U.K. & U.S. grapple with investments in national nuclear labs

The reality is new nuclear R&D is not cheap or easy

The U.K. announced this week that it will charter and fund a new national nuclear laboratory (NNL) at a cost of L$2 billion ($4 billion US). In the U.S. the Department of Energy worried out loud how it will "re-establish a nuclear R&D complex without the budget to support it." The stark contrast between the plans by the two countries could lead to competitive differences over the next decade including export revenues from new nuclear technologies.

New National Nuclear Lab for the U.K.

In the U.K. John Hutton, (left) the government's lead secretary on the U.K.'s aggressive and massive new nuclear build told the Financial Times the facility would follow the U.S. model of being government owned but run by a contractor. The location for the new nuclear lab has been picked and it will be at West Cumbria, 110 miles north of Liverpool, also known as Britain's "energy coast." Hutton said that the lab would focus on nuclear fuel development and "methods of waste disposal." (BBC file photo)

The BBC reports that the new facility would generate 16,000 jobs. Hutton told the BBC, "The UK, like other countries around the world, is getting into a nuclear renaissance and West Cumbria is the home of the UK nuclear industry." (BBC video link)

Hutton also said in a statement that the government aims to ensure that the UK's ambitions for a new generation of nuclear power stations are matched by the required skills and expertise.

"It is now clear nuclear power will need to continue to play a crucial role in our low carbon future. The creation of the NNL will safeguard the UK's high-tech nuclear expertise, facilities and skills."

And here is some rhetoric which might sound familiar to folks in Idaho. Hutton said the NNL will bring together "world-class nuclear research capability" (full text) comprising the staff in Nexia Solutions and facilities owned by the Nuclear Decommissioning Authority (NDA), including the Sellafield Technology Center. The tender for a new commercial operator is expected to be announced by Spring 2009.

Dr. Peter Bleasdate, Director of Nexia, said,

The operation of the NNL will be based on collaborative working. By design, the NNL will not contain all of the capabilities needed to deliver a full suite of nuclear R&D programs. Key collaborators will include industry, the academic sector, research councils and international laboratories. The NNL will look to open up the nuclear technology market to competition by providing access to key facilities and skills. Commercial operations will be spun out to assist in the development of the nuclear research market.

It will be expected to make the most of an emerging domestic and international markets for nuclear technology and research services. Bottom line the U.K. National Nuclear Lab will be driven by a goal of commercial development of new nuclear technologies developed there.

Still thinking about national nuclear labs in the U.S.

Speaking at a nuclear energy conference held in Washington, DC, this week, DOE Assistant Secretary Dennis Spurgeon (right) told an audience of industry leaders the key question his agency faces is, "how to reestablish the nuclear R&D infrastructure to support nuclear power growth?" * INL file photo: Dennis Spurgeon with Idaho Falls Mayor Jared Furhiman (left) and DOE ID Manager Elizabeth Sellers (middle). *

This is a key question because Congress has rejected funding requests for DOE's planned GNEP program for spent fuel reprocessing plants, fast burner reactors, and advanced nuclear fuel R&D facilities. This week the Chicago Tribune reported DOE has finally scrapped consideration of any of the 13 sites in 11 states for new GNEP plants. With no money to pay for them, the agency threw in to the towel.

Spurgeon offered his audience a vision of how to reorganize the agency's nuclear R&D efforts. He said in his keynote speech to the conference,

"Assuming the [nuclear] resurgence does take hold and our efforts result in new reactor orders the need for continued R&D efforts will be even greater. It will be the continued advancements in nuclear technology that can provide assurance that the nuclear renaissance can be sustained into the future."

One of the things government R&D does best is to wring the risk out of new nuclear technologies so that industry can commercialize the most promising ideas. This takes time with the parallel assumption that some ideas won't pan out. To get there you need laboratory facilities, and that doesn't mean just test tube benches. It means really "big science."

Spurgeon said DOE is developing a 20 year investment strategy and will publish it later in 2008. It won't be smooth sailing. There are rocks and shoals in the channel. So far an inventory of current infrastructure, including that at the Idaho National Laboratory, is not a pretty sight. Like unmarked hazards to navigation, the DOE complex has aging and in some cases decripit facilities which still house active programs. Spurgeon said,

"Many of our existing facilities fall short of providing the necessary capabilities required to meet our long-term goals. Due to the age, condition, and original mission of the existing nuclear R&D facilities, many require modifications to support critical R&D needs."

