Saturday, February 16, 2008

U.S. will have 12 reactors under construction by 2015

Leading energy consultant pegs costs at $3,500/kW

OK, while the U.K. and South Africa are off to the races with their new nuclear builds, what's happening in the U.S.? Platts reports that Cambridge Energy Research Associates (CERA) said Feb 15 that while there are between 25 to 30 nuclear power projects under discussion in the US, "we are quite certain that there will be a dozen reactors under construction in the US by 2015."

In effect in fewer than seven years the fossil guys are saying nuclear energy will catapult to the mainstream of the energy equation in the U.S. in terms of new energy facility construction.

However, others said "not so fast." The Houston Chronicle reported conference discussions at CERAWeek focused on a scenario that if Democrats take over the White House and have majorities in the House and Senate, then anti-nuclear activists could wind up in key government positions. John Deutch, the former CIA director who is now chairman of the chemistry department at the Massachusetts Institute of Technology, said he sees political trouble ahead for nuclear power. Michael Morris, chairman and CEO of power plant operator American Electric Power, agreed and said the prospect for legal challenges keeps his company from being part of the "first wave" of new reactor applications. Clearly, the sound of the thump of a legal challenge hitting a court clerk's desk is one of the things keeping him awake at night.

Pricing the power potential

Platts reports that CERA analyst Chris Hansen said at CERAWeek in Houston that he expects the projects to go forward despite cost escalation. Hansen said the cost of nuclear 18 months ago was about $2,000/kW. Now it is $3,500/kW. This is still way below Moody's figures of $6,000/kW. It's closer to what Ashok Bhatnagar, TVA's senior vice president of nuclear generation, said last September that the cost for the Westinghouse AP1000 reactor TVA proposes to build at TVA's Bellafonte is estimated to be $2.5 billion to $3.5 billion each. At 1,000 Mw that comes out to $2,500-3,500/kW.

Hansen said nuclear power could still be competitive if lawmakers impose a $30-per-ton carbon price on coal. Many at the conference said that is a possibly given the growing support for greenhouse gas legislation. However, it is unlikely to emerge from this session of Congress.

Can the NRC deliver COL reviews in 42 months?

In an age of corporate news with the excitement of a bowl of oatmeal, it is a pleasure to read a lead with snap in it. The Houston Chronicle wrote -- The "nuclear renaissance" in the U.S. power industry is still scheduled to arrive within a decade, but it's running a little late.

The newspaper reported that NRC Peter Lyons said his agency has received four applications for new nuclear reactors and expects more soon, but the new joint construction and operating license review process is untested.

"I would not be surprised if the initial applications will probably take longer than we hoped," Lyons said at CERAWeek. "The industry is on a learning curve," he said.

The NRC started another 60-day comment period for an application filed in October by the Tennessee Valley Authority for new reactors at the Bellefonte nuclear power station in Alabama. The agency also is reviewing submissions from Dominion Resources and Duke Energy.

U.S. economy is still mostly burning dead dinosaurs

Bear in mind that CERAWeek is mostly about fossil energy. This supplement to the WSJ clearly indicates the focus is still on burning dead dinosaurs. However, former Federal Reserve Chairman Alan Greenspan told the conference, "going forward we are going to have to use nuclear energy" because of the threat of global warming. He also said the U.S. is "clearly on the edge'' of a recession and reiterated his view that the odds are "50 percent or better.'' That's not good news for capital markets nor for builders of new nuclear power plants in the U.S. who need investors.

There was some good news at the conference. Guy Chardon, a senior vice president of nuclear industry supplier Alstom said said he believes the nuclear power industry is "restarting worldwide," and that power generators are taking a "fuel portfolio approach," with nuclear making up a share of the portfolio.

Will nuclear energy really "catapult" to the mainstream of new energy facility construction over the next decade. Speakers at the conference were not just chucking pumpkins at each other this week. These are serious players in the industry. The road ahead for nuclear energy may indeed be fraught with delays, but the path is well lit and the signposts up ahead do not point to the Twilight Zone.

For a lighter approach to energy issues the following is offered for your viewing pleasure.

Catapults aka 'trebuchet' in action -- "a mean, green throwing machine."

