Who wants to build nuclear reactors?
The Russians and the Brits are going at it as fast as they can, but there are setbacks in the U.S. in Tennessee and Florida.
Russia to build 26 nuclear reactors
The Nikkei Report, Tokyo, reports that Russia has announced it will build 26 new nuclear reactors with electricity generation capacities of 1,000-1,200 MWe each by 2030. Assuming the Russian pricing model, in constant dollars, prevails over the next two decades, the new build has a staggering cost of $78-to-$104 billion.
The Japanese newspaper said that although Russia is encountering increasing financial difficulties, it is putting nuclear power at the center of its energy policy. Success will depend in part on the Russian ruble being worth more than a plugged nickel when the current world financial crisis turns around. Russia plans to pay for its domestic new build in part with earnings from export of its nuclear reactors in deals such as the one it inked with India last December.
According to a statement attributed to Russian Premier Vladimir Putin, Russia plans to increase its total electricity production from nuclear reactors from 16% of total national use to 30% or nearly twice the current capabilities. Some of the new reactors will replace reactors that are currently in service.
Rosatom chief Sergei Kiriyenko (left) reportedly said the state-owned firm will try to diversify sources of investment including using bonds to raise $39 billion for the first half of the new build or 13 new reactors. This suggests a cost of $3 billion for each new power station.
Russia also has problems similar to western nations which is quickly training enough nuclear engineers and technicians to support its nuclear energy ambitions. However, other, and potentially more significant problems, are also challenges for the drive for nuclear energy.
The United Nations Development Program reports declining birth rates and deteriorating health care have drastically shortened life expectancy in the former Soviet Union especially for men. Cases of AIDS and antibiotic resistent TB have increased significantly in recent years. The radical change in demographics affects many state enterprises including the military as well as civilian industrial sectors.
UK auctions three new nuclear sites
The Nuclear Decommissioning Authority (NDA) has successfully auctioned off three sites in the U.K. to be used for construction of new nuclear power plants. World Nuclear News reports they are a 178 hectare site at Wylfa, a 119 hectare site at Oldbury, and a 200 hectare site at Bradwell.
The Wylfa site supports a major aluminum smelter and manufacturing operation. Industrialized nations have long relied on nuclear plants to provide reliable power to the aluminum industry. Earlier this year the UAE said its plans for two new reactors in that gulf country would support, in part, a new integrated aluminum smelter and manufacturing plant for the region. However, in the US, a Missouri utility found to its dismay the biggest opponent to expansion of nuclear energy was an aluminum plant.
A consortium of German companies E.ON and RWE took the first two NDA sites in the UK while French EDF took the third. A consortium composed of GDF Suez, Spain’s Iberdola, and Scottish & Southern withdrew from the bidding saying the prices were too high. They plan to participate in bidding for up to eight sites that the UK government will offer that are not on the NDA list.
The total revenue from the auction was {L}387 million or $572 million. The funds will be used for decommissioning and decontamination of closed nuclear sites in the U.K.
E.On and RWE said their plans for the two sites they acquired, plus others, involve construction of up to 6,000 MWe of nuclear generation capacity. However, EDF said it would build 6,400 MWe on its site and others. The total UK new build is expected to bring nuclear energy to 25% of total electricity generation capacity on completion.
In a separate move the UK government named 11 potential sites for new nuclear power plants and most are pads at existing nuclear plants. Three of them are the NDA sites noted above which are now a done deal. The Department of Energy & Climate Change is taking comments until May 14 on the remaining eight sites. Details are available at a special website set up by the agency.
In another development in the UK nuclear industry, A Sheffield company has asked UK Prime Minister Gordon Brown to help it complete financing of {L}20 million to build a 15,000 tonne press to make very large nuclear reactor components. It has raised the rest on its own.
The development of the giant press to be built by Forgemasters would support the UK new build and also serve export markets competing head-to-head with Japan Steel. A Forgermasters’ spokesman told the Independent newspaper the plant, if built, would shorten the global backlog of new reactor parts. He added that the UK market alone was worth {L}400 million. He added the expanded plant could sustain enough production to shorten the global backlog of large forgings by two reactors per year in addition to meeting UK needs.
NuStart changes horses but keeps AP1000 design
AP reports that a utility consortium will use a Southern Co. nuclear plant rather than a Tennessee Valley Authority (TVA) site as the basis for a new combined construction and operating license application to the Nuclear Regulatory Commission.