He didn't stop there. Overall, Spurgeon said, the U.S nuclear labs "simply do not have required capabilities." He said DOE will look outside the fence of current national lab and "assess our options to include the use of public or privately owned domestic or foreign capabilities." Although he didn't specifically say so, that collaboration could include the new lab in the U.K.

Fundamentally, DOE is going to have to invest in new R&D reactors, like the NGNP, new fast test reactors, and advanced light water reactors if it wants to rebuild its nuclear R&D infrastructure. It is a realignment of the agency's vision and it is driven by necessity. Spurgeon said,

"Most would agree the last resort option would be construction of new facilities from the ground up. In many cases this results in the highest cost and longest lead time alternative, but in some instances, there simply will be no choice but new construction."

Spurgeon also gave his audience a list of key R&D priorities for DOE which should spark interest throughout the system of national labs. His priorities include;

• Nuclear engineering education
  
• Support for test reactors like the ATR and "fast reactors" for testing new fuels
• Lab facilities for separations process development to support nuclear fuel recycling
• Design work leading to construction of high-temperature gas reactors
• Development of advanced computational methods to model and simulate nuclear facilities

Spurgeon emphasized, that with this short list of action items, he is looking for new ways to combine government and industry R&D efforts. He is nothing if not a realist on this count. He said,

"Industry should be increasingly informing the government’s R&D plans. Design data needs should originate with industry, as we have begun to do, so we can have greater assurance that our government R&D dollars are spent on work that will yield results relevant to marketplace needs."

In the twilight of the Bush Administration, Dennis Spurgeon has laid out an ambitious agenda which needs to be examined by Congress and the next administration. It can't sit on a shelf. The U.K. is taking action while the U.S. is realizing that it must follow a model that puts a commercial focus on nuclear R&D. It's a good vision. It will need a lot of money and hard work to become a reality.

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Small reactors seek market share

Conventional light water units of just 45 MW could go online by 2015

There's a fair amount of excitement over an article published in the July 15 issue of Popular Mechanics about a 45 MW light-water reactor. It describes a plant design that is just 65 feet long with a reactor unit as tall as two NBA basketball players, about 14 feet high. The steel reactor vessel is reportedly just nine feet in diameter.

According to Jose Reyes, (left) head of the nuclear engineering department at Oregon State, and co-founder of NuScale Power, the firm has submitted its reactor plans to the NRC. A one-third scale prototype will enter testing for the next 18 months. Assuming it can get all the NRC approvals, and if all else goes well, the firm expects to start building them and have them in service by 2015. Of course, that's a lot of "ifs."

This is still a considerable competitive challenge to the folks in China and South Africa who are racing to build Pebble Bed reactors at about 160-200 MW. Their product statements also brim with confidence about time-to-market, but the actual date either China or South Africa's units will enter revenue service is still unknown. Some information is available on construction schedules.

In South Africa the State-owned technology-development company PBMR plans to begin construction of a demonstration reactor alongside the existing Koeberg nuclear site in 2010. It hoped to load fuel in 2013 and begin reactor start-up in 2014. If successful the firm could build up to a dozen 160 MW plants over the next decade.

In China, Shidaowan is a 200 MWe HTR demonstration plant that will be built in Rongchen City. The Shidaowan project received environmental clearance in March 2008 for a construction start in 2009 and commissioning by 2013.

In a new publication on small reactors published this month the World Nuclear Association has technical notes on at least a dozen different designs with power levels up to 300 MW. Applications include electricity generation and process heat for industrial purposes such as chemical plants, oil refining, and water desalinization.

Advocates of small reactors point out that these plants, regardless of design, can be built in networks, positioned like cell towers, but in an electrical grid. If one unit goes offline, the entire network doesn't shut down. On the other hand, a unit the size of a Westinghouse AP1000 has an all or nothing impact on a transmission and distribution network.

Another benefit of smaller units is that they need less transmission and distribution network infrastructure to reach customers. In the Popular Mechanics article NRC spokesperson Scott Burnell said,

"You can't take an AP1000, a large base-load reactor, and put it down where there is no grid to support it. A smaller design could be useful in a remote setting."

The Idaho National Laboratory (INL) is planning to build a 300 MW "Next Generation Nuclear Plant" (NGNP) with construction starting for the R&D unit in 2016. Commercial applications would come later. In terms of time-to-market, as things stand now, both South Africa and China will be exporting pebble bed design reactors by the end of the next decade. The U.S. could speed things up for commercialization of NGNP if it partnered with one or both efforts.