Friday, February 15, 2008

Norway opens dialog on thorium fuel

North Sea oil giant seeks new energy sources

Reuters reports that Thor Energy of Oslo is planning to build Norway's first thorium nuclear power plant near Porsgrunn, Grenland, in the east of the country, Norwegian financial daily newspaper Dagens Naeringsliv reported. Advocates said that the effort, if it is to be realized, could be for the energy sector in Norway what the Viking explorations of the new world were for the country a millennium ago.

Thor Energy's goal is to build two nuclear power plants in Norway by 2020, supplying up to 20% of the country's daily power demand, the company's chief executive Anders Hermansson told Dagens Naeringsliv. [slides] large PDF file.

However, scientists told the Norwegian government that exploiting thorium for nuclear power production is an interesting but far-away alternative with unknown economic potential.

* * * A report commissioned by the government found that current knowledge of thorium-based energy production and the geology of the natural resource are not solid enough to draw any conclusions about the potential value to Norway.

"Technically there is plenty of thorium, but what are the economics of thorium? That we do not know," Mikko Kara, a Finnish professor who led the study, told a news conference.

Some environmentalists have vigorously criticzed the idea of exploiting Norway's thorium, saying it detracts from the search for renewable energy sources and leads people to believe thorium is a "free lunch." They may have a point there. Even in the nuclear energy field, as science fiction writer Robert Heinlein famously wrote, TANSTFAAL "there ain't no such thing as a free lunch."

Oil and Energy Minister Aaslaug Haga backed away from some of the more energetic claims being made for Thorium and said that the report was meant to boost the level of knowledge about thorium, not to open a debate on whether Norway should adopt nuclear power. Norway currently bans nuclear energy within it borders.

A Thor Energy spokeman said the plant could be built by using existing technology to convert a regular nuclear power plant into a thorium burning plant. A retrofit could be expected to cost $4 billion.

"If we can define the fuel cycle and get the right permissions, it will not take many years to build a thorium plant," spokesman Sven Roest told Reuters in 2006.

Additional reporting on the science issues and a further response from the government is available at World Nuclear News.

India reports progress on design of thorium reactor

Hat tip to TOPIX

The chairman of India's Atomic Energy Commission is reported to have said the country is making significant progress with design of a thorium power reactor.

According to the India Daily Anil Kakodkar said the power potential from thorium reactors is very large and availability of Accelerator Driven System (ADS) can enable early introduction of thorium on a large scale.

"The Advance Heavy Water Reactor design is complete. Pre-licensing has been done. Now, they are working on details." Kakodkar said. He reportedly claimed the construction of the prototype reactor will begin by the end of 2008.

Another media report, this one from the Hindu, says India will build a 300 MW thorium-based Advance Heavy Water Reactor (AHWR) that would serve as a platform for developing and demonstrating technologies for large scale thorium utilization.

Eskom puts pedal to the metal for nuclear bids

Negotiations with bidders to start Feb 25th . . .
a decision is expected in June

[Update 02/22/08]
Engineering News of South Africa reports power utility Eskom will complete its initial evaluation of the two bids for the construction of a new 3,500 MW nuclear power plant in South Africa and start formal negotiations with Areva and Westinghouse on Feb 25. A recommendation for a preferred bid will be submitted to the Eskom board for approval in June.

Speaking at a forum organized by the newly created Nuclear Industry Association of South Africa (Niasa), in Woodmead, Johannesburg, Eskom nuclear program GM Clive le Roux revealed that the utility intends to issue a “limited notice to proceed” to the preferred bidder so that it can secure some of the long-lead components including large forgings and turbines.

He said that, under the existing planning schedule, construction on the so-called ‘Nuclear-1’ project should begin during January 2011, with the first unit of what would be a two-unit pressure water reactor (PWR) to be commissioned in 2016. Five sites were being considered for the first project, including Oyster Bay, Pearly Beach, Bantamsklip, the current Koeberg site, and Kleinzee.

