&L told the Public Service Commission, "Nuclear power is the backbone for FP&L's system." He made his remarks at the opening of a three-day hearing taking place in Tallahassee. The Commission's decision on the regulated utility's request for expansion could come as early as March.

FP&L is reportedly considering two scenarios most likely based on Westinghouse AP1000s. FPL wants to add two reactors at Turkey Point by 2018 and 2020, bringing the utility's number of nuclear plants in Florida to six. FPL's proposals include a 2,200-megawatt plant that could cost between $12 billion and $18 billion, and a 3,000-megawatt project that is likely to cost between $16 billion and $24 billion. Either way the plants would go online by 2018 and 2020 respectively.

These high cost estimates set off a controversy in the industry which is ongoing. A report in the Tampa Tribune on "exploding nuclear costs" drew comments from the Nuclear Energy Institute (NEI) which pointed out that all types of new electricity generating plants, including coal, are costing more.

Coal is not an option at this point for FP&L. Utility regulators shot down FPL's proposal to build a 1,900-megawatt coal-fired plant near Moore Haven in Glades County last year because the unknown future cost of carbon was too much of an uncertainty for them.

"I really don't think the state has any options," said David Parker, a Tampa-based utility analyst with Robert W. Baird & Co. "Since we've said no to coal, nuclear has to be adopted, or the state is going to continue to be whipsawed by volatile utility bills."

"Additional nuclear energy can help supply reliable, affordable power to our customers while avoiding greenhouse gas emissions that scientists have determined contribute to climate change," Florida Power & Light President Armando Olivera said in a statement.

Xcel looks for investors to add nuclear plants

Utility holding company Xcel Energy (NYSE:XEL) wants to partner with other utility investors to build new nuclear power plants. CEO Richard Kelly told Reuters last week, that the firm, which owns two nuclear power plants, is not big enough to file a COL with the NRC on its own.

He said, "I certainly hope nuclear is going to be part of our answer going forward." That's corporate speak for 'we can't bet the company on a nuclear power plant, but we're happy to sign up for part of the action with others.'

Tim Taylor, Xcel's top Colorado executive, recently told the Denver Post that the utility doesn't have plans to place a plant in Colorado, but "in terms of the nation, nuclear has got to be an option."

Xcel owns two nuclear power plants, the Monticello Nuclear Generating Plant and the Prairie Island Nuclear Power Plant, although both are currently operated by the Nuclear Management Company. Xcel plans to expand both its Monticello and Prairie Island nuclear plants, which provide about a quarter of the electricity that's delivered to customers. In its most recent resource planning report filed with the state in December, Xcel says it's aiming to extend the life and increase output by 71 megawatts at Monticello and 160 megawatts at Prairie Island.

In 2006, the Nuclear Regulatory Commission approved a 20-year license renewal for Monticello from 2010 to 2030. Prairie Island's licenses expire in 2013 and 2014, and Xcel intends to apply for 20-year extensions on both of those reactors.

IAEA Watchdog gives Pelindaba a pass

Bill of sale for Brooklyn Bridge now in Vienna

Hat tip to Wired's Danger Room's Noah Shachtman

The International Atomic Energy Commission (IAEA) says in a very brief press release that the attack by two groups of armed men on Nov 8 was not a threat to "sensitive nuclear areas." In a report issued this week, the IAEA reported on the results of a site visit to the Pelindaba nuclear facility of the South African Nuclear Energy Corporation (NECSA). The team went there on Jan 25 at the invitation of the South African government.

According to the IAEA official report "there was no evidence that sensitive nuclear areas were under any threat at any time during the incident. It recommended specific proposals for security training and equipment to the South African authorities."

The IAEA also said that a security upgrade plan at Pelindaba, that began to be implemented by the facility´s operator in 2006, provides an "appropriate basis" for ensuring physical protection of nuclear material and nuclear facilities at the site.

For its part NECSA said the agency has reviewed evidence that “points to negligence on the part of some of the NECSA security personnel.” A number of security workers at Pelindaba were suspended while NECSA officials investigated the incident. “NECSA has initiated disciplinary action against the staff members concerned,” the statement said (The Sowetan, Jan. 21).