Assuming the plant will generate electricity, as well as be used for process heat applications, one of the attractions of the 300 MW size is that it would fit into the existing transmission and distribution grid in Idaho which would be used to send the electricity from the plant to Boise and Salt Lake City. This hypothetical example demonstrates the fact that it would not require significant upgrade costs to add the plant's output to the regional grid. In fact, the most significant factor driving the need to upgrade the grid over the next 20 years will be population growth and with it the demand for electricity.

Add to that the smaller reactor designs are obvious candidates for developing nations that don't have a couple of billion lying around for a 1,000 MW unit. Assuming that the cost curves for a 100 MW light water reactor unit's basic components are similar to a big one, a cost of $2,000/Kw puts a 45 MW nuclear energy unit in a price range of $90 million. In the electricity generation business that's a bargain for C02 emission free electricity. Developing nations would also likely be interested in small reactors for process heat applications.

New options, new uses?

Small reactors will be a new option for utilities, and they may be cautious about buying them for conventional applications. Toshiba has been pursuing the idea of putting a "nuclear battery" into Galena, Alaska, which is an example of a remote application, but the major challenge might be convincing the nuclear engineers who are needed to maintain it to stay there.

Some applications are more or less "remote" than others, and a 45 MW plant still would need a customer base of about 90,000 people, based on Reyes' numbers, to be economically justified. Greeley, Colorado, would be about the right size. The city is 65 miles north of Denver well outside of the furtherest ring of suburban growth. It has its own economic engines of growth including agriculture & food processing, high tech computer component manufacturing, and medical services. It would be a lot easier to recruit a workforce to run the plant there as well. If a city like Greeley wanted to got off the price escalator of electricity from fossil fuel plants, it could consider a small reactor and avoid the greenhouse gas issues related to a new coal or gas fired plant.

The U.S. military may be interested especially for instances where tactical readiness for a fighter wing can't rely on local electrical grids. A nuclear reactor with components small enough to fit inside a Lockheed C5A (payload 290,000 pounds) might be capable of being airlifted to power an entire USAF base. Whether the host country would accept having a U.S. nuclear reactor just show up one day rolling off an airplane is a matter for diplomats rather than engineers.

Civilian application could conceivably include providing reliable power for a major metropolitan airport, financial and medical centers, and other customers who would seek to rely on a combination of a mesh or grid of small units as well as electricity from large base-load units.

Segmenting the market

Westinghouse and other manufacturers of large reactors might not feel much of an economic threat from these smaller reactors because they aren't designed to support base-load electricity demands for entire cities.

The firm has recently inked deals for a total of six new AP1000 reactors with Southern and Progress Energy in addition to four it contracted to build in China last year. NRG's new twin GE-Hitachi units at STP will supply 2,700 MW of electricity starting in 2015 to a huge swath of cities in Texas keeping the lights on for millions of people.

For most major large utilities in the U.S. and U.K. as well as other G8 countries, the conventional large units will likely continue to dominate the market. For developing nations, like Thailand, which have launched exploratory efforts to evaluate the potential of nuclear energy, a 45 MW light water reactor, or other small design, might be worth a look.

& & &

See related coverage on this blog "Small reactors have NRC's attention"

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University of Utah gets $1.5M for nuclear engineering program

EnergySolutions Foundation grant will help faculty, student, recruitment

The Salt Lake City Tribune reports that one of Utah's biggest employers has given a $1.5 million gift to the University of Utah to expand course offerings in nuclear engineering. The university will use the money to recruit nuclear engineering faculty to teach classes and conduct research there.

The grant was made by the EnergySolutions foundation, an arm of EnergySolutions, which has expanded rapidly in the past few years with nuclear waste cleanup contracts in the U.S. and the U.K. The firm, like everyone else in the nuclear business, is scrambling to hire qualified nuclear engineers. It's corporate HQ is located in Salt Lake City. The advantage for the firm is to be able to have first crack at hiring top graduates from the University of Utah engineering program.

Dean of the engineering school Richard B. Brown says engineers with a nuclear engineering degree can snag high paying jobs right after graduation. Engineering enrollment is climbing, but educators say they still have to work to get young students interested in engineering careers. According to a press release, Brown said,

"By graduating more students with experience in nuclear engineering, we will be providing important professional opportunities for students in a highly competitive industry, while addressing industry needs."

Regionally, the shortage of nuclear engineering professionals is caused by the demand for engineers across all disciplines. Brown is focused on increasing the number of engineering graduates for all local industries and reports a 66 percent increase in the number of engineering degrees compared with 1999.

"Support from local industry has been critical to our success," said Brown.

See also on this blog - Want a Job? Go nuclear

Scroll down on the left side of your screen on this blog for links to nuclear industry job listings.