* * * However, Le Roux emphasized that the utility was still seriously considering a large fleet option to introduce up to 20,000 MW of new nuclear capacity to the South African supply network as part of a program to double the utility’s generation capacity to nearly 80,000 MW by 2025. He said, "We believe nuclear will play an important role in helping us to meet our target and that it why its position within our energy mix is likely to rise from 5% to 15% over the next two decades,”

PWRs not PBMRs at least for now

Le Roux told the industry newsletter ‘Generation 3’ pressure water reactors offered by Areva and Westinghouse would play by far the more prominent role in Eskom’s roll-out. South Africa’s own pebble-bed modular reactor (PBMR) has yet to be proven as a viable technology. He said Eskom would be willing to include PBMR’s as part of the 20,000 MW once it had been successfully demonstrated. A demonstration plant is being designed and South Africa is seeking investment in it from Hitachi.

Local footprints are part of the deal

* * * Both consortia have promised material localization and the development of a stand-alone PWR-related nuclear industry, which was likely to be a critical component in the final evaluation.

Niasa President Rob Adam, who is also the CEO at the State-owned Nuclear Energy Corporation of South Africa, said that there is an opportunity to leverage off the Eskom program to re-establish a substantial nuclear industry, from mining to the export of nuclear technology.

Both bidders have moved to deepen their domestic footprints, with Areva having already taken a 51% stake in Lesedi, a black economically-empowered energy services company. Areva also has uranium exploration and development in interests the country through a mining enterprise UraMin.

Westinghouse recently acquired South Africa's IST Nuclear (ISTN) in a bid to increase its domestic presence. The company has since been re-branded as Westinghouse Electric Company South Africa.

Areva touts learning curve in Finland

In an interview with Engineering News, Areva South Africa chairman Serge Lafont maintained that the company had undergone a "steep learning curve" at the Olkiluoto 3 construction site in Finland. The world's first so-called generation 3 reactor is under construction at the site, which he said could be of real value to Eskom. This is a wonderful example of corporate spin as you'll read why in a moment.

He added that, by the time construction potentially started on Eskom's first two-unit reactor, it should have gained additional insight from the deployment of the same EPR technology in France and China. Areva is proposing that Eskom select EPR technology for the 3,500 MW Nuclear-1 project.

The real deal is that Areva's project in Finland has experienced delays related to the quality of the concrete poured for the containment building and disputes with Finnish nuclear regulators. Areva claims these problems have been overcome. The 1,600 MW reactor was initially scheduled to start-up operations in 2009. The company now says the plant will be operational in 2011.

You could say that the lessons learned there will be valuable to South Africa, but the folks in Finland might not necessarily see it that way. As the EPR has matured, Areva has shared some of its technology with the industry. Geeks among the readers should take a look at Areva's online nuclear reactor simulator. You get ten minutes of run time per session. It's free.

For its part Westinghouse is touting its projected sales of AP1000 reactors in the U.S. and a deal for four units in China in 2006.

Different bid approaches

* * * Engineering News in South Africa has dug deep into the bidding efforts targeting Eskom's project fleet of new nuclear power plants. The firm desperately needs new electricity generation capacity to stop the headlong rush into a dark age for South Africa's economy due to rolling blackouts imposed on key industries.

For Areva the focus is on winning the bid for the construction of the ‘Nuclear-1' programme, and the bigger ‘fleet' plan, should it emerge. Serge Lafont of Areva tells Engineering News that its initial submission was for Nuclear-1 alone, but that it plans to submit a second bid later this year covering the ‘fleet' strategy.

Westinghouse CEO Rita Bowser confirmed with Engineering News that it too had submitted ahead of the January 31 deadline, but that its bid covers both Nuclear-1 and the larger fleet strategy. She says its consortium includes Westinghouse, South African engineering contractor Murray & Roberts and U.S. construction firm Shaw Group.

Update 02/22/08
Eskom is having a hard time raising cash for its 20,000 MW nuclear build. The deeper consequences of failure could affect the entire country,

U.K. seeks speed up in new nuclear build

Speed of construction is key to choice of new U.K. nuclear reactors

The Times of London reports that the speed with which new nuclear power plants can be built will be key to the decision on which atomic reactor designs are selected for use in the UK, according to the Government. The pace of action taking place related to the new nuclear build in the U.K. is beginning to look like a fast express train coming down the track.

A detailed assessment is under way of four nuclear reactor designs as part of a push to build a new generation of British nuclear power plants. They include designs from Areva, Toshiba-Westinghouse, GE-Hitachi, and Atomic Energy of Canada Limited (AECL).