Watchdogs that don't bark?

OK, now that I've done the reporting bit, here's some commentary. First, if you thought sleeping Wackenhut guards were a problem at Exelon plants, what happens when the global nuclear watchdog fails to bark after two groups of armed intruders attack a former nuclear weapons plant?

Second, in terms of the IAEA report, my reaction is that the Brooklyn Bridge sales pitch comes to mind. The facts, as reported by the South African news media, are that one group, using inside knowledge of the site's security systems, got past multiple barriers including CCTV surveillance, various electrical fences, and other sensors. A second group was detected by security forces and engaged in a running gun battle for at least 45 minutes.

No one has ever offered a plausible reason for the attack. One of the more interesting comments received by this blog was that the attackers were not trying to take something away from the plant, but rather were trying to verify something was there? For a country that can't keep the lights on, you have to wonder whether the breakdown of basic services in South Africa is a preview of the same threats to nuclear materials as we're seen speculated about in Pakistan?

Previous reports on this blog are here and here.

Thursday, January 31, 2008

Areva reportedly serious about Idaho

Uranium enrichment plant targeted for site near the INL
[Update 02/15/07][Update 05/06/08 Areva chooses site near Idaho Falls]

The Associated Press reports Areva Inc., a French government-controlled nuclear energy company, is in talks with officials in Idaho and other U.S. states over a planned $2 billion uranium enrichment facility that by 2014 could supply fuel to commercial nuclear power plants.

* * * Areva recently hired Erika Malmen, wife of Gov. C.L. (Butch) Otter's former chief of staff, Jeff Malmen, to lobby Otter and state legislators, according to documents obtained from the Idaho secretary of state by The Associated Press.

Lawmakers said they've been drafting legislation to provide hundreds of millions in tax incentives to help persuade the company to build a plant near the Idaho National Laboratory nuclear reservation near Idaho Falls.

* * * Areva, whose U.S. operations are based in Bethesda, Maryland, has narrowed its list of places to build the plant to five states according to spokeswoman Laurence Pernot.

This demonstrates a real need for additional domestic capacity, Pernot said. Areva is ... committed to fueling the nuclear renaissance. Idaho has a long history of involvement in nuclear research at the Idaho National Laboratory

* * * Areva's project would be a smaller version of its Georges Besse II centrifuge enrichment facility now under construction in France, Pernot said. The facility would be capable of producing enough enriched uranium to supply nearly a quarter of existing U.S. commercial nuclear power needs, Pernot said, adding the plant would start producing uranium in 2014, but be at full capacity only in 2019.

* * * More details on Areva's interests in uranium enrichment in this analysis.

Update 02/15/07

The Idaho Falls Post Register reported* in a special bulletin today that a site selection team from Areva met with members of the Idaho legislature trolling for hundreds of millions of dollars in tax breaks to locate the plant here. The newspaper also reported Areva officials have pinpointed a spot between Idaho Falls and the Idaho National Laboratory where it would build the plant. The company also is considering sites in four other states. The other sites that have been reported in the news media include one in far southeast New Mexico and in southwestern Virginia. Robert Poyser, an Areva vice president, said they will make a decision in four to six weeks.

* The Idaho Falls Post Register limits online access to paid subscribers hence there is no link to the bulletin.

Sunday, January 27, 2008

Two planned nuclear plants call it quits

What scared them off?

AP is carrying a report this afternoon (Sunday Jan 27), first published by the Idaho Press, that MidAmerican is pulling out of its plans to build a nuclear power plant in Payette, ID. Elected officials in southwest Idaho say they've been told plans for a proposed nuclear power plant have been abandoned. The firm, which had about as much impact on Idaho's energy picture as a butterfly on a twig, seems to have skipped town with nary so much as a goodbye.

Emmett Republican Sen. Brad Little says MidAmerican Nuclear Energy, the Iowa company, which was studying locating a plant on 3,000 acres near the Paddock Valley Reservoir, told local consultants they were pulling out. Other elected officials confirm Little's account that they were told by MidAmerican officials the company was dropping out of the deal because of financial and other concerns.

