Wednesday, June 22, 2011

TVA’s basis for building Bellefonte

The New York Times cites critics calling it a “salvage heap.”

salvage heapApparently, it does not take much for the New York Times to unleash a strong shot of skepticism when it comes to reporting about building a new nuclear reactor or even completing one that is partially built. It starts with a provocative headline - “Nuclear plant left for dead shows a pulse.”

The news story is filled with colorful quotes from people who think the Tennessee Valley Authority (TVA) has lost its mind in pursuing the restart of construction of the first of two Bellefonte reactors in northern Alabama.

For instance, early on in a 1,200+ word story, the newspaper refers to the partially complete reactor as a “salvage heap.” It follows up with a quote from Louis A. Zeller, the Science Director of the Blue Ridge Environmental Defense League (BREDL). He calls is a “zombie reactor” because it is neither dead or alive.

Then there are multiple quotes from Eric Beaumont, a nuclear expert and partner in Copia Capital of Chicago. He tells the NYT restarting construction of Bellefonte, “doesn’t seem like the most prudent use of money.”

Beaumont than lowers the boom with this statement . . . “based on cost, I absolutely think you can say it is crazy.” However, in fairness, it should be pointed out Beaumont allows that the basis for that opinion might change.

What newspaper reporter worth his salt could resist a string of quotes from expert sources like these? It’s pure catnip that would make any journalist’s nose twitch with curiosity, but does it justify the newspaper’s approach to the story? I don’t think so.

If you wrap it all up with a bow, the NYT seems to be trying to dance on Bellefonte’s grave singing in a chorus, with the people it quotes, in a round of “ding dong the witch is dead.”

So what is the case for Bellefonte?

coal-trainThere are some reasons why TVA is going ahead with the project, which the NYT does get to in the second half of the article. The first reason is that the utility is closing 18 coal-fired plants. In point of fact, the strategic intent at TVA is to replace aging baseload coal plants with nuclear. It is unlikely TVA will ever build another new coal fired power plant.

The second reason, which gets TVA in the game, is that it has something that no other nuclear utility planning to build will get for a long time. What it has on its hands is a 1,200 MW reactor pressure vessel. That’s right, there’s no waiting for years for Japan Steel Works to forge one. It’s right there in Alabama, right now. The NYT seems to have overlooked that fact.

Third, it doesn’t matter that the pipes, pumps, and control room have to be installed from scratch. The stuff that was put in in the 1980s wouldn’t meet today’s safety standards. Plus, TVA is committed to installing a state-of-the-art digital control systems.

Can TVA do it?

brownsferry_plant TVA finished and re-opened Browns Ferry in 2008. The utility found that even in a period of flat or declining electricity consumption, that building new nuclear energy powered generating capacity is more cost effective than new coal or gas fired plants.

The Chattanooga Times Free Press reports that in 2007, the restart of TVA’s oldest nuclear reactor at the Browns Ferry Nuclear Plant helped the utility save an estimated $800 million.

The $1.8 billion restart of Browns Ferry Unit 1, originally forecast to pay for itself within eight years, will now end up paying for itself in under three years because of the unexpected jump in the costs for power generation for gas for peak power. TVA reopened Browns Ferry in May 2007.

The newspaper also reports that the TVA board also voted last year to finish a second reactor at its Watts Bar Nuclear Plant near Spring City, Tenn., by 2013 at a projected cost of $2.5 billion. TVA projects that another Watts Bar unit will generate power for less than the continued costs of buying power from other generators or building new coal- or gas-fired plants.

The New York Times never mentions the successful completion of Browns Ferry in its roll up of critics of the Bellefonte project. However, the newspaper does note that TVA is, “one of the few American builders that could pull off a nuclear power comeback in this climate.”

Let’s ring it up

cash_registerAn interesting sidelight is that the newspaper does not delve into the numbers behind the financial analyst’s views. Perhaps Mr. Beaumont would prefer that TVA go ahead with its original plan to build two Westinghouse AP1000s at $4.5 billion each, completing the the $9 billion effort about 2025 instead of finishing Bellefonte 1 for $4-5 billion by 2020?

