Saturday, May 8, 2010

Dominion choses Mitsubishi for North Anna

It’s the third time GE-Hitachi has lost a sale because it could not come to terms on costs

DollarDominion Virginia Power (NYSE:D) announced May 7 it has selected Mitsubishi Heavy Industries (MHI) Advanced Pressurized Water Reactor (APWR) technology for its planned third nuclear reactor at the North Anna Power Station in central Virginia. In doing so the utility stepped away from a prior relationship with GE-Hitachi’s ESBWR reactor. According to media reports, the reason is the utility and the reactor vendor could not come to terms on costs. This is the third time GE-Hitachi has lost a sale since Exelon and Entergy withdrew from agreements to build new reactors using the ESBWR in Texas, Louisiana, and Mississippi.

The process of selecting the MHI design came about as a result of competitive bidding Dominion CEO Thomas Farrell said in a statement.

“Based on our final analysis of the proposals received in the competitive process, Mitsubishi provided the most attractive value for our customers.”

Electricity demand in Virginia

powerpylonDominion has not formally committed to build the new reactor, but said it will make a decision to do so later this year. According to forecasts for electricity demand, Virginia will need an additional 5,600 MW by 2019, which is about the time the 1,500 MW reactor would come online. Dominion is planning to build a slightly smaller version of the 1,700 MW design selected by Luminant for expansion of its Comanche Peak power station.

Virginia is the second largest importer of electricity in the U.S. after California. Much of that electricity comes from carbon sources. If a tax is placed on carbon in the next few years, even a small one, those imports will become more expensive making the choice to build a nuclear reactor for 25% of the expected growth in demand all the more attractive.

Competitive factors

Dominion’s competitive review focused, among other things, on the cost of the engineering procurement contract (EPC) which has multiple risk factors. They include items for fixed cost commitments from vendors, items that involve shared risk for cost escalation, and items which both the supplier and the buyer negotiate prices for with the vendors. With a total cost of $6-10 billion for the reactor, inability to put numbers on some critical reactor components may have limited GE-Hitachi’s competitive position relative to MHI.

The MHI reactor design is still in the review process at the NRC as is the ESBWR though both are making progress. The Wall Street Journal reported May 7 that David Matthews, director of the Division of New Reactor Licensing, told the newspaper, certification of the ESBWR “is moving along very well.”

Dominion will have to amend its NRC application for a combined construction and operating license with the NRC. This change could add some time to getting authority from the regulatory agency to break ground. Dominion will now also be betting that all will go well with reactor design certification for the APWR.

The only other utility planning to use the GE-Hitachi ESBWR is Detroit Edison which chose it for FERMI III. This reactor new build is positioned as a second wave deal due to the collapse of the U.S. auto industry and with it electricity demand from industrial users in DTE’s service region.

International market factors

Japan’s government backs the export of nuclear reactor components including the large forgings from Japan Steel Works. MHI is reportedly building a $450 million manufacturing facility to supply components for its reactor exports. GE Hitachi told the WSJ that MHI’s government backing makes the firm a “fierce competitor” in terms of entry to the U.S. market. However, spokesperson Catherine Stengel also told the WSJ the firm has good prospects for reactor sales in Sweden, Finland, the U.K. and India.

GE-Htiachi’s prospects in the U.K. may come later as the ESBWR is not entered in the current design reviews for the first round of new builds. The firm has better chances with India where it is partnering with domestic heavy manufacturing firms to build components to be supplied to that country’s aggressive plans for 20 GWe of new generating capacity and for export. GE- Hitachi has said that with India’s lower labor costs, exports can be very competitive relative to other suppliers.

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Friday, May 7, 2010

Intl’ Isotopes inks five-year deal with LES

Fluorine.svg Plant will be located in Hobbs, NM, a short truck haul from Urenco’s enrichment facility

This article is an edited version of a story published in Fuel Cycle Week, V9:N374 April 29, 2010 by International Nuclear Associates, Washington, DC

International Isotopes (OTC:INIS) based on Idaho Falls, ID, has entered into a five-year agreement with Louisiana Energy Services (LES), a wholly owned subsidiary of URENCO, to provide uranium deconversion services for the LES uranium enrichment plant in Eunice, NM. The LES plant is expected to start commercial uranium enrichment operations in June.

laflin_photo(2)Steve Laflin, CEO of International Isotopes (INIS), told FCW in a wide ranging interview that the uranium deconversion plant, to be located in Hobbs, NM, is a first-of-a-kind facility because it will produce commercial products from the depleted uranium.