“Speed of deployment” is one of the main criteria being used to assess which to approve, according to a spokesman for the Nuclear Installations Inspectorate (NII), a unit of the Health and Safety Executive that is leading the so-called Generic Design Assessment. The others are safety, security and compatibility with British engineering standards. The newspaper quoted a spokesman for the regulatory agency who said, “The designs must be deployable by 2016-22."

The issue of time to market did not set well with anti-nuclear groups. The newspaper reported that Jean McSorley, for Greenpeace, said that it was not the job of the NII to focus on the “speed of deployment,” but to regulate on safety and security issues.

In the U.S. the NRC has established a self-imposed deadline of reviewing combined construction and operating licenses within 42 months but has not included the time it takes to build a reactor as part of its review.

British Energy puts partnership deals on fast track

Speaking of things moving fast in the nuclear energy field, Dow Jones reports British Energy Group said this week it may be announcing partnership deals with other utilities to build new nuclear reactors in the U.K. by the end of March.

"We're in discussions with ten plus potential partners, the discussions are fairly detailed," Bill Coley, chief executive officer of the company said in a conference call. "We're hoping to provide guidance and while we can't guarantee that it will be at the end of March we expect it to be around that time."

Coley said of the four reactor designs currently being considered by the U.K. government none was currently a front-runner, but the economics of the design was likely to be the deciding factor on whether or not the design will be chosen.

Austin says no to NRG's nuclear expansion

San Antonio may take 50% share

The Dallas Morning News reports the Austin City Council voted not to invest in two new nuclear reactors that NRG Energy plans to build at the South Texas Project nuclear plant.

The city is part owner of the nuclear plant, along with NRG and San Antonio. NRG had asked both cities to invest in 2,700 MW of new nuclear generating capacity.

The Austin council passed a resolution that said NRG's estimates that the reactors will cost $7 billion and will begin operating in 2015 are unreliable. The resolution was based on a consultant's report.

As a practical matter it means Austin will get its next 152 MW of electric power from coal or natural gas. However, Austin could reconsider and sign on as a customer of the expanded nuclear generating capacity. The price per Kw/Hr will determine that outcome.

* * * Austin Statesman has detailed coverage here. One of the key highlights is that the Interim Manager of Austin Energy, which hired the consultant, who wrote the negative report, ran for city council on an anti-nuclear program. Can you say "stacking the deck" three times fast? I wonder whether the members of the Austin City Council were aware of this influence or went along with it because it was politically convenient? Here's the news clip . . .

But a consultant hired by Austin Energy in December for $205,625 determined that the expansion could cost at least $1 billion more than estimated and take two years longer, according to a memo to the City Council.

"There was a high probability that there were going to be cost overruns and schedule overruns, and we thought there was an unacceptable level of risk," said Roger Duncan, interim general manager of Austin Energy, who was elected to Austin's City Council in the early 1980s on an anti-nuclear platform. A nuclear plant remains "a very expensive proposition," he said.

* * * Previous coverage on this blog here.

Wednesday, February 13, 2008

Constellation sets sights on New York

Areva EPR slated for Nine Mile Point near Oswego

Constellation CEO Michael Wallace is announcing new nuclear reactors the way a magician pulls rabbits out of a hat. This week he said says the firm will build a new nuclear reactor in upstate New York.

Wait, isn't New York home to anti-nuclear Governor Elliot Spitzer? For his part the governor wants to shut down Exelon's Indian Point nuclear power plant never mind consider any new ones. It's going to be some trick to get past that.

No wait, Constellation Energy says it will build a new nuclear reactor at Calvert Cliffs in Maryland, except the utility is so annoyed with state government there it refused to show up at a recent hearing to address the issues. Will investors show up while the government and the company are having hissing fits?

Yes, wait again. Constellation Energy says it will build two nuclear reactors in Amarillo, TX, which has a local sponsor who runs the plant project out of a ranch with a bird house on the front porch. The developer seems to be on the level, but the prospects for success there seem to be a long way off.

Nope, wait one more time. Constellation Energy says it signed an agreement with a Virginia penny stock outfit to build a nuclear power plant at a remote high desert site about 100 miles southeast of Boise, ID. The problem is Alternative Energy Holdings can't get its story straight about where its investment funds are coming from and it owes $50,000 in filing fees to Owyhee County. The local planning commission, fed up with being stiffed, has gone public with a threat to pull the permit application.

