Brazil Seeks Private Investment from US on SMRs

  • investors2In a visit to the US this week, a key energy official from Brazil said his country is interested in “partnering” with the US investors for development of small modular reactors (SMRs).
  • In a related development, the same official said the county is working on a proposal to open up uranium mining, and oil and gas exploration, in Brazil to private investment.
  • Separately, efforts by the China National Nuclear Corp (CNNC) to ink a deal to build two nuclear reactors in Argentina have stalled out over differences related to financing the projects.
  • Bulgaria has announced a solicitation for investors for the troubled Belene nuclear project while at the same time announcing that Rosatom will be the EPC if financing for it is found.
  • India announced it is willing to reopen talks with Westinghouse for the construction of six 1150 MW AP1000 units there, but as long as the country’s supplier liability law remains in force, it may be just more talk.

Brazil Seeks Investors in Nuclear Energy Projects

While having no development effort of its own for small nuclear reactors (SMRs), Brazil this week reached out to the US for collaboration partnerships. Without providing details, a key energy official, Bento Albuquerque, said this week that a bilateral forum will be set up to discuss energy investment opportunities in nuclear energy, uranium mining, and oil & gas exploration. It’s first meeting is scheduled for April. The minister met with US Energy Secretary Rick Perry in Houston, TX, this week.

Brazil currently has two nuclear reactors and an ongoing effort to construct a third unit, Angra III, a 1400 MW PWR. According to the World Nuclear Association, in November 2018 it was reported that Eletronuclear was negotiating with CNNC and State Power Investment Corp (SPIC), KEPCO, Rosatom, and a consortium comprising EDF with Mitsubishi Heavy Industries to complete the plant.

Recent cost estimates to complete the plant have not been verified by a complete engineering analysis. Part of the reason for this is that construction of the plant, which began nearly a decade ago, has been started and stopped several times by different EPC firms.

Plans for two more nuclear power stations, composed of four 1000MW+ PWR type units each, have been stalled due to a lack of financing. Brazil may be now rethinking its plans for full size nuclear power plants in favor of more affordable SMRs.

Energy Minister Bento Albuquerque, a former navy officer who ran the country’s nuclear program for that service, told the Reuters wire service on 15 March 2019 that Brazil is proposing to open up its state owned nuclear sector to private investment to attract developers of SMRs.

No details were provided as to specific opportunities, sites, or financial arrangements. Brazil may seek financial assistance from the US via the Export-Import Bank if Congress lifts the current limit of $10 million on loans.

Other energy related discussions on Washington covered opening up oil and gas exploration in the coastal waters of Brazil.

All of these opportunities need to be seen in light of the chaotic history of Brazil’s energy sector.

Brazil Nuclear CEO Arrest on Bribery Charges

In August 2015 Federal police in Brazil arrested Othon Luiz Pinheiro da Silva, CEO of Elecrtrobas Termonuclear, which is building the country’s third nuclear reactor, Angra III, on charges he took bribes from construction firms involved in the project. The investigation into the bribes got its start in an unrelated investigation into a massive money laundering scheme in the oil & gas sector.

Standard & Poors said the arrest of the nuclear chief was another “political uncertainty” that caused the rating agency to change Brazil’s credit outlook to negative. US investors sued Electrobas for failing to disclose the arrest of the company’s CEO in April. Bond yields for the firm, reflecting the higher risks associated with the company’s CEO being caught up in a bribery case, rose to 8% by late July 2015.

Elecrobas denied any wrong doing and put the CEO on a leave of absence. He was later arrested and spent two years in jail being released in 2017.

Plans for Future Expansion of Nuclear Energy in Brazil

A review of nuclear energy plans for full size reactors in Brazil by the World Nuclear Association indicates that Brazil has proposed building two new nuclear plants in the northeast and two more near Angra in the southeast. Two sites have been named on a provisional basis. Both would involve three-to-four full size units, most likely PWRs, in the range of 1000 MWe each.

The sites involved include one in the northeast on a large dam on the Sao Francisco River between Pernambuco and Bahia states for up to 6600 MWe, and one in the north of Minas Gerais state in the southeast of the country, inland from Angra, for 4000-6000 MWe.

The cost of six-to-eight units at this size, using an overnight estimate of $4500/KW, comes to $4.5 billion per unit or a total cost of $27 billion to $36 billion most likely spread out over a period of up to two decades. Even so, the total cost is likely out of Brazil’s reach without international financing.

Rosatom’s ‘build-own-operate’ plan, which it is using in Turkey, contemplates cashing out at the 15th year of operation to recover the up front financing, It is unclear whether any other vendor, including China, would offer such favorable terms.

Other vendors who have expressed an interest include China National Nuclear Corporation (CNNC) which would offer a 1000 MW Hualong One, Westinghouse which would offer ther AP1000, and Areva-Mitsubishi offering the Atmea-1. Atomstroyexport has said it would offer the VVER-1000.

Argentina’s Nuclear Deals with China in Question

The NBN market research agency reports that a deal is on the skids for Argentina and China to close on t6erms to build Atucha III–fourth nuclear power plant in Argentina. The news wire said that the deal was at risk of becoming “a pipe dream.”

The two states had agreed that CNNC and Nucleoeléctrica Argentina SA would start construction of a 700MWe CANDU-6 heavy water reactor in 2018, and start construction of a million-kilowatt Hualong One PWR in 2020.

However, NBN now reports that, according to an insider from China National Energy Industry Corporation (CNEIC), the terms contract of this project will not be nailed down because Argentina has not accepted China’s offer.