The key products which will be sold on wholesale markets are boron, fluorine, and silicon compounds. Two have uses in the manufacturing processes for electronic circuit boards and computer chips that involve chemical vapor deposition. The boron will also be sold for use by commercial nuclear reactors. Paradoxically, the fluorine extracted from the UF6 will be used by end-user customers to make solar cells.

Revenue streams

Laflin told FCW he will make money four ways. The business model developed by Laflin is interesting because he gets paid not only by his customers, but also by the supplier of his raw materials. LES will pay Laflin to take its depleted uranium and will even guarantee minimum volumes of depleted materials with options for process more if he has the ability to do so. The contract with INIS is slated to start-up in 2013 and will quickly grow to 75% of the capacity of the deconversion plant.

Laflin explained that after the depleted uranium hexafluoride is de-converted by INIS into uranium tetrafluoride, it can be used as the feedstock for INIS's fluorine extraction process (FEP). The FEP is a patented process that can produce high-purity fluoride gas products from the depleted uranium tetrafluoride.

"This agreement with LES represents one of four potential revenue streams we anticipate will be produced by the INIS facility. In addition to payment for de-conversion services under the LES agreement, and from other potential enrichment facilities, INIS intends to sell anhydrous hydrofluoric acid and valuable industrial fluoride gasses that are each extracted during the de-conversion and FEP processes, respectively. Those gasses can be used to make important products such as silicon for solar cells and computer chips."

The agreement with LES also calls for INIS to provide some related ancillary for-fee services, such as uranium hexafluoride cylinder cleaning, inspection, and re-testing.

The company purchased the patents for the FEP in 2004, and has been operating its FEP gas facility in Idaho. Since 2006 it has been testing components and analytical processes for the larger New Mexico facility.

"We can show a half million pounds of production of fluorine," Laflin said "and two million pounds of boron with our processes for this plant."

Regulatory reviews

Additional signs of progress are that in early March of this year the U.S. Nuclear Regulatory Commission (NRC) docketed the firm's license application. Laflin told FCW requests for additional information (RAIs) are expected in June. A public scoping meeting on the environmental impact statement is also scheduled in June. He added that he expects a license from the NRC by January 2012. The company expects to take title to the site for the factory in about two months.

Disposal of the depleted uranium after the fluorine has been extracted will be at a licensed landfill. INIS expects to have two options. One will be the Energy Solutions site in Utah and another will be at a site just over the New Mexico border in Andrews, Texas.

There Waste Control Specialists expected to open a disposal facility to take depleted uranium once the NRC completes a regulatory review of environmental site characteristics for sites to do so. Laflin said he expects the NRC to complete its work, and the Texas Department of Environmental Quality to issue a permit, before he starts deconversion operations in 2013.

Having a second site to take depleted uranium, Laflin said, will create some pricing pressure on Energy Solutions which currently is the only site licensed to take the material now.

More kinds of green

green economic growthAccording to Laflin, his firm will be able to produce fluorine products at a fraction of the cost of similar products at other commercial facilities. The first reason is he is paid by his supplier to take the feedstock. Another reason is that energy efficiency and water conservation measures are built into the deconversion plant design. A key metric, Laflins said, "is that conventional methods require seven times more energy per pound to produce fluorine than is required by INIS methods."

"We will save 4.5 million kilowatt hours which is equal to six million pounds of CO2 a year."

Saving energy means saving money Laftlin says. He's emphasizing the low cost of production and the profits earned as a means to drawing in new investors to help build the plant. An estimate provided by INIS in 2008 indicated the new plant will cost $55 million.

Laflin said the design of the deconversion plant re-uses all of the water in its treatment systems. It cuts down on the needs for water in the arid New Mexico climate and drastically reduces the plant's environmental impact in terms of waste discharges. The plant will have its own sewage treatment with tertiary processes. The output will be used to support a plant nursery.

The deconversion plant will have its own solar energy array to offset use of electricity from the local grid and a geothermal system to reduce energy requirements for heating and cooling systems.

Messages for investors

A reduced environmental footprint and energy savings are "a good message for investors" Laflin notes because many on Wall Street are "gun shy" of anything involving the nuclear industry.