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Western Lands Uranium Gopher for July 25, 2008

Mining uranium exploration press releases for useful stuff

This column is an edited version of an article published in Fuel Cycle Week July 23, 2007, V7 N288, by International Nuclear Associates, Inc., Washington, DC.

(An occasional column on money and mining news items)

The rise of nuclear energy, a second act if ever there was one, has given uranium a shot in the arm in western states in the U.S. Interest in uranium mining is growing and with it comes another growth industry - the production of press releases about the uranium mining industry. The purpose of this occasional column is to separate the really interesting stuff from promotional fluff.

The choices of the subjects is based on what looks interesting mostly in states that are "west" of the 100th meridian, but this isn't hard and fast. The states of interest are WY, CO, UT, TX, NM, AZ, & NV. For this reason the series is titled the "western lands uranium gopher." These are news notes and the content is not to be considered investment advice.

Interior challenges ban on Grand Canyon uranium mining

The U.S. Department of Interior took the first step July 16 challenging a ban on uranium mining on one million acres of public land near the Grand Canyon. The agency said through a spokesman that the resolution isn’t binding under the law.

Interior Secretary Dirk Kempthorne sent a letter to Rep Nick Rahall (D-W.Va.), Chairman of the House Natural Resources Committee, saying the ban voted on June 25 can’t stand because the committee lacked a quorum. Rahall, who cares a lot more about coal than he does uranium, nevertheless wrote back objecting to the executive branch telling Congress how to conduct its business.

Rep. Raul Grijalva (D-Ariz.), who sponsored the original resolution after a field hearing in his home state, called the letter a “delaying tactic.”

“It’s an end run,” and he said it was “insulting” that the letter was ordered by Interior Sec. Kempthorne, but signed by “some low level Bush appointee.” He added, “We are at the point that our patience with the secretary is wearing thin.”

A reasonable translation is that it is Grikalva who is on thin ice with the measure because the provision of the law it relies on never been tested in the courts and it hasn’t been invoked by Congress in nearly two decades.

The committee’s emergency declaration invoked a rarely used provision of the Federal Land Policy & Management Act (FLPMA) and passed by a 20-2 vote after all of the republicans walked out. The committee has 27 Democrats and 22 Republicans so it is likely the measure would have passed with or without the Republicans.

The measure as passed contains a “finding” that an “emergency situation” exists and requires the Department of Interior to stop all new mining claims. The measure has no effect on the more than 10,000 mining claims that already exist on public lands around the Grand Canyon.

Colorado Democrats on hot seat over uranium bill

A Republican challenger to Colorado State Rep. Randy Fisher (D-Ft. Collins) says he played on voters fears about uranium mining and “overreacted” on the issue. Donna Gallup, who is challenging Fisher in the November election, said after doing her research believes that uranium mining is not dangerous and that Fisher exploited the issue to boost his image in an election year.

“He played on constituent fears. Now he’s a hero. I don’t want to play that game,” Gallup said.

Larimer Republican County Chairman Kirk Brush agreed. He said, “Fisher has kind of gone off the deep end.”

Fisher was one of two cosponsors of legislation that passed and was signed by the governor which imposes new groundwater protection requirements on ISR mines. Powertech is planning an ISR mine near Nunn, Colo, about 15 miles northeast of Ft. Collins. It was this mine proposal which sparked an uproar and led to the legislation.

Fisher is seeking a second term and said he disagrees with the charge that he over played his hand. “I believe she’s wrong,” he said.”

Fisher dismisses Gallup’s charge and says that education, not uranium is the most important issue in his district which is home to Colorado State University. Fisher said that if elected he plans to sponsor a bill for a state severance tax on all mining in Colorado to fund new education initiatives.

Midasco acquires Silverbell and Calliham Mines in Utah

Midasco Capital (CDNX: MGC:V) announced it has completed the acquisition of 100% of the mineral rights of the Silverbell Uranium Mine, a large uranium property immediately south and adjacent to the company's Calliham mine holdings near Summit Point in San Juan County, Utah.

The acquisition includes the control of the mineral rights for a term of 20 years, and consists of 960 acres of privately held mineral rights. Specifically, the Silverbell Mine has an existing, un-mined historical resource of 794,320 pounds of U3O8 with an average grade of 0.20% U3O8 and 5,099,400 pounds of V2O5 with an average grade of 1.27% V2O5 (Uranium:Vanadium ratio of 1:6.35) according to a 1992 Umetco Minerals Corporation internal resource summary prepared after mine shutdown.