Once you realize how many different directions Constellation is headed in it is breath taking. So here's a round up from one of the wire services.

Reuters reports UniStar Nuclear Energy told the (NRC) it will submit a combined operating license (COL) application late in 2008 for a 1,600 MW EPR at Constellation Energy's Nine Mile Point Nuclear Station in upstate New York.

In a Feb. 8 letter to the NRC, UniStar, a joint venture of Constellation Energy and the EDF Group, said it selected the Nine Mile Point Nuclear Station, located six miles northeast of Oswego, NY, which is also home to two BWRs with a combined 1,685 MW of generating capacity.

While UniStar has filed one COL for a site in Maryland and expects to file another for the Nine Mile Point station, the company has yet to make final decisions for either project.

"We have not made a final decision to construct a new reactor, but we are moving ahead systematically in both Maryland and New York and will make any decisions on where construction might take place based upon many factors," said Michael J. Wallace, chairman of UniStar and executive vice president of Constellation Energy.

"We are working to be in a position to make a decision to break ground for a new reactor at the Calvert Cliffs site at the end of 2008, depending upon the outcome of several issues, including economics and federal loan guarantees," Wallace told Reuters.

Finally, last year UniStar announced plans to develop, own and operate a fleet of U.S. EPRs. In December UniStar struck an agreement with an affiliate of PPL Corp. to submit a COL application for a potential third reactor near PPL's Susquehanna plant near Berwick, PA, and announced plans for an EPR at Ameren Corp's Callaway in Missouri.

Rabbits multiply quickly. Can the same be said for Wallace's plans for nuclear power plants?

Tuesday, February 12, 2008

Idaho anti-nuclear initiative has legal problems

Primary objective may be a scare tactic

A proposed anti-nuclear initiated referendum intended for the Idaho ballot next Fall hit a stumbling block this week with a negative advisory opinion from the state attorney general. The Twin Falls Times News reports the AG's analysis found serious legal flaws with the initiative, which it reviewed last month, and raises doubts that voters will have much say in the locations for nuclear power plants.

Still the image of an anti-nuclear ballot initiative, like a scarecrow in a cornfield, might be enough to drive away investors in a new Idaho nuclear power plant who don't want to see costs escalate while opponents try to tie them up in legal knots.

Wasden wrote in his analysis that, "Portions of the initiative may conflict with … constitutional provisions and fall outside the scope of actions allowable by initiative or referendum." Investors may not care if the AG is right. What they will care about is if someone thinks they can add a year or two to the build time and start-up with a legal challenge. Every month the plant isn't making progress towards generating power is money down the drain.

The newspaper also reports that the county commissioners in Owyhee County, currently grappling with the elusive Alternative Energy Holdings Inc. (AEHI) proposal for a 1,600 MWe plant there, are not thrilled with the ballot measure. The commissioners told the paper they agree with Wasden's analysis, and said a voter initiative would add unnecessary bureaucracy to Idaho's siting rules. If there is anything a rural elected official in Idaho dislikes more than taxes, it is "unnecessary bureaucracy."

According to the newspaper, Dr. Peter Rickards of Twin Falls is going ahead with his plans to put the measure on the ballot. To do so he must modify the legal language and get 46,000 signatures. Even if he gets to that point, his proposal may have little legal impact on the process of siting a nuclear power plant in Idaho. The federal government has the primary authority to approve a nuclear power plant and Idaho counties still will have the local land use authority.

Bottom line the regulatory barriers aren't the issue. It is getting the investors to show up and stay in.

Monday, February 11, 2008

Owyhee County tells AEHI to pay up

The firm owes $50,000 and could lose its permit if it defaults [Updates 02/14/08, 02/19/08, 02/20/08]

The Idaho Statesman reports that Owyhee County officials say they are prepared to stop work on the land use permit process for a proposed nuclear plant near Bruneau because company officials have failed to pay a $50,000 fee to process the application. It seems the Virginia firm has been getting a free ride since filing its papers with the planning department last summer.

Back in July 2007 Mary Huff, the county planning administrator, told me in an interview AEHI had punted on paying its bill claiming the county didn't have a fee schedule for nuclear power plants. This is slightly ridiculous since the rural county could hardly have provided for this contingency in its subdivision rules, at least until AEHI showed up. It's like a hobo on a freight train saying he didn't buy a ticket because he couldn't find the conductor.