Numbers might not add up

The market melt down and the turmoil in capital markets may be some of the reasons the privately held firm is backing out. They've still got investors who might be asking why the mid-range utility wanted to tackle the enormous capital costs of a nuclear reactor without other investors on board.

Another possibility is that MidAmeican had specified the new, giant Mitsubishi APWR, which has just filed its design with the NRC. Given the cost, and the time needed to certify the design, MidAmerican might have gotten cold feet just on these factors alone.

It's possible that Mitsubishi asked MidAmerican for financial support on the NRC design review, and without the near-term prospects of a revenue stream, MidAmerican balked. Finally, even if there was smooth sailing ahead for a brand new reactor design, no one has ever built one which makes the large forgings for the plant first-of-a-kind and thus more expensive.

The prospect of an anti-nuclear referendum on the Idaho ballot next year may also have weighed in the balance. That would be unfortunate if true. Economic development experts in the western part of the state can now start thinking about where the electricity is going to come from to keep the lights on.

Little said MidAmerican plans an announcement this coming week. We'll watch for it.

[Update 01/28/08] A Des Moines, IA, TV station reports that in a message posted on the Iowa company's Web site Sunday, Bill Fehrman, the project manager for the proposed Idaho nuclear power plant, says that after due diligence, MidAmerican Nuclear concluded it does not make economic sense to pursue the Payette County project at this time.

The decision was based on the economics of building a nuclear plant and not on whether the site near Payette was suitable, Fehrman says.

According to Fehrman's statement, MidAmerican still believes that that nuclear energy must be an important part of the nation's energy supply in the future.

Another nuclear utility stops work in South Carolina

Reuters reports that South Carolina Electric & Gas has suspended plans to submit a COL to the NRC. The firm had planned to specify two Westinghouse AP1000s for its Sumner, SC, site in a submittal scheduled for late last year.

A company spokesman said the company was concerned about the rising price of concrete and steel. However, Robert Yanity also said these costs are affecting all energy utilities, such as coal and gas, and are not confined to nuclear plants. He added that the firm is still "pro-nuclear," and may revisit its decision yet again in a couple of months.

If SCE&G decides to move forward to expand its nuclear capacity, it will file an application this year to take advantage of federal incentives for new reactors allowed under the Energy Policy Act of 2005, Yanity said. The new plant would be located at the site of the 966-megawatt V.C. Summer nuclear station in Fairfield County, about 25 miles northwest of Columbia.

The utility set a record for electric consumption on its system in August and set another record earlier this month amid freezing temperatures that exceeded its previous record set in August. Sooner or later Scana will need more generating capacity.

NRC's Klein still confident

Accordiong to Platts NRC Chairman Dale Klein said last week he expects "eventually" to see construction of all the units for which operators have formally indicated plans to file combined construction permit-operating license applications.

However, Klein said, the construction might be in two "waves." Klein made the comments to reporters January 22 after his presentation to the Nuclear Energy Institutes's Nuclear Fuel Supply Forum in Washington. He said NRC, on the basis of statements of intent by utilities, is anticipating 21 applications covering "about 32" units.

Klein told Platts some of the uncertainty may come from the "dynamics" between utilities and vendors. Because of current limits on the worldwide capacity to make the needed components, utilities may be looking for some assurance that the plants can be built on time and on budget, while vendors may be looking for a firm commitment from buyers before ramping up manufacturing capacity, he said. That would create a "chicken and egg" situation, he said.

NEI Response

The Nuclear Energy Institute has some thoughts on these developments. NEIS writes.

The decisions to delay or defer new nuclear projects takes nothing away from the inescapable fact that the United States needs more nuclear generating capacity, as part of a diversified electricity supply and demand management portfolio, to help meet the nation’s economic and environmental goals.

In particular readers are directed to review the issues associated with new nuclear builds. It makes for interesting reading.

Utah editor writes that nuclear is our future

Coal is our past

Joe Cannon, a leading Utah Republican and the editor of the Deseret Morning News, Utah's second largest newspaper after the Salt Lake City Tribune, has published an opinion piece in the newspaper that points to nuclear power as an effective way to meet demand for electricity.