My bottom line view of the NY Times article is that it focused too much on 'he said she said' type reporting and not enough delving into an independent assessment of how both sides may be talking through their respective hats. The anti-nukes have a great sound byte way too tempting to ignore, but no facts, or at least any that are attributed to them in the article. The utility has the basics of strategic intent right, but the $4 billion price tag needs more definition.

TVA answers the New York Times

The sound byte peppered coverage in the newspaper did not go un-noticed in Chattanooga. In a letter to the editor June 22, 2011, TVA CEO Bill McCollum responds to the newspaper’s coverage. Here’s the full text.

Your article about the Tennessee Valley Authority’s plans for our uncompleted Bellefonte nuclear plant exaggerated the significance of Bellefonte’s older design and painted a picture of a decrepit “salvage heap.”

T.V.A. is rigorously inspecting Bellefonte and will replace any components that do not measure up to modern standards. Nuclear safety systems will receive the greatest scrutiny. Control systems will be updated to digital, and the control room will be the most advanced in the nation.

While some equipment and material have been removed from Bellefonte and used elsewhere by T.V.A., most of it would have been replaced anyway before the unit was allowed to operate. The massive steel-reinforced concrete structures at Bellefonte are as strong and safe as any modern structures.

T.V.A.’s successes in restoring to service Browns Ferry Unit 1 and Watts Bar Unit 1 — both of which are older than Bellefonte — have taught us how to fully evaluate and modernize nuclear plants to ensure safe and economical operation. Should we proceed with Bellefonte Unit 1, we expect its power to be competitively priced and the best option for electricity that is both safe and clean.

It is a rare thing for a nuclear utility to do more than just roll over in the face of negative coverage of its plans. Clearly, TVA feels the newspaper missed some key points in the article.

So there you have it. It's a case of sensational sound bytes versus a business case with a reactor pressure vessel in hand, and to complete the picture, the successful and profitable re-start of Browns Ferry along with the expected completion of Watts Barr on time and within budget by 2013. So which story would you believe?

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Will Davis said...

Wonderful post. Thanks for eviscerating this rubbish article, and for setting everyone straight on the facts.

Joffan said...

One unstated reason for preferring to finish Bellefonte 1 is licensing. I confess to speculation on this, although I know I am not alone, but the fact that there is already a construction licence for Bellefonte 1 takes a huge project risk out of the business equation. Unless and until the NRC shows itself capable of regularly granting construction or combined licences, this risk will be a major disincentive to undertake any new nuclear build. VC Summer, best of luck to them, notwithstanding.

Anonymous said...

TVA is one of the few US utilities still willing to take the "long view" on major investments like this. The result will probably be lower electric prices for their customers for
years to come, stimulating their regional economy. What's wrong with that?

Jack Keeling said...

I am a 41-year veteran of the nuclear industry. I started my career with the TVA and saw the horrible way it handled the first round of nuclear construction in the U.S., leaving the agency with $27 billion of unbonded debt. After the shutdown of all its nuclear plants in 1985 vast improvements were made, and TVA performed well with the restart of the already-licensed Browns Ferry units. It is apparently doing quite well with the completion of construction of Watts Bar Unit 2.

However, Bellefonte is a different issue. The original plans were to site an AP1000 Nubuild there and abandon the partially-completed Babcock & Wilcox (B&W) units. For some reason, this was abandoned and TVA started pushing completion of partially-completed Unit 1.

I object for two reasons:

1. After Fukushima Daiichi, the only viable Nubuilds I see being built are those utilizing a passive shutdown design, such as the AP1000 or the recent GE-Hitachi submittal to NRC.
2. The B&W design is troublesome and only superior nuclear utilities seem to be able to control a B&W unit. Others, such as the Rancho Seco unit on which I worked 1985 - 1988, have been nothing but woe to their owners and to the nuclear power industry. TVA is in the same category as Rancho Seco owner SMUD, a marginally-successful public-owned utility and I am concerned with their ownership of a B&W unit.

In conclusion, once Watts Bar Unit 2 is complete, TVA should settle down and pay off the $27 billion of bond debt with its revenues.