INIS needs new investors to raise cash as just three insiders own 55% of the approximately 280 million shares of stock outstanding. However, according to financial reports, these insiders have also been putting more of their own money into the company since November 2008. At market close April 26 INIS stock stood at $0.42/share against a 52-week range of $0.24-$0.85.

The contract with LES is a "springboard to having discussions with other enrichment plants" Laflin said. For instance, USEC's gaseous diffusion plant in Ohio has a huge inventory of depleted uranium. So far Laflin says he has not yet discussed contract opportunities with Areva even though the Eagle Rock Enrichment Facility is planned to be built just 18 miles west of INIS home town of Idaho Falls.

Asked if there is any competition on the horizon, Laflin noted that Areva in France and URENCO in the U.K. are building deconversion plants, but only to manage the waste and not to produce commercial products from it.

Given the projected growth in uranium enrichment plants in the U.S., Laflin says his firm can only grow with the industry.

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Thursday, May 6, 2010

New reactor designs making progress

However, commercial success is still a shot in the dark

JetsonsDeveloping new nuclear reactor designs requires really long-term perspectives which only governments or foundations, like the one supported by Microsoft billionaire Bill Gates, can sustain over a period of a dozen or more years.

Some reactor design ideas, like those for Thorium fueled reactors, move ahead slowly but lack mainstream funding from government agencies. Plus, they require the expertise of newly minted scientists and engineers to devote years of their careers to a project which might not payoff as well as other more robustly funded opportunities.

And some independent ideas about new reactor designs are as plausible as the flying car in a Jetsons cartoon. People wonder why it is so hard to come up with financial support for a new nuclear reactor. The answer is that it isn’t software. The cash out period is measured in decades. Even the most patient silicon valley venture capital firm wants a 30% ROI in less than five years.

In the high tech world of computer software, start-ups plunk down a few million of VC money burning through it using rapid prototyping and releases of successive ‘beta’ versions to early adopters. If they are on target with market needs, pricing, and other strategic factors, they cash out and everyone goes home happy. For every success story, there are also multiple cases of missed opportunities and wrong turns.

Mozilla’s Firefox web browser took a different approach using a crowd sourcing approach engaging hundreds of thousands of programmers in an ‘open source’ model. Nightly builds were posted for comment continuous feedback a competitive factor in achieving time to market objectives. Could a new reactor be built using a globally distributed virtual team? It is plausible, but someone also has to pay for it. Nuclear engineers do not come cheap.

Even so commercial success for the high technology entrepreneur is still a shot in the dark. Designing new nuclear reactors is not like developing software. There is no rapid prototyping method though new computer codes are becoming available every year.

The pace of technological advancement in the nuclear industry is glacial by comparison to other high technology endeavors. It is one thing to develop a reactor design in a virtual computer environment. It is quite another to actually build one that works.

There is no “sure thing.” What’s amazing about new reactor designs is that there are so many of them despite the daunting barriers getting one to market. Here are a few updates.

Bill Gates’ TerraPower and the ‘Travelling Wave Reactor’

billgates(NucNet): A US business venture funded partly by Bill Gates (right) is reportedly looking for partners to help it develop a 1,000-megawatt nuclear power reactor concept called the Travelling Wave Reactor (TWR), which can operate for up to 100 years without refueling or removing any used fuel from the unit.

The company says it has had some communications with Toshiba, but denied in a press statement published in the Wall Street Journal that a partnership between the two firms was under development.

Instead, the firm said it continues to meet with a variety of US and international organizations and governments to “listen, learn and discuss” future options for the TWR design. TerraPower has not yet entered into agreements with any companies to build or operate the TWR, a March 24 statement said.

TerraPower says that the design objectives for the reactor are to simplify the nuclear fuel cycle. TWRs could improve the cost, safety, social acceptability, and long-term sustainability of nuclear energy as a source of carbon emissions-free electricity.

The TWR concept uses ideas that date back to the 1950s for using non-enriched or even depleted uranium-238 as a nuclear fuel, breed-burn core designs.

Today’s nuclear power plants need a full core of fuel made from enriched uranium. The TWR, in contrast, initially contains only a small amount of enriched uranium with U235, which is used to kick off the chain reaction through a core of depleted uranium.

The wave of fission would move slowly through this depleted uranium core, splitting many more of the uranium atoms than a conventional reactor would.