The deposit was initially discovered by Homestake Mining in the late 1960's and was developed by Atlas Minerals. Union Carbide took over operations at the mine in the mid-1980's and operated up to January of 1991. Atlas and Umetco's production records at the mine from 1975 to 1990 record a total of 248,245 tons of ore with weighted average grades of 0.154% U3O8 and 1.058% V2O5 (total recorded production of 763,307 pounds of U3O8 and 5,250,055 pounds of V2O5).

The company also reported that similar to the Calliham Mine, the Silverbell Mine is entirely located on private property and only requires permitting through the State of Utah and not through any federal agency, enabling a much shorter permitting timeline. The company is currently drafting mine development plans and is moving forward to acquire mining and exploration permits.

At market close on July 14 the firm’s stock closed at $CAD 0.10/share very near its all time low in a 52-week range of $CAD 0.09-$0.36/share. According to interim financial documents filed on SEDAR on May 2008, the firm experienced a third straight year of losses with no operating income. For the three month period ending in March, the firm recorded a loss of $CAD 268,000.

Midasco did not state the value of the properties it has acquired in Utah, but according to the financial statement, the firm had just $CAD 1.5 million in cash and securities on its balance sheet as of March 2008. How the firm financed the current acquisitions remains a question and, more importantly, now that it has the properties, how will it development them?

Formation Resources to mine coal for uranium in North Dakota

Formation Resources, a U.S. business unit of Pacmag Metals (ASX:PMH) of Australia, said it is investigating building a plant in North Dakota to acid treat and burn coal to extract uranium. The company is exploring several sites and told the Bismark Tribune on July 17 it plans to use open pit methods to uncover coal down to 100 feet and acquire the first two feet of coal where the most uranium can be found. The most likely site is Belfield, ND, where it will said it is considering building a plant and will supply it with a new railroad siding.

Right now exploration is still underway to find likely hot spots. Mark Sexton, a spokesman for the U.S. Forest Service, which authorized the firm to prospect on 17,000 acres on the Little Missouri National Grasslands to Formation Resources, was doubtful there will be any production in the next few years. He said the Geiger survey methods had better work or, “they’ll be digging holes from here to eternity.”

Even if Formation Resources finds uranium, it could face significant delays in completing federal regulatory reviews. Lonny Bagley, field manager for the BLM, which would issue any leases, pointed out right now all Formation Resources has is permission to look for uranium and does not hold any leases to mine it. He said environmental studies would be need to make a decision on the leases, if Formation applies for them. The federal land management plan for the National Grasslands would have to be amended to include mining as an approved use.

Black Range faces lawsuit for Taylor Ranch mine in Colorado

Black Range Minerals Ltd, (ASX:BLR) a Perth, Australia mining firm, said its Taylor Ranch project in Colorado may be under threat following a lawsuit filed against the Fremont County Commissioners who approved a conditional use permit for exploratory drilling.

"The lawsuit has been filed on the grounds that the County Commissioners abused their discretion in awarding Black Range its permit," Black Range said.

The company's attorneys in the US reportedly were surprised by this action, but company officials said it remained on track to re-start drilling at the project by early August.

Uranium Energy nets $15M in stock offering

Uranium Energy Corp. (AMEX:UEC) has raised $15.3 million in its latest stock offering.

The Austin-based company focused on uranium exploration and development in the Southwestern United States says it's completed the sale of 6.4 million shares at $2.40 each.

The firm's stock closed on July 18 at $2.21 against a 52-week range of $1.80-$4.82 with market capitalization of $88 million and 39 million shares outstanding.

Uranium Energy says it will use the proceeds to continue work at its Goliad ISR Uranium Project, to acquire new land for exploration and development and for general corporate purposes.

Founded in 2003 by Alan Lindsay and Amir Adnani, Uranium Energy holds interests in nearly 71,000 acres of mineral properties in Arizona, Colorado, New Mexico, Texas, Utah and Wyoming. The company has 23 employees.

Mining company liable for pollution at former uranium mine in Washington

A federal judge has rule that one of the world's biggest mining companies is partly responsible for cleaning up massive pollution at a former uranium mine on the Spokane Indian Reservation.

The ruling on July 14 by U.S. District Judge Justin Quackenbush of Spokane was a victory for the federal government and tribal officials, who have been trying to ensure that Colorado-based Newmont Mining Corp. help pay for a cleanup that could cost $152 million. Federal lawyers had argued that Newmont was liable for cleanup costs under the federal Superfund law, because it had control over part of the mining operations through a subsidiary, Dawn Mining Co.

