Thursday, April 12, 2012

Nuclear start-ups have stretch goals

The desire is for independence and to innovate with great results

Conceptual drawing of a molten salt reactor
(Image: Idaho National Lab)
Two recent nuclear energy start-ups have the potential to create new business opportunities with unconventional reactor technologies.  Two of them are pursuing new designs using molten salts as compared to the conventional light water design.

In Massachusetts, Transatomic Power, run by two Ph.D. candidates at MIT, Leslie Dewan and Mark Massie, the effort is focused on using uranium-based spent nuclear fuel to provide the energy to run the reactor. Their business model is to license a design to a major reactor vendor or a state-owned reactor development agency.

In Alabama, Flibe Energy, named after an acronym for a a specific type of salt, is run by Kirk Sorensen who after earning a masters degree in nuclear engineering, jumped out of the corporate world to develop a start-up effort aimed at producing a thorium-fueled reactor for military applications.

Transatomic Power

Dewan and Massie talked with this blog on April 12 about their start-up.  Asked why they chose this specific technology, they point to three specific factors - safety, waste, and economics.  Massie says the team chose the molten salt design concept because they feel it will provide more bang for the buck, and it will be faster and cheaper for someone licensing their technology to bring it to market.

The most significant reason is that when compared to a new design for a fast reactor, there is no need for fuel design, qualification, and fabrication, a process that could add years to the development timeline.

Financial backing for the firm is coming from private investors as seed funding.  Dewan says the hunt is on for early stage funding to establish a stronger financial base.

The real challenge in the next two years is to build a team to complete the design.  The firm has gone back to some of the experts who worked on the molten salt reactor at Oak Ridge National Laboratory, but what it really needs is a new generation of engineers to work on the design.

"There is a misconception that there is not a lot of room for innovation [in the nuclear industry]. What we offer to a new PhD. or engineering graduate is the excitement and opportunity to develop new aspects of nuclear energy," Dewan said.

The team feels it got bit by the entrepreneurial bug because of a desire to be more innovative and to "do something really big."

"The only way to accomplish that is not to work for someone else," Dewan said.

While China might have interest in their work, the team is worried about untested issues associated with intellectual property protection.  On one hand licensing for a start-up technology is likely to be less difficult there, the prospect of being nationalized is not an appealing outcome.  Still, Dewan is keeping her options open and has begun to study the Mandarin language.

She qualifies the commitment to that path by noting she would like to see the work done in the U.S.

"This is an American reactor," Dewan said.

The Transatomic Power reactor is being targeted as a small modular reactor with an preliminary electrical output of 200 MW and an outlet temperature of about 650C hooked up to conventional steam system.  The team sees the best location being next to existing reactors with an inventory of spent fuel in dry casks that could be used to power their design.  Massie added that a utility that doesn't have an existing reactor could power the design with conventional uranium fuel.

The team declined to identify a time frame for completing their design though they did say a lot of the work on the core is done.

Flibe Energy
LFTR concept drawing
Source: Energy from Thorium

On his website Kirk Sorensen writes that Flibe Energy is a new company that will develop small modular reactors based on liquid-fluoride thorium reactor (LFTR) technology. Liquid-fluoride reactors operate at high temperature but not at high pressure because they use a chemically stable medium as the fuel and the coolant, making them much safer to operate than conventional reactors.

He says that "Thorium is the only abundant nuclear fuel that can be efficiently utilized in a thermal-spectrum reactor and is uniquely chemically suited for use in a fluoride reactor."

The market for the design is based on an assessment that there are many remote sites where electrical power is generated by diesel fuel that is transported over great distances and over challenging or hostile terrain. A small modular power source has the potential to reduce the costs, hazards and vulnerability of power supply-lines, saving money and even lives in term of providing power to military bases.

This blog caught up with Kirk Sorensen as he was getting ready for an international trip.  He responded to questions via email.  Here's what he said.

Q: Why did you choose this specific technology?  What is about it that helped you decide on it?

A:  Of the four coolant possibilities (water, liquid-metals, gas, and molten-salt) only molten salt has the desireable attributes of both high temperature operation yet low pressure operation.  Halide molten-salts are also impervious to radiation damage due to their ionic structure.

Fluoride molten-salt chemistry is a natural fit with the thorium fuel cycle, which leads to very high fuel utilization and minimizes waste generation and nearly eliminates transuranic waste generation.  Molten-salt fuels can also reject xenon in normal operation, facilitating load-following characteristics in a small, high-power density core.

