Friday, July 29, 2011

Spent fuel draft report has few surprises

The Blue Ribbon Commission calls for interim storage and finding a new geologic repository, but nixes reprocessing as a near term strategy

peach pieA council of wise men and women is Washington is almost always called a “Blue Ribbon Commission,” which may make its members feel like a slice of prize peach pie at the county fair.

This one, appointed by Department of Energy Secretary Steven Chu, has the unenviable job of making a silk pursue out of Nevada Senator Harry Reid’s adamant opposition to opening the Yucca Mountain site.

For his part, President Obama, who needs Reid to do heavy legislative lifting in the Senate, and support in Nevada for the 2012 election, has purposely shown all the signs of having a tin ear when comes to the spent fuel issue.

The report uses sharply worded language to describe the current situation with its ongoing political and economic costs. One senses impatience that perhaps the BRC could have done more with its charter.

The Blue Ribbon Commission’s draft report released today contains little that could not be written on the day of its first meeting in January 2010. The draft report calls for several well understood actions. These are useful recommendations. Most of this work could be accomplished in the next five-to-ten years.

  • Set up interim storage at one or more locations, any place but Yucca mountain. Charter an off-the-books federal corporation, funded by waste fees, to pay for management of spent fuel.
  • Find a deep geological site to put the stuff.
  • Conduct R&D on reprocessing and fast reactors.
  • Do the work consistent with the nation’s nonproliferation objectives.

More kicking the can down the road

spent fuel canistersThe BRC noted that it sees “no unmanageable safety or security risks associated with current methods of storage” in the U.S. This is the essence of the charge the BRC has kicked the can down the road leaving nuclear utilities holding the bag, so to speak, with wet and dry at reactor storage of spent fuel.

The situation could remain unchanged for decades or longer. Spent fuel can be moved to dry cask storage after cooling off for about five years. The dry casks have expected lifetimes of up to 150 years.

The BRC is full of very smart people, and not just in the technical realm. The BRC is chaired by former Democratic congressman Lee Hamilton and Brent Scowcroft, the national security advisor to President George H.W. Bush. The other 13 members are also very smart which is why you wind up scratching you head. Aside from from obvious process steps for site selection, and organizational work to get the waste fund and people to manage it out of DOE, we’re still pretty much where we were when they started work.

The numbers they are dealing remain rather astonishing including payment of $25 billion into the waste fund, and over 60,000 tons of spent fuel with another 2,000 tons being added every year to the national inventory. In addition to the 104 operating reactors, spent fuel is stored at dry casks at another 10 reactors that were closed in prior years.

While the BRC’s recommendations are relatively noncontroversial, especially in terms of site selection process, acceptance in Congress could be a rough trip. House republicans have repeatedly attacked the Obama administration over the delay in the NRC’s review of the license application for Yucca mountain. The White House position is that interim and final storage is OK for any place that accepts the sites as long as they’re not in Nevada.

Missing the boat on reprocessing

Reprocessing is a nonstarter with the BRC. However, it seems to be recommending creation of a perpetual R&D sandbox for advanced reactor technologies and reprocessing methods. This is a significant blind spot as more than three dozen reactors globally now run on MOX fuel. Even former NRC Chairman Dale Klein told the AAAS last February reprocessing has promise. Did the BRC ever talk to him?

A more innovative approach would have been to assess some of the available technology roadmaps and licensing challenges of building a 800 tonne/year facility. It would be a first step toward a significant investment in reprocessing as a change to the way we deal with spent fuel.

The BRC will accept comments through October and submit a final report in January 2012.

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Thursday, July 28, 2011

ANS issues spent fuel report

The American Nuclear Society issued a comprehensive spent fuel report

spent fuel canistersOne day ahead of the Blue Ribbon Commission, which will have its report out tomorrow, the American Nuclear Society has its own review of spent fuel management options.

In the current news cycle of all debt ceiling all the time it may be a while before the mainstream media notices the BRC’s work or comments from anyone else.

The BRC is expected to recommend a single interim storage site and a renewed hunt for a permanent geologic repository.  This will raise the profile of salt as an option which will bring WIPP back into the equation.

Critics of the expected recommendations from the BRC say that reprocessing is a viable option and that the BRC’s dour outlook on fast breeder reactors is not justified by current efforts in China, Russia, and India.

Proponents say the BRC’s recommendation represent a consensus political judgment that works in an off election year. It won’t make Sen. Majority Leader Harry Reid mad, which keeps him in the traces for Obama’s heavy lifting in the Senate.

