Friday, December 10, 2010

Pete Lyons nominated for Assistant Secretary Nuclear Energy

He is a former aide to Sen. Pete Dominici

The White House  has nominated a former NRC Commissioner to run the Department of Energy’s civilian nuclear programs.  Senate confirmation is required, and will likely take place when the new Congress returns in 2011.

Peter_Lyons_tnDr. Peter B. Lyons (right) is currently the Principal Deputy Assistant Secretary of the Office of Nuclear Energy at the Department of Energy (2009-present).

For an overview of what this office does, see a budget briefing Lyons delivered in early 2010 about its budget request for 2011. See also DOE NE Program Factsheets for information on specific projects.

Prior to going to work for Sec. Chu, Dr. Lyons served as a Commissioner of the Nuclear Regulatory Commission (NRC) from 2005 until his term ended in 2009. (NRC profile)

From 2003 to 2005, Dr. Lyons served as Science Advisor on the staff of U.S. Senator Pete Domenici and the Senate Committee on Energy and Natural Resources, where he focused on military and civilian uses of nuclear technology, national science policy, and nuclear non-proliferation. 

As readers of this blog know, Sen. Domenici was a strong advocate in the Senate for the resurgence of nuclear energy in the U.S. Senate.  The Committee is now chaired by New Mexico Democrat Sen. Jeff Bingaman.

Los Alamos connection

lanl logoFrom 1997 to 2003, Dr. Lyons was assigned by the Los Alamos National Laboratory (LANL) to serve as Science Advisor on the staff of U.S. Senator Pete Domenici and the Senate Energy and Natural Resources Committee, where he focused on military and civilian uses of nuclear technology, national science policy, and nuclear non-proliferation.

From 1969 to 1996, Dr. Lyons held several positions at the Los Alamos National Laboratory including: Director for Industrial Partnerships, Deputy Associate Director for Energy and Environment, and Deputy Associate Director-Defense Research and Applications.

Technical background and education

Dr. Lyons has published more than 100 technical papers, holds three patents related to fiber optics and plasma diagnostics, and served as chairman of the NATO Nuclear Effects Task Group for five years.

Dr. Lyons is a Fellow of the American Nuclear Society (ANS), and a Fellow of the American Physical Society (APS).

He received his Ph.D. in Nuclear Astrophysics from the California Institute of Technology (1969) and his undergraduate degree in Physics and Mathematics from the University of Arizona (1964).

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Money flows for nuclear energy

Areva gets stake from sovereign wealth and House adds to loan guarantees

raising_capitalMoney is flowing to new nuclear projects. French state-owned nuclear giant Areva announced that Kuwait will take a 4.8% stake in the firm worth $795 million.

The Wall Street Journal reported French Finance Minister Christine Lagarde made the announcement in Paris.

At the same time, Lagarde also said the French government would invest an additional $396 million. Finally, Areva will raise cash from the sale of subsidiary in the electronics industry.

Areva has been working to raise $4 billion to pay for the firm’s expansion in Europe, China, and India; and for new uranium mines. Talks have been underway with the sovereign wealth fund of Qatar and with Mitsubishi in Japan. Overall, if the firm’s financial goals are achieved, these new investments will account for a 15% share in the firm.

It may take some time for Areva to realize these goals. For instance, Qatar wants its stake to be in uranium mines rather than reactors, but Areva needs the cash to build new 1,600 MW EPRs. Internal French politics may also play a role.

Alstom, the French power generation equipment manufacturer, is opposed to having Mitsubishi take a stake in Areva. Also, EDF, which owns a 24% stake in Areva, may want to increase it to gain seat on the board. The two firms do not get along so Areva is expected to try to block this move.

If talks fail with Qatar and Mitstubishi, Areva may have to look elsewhere for funding. There is only so much money that the French government can put into the firm, given its social welfare priorities, which is why Areva is looking for external investors.

An Areva executive in the U.S. told a meeting of government officials in Washington, DC, earlier this week the firm would not have been able to commit to building its Eagle Rock Enrichment Facility in Idaho if it had not received a $2 billion Department of Energy loan guarantee.

More money for U.S. nuclear projects

standing liberty dollarIn the U.S. the House passed legislation adding $7 billion in new loan guarantees for nuclear power plants. The Department of Energy short list for them includes NRG’s South Texas Plant and Scana’s V.C. Summer Station.