The key to these plans is the use of liquid-fluoride-salt technology—and a special combination of fluoride salts which gives Flibe Energy its name. Lithium fluoride (LiF) and beryllium fluoride (BeF2) together form a solution often called “F-Li-Be”, that is the ideal medium for nuclear chemical processing and reactor operation. It is chemically stable, nearly invisible to neutrons, and impervious to radiation damage, unlike almost every other nuclear fuel. Flibe carries large amounts of heat at low pressures, leading to small, compact, and safe designs for nuclear reactors.

Q: Why would a customer want to buy it?

 Our intent is not to sell our reactors but rather to build and operate them.

Q: Who is your target market?

A: Military facilities in the continental United States.

Q: What is your time frame for developing the technology, e.g., major milestones such as; - prototype - completed design - NRC licensing - Construction at customer site

A:  Assuming the desired funding, we would be aiming for a prototype within five years of project initiation and five years of "shakedown" operation beyond that.  Beyond that we would build units in a factory and deploy them to various military bases across the US.  The US military has independent regulatory authority and we would not be pursuing NRC licensing.

Q: What kind of backing do you have such as govt grant, investor financing, self-financed, etc.

 Our plan requires initial financing but is mostly financed by the sales of products developed in the early stages of the plan.

Q: What are your immediate plans in the next one-to-two years?

A: We intend to raise the funding necessary to begin the first stages of our plan as well as to develop the framework within the US military, particularly the US Army, to supervise the operation of these reactors.

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Wednesday, April 11, 2012

TVA digs in to deliver two reactors

Delays at Watts Bar 2 push back start up at Bellefonte

This is my updated coverage from Fuel Cycle Week, April 5, 2012, V11:No.467, published by International Nuclear Associates, Washington, DC.

While the rest of the country focuses on the NRC’s approval of four new Westinghouse AP1000 reactors at two sites, the Tennessee Valley Authority has its own in-house version of the nuclear renaissance and right now it is running late.

TVA CEO Tom Kilgore told the utility’s board of directors in mid-February construction productivity is down and costs are up for completion of the 1,200 MW Watts Bar 2 reactor located in Tennessee.

On April 5, one day after this article went to press, Kilgore said at a press briefing that TVA expects the project costs for Watts Bar 2 to increase by $1.5-2.0 billion. Also, he said the schedule will be revised with completion now set for the last quarter of 2015 compared to the original date of 2012.  

Originally scheduled for completion this year, a new “estimate to complete” will push the date back by three years. Delays there mean the start and completion dates for construction of the 1,260 MW Bellefonte Unit 1 reactor at a site in Alabama will be pushed back as well. TVA’s board has mandated that only one reactor will be under construction at a time. The board said work on Bellefonte will have to wait until the first fuel load takes place at Watts Bar 2.

TVA's Board of Directors will meet later this month to review and possibly approve the new schedule and cost estimate.  However, a response from Wall Street is already public.  Moody's Investor Services warned April 11 that the higher costs to complete Watts Bar 2 could result in rate increases for electricity supplied by TVA to its customers.

Moody's said the rate increases will be need to pay for the unanticipated construction costs.  TVA CEO Tom Kilgore disputed the assessment from Moody's saying he is confident the work to complete the reactor won't be a rate driver.

Cost and schedule variances

TVA committed in 2007 to complete the $2.5 billion Watts Bar 2 reactor, which had been mothballed for years. Bechtel was assigned to do the work. In 2011, with slipping schedules and rising costs, TVA took back direct control of the project and hired former TVA CEO O.J. “Ike” Zeringue to supervise all engineering and construction work.

The ghosts of the bad old days from the ‘70s & 80s of spiraling out of control costs at nuclear reactor projects haunt the utility like the shadowy images in a ‘B” grade horror movie. TVA is struggling to get its arms wrapped around cost and schedule variances.

So far it has spent $2.2 billion, or 88%, of the original estimate of $2.5 billion, on the project which is only 70% complete. Watts Bar 2 was estimated to be 55% complete when work restarted on it in 2007.

According to a slide presentation (Slides 66-75) given to TVA’s board of directors in February 2012, through October of 2011 the schedule performance index for construction of Watts Bar 2 dropped as low as 0.65, which is significantly below the nominal level of 1.0. It’s a huge red flag for a capital construction project of this size.

In additional to a new leadership team, with other executives shifted or retiring, TVA’s big push is to update its project plant for Watts Bar 2 with a credible set of cost numbers and schedule dates. TVA CEO Tom Kilgore told the board he’ll have them this month.

The bad news is, according to TVA spokesperson Scott Brooks, that the new estimate at completion will exceed the original estimates. However, CEO Kilgore says he’s not abandoning ship. He pointed out to the board in his briefing the completion of Watts Bar 2 is still a bargain compared to the cost of building a new nuclear reactor from scratch.

He said the new estimate at completion (EAC) could be as high as $4.58 billion and “it would still be an economical plant." 

