Saturday, January 14, 2012

New reactor deals for the new year

Jordan short lists three firms and selects six potential sites for a $5 billion project

Map of Jordan
Jordan's plans to develop a nuclear reactor to supply the country with electricity reached several important milestones this week. Government energy officials completed a site selection study with assistance from Belgian consultant Tractabel.

Also, the Jordan Atomic Energy Commission (JAEC) shortlisted three potential bidders for the $5 billion project.

The JAEC, which had already selected two sites at Mafraq, 60 km east of Amman, and Aqaba, Red Sea port city, said the criteria for the first two and the other four are safety, seismic stability, and access to cooling water.

The Jordan Nuclear Regulatory Commission will review the sites for safety issues.

The three firms which have been short-listed to bid on building the reactor, are Atomstroyexport (Russia), AECL (SNC Lavalin, Canada), and a joint venture of Areava (France) with Mitsubishi Heavy Industries (Japan).  Khalid Touqan, head JAEC, told financial wire services in Jordan the winning bidder is expected to be announced by the end of 2012.

In late 2011 Jordan had announced a temporary postponement of the project while it firmed up financing for the project. While no details have been announced, one option is that the reactor will be an owner operated project with a guaranteed rate of return for a set period of years followed by sale of the plant to local investors.  Negotiations with potential investors are expected to begin in March 2012.

Khalid Tougan, JAEC Director
Negotiations for engineering and construction services, and the procurement of components of the reactor, are also expected to get underway soon with GDF Suez, Rosatom, Datang International Power, and Kansai Electric.

Energy security v. energy costs

The JAEC has said it expects the reactor to enter revenue service by 2019 and to be a source of electricity with 12 other countries in the region.  One of the drivers for the project is energy security as the country has seen interruptions of natural gas supplied from Egypt.  A pipeline network between the two countries has suffered 10 sabotage attacks in the past 12 months.

JAEC's Touqan has had to address the cost of the reactor in the country's parliament where critics have charged that cost over runs could severely impact the government's finances.  He defended the safety of the reactor designs saying all vendors are offering third generation reactors with advanced safety features.

Nuclear cooperation agreements

Touqan noted in his testimony that Jordan has signed nuclear technology cooperation agreements with Spain, France, Russian and the U.K. However, a so-called 1-2-3 Agreement with the U.S. has not been signed due in part to opposition in the U.S. from nonproliferation groups.

Ellen Tausher,
U.S. Under Secretary
of State for Arms Control
The U.S. is trying to get Jordan to signed an agreement similar to the one inked by the UAE which gives up any plans for uranium enrichment or spent fuel reprocessing.

According to wire service reports, Ellen Tausher, Under Secretary of State for Arms Control, said Jan 12, a draft agreement is being reviewed by the Jordanian government. She said she plans to go to Jordan in February to negotiate an agreement along with Department of Energy Under Secretary Daniel Poneman

The U.S. has pursued the UAE model in the Middle East, but not elsewhere, Tausher said, because proliferation issues are more significant in that part of the world.  Pressure from Congress may play a role in negotiations with Jordan.

In 2011 the House Foreign Affairs Committee passed H.R. 1280 that broadens the review process for 1-2-3 agreements with a preference for the UAE model. For its part, the Obama administration objected to the House bill saying that its new restrictions would impede nuclear technology cooperation agreements. The bill was not reported out by the committee to the House floor for a vote.

Jordan has an estimated 70,000 tonnes of uranium deposits and has asked Areva's mining operation to further define the deposits and develop a plan to exploit them.  It isn't clear whether Jordan is interested in developing fuel cycle production facilities or will simply sell the uranium to firms like Areva in return for a guaranteed fuel supply.

Indian billionaire takes stake in Terrapower

Reliance Industries, which is one of the world's foremost operators of oil refineries, has taken a minority stake in TerraPower LLC, a nuclear reactor design effort privately funded in part by former Microsoft CEO Bill Gates.  Reliance told financial wire services that billionaire chairman Mukesh Ambani sees nuclear energy as having a big role in the future of energy supply on the planet. The firm is diversifying its portfolio.

Bill Gates visited China in 2011 telling his hosts the project will take time to reach technical maturity and may cost $1 billion. The reactor is expected to be designed to produce either 500 MW or 1,000 MW.  It is a sodium cooled fast reactor based in part on the technology of the Integral Fast Reactor developed at Argonne National Laboratory.  TerraPower claims the reactor will be designed to run on depleted uranium for up to 60 years on a single fuel load.

Another investor in the project is Vinod Khosla, a U.S. venture capitalist.  See ANS Nuclear Cafe 12/15/11 for a detailed report and analysis of the Gates visit to China and TerraPower's prospects.

CEZ downsizes Temelin bid

Daniel Benes CEZ CEO
A major change has been announced for what was once Europe's biggest new nuclear reactor project.  The Czech state-owned utility CEZ told financial wire services Jan 9 it will probably reduce the size of its planned tender from five to two new nuclear reactors.  CEO Daniel Benes said the firm now has plans to build two new reactors at the Temelin site with an option for three more.

Benes said the reason for the change is that demand for electricity has been stagnant and that given the economic doldrums of Europe, isn't likely to grow much in coming years.

The original tender was expected to be worth $28 billion but now may come in at about $10 billion.  Bids are due in July 2012 with a winner expected to be selected in 2013.

The option for an additional three new reactors, one at CEZ's Dukovany site and two in Slovakia, would most likely be the subject of an entirely new bid and proposal process.

# # #

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


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.

# # #

Tuesday, January 10, 2012

National Nuclear Science Week Jan 24-28

National Nuclear Science Week is designed to recognize the contributions of the nuclear science industry and those who work in it every day. Each day of the week of January 24-28, 2011, the program will be promoting a different aspect of nuclear science.

Department of Energy Secretary Steven Chu issued a statement in support of the week long program.

Nuclear science plays a vital role in the lives of Americans and the world. Consider these facts:

• 104 operating nuclear reactors in the US employ an average of 700 people to operate them in the 31 states that have nuclear power generating plants
• 20 percent of our nation’s electricity is generated by nuclear power
• 436 nuclear power plants are operating in 30 countries, supplying 14 percent of the world’s electricity. Fifty-three new nuclear plants are under construction in 14 countries.
• 18 million nuclear medicine procedures are performed per year among 305 million people in the United States

The website offers information for teachers, students, and parents.

For more information, contact the website for National Nuclear Science Week sponsored by the National Museum of Nuclear Science & History, Albuquerque, NM.
# # #

Sunday, January 8, 2012

Areva inks $500 million nuclear fuel deal with Xcel

It is a vertically integrated contract covering the entire front end

coolhandnukeFrench state-owned nuclear giant Areva had some good new this week in its U.S. market. The firm signed a unique integrated fuel and services  contract on Jan 4 with Xcel Energy (NYSE:XEL) to supply the utility's Monticello nuclear generating plant in Minnesota. The contact is worth approximately $500 million for a ten-year period of performance.

The deal, which starts in 2015, will cover six refuelings of the reactor. Products and services include uranium, conversion, enrichment, fuel design, and fabrication as well as related engineering services. It is the first integrated contract of its type in the U.S. in several decades.

Read the complete story exclusively at CoolHandNuke online now.

# # #