In the meantime, ANS says their study will help citizens,

Here’s the text of its release

La Grange Park, IL – July 28 – The Report of the American Nuclear Society (ANS) President’s Special Committee on Used Nuclear Fuel Management was issued today, ANS President Eric P. Loewen, PhD, announced.  “This report demonstrates the vitality and relevance of the Society to the continuing discussion about the future of nuclear energy,” Loewen said.

In early 2010, then ANS President Tom Sanders recognized the importance of the question of what to do with used nuclear fuel and formed the President’s Special Committee on Used Nuclear Fuel Management.  Eleven members of ANS worked to prepare the 64 page report which describes feasible used nuclear fuel management options and explores the advantages and disadvantages of each. 

Professor Audeen Fentiman, professor of nuclear engineering at Purdue University and Chair of the Special Committee said in describing the report, “members of the Committee worked long hours in order to create this document and we believe that it will be of considerable value in shaping the debate about the management of used nuclear fuel.”

When asked about the report, former ANS President Tom Sanders noted, “I was concerned that too much of the conversation about used nuclear fuel was based on unsound scientific and engineering principles, and I firmly believed that the role of ANS is to provide unbiased reporting so that citizens and policy makers are able to make informed judgments about nuclear issues.  Our hope is that our work would also be useful input to the report of the Blue Ribbon Commission on America’s Nuclear Future.”

Concluded Loewen, “The Report will serve as the chief source of information about this issue; the painstaking care and thoughtfulness with which the committee members acted is ample evidence of what the Society does best: solid research, unblemished by an agenda other than the search for truth.  They all deserve our thanks and respect.” 

For more information about the American Nuclear Society, visit www.ans.org.
To view the report, follow the link
http://www.new.ans.org/pi/resources/reports/docs/ans-unf-report.pdf

Established in 1954, ANS is a professional organization of engineers and scientists devoted to the peaceful applications of nuclear science and technology.  Its 11,500 members come from diverse technical backgrounds covering the full range of engineering disciplines as well as the physical and biological sciences.  They are advancing the application of these technologies to improve the lives of the world community through national and international enterprise within government, academia, research laboratories and private industry.

CONTACT:

Fritz Schneider (301) 728-4811

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Did Canada give away the store in sale of AECL?

Reactor refurbishment service will be a cash cow for SNC Lavalin with limited options for sales of new reactors

This is my updated coverage of the sale of AECL originally reported in Fuel Cycle Week July 21, 20011, V10:N434 by International Nuclear Associates, Washington, DC

AECL SymbolOn June 29 the government of Canada finally put an end to industry uncertainty about  how it would dispose of its nuclear crown corporation, Atomic Energy Canada Ltd. (AECL).

The administration of Stephen Harper signed away the company’s CANDU reactor division to SNC Lavalin as a re-branded entity, CANDU Energy, at the bargain-basement price of C$15 million in cash, plus $285 million in future royalties earned through the sale of new reactors.

That final price of $300 million had been kicked around in on-and-off negotiations for nearly two years.

Leslie Quinton, a spokesperson for SNC Lavalin, told FCW the purchase price includes “exclusive rights for commercialization of the CANDU technology.” The royalties pay out to the government for 15 years, after which anything SNC Lavalin sells is gravy. This of course assumes that the “extended version” of the 740 MWe CANDU 6, AECL’s flagship reactor design now in development, will still be in demand by 2026.

Next Step to Finish EC6 Design

Out of AECL’s 4,000 employees some 1,200 come to SNC Lavalin in the package, along with a one-time government gift of $75 million in cash—five times the “sale price”—to wrap up work on the EC6. Another $32 million in development costs will come out of SNC Lavalin’s coffers.

The EC6 features a slightly smaller and more easily maintained fuel assembly design. Also, instead of operating at maximum capacity all the time, the new reactor is designed to allow for load following— generating the electricity needed to meet demand at any one time, which is especially attractive for smaller electricity markets, such as in developing countries.

Among its passive safety features is an elevated reserve-water tank that in an emergency would rely on gravity to deliver cooling water into the reactor.

Meanwhile, plans to develop the 1,100 MWe ACR1000 AECL’s original attempt to modernize the CANDU reactor, have been shelved, maybe for good. The Canadian Nuclear Safety Commission declined to certify the design for safety and the expense of redesigning it to meet regulatory requirements is said by some to be too high for the Canadian government. SNC Lavalin shows no interest in reviving it.  During the bidding process for AECL Bruce Power, which in the past referenced the ACR1000 for a twin reactor facility in Alberta, also said no dice to putting money into completing the design.

AECL will continue to exist as a much smaller organization, primarily to continue running the medical isotopes-producing reactor at Chalk River, as well as decommissioning and other administrative work. This will include managing Candu Energy’s taking over its existing refurbishment work.