Huff told the Idaho Statesman Alternative Energy Holdings Inc. has failed to respond to three requests for payment. She said the county commissioners sent a letter to the company on Feb 11 that said if payment isn't received within 10 days the application for a conditional use permit would be suspended. It's not a good sign for a land use decision when the developer doesn't pay the fees.

“We’re not going to continue to hold this and beg for fees,” Huff told the newspaper. “The company needs to decide if they want to go forward with this project.”

Huff told the Idaho Statesman that in December that CEO Don Gillispie had agreed to pay $50,000 to help offset the costs of the county’s review of the company’s conditional use permit application. The company needs the permit before it proceed with the project.

In an e-mail to the Idaho Statesman, Gillispie disputed the county’s story. Now he claims he hasn't received the invoice. Maybe it is a misunderstanding, but my bet is that it comes in the form of "what is it you don't understand about paying your bills?" At least that's how Owyhee County sees it.

Update 02/14/08

Joe Weatherby is chairman of the Owyhee County Energy Task Force and is on the Owyhee County Planning and Zoning Commission. He has an OP ED in the Idaho Statesman today. Here are a couple of highlights.

* * * The nuclear power proposal by AEHI/Idaho Energy Complex/Don Gillispie for Bruneau is under the same economics as MidAmerican. If Warren Buffett can't make it work, can Don Gillispie? The Bruneau plant is not in the best interest of Owyhee County for numerous reasons, but the economics alone is enough to give you cause for much concern.

* * * AEHI's promotion of cheap power for Owyhee County farmers and ranchers does not appear to hold water in the face of logic and economic realities. This is just one of the many issues that Owyhee County citizens and AEHI stockholders should question regarding AEHI's proposal.

Update 02/19/08

AEHI pays up -- The Associated Press reports that AEHI had finally paid its bill to Owhyee County for a conditional use permit. Payment of the fee does not result in approval of the permit. It reimburses the county for the costs of the permit review.

Owhyee County officials threatened to suspend the permitting process, saying Alternate Energy Holdings Inc. had ignored repeated requests to pay the fee.

Alternate Energy CEO Don Gillispie said a check for $50,000 was sent to the county.

Update 02/20/08

Some clarification is needed especially for the people sending me hostile comments. I'm most decidedly NOT anti-nuke. It is pretty funny when someone sends an obscenity laden email that says that I am. I am skeptical of AHEI's ability to raise the funds and build a plant.

# # #

Sunday, February 10, 2008

News media sees nuclear in a new light

An end to rip & read from press releases?

After years of wondering what comic books editors and reporters at the nation's major newspapers were reading about nuclear energy, some balanced reporting is starting to show up.

Editorial cartoons in the news media have skewed public views of nuclear power controversies, and promoted opinions that affords an irrational look at the industry. Taking a page, literally, from editorial cartoons, the anti-nuclear movement published entire comic books to explain their views of nuclear power. The industry was also guilty of dumbing down its message to the public with sometimes unintended results. Both appear hilarious useful only as T-shirt art at least by today's standards.

This trend seems to be changing now. Two examples saw ink this week both in western newspapers. The era of "rip & read" from the anti-nuclear play book may be coming to an end, and with it, the rise of serious, balanced reporting on the prospects for nuclear energy as a solution to global warming.

Denver Post

At the Denver Post a story with a regional focus on Xcel Energy, the regulated utility in Colorado, takes a detailed look at the factors which might bring nuclear energy back to Colorado as an energy source. People in Colorado with long memories recall the ill-fated Ft. St. Vrain nuclear power plant which was taken out of service after too many operational problems.

New interest in nuclear energy is taking place because "Nuclear power needs to be a part of the nation's portfolio to meet increasing demand for electricity while reducing carbon emissions," Xcel spokesman Mark Stutz said.

Houston Chronicle

At the Houston Chronicle that newspaper takes a look at the revival of nuclear energy in Europe despite the long lasting legacy of the Chernobyl disaster. The paper writes that the US should take inspiration from Europe where nuclear energy is increasingly being seen as the only way to tackle the twin problems of climate change and energy security.

