Wednesday, January 11, 2012

U.S. Nuclear manufacturers lukewarm on AP1000

There is so much excess production capacity for pumps, pipes, and parts that few plan expansion when orders show up

This is my updated coverage for Fuel Cycle Week, V11;N454 January 5, 2012 published by International Nuclear Associates, Washington, DC. 

ap1000The U.S. Nuclear Regulatory Commission voted unanimously on Dec. 22 to approve the Westinghouse AP1000 reactor design for use in the United  States. The action sets the stage for construction of two of these reactors at Southern's Vogtle site in Georgia and two more at Scana's V.C. Summer station in South Carolina. 

However, an industry trade group told FCW that few of its members, who are expected to make the parts for the reactor, plan to expand capacity to fulfill the orders. Instead, they say they will wait and see if there is a second round of construction of new reactors based on the first two at Southern’s Vogtle site coming in on time and within budget.

Applications for combined construction and operating licenses (COL) are pending before the NRC. Both Southern and Scana have expressed hope the regulatory agency will issue them in the first quarter of 2012.

However, Scott Burnell, a spokesman for the agency, told FCW in an email Jan. 2 that NRC has not yet scheduled the necessary meetings to issue the licenses.

"In order for a COL to be issued, the Commission must provide affirmative findings that the application and staff's review satisfy AEA (Atomic Energy Act) and NEPA (National Environmental Protection Act) requirements,” wrote Burnell. “If the Commission sees fit to require any additional license conditions, they would be included in the Order from the affirmation session."

If the NRC does take the next step, the four pending COLs will be the first issued under the new 10 CFR Part 52 process that replaces the old Part 50 regulation which required separate construction and operating licenses.

The Part 52 process is designed to streamline the approval of licenses with potentially lower costs to utilities. The Part 50 process was widely seen as vulnerable to multiple legal challenges from anti-nuclear groups, making a commitment to build a new reactor a risky decision for a publicly traded utility.

Arduous road to success

aris candrisAris Candris, Westinghouse CEO, (right) told the Associated Press that the road to the NRC decision “has been long and sometimes arduous."

The NRC vote brings the U.S "one step closer to constructing AP1000 units and putting thousands to work to ultimately provide future generations with safe, clean and reliable electricity," he said.

CEO Cardis said that the U.S. projects will produce 3,000 construction jo bs at each of the twin reactor sites. About 1,700 workers are working at Vogtle now in pre-licensing construction of non-safety related systems.

Turn-Around for Jackzo

Nuclear industry observers noted that Chairman Gregory Jaczko said in the agency's prepared statement that he is satisfied the design is safe. That represents a change from his views of last May.

At the time, he issued an unprecedented statement to the news media criticizing Westinghouse and alleging the company was dragging its feet in responding to agency questions.

And in October he said that he was "sympathetic" to the views of a coalition of anti-nuclear groups who wanted the agency to stop all reactor licensing, including life extensions, until it has completely updated its regulations with Fukushima related safety measures. That process will take years.

But last month, Jaczko wrote in his vote in favor of certification that “the design provides enhanced safety margins through use of simplified, inherent, passive, or other innovative safety and security functions, and also has been assessed to ensure it could withstand damage from an aircraft impact without significant release of radioactive materials.”

Implications of Design Approval

The NRC's approval of a reactor design is a global "gold standard" and may open markets for the reactor in other countries. The new design certification is good for 15 years.

Westinghouse is building four AP1000s in China and is in negotiations to build more of them there. The firm has executed technology transfer agreements with China, which is planning to shift from older Gen II domestic designs to Gen III through adaptation of the AP1000's passive safety features. The first Chinese unit is expected to come online in 2013.

Earlier this month the U.K. Nuclear Safety Agency issued an interim approval of the reactor under its generic design assessment. Westinghouse has said it will complete the expensive process when a customer places an order for a unit in Britain (FCW #452, Dec. 8). Multiple sites have been approved by the government for new reactors.

Nuclear Fabricators Cautious

Reactor%20coolant%20pump%20(MHI)

The Nuclear Fabrication Consortium, based in Columbus, Ohio, said that while its members, who manufacture components for nuclear reactors, welcome the prospect of orders based on new construction, few will invest in new plant capacity to meet demand from the Southern and Scana projects.  (Cooling pump image source World Nuclear News)

Nathan Ames, NFC's Director, told FCW in a telephone interview Jan. 3 that companies who make pipes, pumps, and parts are waiting to see how well the new construction process goes and whether the nuclear industry has a second wind after these four units.

"There is no great upwelling of enthusiasm among our members about the first four AP1000s,” Ames said. “Our members tell me they have sufficient capacity now. If a second round of plants get commitments, then people will invest in new production facilities."

The NFC official cited the low price of natural gas, uncertainty over how long the low prices will hold, and whether Southern and Scana can bring in their four reactors on time and within budget, as factors for the consortium’s caution.

"There's a lot of fear we could get a situation like the one in Finland," Ames said, which could deter other utilities from moving forward with new reactors.

There are significant differences in the costs of the projects. Southern, which has an $8.3 billion loan guarantee from the Department of Energy, says its two reactors will cost $14 billion. Scana, which did not pursue a loan guarantee, says its plants will cost $9 billion. Southern's reactors are expected to come online in 2016 and 2017, and Scana's in 2016 and 2019.

Prospects for a second round of new nuclear reactor construction include a GE-Hitachi ESBWR at DTE's Fermi III in Michigan, another at Dominion's North Anna III in Virginia, and two Mitsubishi APWRs at Luminant's Comanche Peak twin new units in Texas. Following them are proposals by Duke for two AP1000s in South Carolina, two more AP1000s by Progress on Florida's west coast and yet two more by Florida Power & Light near Miami.

Ames said his members think they really won't know how well things are going with the Southern and Scana projects until 2016 which is when the first Vogle plant is expected to enter revenue service.

Update January 9, 2012

Westinghouse Electric Company announced that its President and Chief Executive Officer Aris S. Candris will retire effective March 31.  Westinghouse also announced that Dr. Candris will stay on as a Senior Advisor to Westinghouse.

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1 comment:

Jack Keeling said...

The blog author lists all the Nubuild projects current with COL's with the NRC, but I still agree with NEI CEO Fertel that the only Nubuild plants ongoing or complete in 2020 will be Vogtle 3 and 4, Summer 2 and 3, and Watts Bar 2. This is confirmed each day I commute between Cleburne and the Comanche Peak Nuclear Power Plant as I see shale gas well after shale gas well and the supporting paraphernalia such as compressor stations, concentrating facilities, and the fleet of trucks on the highway carrying fracking fluid.

All this has driven the price of natural gas to levels not seen in years, and will not only kill non-passive shutdown R&D projects such as several of the COL's, but may yet threaten the U.S. Nubuilds. A manufacturer should not place bets on the Nubuilds as a source of more than one-time business.