Debt Not Part of the Package

debtOne thing that SNC Lavalin will not take on with the low-ball price is AECL’s outstanding cost overruns in the life-extension project at the Point Lepreau nuclear plant in New Brunswick. What remains of AECL will retain the liability of cost overruns to date, and will continue in the role of master contractor for the job. 

AECL, which underestimated the technical complexity of the task, ran up more than $400 million in excess costs, which Ottawa is expected to pay as part of the deal. Quinton said CANDU Energy would now step in as a subcontractor on the job, presumably bringing badly needed SNC Lavalin expertise to the project.

Due to delays in completing the project the provincial government of New Brunswick has found itself on the hook for replacement power purchases, and it is lobbying the federal government for help—with no success so far.

According to Quinton, CANDU Energy will perform four other refurbishments under subcontract, including two at Bruce Power in Ontaria, one at Gentilly-2 in Quebec, and one at Wolsong in South Korea.

Government expenditures on AECL since 1952 come to $1.7 billion. Of those costs, $854 million have occurred since 2003. Another $476 million went to develop the EC6 and the ACR1000.

Life-Cycle Costs Debated

Candu 6 schematicOne unknown is whether the EC6 will bring in revenue, and therefore how high a priority a sales push would be for the new owner. Certainly its royalties obligation to the government would skim off profits.

But there are some prospects in Canada, the most promising of which in the near term is the need for two reactors at the Darlington plant site in Ontario. This project has been discussed for years, but remains intractably stalled, to the frustration of Canadian energy officials.

Steve Aplin, vice president at the Toronto energy consultancy HDP Group, told FCW that what has held back the Darlington deal is uncertainty about whether the federal government will backstop the new builds for cost overruns.

The reactors themselves are a relatively small part of the cost. In 2009 industry analysts estimated their cost per KW at $2,700, or $1.9 billion each. But the total cost, including new transmission infrastructure, long-term refurbishment cycles and decommissioning for the two 740-MWe units would cost more like $28 billion.

Ontario provincial government officials said they were concerned about these life-cycle costs, but the federal government has taken the position that waht the province really wants is a guarantee on costs plus lifetime subsidies for capital projects. In short, Ottawa has told Ontario it is on its own for the Darlington deal. Ontario is not budging.

Ontario’s Energy Minister Brad Duguid has often pressed the government in Ottawa to move forward on the AECL sale. He recently told financial wire services that he was relieved that the province could now move forward with the Darlington project. But he also repeated that he expected the government to take responsibility for future cost overruns.

Overseas Prospects for EC6

But even more important is how the EC6 would fare in the global market. Argentina is said  to be interested in a new CANDU reactor, as is Romania, which already has two. Quinton also named Jordan, Turkey, and the Ukraine as prospective buyers. But Aplin said SNC Lavalin would have to mend some fences if it wanted to bring Argentina back.

fiddle around“Basically, while the federal government fiddled around with the sale of AECL for two years it told a willing buyer to get lost,” Aplin said.

Jordan might be interested possible because it has uranium, but, like the United Arab Emirates, does not want to build its own enrichment plant, which would constitute a provocation to its neighbors in the volatile Middle East.

Romania is interested in two more CANDU reactors but has not raised enough money to pay for them. Earlier this year European investors backed out of a deal, leaving a technical team in place with no funding.

India, too, has expressed interest. although at the moment appears primarily interesting in securing uranium. This week an Indian delegation visited Canada on July 17 for that purpose. A deal between the two nations would perhaps put to rest Canada’s longstanding ill will springing from India’s use of a CANDU reactor to develop a nuclear device in the early 1970s.

Indian officials have also raised the possibility of joint projects marketing CANDU reactors to smaller countries that cannot buy larger units. India has a 700-MWe indigenous reactor design based on the CANDU technology, which it wants to position for export sales. Joining forces with the now-privatized segment of AECL might make sense for both parties.

What is boils down to is that SNC Lavalin has pretty good prospects of selling at least three EC6 reactors in the next few years. Hypothetically speaking, if the delivered price in the not too distant future is $3,500/ Kw, then the gross revenue of the reactors would be in the range of $2.6 billion each or just shy of $8 billion. That’s not bad for an investment of $15 million in upfront money plus another $32 million in R&D work.

Refurbishment Contracts a Money-Maker

The sure thing for SNC Lavalin will be a series of contracts to finish refurbishment of CANDU reactors in Canada and elsewhere in the world (the global fleet consists of 34 reactors). The reactor design is so specialized that no one else can perform that job. Refurbishment business of other CANDU reactors in India, China, and South Korea is virtually guaranteed to come in the door sooner or later.