After years of resistance, the British government last month gave the go-ahead for a new generation of nuclear power stations. As many as 10 new reactors are in the works. Around the world, up to 90 nuclear reactors are being planned, many of them in Europe.

"There is a growing realization that nuclear (power) will have to be part of the energy solution for Europe," said Adam McCarthy, associate director of Energy Policy Consulting in Brussels.

* * *

If you are interested in reading more news about nuclear energy, take a look at the sidebar to this blog which lists a number of sources.

Idaho lab, EPRI craft new LWR reactor strategy

When you hear hoof beats think horses not zebras

Two nuclear R&D giants got together last week and announced the nuclear industry and the US government should establish a new cost-sharing partnership for research and development into new generation light water nuclear (LWR) reactors. The Electric Power Research Institute (EPRI) and the US Department of Energy’s Idaho National Laboratory (INL) are proposing strategies that they say must be pursued for nuclear energy to play a substantial role in meeting future US energy needs.

The proposed R&D partnership and its focus on LWR reactors indicates a realization the adoption path for radical advancements in nuclear reactor technologies may be measured in decades and that rapid expansion of the nation's nuclear fleet will require use of current and enhanced LWR reactor designs. The initiative follows a similar strategy targeting advanced R&D for LWR reactors announced by Japan last October.

Given the revival of the nuclear energy industry, it makes sense to focus on LWR reactor designs as a way to advance the state of the art. The proposed initiative on light water reactors is distinct from the INL's current focus on Generation IV nuclear reactor R&D and GNEP technologies. There is no indication the INL is giving up any of its work in these areas, but rather adding to it by moving toward an engineering focus on the mature end of the technology adoption curve.

Top objectives listed

The first objective EPRI and INL say to expand the nation's use of nuclear energy is to construct and operate dozens of new nuclear power plants, starting in the next several years. The second is to maximize the contribution from the US’ existing nuclear power fleet by extending the operating licenses.

“Implementing both of these strategies will require significant investment in research and development,” the EPRI and INL said in a joint statement. They see this focus for nuclear R&D as a value-added strategy that enhances existing LWR technologies.

Chris Larsen, vice-president and chief nuclear officer for the EPRI, said industry recognizes that LWR technology is mature and that industry should carry a large portion of the responsibility in maintaining this technology. However, he said “the magnitude of the challenges” require the active engagement and leadership of the federal government in achieving goals identified in the EPRI/INL report. There is plenty of work to do, and a lot of its rests with the industry's advanced LWR designs now being reviewed by the NRC.

Currently, the NRC has certified designs for the Westinghouse AP1000 and the GE ABWR reactors. Design certification is underway for the GW ESBWR, Areva EPR and the Mitsubishi APWR. Areva and Mitsubishi submitted their certification packages to the NRC within a month of each other in late 2007. NRC's web page on new reactor licensing activities contains a wealth of detail on the scope of the reviews. These are all light water reactors.

INL - EPRI list of Nuclear R&D Objectives

The proposed industry/government cost-shared R&D effort is focused six objectives.
  • Sustaining the high performance of nuclear plant materials
  • Transitioning to state-of-the-art digital instrumentation and controls
  • Making further advances in nuclear fuel reliability and lifetime
  • Implementing broad-spectrum workforce development
  • Implementing broad-spectrum infrastructure improvements and design for sustainability; and
  • Addressing electricity infrastructure-wide problems
INL's Deputy Director for Science & Technology, Dr. David Hill, said "Both the public and private sectors have much to gain from this research effort. Consumers across the country will benefit from avoided emissions of air pollutants and greenhouse gases, reliable baseload electricity, and the creation of thousands of high-wage jobs. Benefits to the private sector include improved plant performance and reduced business risk during new plant development."

EPRI and INL emphasized the need for cost sharing in a public/private partnership because both the public and private sectors stand to benefit from these strategies. The research effort would be managed by a team comprised of DOE, EPRI and Nuclear Energy Institute (NEI) representatives.

For the nuclear energy engineers, scientists, and energy wonks among the readers, the joint EPRI/INL plan is online (PDF file, 30 pages) or for more info on the initiative, contact: Teri Ehresman, INL, (208) 520-6252 or Clay Perry, EPRI, (202) 293-6184.