He added a caveat he expects the EAC to be lower. Kilgore told the TimesFreePress in TVA’s home town of Chattanooga that he “does not want to be wrong [about costs] a second time.” 

In response to lagging productivity numbers last October, the utility laid off 800 workers at the site which seems counter-intuitive. TVA may have hit on something and that is there may be a limit to how many people you can put on a nuclear reactor job site and not have them get in each other’s way. The layoffs reduced the workforce to about 2,500 contractors. TVA says more work is getting done now that fewer people doing it.

TVA has also blamed the delays at Watts Bar 2 on the expected regulatory changes expected to be imposed on the plant by the NRC in response to the Fukushima crisis in Japan.

Safety issues

There have been troubles with safety on the site. TVA spokesperson Scott Brooks told FCW that in September 2011 Watts Bar 2 personnel discovered that cables had erroneously been disconnected from Unit 1 equipment, which is a the operating reactor, instead of Unit 2, which is under construction, and that a valve on Unit 2 was removed from a system without following proper guidelines.

Brooks said the Unit 2 safety “stand down” was ordered stopping work for three days to assure that errors discovered are clearly communicated to all personnel and to reinforce TVA’s expectation that workers adhere to the highest standards of safety and quality.

Additionally, in a separate set of troubles that started in 2010, two men working at the site were arrested and charged with faking records for 200 inspection entries of electrical cables being installed at Unit 2. The falsified records were discovered as part of the utility's quality assurance program and resulted in the case being turned over to the U.S. Attorney's office.

Bellefonte gets pushed back

Like Watts Bar 2 TVA has taken the approach that completing a partially constructed reactor makes more sense than building a new one from the ground up. There’s a lot to be said for having a containment building and a reactor pressure vessel in hand to give you a running start.  Last September TVA let a contract worth approximately $1 billion to Areva to provide engineering, construction, and component replacement procurement for the Bellefonte project.

TVA spokesman Brooks tells FCW that now much of the major construction activities will have to wait until Watts Bar 2 is done.

“The completion of Bellefonte Unit 1 depends on the new completion date for Watts bar 2.”

New digital control room at
Watts Bar 2:  (TVA file photo)
Both reactors are being built under the NRC’s old Part 50 process which requires a construction license and then an operating license. Brooks says TVA does not have a date for the operating licenses for either reactor.

Because of the delays at Watts Bar 2 pushing out the schedule for Bellefonte, on March 16 TVA laid off about 450 people, or half the work force at Bellefonte.

David Stinson, VP for the Bellefonte Project, said in a statement that the utility is “resetting priorities” for Bellefonte since it must wait for completion at Watts Bar 2.

In addition to construction work at Bellefonte, Areva also provides nuclear fuel assemblies and refueling services for TVA’s nuclear reactors.

Seeking the Browns Ferry payoff

In October 2008 TVA announced that the $1.8 billion restart of Browns Ferry Unit 1, originally expected to pay for itself in eight years, will end up paying back its costs in about 30 months or less than one-third the time. This is the type of payoff TVA undoubtedly would like to see for the Watts Bar 2 and Bellefonte reactors.

TVA’s investment in Watts Bar 2 is based on an analysis accepted by its board in 2007 that the completed reactor will generate power for less than the continued cost of buying electricity from other generators or building new fossil plants. Even with the current low price of gas, TVA primarily uses it for peak load electrical generation.

These types of calculations are at the heart of CEO Tom Kilgore’s determination to get the new estimate for Watts bar 2 right.  He presents the the new numbers to the TVA board later this month. The pay back for the project in the black or the red is riding on it.

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Tuesday, April 10, 2012

Talking Turkey about nuclear energy

New deals continue to emerge with multiple countries

russiaIndustry analysts say we are living in the “post Fukushima era” when it comes to nuclear energy.  Chronologically this is a true statement, but in terms of deal making for new nuclear reactors, the drivers continue to be the need for reliable electrical power that does not depend on fossil fuels. 

The issue isn’t so much global warming as it is the case for energy security against the capricious waves of endless political change that can cut off a nation from its energy supply with a headline.

A prime example of this thinking is taking place in Turkey where the government has been engaged in a series of negotiations for the second nuclear power station at Synop, a site on the Black Sea. 

The second power station has been in play for several years with two Japanese consortiums and one from South Korea taking a look, but none inked a deal.  Now comes reports that the China National Nuclear Corp. and the China Guangdong Nuclear Power Corp are interested in submitting a bid.

According to English language news media in Istanbul, Turkish Prime Minister Tayyip Erdogan was in Beijing April 9 where he signed an Agreement on Cooperation for Peaceful Use of Nuclear Energy with his Chinese counterpart Win Jiabao. 

Read the full details exclusively at CoolHandNuke online now.


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