While it is impossible to estimate the ultimate value of these contracts to SNC Lavalin. Each refurbishment project takes several years, employs hundreds of people with nuclear and related engineering expertise, and involves little technical risk. It’s a beans-and-bread business that could generate substantial profits for the firm.

From the Canadian government’s perspective, the key benefit of the deal is that it will have privatized the future maintenance of its CANDU fleet, while freeing the government from taking a role in nuclear reactor design development.

Government Was Forced to Sell Low

fire-saleDid the government give away the store? One way to judge the value of a deal is to look at the revenue a company gains per employee. SNC Lavalin took 1,200 employees, but at the moment they represent only potential revenue, as AECL has not sold a reactor in years.

Meanwhile, the highly visible refurbishment project at Point Lepreau is in the ditch, with significant schedule delays and massive cost overruns. An enraged provincial government is waving an invoice worth tens of millions for replacement power purchases while the reactor has remained idle.

If AECL could sell one CANDU EC6 at $3,500 per KW it would produce $259 million in revenue. For each of the 1,200 employees in the newly privatized reactor business, that gains an indicator of $216,000 in revenue. The government royalty would lessen those revenues, but how much so is unclear, because neither the government nor SNC Lavalin has revealed the rates.

Total government spending in 2009 on AECL was $822 million. Of that amount, $346 million went to life-extension projects (refurbishment) and $108 million to new reactor R&D and design work. Allocating all the government’s spending against AECL’s 4,000 employees produces a figure of $205,500 per employee.  That's on a par for this metric with grocery stores and other consumer goods retail chains.

If allocated against just the 1,200 employees SNC Lavalin accepted, it results in a much better number: $685,000. But the government probably hoped for a larger privatization effort that would leave a small workforce to run Chalk River. This may have been a sticking point that delayed negotiations.

Unfortunately, the amount of revenue per employee for all 4,000 workers in 2009 is far lower than what global engineering and construction firms expect. By comparison, Fluor Corp. recorded revenue per employee of $834,000 for its entire workforce.

Given the skill sets of the reactor engineers at AECL, a more reasonable number that would attract investors would have to be in the range of what Rolls Royce tallied in 2009, of $375,000 in revenue per employee. Rolls Royce is deeply involved in the business of manufacturing nuclear reactor components, which makes it a useful benchmark.

It follows that with lower-than-industry-average revenue numbers for the employees that moved to CANDU Energy, the Canadian government had little choice but to give AECL away for a pittance.

Layoffs are likely if no sales emerge in the near term. The Canadian Society of Professional Engineers told the Toronto Star on June 30 that as many as two-thirds of the employees transferred to CANDU Energy could lose their jobs if there are no E-6 buyers. The union complained that layoffs would also affect refurbishment projects.

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Is the NRC on target with its call to redefine nuclear safety?

A report by a Nuclear Regulatory Commission staff task force calls for sweeping regulatory change, but also acknowledges that information about the Fukushima accident is unavailable, unreliable, or ambiguous.

In the third of a continuing series, the ANS Nuclear Cafe explores a significant issue affecting nuclear science and engineering by asking a diverse group of nuclear energy professionals for their views on a high-profile issue.

On July 13, the U.S. Nuclear Regulatory Commission issued a 96-page reportRecommendations for Enhancing Reactor Safety in the 21st Century: The Near-Term Task Force Review of Insights from the Fukushima Dai-Ichi Accident—calling for a redefinition of the level of protection “regarded as adequate” for safety at the 104 operating nuclear reactors in the United States.

The NRC’s task force wrote in the report that there is a need to “support appropriate requirements for increased capability to address events of low likelihood and high consequence, thus significantly enhancing safety.”

National Press Club speech

In a July 18 speech at the National Press Club, NRC Chairman Gregory Jaczko (right) said,

“In its review, the task force did not find any imminent risk to public health and safety from the continued operation of the nation’s nuclear power plants. The task force was clear, however, that any accident involving core damage and uncontrolled radioactive releases of the magnitude of Fukushima–even one without significant health consequences–is inherently unacceptable.”

The NRC published a series of recommendations including boosting defenses against flooding and earthquakes, and protecting reactors and used fuel pools when there is a complete loss of electricity.

Within the NRC, and in response to the report and Jacko’s speech, three commissioners—William Magwood, Kristine Svinicki, and William Ostendorff—signaled that they disagreed with the push by Jaczko to put these changes on a fast track.

Commissioner Ostendorff told the New York Times, “I personally do not believe that our existing regulatory framework is broken.”