The consortium, called NuStart Energy Development, includes TVA and Southern (NYSE:SO). It is developing common standards for licensing, engineering and safety for the AP1000, a Westinghouse design, that could be used by any utility to speed up their licensing process. It plans to build a fleet of them starting with two AP1000s at the Vogtle site. Another two are planned, but work has not started, at TVA’s Bellefonte site.
NuStart and TVA have been using TVA's Bellefonte site in Hollywood, Ala., for the initial application. However, TVA is burdened by the fact the Bellefonte site includes two partially complete reactors. TVA has not yet made up its mind whether to complete them or build the two new units or build all four. Another barrier is that TVA will have to ask Congress to raise its debt ceiling for any of these options. In the current financial turmoil of failed banks and a major recession, it could be difficult for TVA to convince Congress to take this action.
Meanwhile, Southern is roaring ahead to add two more reactors to its Vogtle site. The utility broke ground there in April. TVA is expected to continue work on its Bellefonte application on its own schedule.
Startup of Progress plant in Florida delayed by 20 months
Reuters reports Progress Energy (NYSE:PGN) will delay the construction for its twin AP1000 reactors, and related transmission and distribution infrastructure, reportedly costing $14 billion, in Levy County, FL. It will also delay collection of a rate increase to pay for the plants, the company said on May 1.
The utility said a 20-month delay in the construction schedule for two 1,105-megawatt, AP1000 reactors will push commercial start-up in revenue service for the first unit to 2018, rather than 2016. A second reactor at the site could start-up in early 2020.
The schedule change follows a ruling by the NRC that prevents early excavation and foundation work until Progress receives its license to construct and operate the plant. Progress wanted to go with this work ahead of the license, which is expected in 2012. However, the NRC said it had not yet completed its evaluation of the geology and environmental issues associated with the site.
For its part Progress executives gripped and grinned trying to put a positive spin on the setback.
- The delay may work in their favor from a financial view.
Jeff Lyash, (right) Progress Energy Florida president, said, that while the Florida nuclear reactors remain a "top priority," the delay may be best for customers' wallets, given the severity of the economic slowdown.
"Shifting this portion of the work until we have the combined operating license in hand enables us to spread some of the costs over a longer period," Lyash said.
- The delay may also improve the project's chances of being built.
The shift "provides time for the economy to recover, which should allow for financing in a more stable market," said Progress Energy Chief Executive Bill Johnson.
The Tampa Tribune reports that a significant consumer backlash to the rate increases was rising rapidly so the delay may also play in the favor of the utility. Unemployment is at record highs in Florida and home foreclosures are following behind. As economic conditions improve, there may be less opposition to the rate increases to pay for the new plants.
Florida was one of the first states to allow utilities to collect early costs ahead of construction. The legislation was seen as a way to advance Gov. Charlie Crist's effort to address global warming concerns by reducing Florida's carbon dioxide emissions. It may still work out that way, but not as fast as Progress wants. The utility sees backing off of the rate increases as a prudent move to stop the consumer backlash to rate increases from spilling over into legislative action that would repeal current state law.
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$104 billion for 24 reactors over 20 years? Wow! That's almost as much as the US spends a year in the unnecessary war in Iraq:-)
ReplyDeleteUnfortunately, Iraq won't make the US $300 to $700 million dollars a year in revenue-- per reactor-- like nuclear power plants would.
One of the reasons that the aluminum smelter in Missouri opposed Ameren's plans was that it did not like the "deal" it was being offered.
ReplyDeleteNuclear plant marketers are doing a poor job of closing deals. Perhaps a reevaluation of their pricing strategy is in order.
About a year ago, I had the opportunity to hear John Sununu discuss his experience as governor of New Hampshire when Seabrook was near initial start up. The economics were under close scrutiny due to a number of delays and overruns. The Governor suggested that the plant owner could offer a salable deal for consumers and make more money over time if it simply agreed to introduce the plant without an immediate rate increase. The key would be to index the rates for inflation which would have been acceptable to the people, especially if the annual increases were kept to a single digit.
Instead, the bankrupt company and its investors insisted on a traditional "rate base" treatment that allowed for an immediate rate increase.
The short term investors benefited, but over time, the value of the state's proposal to the plant operators would have been significantly greater.