He notes that most decision making on a new nuclear plant is assigned to the NRC, but he reminds his readers the Utah legislature and the governor have to weigh in. He writes that the state need to tip the scales to nuclear energy to help prevent the world from tipping into a disaster from environmental effects of new coal-fired power plants and a run away trend toward increased global warming from greenhouse gases. Coal is currently the primary source of power for electricity generation in Utah.

The Salt Lake City Tribune has been on the other side with strong editorials against nuclear energy. It will be interesting to see how or if they respond. Utah's effort to date to organize a new nuclear energy project has verged on the comical with an encore of conflict of interest issues by two of the legislators involved in it.

If Utah is to realize Cannon's vision, leadership is needed from the business community as well as the state government. In a state where the governor's view is that nuclear energy is fine as long as no one tries to do something about it during his term, it takes real political guts to endorse it.

Cannon's lead editorial is all the more compelling because in the 1980s he served as a key official at the U.S. Environmental Protection Agency (EPA) responsible for controlling air pollution and the regulation of radiation in the environment. He knows from hands on experience about the challenges that his state faces if its economy is to grow, and demand for electricity is to be met, without heating up the planet.

Here are some highlights of the editorial

Most countries in the world, including our country and state, are committed to reducing greenhouse gases. Unhappily, this comes at a time when demand for electricity continues to increase . . . All the fastest growth sectors of the economy depend entirely on electricity. In order to meet this increased demand in the United States over the next 25 years, we will need to build the equivalent of 300 new 1,000-megawatt power plants.

Many hope that this demand can be met by conservation and the use of renewable fuels. There is no plausible scenario by which this is possible. Even the most enthusiastic wind energy supporters, for example, believe that only 6 percent of our electricity will come from wind by 2025.

We must not, and should not, opt for more coal-fired generation . . . When the entire cost of coal combustion is taken into account, from mining hazards, to mercury, sulphur, nitrogen oxide and other emissions, it is clear that nuclear power is much more benign to our health and the planet's health.

In Britain, where 20 percent of electricity also comes from nuclear power, the government committed just days ago to a new generation of nuclear power plants. It took this action in order to meet both its climate change concerns and its increased thirst for electricity.

Finally, Cannon quotes Gwyneth Cravens, novelist and editor at The New Yorker magazine, and her book "Power to Save the World, The Truth About Nuclear Energy."

"Our world does not have to continue in this way. We do not have to pollute the earth in order to have modern civilization. America must make decisions soon about nuclear power. As the biggest single producer of greenhouse gases (we have) an ethical obligation to the rest of humanity. Because of general ignorance and misinformation about rays and particles and the realities about the risks and benefits of large-scale energy generation, we are in danger of making poor choices and blindly accepting energy policies that harm the planet and darken prospects for our children and grandchildren."

It's a fitting close to a significant editorial.

Way to go Joe.

# # #

Westinghouse faces competition for reactor business

The nuclear giant in Pittsburgh says it's nothing they can't handle

The Pittsburgh Tribune reports that while Westinghouse was first in to the Chinese nuclear market, it now faces competition there and in the U.S. from French state-owned Areva. However, a Westinghouse spokesman told the newspaper the competition is expected and the firm plans to earn a significant share of the new nuclear energy market. A quick check of the NRC list of expected license applications confirms that outlook with eight units expected to be included in license applications in 2008. Four units were specified in license applications in 2007.

"Our competitors provide excellent products and service, and it's a tough market," said Westinghouse spokesman Vaughn Gilbert. "But we feel we're very competitive."

So far no Westinghouse AP1000 units have been built in the U.S. Areva has two EPRs under construction. One is in France and the other in Finland. Areva is partnered with Constellation Energy out of Baltimore in the U.S.

Right now the designs are on tens of thousands of pages of paper, but that will likely change as the licensing applications come in and construction gets underway around the nation. Some of the near-term challenges Westinghouse faces are summed up in the current negotiations the firm is completing with Georgia Power.

Full disclosure - I was a source for this article and am cited in it by name and as publisher of this blog. Here's my above the fold sound byte.

"Nobody has a preferred position there," Yurman said. "The Chinese are doing business with everyone."

Yup, that about sums it up. Good night Chet.