Nuclear industry response

Industry reaction was swift. The Nuclear Energy Institute’s senior vice president and chief nuclear officer, Tony Pietrangelo, (right) said in a press statement that the NRC may be premature in calling for wide-ranging regulatory changes.

“The task force report does not cite significant data from the Fukushima accident to support many of its recommendations. Given the mammoth challenge it faced in gathering and evaluating the still-incomplete information from Japan, the agency should seek broader engagement with stakeholders on the task force report to ensure that its decisions are informed by the best information possible.”

Given the wide range of points of view about the NRC report, the ANS Nuclear Cafe asked some American Nuclear Society members to commenton the task force’s report.  You can read six reviews of the NRC report exclusively at the ANS Nuclear Cafe online now.

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Wednesday, July 27, 2011

Entergy to refuel Vermont Yankee

The utility places a $100 million bet despite a hostile political environment

entergynuclearThe future of the Vermont Yankee nuclear reactor got a bit brighter this week as its owner and operator the Entergy Corp. (NYSE:ETR) announced its board of directors had approved the fabrication of fuel and the refueling of the Vermont Yankee reactor in October.

The refueling will cost as much as $100 million of which about two-thirds is the cost of the fuel and the rest labor and supplies. About 800 workers will be brought in over the course of the month long outage as part of the refueling process.

The new fuel will replace about one-third of the reactor core and is good for about 50 months of use before it will also have to be changed out. In effect, Energy is betting that it can beat the reaper in Vermont and continue to earn revenue from the sale of electricity in Vermont.

Opposition from State of Vermont

Entergy received a 20-year license extension for the reactor from the U.S. Nuclear Regulatory Commission in March 2011, but the state of Vermont has refused to issue a certificate of public good to allow it to continue to operate beyond March 2012.

The company filed in U.S. District Court for a preliminary injunction against the State of Vermont. However, U.S. District Court Judge J. Garvan Murtha denied the claim, saying there was no immediate irreparable harm, and scheduled a trial on the merits of the case for September.

If Entergy loses in court, it could lose not only its investment in the replacement fuel, but also all future earnings for the remainder of the new 20-year license extension.

Over to you New York

There may be a second reason why Entergy is betting the ranch, so to speak, in Vermont. It is to send a message to neighboring New York which has been contending against two 20-year license extensions for the reactors at Entergy's Indian Point power station.

The unstated message which comes across the border from Vermont to New York is that Energy is putting its money behind its drive to keep the Vermont Yankee reactor open and can be expected to do the same with Indian Point.

The NRC staff has already determined the twin reactors there, which supply 2,100 MW of power to the New York City region, are safe. However, the State of New York and several environmental groups with close ties to Gov. Andrew Cuomo, have filed contentions against relicensing. These legal motions will be resolved as part of hearings conducted by the Atomic Safety and Licensing Board.

High stakes in granola country

granolaThe decision to refuel Vermont Yankee is a high stakes play because once the company orders it, the fuel cannot be used in other nuclear reactors. It is engineered for the specific configuration and operation of Vermont Yankee. See Margaret Harding's technical notes at her blog Four Factor Consulting.

Vermont's Governor Peter Schumlin wants to shut down the reactor and made that outcome a central plant of his successful electoral campaign in 2010. Driven by the state’s “green” politics, his work was made easier by miscommunication by Entergy over the issue of leaks of radioactive tritium from underground pipes.

Despite a considerable political uproar over the issue of tritium leaks, William Sorrell, Vermont's attorney general, has decided not to file charges against Entergy Corp.

In January 2010, Entergy said it discovered a tritium leak at Vermont Yankee. The company stopped the leak in March 2010. Previously, plant managers told a state legislative committee, under oath, there were no leaks from underground pipes.

Sorrell said July 6 that his office conducted an investigation, but lacked enough evidence to prove perjury in court.

"Clearly, Vermont Yankee personnel repeatedly failed to meet a minimally acceptable standard of credibility and trustworthiness, but proving that perjury took place is another matter entirely, We lack the smoking gun necessary to prove the crime and it would be unethical and irresponsible for us to press criminal charges when we do not have the evidence to meet our heavy burden of proof."

The company took disciplinary action against the employees involved in the case. According to press reports at the time, some Entergy employees either lost their jobs or faced other internal personnel actions affecting their careers.

The incident left a visible dent in Energy's credibility which continues to affect public sentiment. What it will not do is affect the NRC's licensing authority for the reactor. The issue is now joined in federal court. We'll have to wait for the trial in September to see how that turns out.

Update

Due to a client / server error this post appears simultaneously here and at CoolHandNuke. It was intended to appear at CoolHandNuke, You can read it there.



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