The bill now goes to the Senate where the number pending there is $10 billion. A conference committee might split the difference. The Obama Administration had asked for $36 billion. Steve Kerekes, a spokesman for the Nuclear Energy Institute (NEI), told the Washington Post Dec 9 the $7 billion “works for now.”

In November Constellation walked away from negotiations with the government for a loan guarantee for its Calvert Cliffs III reactor, which was expected to be a 1,600 MW Areva EPR. The future of that project is up in the air over how it will go forward with Unistar and EDF. Another U.S. partner is needed to take a stake in it due to U.S. laws on foreign ownership of nuclear reactors.

If Unistar and EDF cannot get the Calvert Cliffs project back on track, the Department of Energy may consider offering a conditional commitment for a loan guarantee to Luminant’s Texas-based Comanche Peak project. It is unique due to its planned use of two 1,750 MW Mitsubishi APWR reactors. Dominion in Virignia has also chosen the APWR though it is reportedly looking at a 1,500 MW version.

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Wednesday, December 8, 2010

Exelon calls Christie’s bluff

Utility will close Oyster Creek in 2019 ten years before the license is up

Chris-ChristieGov. Chris Christie (right) told a group of editors last week “he will decide by the end of the year” whether or not to require the Oyster Creek nuclear power plant to install $700 million in cooling towers in order reduce the amount of water the plant takes from Barnegat Bay.

Well, he's not going to have to do that. Exelon, which repeatedly told the state it would shut down the reactor if it's environmental agency insisted on cooling towers, did just that today. In a press release issued this evening (12/08/10), Exelon said economic and regulatory conditions made it impossible to continue to operate the plant at a profit.

Exelon will shut down the reactor in 2019 ten years before it's NRC license expires.

Here's the part that's really interesting. In his statements to the editors, Christie said Exelon was bluffing about shutting the plant down. Wrong.

This is a huge mistake for the State of New Jersey and its economic future does not look bright as a result.

There are two implications from this event. First, it may give encouragement to the incoming Cuomo administration in New York to push harder for cooling towers for Indian Point. Second, it will embolden anti-nuclear groups elsewhere to be more confrontational on the grounds that utilities may seem more likely to fold than fight if faced with expensive regulatory requirements.

Is Salem Next?

Oyster Creek isn’t the only nuclear reactor in New Jersey. Three other reactors provide, with Oyster Creek, about half of the state’s electricity. According to the Energy Information Administration, coal provides another 16% and natural gas provides 30%.

Neither of the two reactors at the Salem nuclear plant use cooling towers. It is likely that if the state were to similarly impose the cooling tower requirement on them, and all three reactors shut down, the state would lose 2,923 MW of electrical generation capacity.

This is equal to losing 38% of its total electrical generation capacity. It would have a stunning negative impact on the state’s economy. The replacement power would have to be purchased on the spot market and most likely from fossil sources.

Environmental groups who have mounted their sustained campaign to shut down Oyster Creek may not realize it, but, if successful, their victory would be felt far more significantly in the checkbooks of the state’s businesses and residents than in the protection of fish in Barnegat Bay.

It's another fine mess - save fish and pollute a planet.

Prior coverage on this blog

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Washington tries to think about nuclear energy

A top level summit draws a crowd, but did it accomplish anything?

Sec Chu at Nuclear Summit 20101207The period prior to the start of a new Congress, following a mid-term election, is ideal for interest groups of all persuasions to hold “summits” to get their ideas into the legislative mix.

So it was for the nuclear energy industry which gathered under the umbrella of the Third Way, a think tank, and the Idaho National Laboratory, a Department of Energy nuclear energy R&D center. (photo of Sec. Chu at the meeting by Third Way)

The difference between this conference and many others also taking place this month is the “A list” members of the panelists including White House energy advisor Carol Browner, Energy Secretary Steven Chu, General Electric energy executive Jack Fuller, and Exelon Chief Nuclear Officer Chip Pardee.

What the group wanted to do is to figure out, among other things, is how to re-start the nuclear renaissance in the U.S. It has taken some lumps lately signified by the Constellation Energy Group (NYSE:CEG) walking away from loan guarantee negotiations with the government for the Calvert Cliffs III reactor, a 1,600 MW power station that would have broken ground in 2012.

Also, legislation put forward by the Obama administration to set a price on carbon failed in 2010 leaving the door open to robust investment in new natural gas powered electricity generation. A carbon tax, with a high enough number, would have been an action forcing mechanism to shift investment from fossil to nuclear power plants.