The company has claimed in court documents that while it was a majority owner of Dawn, it didn't make day-to-day decisions about how the mine operated. The judge still must decide how much of the cleanup costs Newmont is responsible for. Dawn Mining and the U.S. government have already been named as partly responsible for the pollution.

The ruling, which could be appealed, might help jump-start cleanup of the defunct mine, which has leaked radioactive and toxic chemicals into nearby streams, soil, plants and animals. The mine was started in 1954 and left behind two huge craters holding toxic ponds, sit in the middle of the mine site.

A water-treatment plant filters water that leaks from the ponds to keep pollution from reaching nearby streams. It hasn’t worked and contaminants, including uranium, have leached into plants and nearby creeks. Tribal attorney Shannon Work said that with the court's ruling, the tribe hopes that those responsible "will now step up and begin the much-needed cleanup."

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Areva plucks name of Idaho Falls site from history

A reference to eagles fishing the Snake River should please everyone

The Idaho Business Review (IBR) reports that the new Areva uranium enrichment plant to be built 18 miles west of Idaho Falls has a name. The $2 billion facility will be called the Eagle Rock Uranium Enrichment Facility. Areva made the announcement in Idaho Falls with a full page advertisement in the Idaho Falls Post Register.

Eagle Rock was the original name of Idaho Falls in the 19th century after the great birds of prey who hunted for fish along the lava rock falls located in what is now the center of town. Eagles can still be spotted over Idaho Falls today, and an occasional mating dance in the skies over town is a thrill to behold. You can see the Idaho Falls today live on this web cam.

Symbols of History

According to IBR an Areva spokesperson said,

“This name was selected for several reasons. It includes the American symbol of strength – the eagle – and envisions the strength of America as we move towards greater clean energy security, while the rock represents a symbol of endurance and quality.”

AREVA President Michael McMurphy was quoted by IBR based on a release from the company recognizing the historical significance of the name.

“Most of all, the name embodies an important connection with the history of Idaho Falls.”

IBR reported that company spokesman Jarret Adams said the decision to name the facility Eagle Rock originated with the facility’s project team, and went all the way to CEO Anne Lauvergeon, who “really liked it.”

Jobs come with the name

Construction of the plant, which is slated to begin in 2011, will employ up to 1,000 people, and the permanent workforce will be 250 people. Areva is now in the process of applying for an NRC license and, as one of its first steps, has hired a subcontractor to prepare some of the environmental studies needed for it.

Areva has indicated to economic development groups it plans to ask its some of its suppliers to build their infrastructure near the plant, which should bring more jobs to the area. Also, the company reportedly told Department of Energy officials in Washington, DC, who run the Idaho National Laboratory (INL), that cooperative relationships with the nuclear energy programs there would be welcome.

Areva executive Sam Shakir will be in Idaho Falls on August 21st to speak to a breakfast meeting of business and civic leaders about progress with the plant. Contact the Partnership for Science & Technology at Tel: 208-313-4166 for details.

Blue Castle reactors for Green River, Utah?

It is one of four locations being considered for a 3,000 MWe plant, but questions about costs and credibility remain unanswered

Update August 2009 - Transition Power to seek Early Site Permit

The Salt Lake City Tribune reports that advocates for a nuclear energy power plant in Utah have indicated a "strong candidate" is an industrial park in the Green River, UT, area near the intersection of Route 6 and Interstate 70. Aaron Tilton, the head of a business group called "Transition Power," which is pushing the effort, said the location is one of four his business group is evaluating as a site.

Reed Searle, director of strategic relations for Transition Power, called the industrial park near the intersection of Route 6 and Interstate 70 "the preferred location" last week. However, the Tribune also reported that Tilton, "balked" at the term "preferred" while confirming the new industrial park is a "strong candidate" for reactors. Tilton told the Tribune, "It's not the only place" under consideration, but one that would meet the licensing criteria - we think."

That's not a strong vote of confidence by Tilton for the site and probably represents crossed signals within Transition Power. Searle is an experienced executive from a coal-fired utility in Utah, and isn't likely to make off-the-cuff comments to the press. He was director of the Utah Energy Office in the 1980s and later was the executive director of the Intermountain Power Agency, which provides coal-generated electricity mainly to California. Searle left the IPA last year to join Transition Power. Tilton is the public face of the effort which has several other former nuclear industry managers as consultants to the firm including Nils Diaz, a former chairman of the NRC.

Neither Tilton nor Searle said where the other three sites are located. Last year there were press reports one site would be in Kane county along Utah's southern border with Arizona. This was based on a water rights deal arranged by Rep. Mike Noel who is also the executive director of the water authority in Kane County.