ACR1000 slated for New Brunswick province

Go ahead for reactor depends on the financial future of AECL

The Toronto Globle & Mail reports that a consortium of private sector companies is teaming up with Atomic Energy of Canada Ltd. (AECL) to finance and build an ACR1000 reactor in New Brunswick. It will be a test of a new ownership model for Canadian nuclear plants. It also would involve first-of-a-kind construction of a reactor which is still in the design stage. The cost of the new reactor has yet to be determined, but the consortium that wants to build it will have to balance these factors and more.

The project at Point Lepreau, N.B., would mark the first time in the Canadian marketplace that a reactor consortium financed the construction of a plant and continued to own it while selling the power to the utility customer. The province supports the construction of the 1,100 MWe reactor, which would supply both domestic and export markets.

New Brunswick Energy Minister Jack Keir said in an interview with the newspaper his confidence in the Candu design is based on the willingness of AECL's partners to take ownership of the nuclear facility. The merchant model involves negotiating long-term power purchase agreements with utilities and then using those agreements to raise debt from investors such as hedge funds, pension funds and other capital pools.

According to the World Nuclear Association, a study has found that building the first new-design Candu reactor could be feasible in the Canadian province of New Brunswick. The big "if is that the partners who will build the plant gets the financial details and the risk levels right. As part of its push to become an 'energy hub', the government of New Brunswick last year commissioned the report on the idea of building a second nuclear power reactor at the Point Lepreau site.

A feasibility study carried out by MZ Consulting concludes that a project to build a first-of-a-kind Advanced Candu Reactor (ACR-1000) at Point Lepreau was feasible under certain conditions. The provincial government issued a press release with a long list of "feasibility" issues, most of them financial, that it said would make or break the proposed nuclear project.

The MZ Consulting report primarily considered an ACR-1000 unit operating on a 'merchant' basis - that is, selling its power to a range of customers rather than supplying one major utility. MZ said about half the output from the plant would go to New Brunswick itself, the rest could be exported to the neighboring Atlantic coast province of Nova Scotia as well as New England states. Critics of the deal said there is not enough transmission capacity in Maine to send electric power to other New England states. For their part New England states, fed up with the high cost of imported oil, would likely welcome economical electricity from the plant. Competition is expected from a proposed new unit at Bruce Power in Ontario. In effect. Canadian investors see opportunities to sell nuclear power to electricity customers in their own country and to feed the ravenous appetite of its neighbors to the south.

Meeting not over yet

According to the financial press coverage for the New Brunswick reactor, AECL would not take an ownership stake. Its partners that include SNC-Lavalin Group Inc., [a construction firm], General Electric Co., Hitachi Ltd.; and, Babcock & Wilcox Co. would retain ownership and finance the project by concluding long-term contracts with New Brunswick Power and other customers. In effect the state-owned corporation isn't going to take an equity position in a merchant plant. One of the risks for the consortium is that the provincial government is asking for a fixed price contract and thus unloads the risk on the builders. For their part they need to have very sharp pencils and excellent construction managers to bring the plant in on time within the cost parameters of business success.

Another uncertainty is that the Canadian government is reviewing the ownership structure of AECL, which is a Crown corporation, and is considering whether to sell shares to investors including foreign competitors such as Areva. Mr. Keir said he wants to ensure that the federal government remains committed to the future of struggling AECL and its heavy-water Candu design before the province signs on. Otherwise, an outside investor could change the terms of the deal.

The ACR1000 reactor is still in the design stage, and certifying it will take time and a lot of money before AECL can build one. Private investors might not want to bear these costs, and may demand that the Canadian government only offer shares for sale after the reactor design is certified for the power market. For its part if the Canadian government wants the ACR1000 to be as domestic success and serve as an flagship export in the global nuclear market, it may have to hold on to AECL for a while longer at least until it can get the ACR1000 out the door.

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The Point Lepreau nuclear generating station, which produces 630 megawatts of electrical power, is currently being refurbished at a cost of $1.4 billion.

Typically, as David Walters points out, the ACR1100 is marketed to customers as a twin-unit reactor with a total of 2,200 MWe. This is the configuration AECL proposed to Energy Alberta last summer. Given the reported construction price of $5 billion, that would bring in the New Brunswick facility at a very competitive price of $2,300/Kw.