John Gilleland, head of TerraPower’s Nuclear Initiative, based in Washington state, recently revealed details of the TWR concept for the first time at a seminar at the Department of Nuclear Engineering of the University of California in Berkeley.

He said advantages over a more conventional uranium-plutonium breeder reactor system would include a simplified fuel cycle, no need for highly enriched uranium except for ignition, no reprocessing, less transport, less nuclear waste, no separation of fissile material, hence a lower proliferation risk and lower overall costs.

He said TerraPower was planning to develop a 1,000-MW TWR, which could be installed in an AP1000-like containment.

Mr Gilleland also said there were technical challenges to be met before a TWR demonstration unit can be built, in particular material damage questions, design of the intermediate heat exchangers, and the realities of thorough testing and regulatory requirements.

NGNP conceptual design due September 2010

INL logo blue large(NucNet) Conceptual design reports that are “the last major deliverables” for phase 1 of the US Next Generation Nuclear Plant (NGNP) project are expected to be completed by the end of September 2010, the Department of Energy (DOE) has said in a report (full text) to Congress. DOE said it will carry out a review of the project in September after which it hopes to give the go-ahead to proceed to phase 2.

Phase 2 includes the competitive selection of a single reactor design for demonstration as the next generation plant. It also includes finalizing the design of all safety systems so a combined construction and operating license (COL) application can be submitted to the Nuclear Regulatory Commission.

DOE said in the report the time line for building the first-of-a-kind reactor could be as long as a decade following completion of the conceptual designs. The September 2010 date for these reports seems to be optimistic. DOE added an estimate that total R&D costs including building the first 300-600 MW unit would be in the range of $4 billion.

Japan Restarts Monju FBR For First Time Since 1995

transparency(NucNet)(BBC) Japan has restarted the Monju fast-breeder nuclear reactor for the first time since it was shut down in December 1995 after a sodium coolant leak.

The 246 MW FBR was restarted to low power levels the state-run Japan Atomic Energy Agency (JAEA) said. The JAEA said the reactor should reach operational levels by May 8th when it should be supplying part of its capacity to the grid. It will undergo more tests over the next two years after which it is scheduled to enter full commercial operation.

Start-up tests on the unit were originally scheduled to start in February 2009, but were postponed after corrosion was discovered in the outdoor exhaust duct of the reactor auxiliary building.

After reviewing a report on the series of safety inspections conducted by JAEA at Monju since 1995, the country's Nuclear and Industrial Safety Agency concluded in February 2010 that conditions were safe and ready for resumption of functional tests.

The facility was shut down in 1995 following a fire. The accident and cover-up created widespread public concern over the safety of nuclear power.

No one was hurt and there was no radiation leak in the accident, which occurred less than two years after it had begun generating power. The plant's operators were criticized for concealing extensive damage to the reactor.

Japan’s concept of a safety culture does not always, on execution, include with vigor and success what Americans view as a a required element, which is transparency and accountability to the public. The 15-year delay in re-start was one of the consequences of this failure to be transparent.

Fusion is still just around the corner for the next 50 years

RainbowThe international community is confident of accumulating the knowledge necessary to build a nuclear fusion demonstration reactor within 10 years, the director-general of the International Thermonuclear Experimental Reactor (ITER) project has said.

This is the latest is a series of statements by various international developers of fusion energy that have been published since the 1950s. The major scientific and engineering challenges remain as significant as ever. It is one of the grand challenges of science on a global scale. It might be easier to reverse engineer human consciousness or secure cyberspace.

Kaname Ikeda, addressing participants at the ‘Financial Times’ Energy Challenges conference in Brussels, Belgium, said: “ITER is not an electricity producing machine, it is experimental, but we are confident we can build this machine, and show that [fusion] is technologically feasible.”

He said “the design and structure of this machine must be safe and durable”, but he also acknowledged that in taking the “next step to demonstration” a number of challenges remained. “In parallel,” he added “there is the additional aspect of investigating the availability of materials.”

When questioned on the extent of international collaboration for the project, which is located in Cadarache in southern France, Mr Ikeda added that “defense-related technology” was also likely to be of interest to project participants: “I believe this is not only for peaceful purposes.”

ITER, which will be the world’s largest experimental facility to demonstrate the scientific and technical feasibility of fusion power, is a collaborative project comprising six member countries (China, India, Japan, Korea, Russia and the United States) and the European Union.

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