With the price of gas hovering just above $4/MMBtu, publically traded utilities are flocking to this form of capital investment for relatively quick returns compared to the timeframe for bringing new reactors online. At some point in the future, gas prices will go up. Then rate payers will regret not having taken the longer term view by investing in nuclear energy.

Chu’s idea for a clean energy standard

cleanenergy Having lost key cards to play in setting energy policy, the government now wants to propose a new “clean energy” standard that would require half the nation’s electricity be generated from low-or-no carbon sources by 2050. The standard would include nuclear energy in the mix.

Energy Secretary Chu said the mechanism would provide “certainty” that there would be a market for electricity generated by nuclear reactors. He added that the standard should start with a requirement that by 2025, 25% of all electricity generated in the U.S. should come from low-or-no carbon energy sources.

Technical idealism meets business realities

This is a big idea. Proving it will be a tough sell in the world of electricity rates, and calculations of returns on capital assets. It opens the door to all kinds of gamesmanship both at the federal level and with state public utility commissions. Plus, investors in solar and wind energy projects, who are important parts of this administration’s political base, will work the various avenues in Congress to limit or exclude nuclear energy from the mix.

roi graphicThe nuclear energy utilities are not in an enviable position because all of them have multiple bets on fuel types including coal, gas, as well as renewable energy investments. To say these utilities are “conflicted” really means it gives everyone a new headache when it comes to figuring out how to allocate “clean” v. not so clean energy types.

The idea of arm wrestling with the market with a new clean energy standard doesn’t have the same compelling power as a carbon tax, but absent one, it may be all the White House has got to work with for the next two years.

White House energy advisor Carol Browner said a carbon tax “would be hugely beneficial to this industry (nuclear). She discounted any chance of passage of legislation by the incoming Congress, which will be controlled by republicans in the House who oppose it.

Is anyone paying attention?

Secretary Chu deserves credit for trying to come up with a new means of getting past market mechanisms as a basis for building new nuclear reactors. His ideas may be lost in the media mix as the press focused on the lame duck Congress with its focus on tax cuts.

One would think that such a gathering would be catnip for the media. The New York Times reported, in one of its blogs, that the meeting was long on high level talk about the obvious and short on innovative solutions . . .“there were few truly new ideas or even new laments.”

Other media coverage included financial and national wire services and political blogs and trade press. There was no coverage this morning in the Wall Street Journal. The Washington Post used AP’s wire report.

Time to think about the longer term

grossenbacherJohn Grossenbacher, Director of the Idaho lab, (right), who facilitated discussions during the summit, spoke with reporters afterwards. He looked beyond the headlines and praised Sec. Chu for focusing on three key areas.

  • Developing public/private partnerships to build reactors
  • Finding ways to assure financing and certainty in the marketplace for utilities and investors
  • Rebuilding America’s nuclear energy infrastructure to manufacture components

Grossenbacher noted that, “if you just let market forces drive energy policy, you will get natural gas plants being built as long as it is plentiful and cheap, but it may not always be that way.”

He said that the nation needs to look beyond market mechanisms to address two key goals (1) energy security, and (2) environmental stewardship.

However, he said in response to a reporter’s question that the term “clean energy standard is a headline grabber,” even if it’s legislative form is still to be defined by a working group that will convene this winter.

One of the outcomes of the summit will be a series of working groups to develop legislative and regulatory proposals. Their reports are due by mid-2011.

In the area of public/private partnerships, Grossenbacher said the industry must find ways to address risks, and boost certainty for construction of new reactors, in three broad areas – licensing, financing, and technology.

He added that it is “unreasonable” for people to expect that Washington will be able to “develop a grand energy strategy.

He agreed with a statement by GE’s Jack Fuller that for the U.S. to again participate in global nuclear energy markets, the U.S. must first prove the viability of its domestic market with successful construction of new reactors. You can’t export your reactors to other countries if no one is building them at home.

SMRs must prove their economics work

small reactors With regard to small modular reactors, over which there is a lot of buzz including their potential for exports, Grossbacher said that the vendors of these emerging technologies must prove the economic viability of the smaller designs.

“There are reasons people built large reactors and they have to do with economies of scale. We have to see if SMRs built in factory settings will provide the same advantages to utilities.”

Thinking about the next 100 years

Grossenbacher, who had a long, distinguished career in the nuclear navy before taking his civilian post in Idaho in 2005, knows a thing or two about building reactors. He’s been saying for some time that to think usefully about nuclear energy, you have to work on a timeline of 50-100 years. He emphasized this point again in his remarks to reporters.