Tilton transitions from the legislature

In terms of the Green River site, which is at the other end of the state, Tilton (left) said, "What is preferred about it is that there is a lot of local support." However, accurately assessing local political support isn't exactly Tilton's strongest suit. He lost his bid for re-election and is leaving the legislature at the end of his current term. According to press reports at the time, Tilton angered Mapleton area residents over plans for a residential subdivision in an environmentally sensitive area,

The Deseret News reported last April Tilton lost his seat in the Utah House when delegates at the Republican State Convention in District 65 gave Francis Gibson, a reported "upstart candidate," a two vote margin with 70 of 115 votes, or 60.8 percent. That gave Gibson the Republican nomination and dropped Tilton from the republican ticket.

Transition Power pops up on NRC's radar

Transition Power reportedly will file a formal application with the NRC for the new nuclear plant in 2010. Indeed, the "Blue Castle Project" is now listed on the NRC's table of expected applications for a combined construction and operating license. If built, the twin reactor project would generate 3,000 MWe. The initial plans for the plant were for a mere 900 MWe to replace a now cancelled third unit for the coal-fired IPA utility.

Other projects slated for the Green River industrial park include one from Mancos Resources, the U.S. subsidiary of British Columbia-based Blue Rock Resources Ltd., to build a $100 million uranium mill. it will also require an NRC license, but its fate isn't tied to plans by Transition Power for a nuclear reactor nearby.

Opposition says speak out early

John Urgo, HEAL Utah's outreach director, told the Tribune it is critical that the community get involved in the process.

"Once Emery County decides to sell and rezone land for Tilton's nuclear reactors, the process moves from the county's control into the hands of the federal government," he said. "If Green River wants a voice, now is the time to speak up."

Costs & credibility are on the line

At $3,500/Kw a 3,000 MWe plant will cost $10.5 billion. The license application alone will cost $50M or more depending on the reactor type chosen by the company. Twin Areva EPRs at 1,600 MW each would fill the bill, but there are other choices.

A key issue is whether the transmission and distribution infrastructure in Utah could handle the new power load. Transition Power isn't a utility and needs one as a partner on the project to get the electricity to customers, some of whom would probably be in California. All this adds up to a lot of money. Transition Power hasn't said how it will raise that kind of investment in the project.

Finally, and this is the area where Tilton has spent a lot of time, there is the question of whether Utah will adopt a plan similar to Florida which allows a regulated utility to charge the rate base, e.g., consumers, for construction costs while the plant is being built. Progress Energy in Florida just got approval to build two new nuclear reactors using this regulatory model. Previous efforts along these lines in Utah have shown the state to be conflicted about this issue. Tilton and Noel took a lot of heat last year about perceived "conflict of interest" for their efforts to move Utah in this direction. If the legislature doesn't change the law, Transition Power would be looking at a Merchant plant financial model that would bear the entire risk of the cost of the project.

For the moment Tilton's project, Merchant or not, still looks like it fails to pass the world famous "baloney test" for new nuclear builds. A key signal is that, for now, the firm's executives can't seem to get their stories straight in public about where they plan to build the plant.

It will take a lot more work for Transition Power to prove that it is a serious effort to build and operate a nuclear power plant in Utah. Readers who think this assessment is unfair should read NRC Chairman Dale Klein's "no bozos" speech about new entries into the nuclear power industry. None of this is to suggest that Transition Power doesn't mean what it says. Proof of its intentions will be in credible actions.

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New name for nuclear power?

Will the label "terrestrial energy" stick?

In an OP ED in the Wall Street Journal for July 21, noted environmental writer William Tucker advocates that nuclear power be called "terrestrial energy." He points out that the heat engine at the core of the planet is fueled by the radioactive decay of uranium and thorium elements deep below the surface.

He has a lot of insightful thoughts about nuclear energy, and all of them are aimed at two questions. They are how to gain public acceptance for it and how to get investors to put up the money for new plants.

Along the way he discusses some of the positions taken by anti-nuclear groups and gives his views on them. For instance, he writes, "the problem of radioactive waste has been absurdly exaggerated. More than 95% of the material in a spent fuel rod can be recycled for energy and medical isotopes."

These are very useful dialogs and Tucker addresses them in the column. He also has a book about these issues coming out in the Fall.

"Terrestrial Energy: How Nuclear Power Can Lead the Green Revolution and End America's Long Energy Odyssey."

The OP ED doesn't address the differences between plants built pay-as-you go in regulated states like Progress in Florida and the challenges facing Merchant plants like NRG in Texas. However, since these issues are so fundamental to the success of a new nuclear plant, I would expect to see them addressed in the book.