He’s right. In our society, with its emphasis on instant gratification and political quick fixes, we cannot think about nuclear energy with the paradigm of “add water and microwave” to find a solution. Hopefully, the nuclear summit will develop some legs to take the nation on the long journey to clean energy.

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Monday, December 6, 2010

Areva inks India nuclear deal

It covers the first two of a planned six pack of power stations

Areva logoThe Wall Street Journal reports that Areva, a French state-owned firm, has signed a (euro)7 billion deal with state-owned Nuclear Power Corporation India Ltd (NPCIL) for two 1,600 MW EPR reactors. The deal envisions construction of four additional reactors plus fuel for 25 years.

The reactors will be located at seacoast city of Jaitapur in the western state of Maharashtra, about 550 Km south of Mumbai (map) The first two units are expected to enter revenue service in 2017.

The signing ceremony took place at the highest levels. It included French President Nicolas Sarkozy, Indian Prime Minister Manmohan Singh, Areva CEO Anne Lauvergeon, and the Chairman of NPCIL Dr. S.k. Jain.

Areva said in press statement about the deal the scope of the agreement includes reactors, steam generators, and related components. The agreement lays out contractual terms and conditions.

India’s harsh nuclear liability law has frozen out U.S. firms from India’s $150 billion new build. Areva, which has sovereign immunity, and its Indian counter parts said only that they would establish a “framework” to deal with the law.

The Times of India reported Dec 6 that no reactor will break ground until there is resolution of two issues -- India's nuclear liability law and pricing.

In a joint statement, Indian and French government officials said:

"Following India's enactment of a civil nuclear liability legislation, both countries stand ready to further exchange views on this issue so as to ensure the appropriate framework for the sound development of their cooperation. "

Russia not happy about liability law

russiaEven the Russians are complaining about the Civil Liability for Nuclear Damage law. Section 17 assigns liability to suppliers in the event of a nuclear accident long after the components are installed in an operating reactor.

The Hindu, India’s largest newspaper, reported Dec 5 that Gregory O. Kumani, VP of Atomstroyexport, said the Russian state-owned firm has not agreed to accept the new liability law as a condition to do business with NPCIL.

While the Russian firm has sovereign immunity, it may be worried about the appearance of liability if something were to do wrong, and the impact on its ability to sell Russian built reactors in other global markets.

India’s big stake in Russian reactor technology

The Russian company is building two 1,000 MW reactors at Kudankulam on India’s southern coastal tip. A follow-up deal calls for two more 1,000 MW VVER design reactors and two rated at 1,200 MW.

Construction is done on the first unit which is now in its start-up phase. The second unit will complete construction soon. Both units will likely be in revenue service in 2011.

Impact on Indian supply chain

As a practical matter, as the Russians and the French “localize” production of reactor components, the burden of the liability law will fall more on Indian firms. Former Indian Atomic Energy Chairman Anil Kakodkar said as much in an interview with the Economic Times Dec 5. He complained that Indian firms could face increased liability risks.

Kakodkar has been a staunch advocate of localization of production of components for India’s massive program to build 20 GWe of new reactor power stations.

He called for a cost effective insurance program to handle liability coverage so that investment funds for growth in production capacity are not diverted into financial instruments that don’t contribute to the new build.

NDTV News Coverage from India

Sunday, December 5, 2010

Buffet’s $50 million launches IAEA fuel bank

It will help nations peacefully develop nuclear energy

Warren BuffettThe New York Times reports that a $50 million privately funded initiative by philanthropist Warren E. Buffett (right) has added enough funding for an international nuclear fuel bank to start operations.

The fuel bank will be administered by the International Atomic Energy Agency (IAEA). Buffett told the NY Times he made the contribution because, "the spread of nuclear weapons of incredible destructive capability is the No. 1 problem facing mankind."

Buffett made the $50 million commitment in September of 2006 contingent on the IAEA receiving an additional $100 million in funding to jump-start the reserve, a condition that was met in 2009 when Kuwait donated $10 million.

According to the NY Times, other backers of the fuel bank include the U.S., the European Union, Norway, and the United Arab Emirates. Total funding for the fuel bank is now at $157 million, enough to buy the first fuel load for a new nuclear reactor, about 60-80 tons of uranium.

Nonproliferation experts say the implementation of a fuel bank creates opportunities for nations to develop nuclear energy without the threat of nuclear weapons.

Real the full details exclusively at CoolHandNuke a nuclear energy jobs portal and a whole lot more -- now online.

coolhandnuke

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