You can read more about the book and Tucker's views on nuclear energy at his new web site and blog.

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Progress Energy wins green light for twin reactors

The decision puts Florida on a par with Texas in advancing the U.S. "nuclear renaissance

The Tampa Tribune reports that Progress Energy's $17- billion nuclear energy and transmission/infrastructure project won unanimous approval July 15 from state regulators, paving the way for the utility to start charging customers for the construction costs associated with plant as early as January 2009.

The Florida Public Service Commission unanimously approved the project. The impact on electric bills will be decided by the commission at a September hearing. The Tribune reports that the new nuclear plant will be among the most expensive construction projects ever undertaken in Florida. The pay-as-you-go plan makes the development of the plants possible and avoids huge risks for investors.

The decision puts Florida head to head with Texas in advancing the U.S. "nuclear renaissance." Progress Energy, based in St. Petersburg, FL, plans to file this summer for a COL from the NRC. Approval will take 42 months. Florida Power & Light is also developing new nuclear reactors making the Sunshine State a magnet for the industry.

Preliminary construction work could begin next year on the 5,100-acre site. The utility needs to build access roads, a barge loading dock in the canal, and a rail line to the construction site.

Progress Energy said in a statement the project is the best way to meet growing power needs while reducing greenhouse gas emissions.

"Carbon-free nuclear power is a strategic asset in our statewide effort to become energy-independent, to reduce our reliance on more volatile-priced fossil fuels, and to provide a balanced approach to meet the challenges of growth and climate change," said Jeff Lyash, president and chief executive officer of Progress Energy Florida.

Critics have attacked it as expensive and risky and they are coming at it from a financial perspective rather than one based on environmental values.

"This project has a long ways to go, and there's a lot of money at stake," said Bill Newton, executive director of the Florida Consumer Action Network. "We think it's a big mistake to raise people's power bills for something that may never be needed."

The utility plans to build two Westinghouse AP1000 nuclear reactors at a cost of $14-billion, plus $3-billion for nearly 200 miles of transmission lines through nine counties. The first reactor is schedule to come on line in 2016, and the second the following year.

Rolls Royce brings merlin magic to nuclear industry

The aircraft engine maker plans to set up a full fledged nuclear energy division

Hat tip to Eric Hundman at FP Passport

While the U.S. movie industry has embedded an impression on the American mind of a Rolls Royce being a luxury car, in fact the firm is world famous for its aircraft engines. During WWII it made the Merlin engine that powered the U.S. P-51 Mustang. The sound of a Merlin engine is unmistakable, and anyone who has ever heard one will never confuse it with any other aircraft type.

Readers would also be interested to know that Rolls-Royce has made the nuclear reactors that power the British Navy's submarine fleet.

Line of business to become an operating division

The U.K. media reports this week that Rolls Royce, which has for some years been a supplier of nuclear safety and control instruments worldwide, is now in the process of creating a separate nuclear division. The company said in a press statement that it anticipates a 70% increase in the value of the global nuclear market over the next 15 years. Given the U.K. government's plans to build as many as 18 new nuclear reactors, the decision makes perfect sense.

Jonathan Hale, director of business development, told the Financial Times concerns about global warming, energy security and the high cost of fossil fuels meant that nuclear power was growing in popularity and could be worth £50bn ($100bn) in 15 years.

Mr Hale told the Times of London that the new business unit eventually could be bigger than Rolls-Royce's marine business, which makes propellers and turbines for ships and submarines. It had sales of £1.5 billion last year and employs more than 7,000 people according to the Times.

Sir John Rose, (left) the company's chief executive, said: “Rolls-Royce has been involved in the UK's nuclear industry for over 50 years. Our experience is directly applicable to all phases of new-build programs that are planned in the UK and globally, and also to the upgrade of existing plants.”

Rolls reportedly has contracts to supply technical expertise to EDF, the French utility, which wants to build four reactors in Britain, and Toshiba Westinghouse, a nuclear reactor specialist.

George Lowe, the Rolls-Royce executive who is to head the new division, said that the company could manufacture virtually any of the components required for a new civil reactor, except for some of the very largest, specialist steel forgings, such as reactor vessels. He said that Rolls had Britain's most well-established nuclear supply chain, including a network of about 260 British companies.

Mr Hale said: “We have more nuclear capability than any other company in the UK by far. If we develop a civil nuclear business here, then we can export it around the world.” He said that the company planned to bolster the new unit by hiring and training nuclear engineers.