The original plan estimated that the total investment of this project would be USD$14 billion, of which USD$12.5 billion would be financed by China. It would also be supported with low-interest loans, repayment period of 20 years plus an eight-year grace period with an annual interest rate of 4.5%. Earlier estimates, reported by Reuters, put the cost of the project at USD$8 billion.

Argentina reportedly asked for more favorable terms which CNNC said it would not agree to for the project. With the Candu type unit in question, the Hualong One may also be at risk. An effort to restart the stalled negotiations in January 2019 did not move the needle. All parties involved have since declined to make statements to the news media.

Argentina and China had planned to announce a done deal last November when Chinese President Xi Jinping visited the country during a G20 summit in Buenos Aires. China remains a key trading partner with Argentina. (Reuters Factbox).

Bulgaria Announces Start
of Investor Selection For Belene

(NucNet) Bulgarian state energy company NEK announced this week the start of an investor selection procedure for the two-unit Belene nuclear power station project.

NEK said it is looking for an investor for the construction of Belene with options to take a minority stake in a future project company or purchase electricity to be generated by the facility.

The purpose of the call for interest is to gather information about potential candidates. Investor must submit expressions of interest in the next 90 days. The government said it would make a decision within 12 months of receiving the filings.

NEK said Bulgaria will participate in the project company by contributing assets including the licensed site, nuclear island equipment, permits and documentation. Bulgaria paid Rosatom over $600M for these assets after it halted construction in 2012.

According to the call for interest, the station must be operational within 10 years from the signing of an investors’ agreement and its cost must not exceed €10 billion for both units.

NEK reiterated Bulgaria’s position that Belene must be built on a market basis, without state guarantees or long-term electricity purchase contracts. These harsh conditions may put a significant damper on investor interest.

In 2008, Bulgaria ordered two Russian VVER-1000 pressurized water reactor units for Belene, but the project was cancelled in 2012 because of financial and political considerations.

In June 2018, the government formally revived the project following a vote in parliament.

France’s Framatome, China’s CNNC, Russia’s Rosatom and US-based General Electric have already formally expressed an interest in investing or providing equipment and services for Belene. Talks have also been held with South Korea’s Korea Hydro and Nuclear Power.

Bulgarian officials have said that if the country goes ahead with the Belene project, Russia’s Atomstroyexport will be the main contractor.

US And India Revive Talks to Build Six Nuclear Plants

(NucNet) The US and India have signed an agreement confirming their commitment to cooperate on the civilian use of nuclear energy including a proposed construction of six US-supplied nuclear power plants according to a statement by the US Department of State.

The statement issued on 13 March 2019 said that India’s foreign secretary Vijay Gokhale and US undersecretary of state Andrea Thompson signed the agreement in Washington this week, but gave no further details about the nuclear power plant project.

Former US president Barack Obama and Indian prime minister Narendra Modi announced in 2016 that engineering and design work would begin for Westinghouse to build six AP1000s in India in a deal that was expected to be signed by June 2017. The agreement was the result of a decade of diplomatic efforts as part of a US-India civil nuclear agreement signed in 2008. The deal for US entry into India’s commercial nuclear energy market never happened.

The main stumbling block is India’s supplier liability law. As long as it remains on the book, the project will not move ahead. The World Nuclear Association (WNA) profile of India’s civilian nuclear program notes that GE Hitachi (GEH) said February 2014 to NPCIL that it had hoped to commence construction of the first 1594 MWe reactor early in 2015.

However, with no change to the 2010 Civil Liability for Nuclear Damage Act, GEH in September 2015 said it would not proceed with any investment in India until the country’s liability regime was brought into line with the rest of the world. With the GEH left the market. India later said that it wouldn’t have accepted the ESBWR design, which passed an NRC design and safety evaluation, because there was “no reference plant” to build confidence in the ability of GEH to deliver units for India on time and within budget.

India has shown little interest in changing the supplier liability law, due in part to the strong political clout of its coal interests, and has gone ahead with plans to build 10 700 MW PHWRs based on a domestic design and supply chain which favors heavy industry employment.

India has also inked multiple deals with Rostom having successfully commissioned two 1000 MW units at Kudanlulam, broken ground for two more, and has plans in the works for a third set at that site in Tamil Nadu on India’s southern most coastal location.

Six plants at Andhra Pradesh were at one time slated to be GEH ESBWRs, but that was changed to Westinghouse AP1000s. The Westinghouse plants were originally planned to be in Gujarat, PM Modi’s home turf, but anti-nuclear protests there prompted to move to the site on India’s east coast when GEH pulled out.

Westinghouse emerged from bankruptcy in March 2018 with the purchase of some of its nuclear assets by the Brookfield private equity fund. Westinghouse got into financial trouble due to the collapse of the V C Summer nuclear project in South Carolina primarily due to mismanagement by Westinghouse as both the vendor and as the EPC. As a result the firm said that for any future efforts, it would act solely as a vendor and not also take on the EPC role.

Since then it has not booked any new projects. One piece of good news is that by the end of 2018 all four AP1000s built by Westinghouse in China had entered revenue service.

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Building Full Size Nuclear Reactors Still Get Interest in the EU

  • Despite the apparent collapse of the market for new, 1000 MW+ conventional light water nuclear reactors in the US, proposals to build them in Europe are still on the table.
  • Plans to swap out coal plants for large, conventional 700-1000 MW nuclear power stations continue to get attention from key decision makers in Finland, France, Czech Republic, Romania, Poland, and Bulgaria.
  • One size does not fit allThe key problem is financing. None of these nations want to take debt as a means of financing their new builds. Others want to postpone payments for the projects until the completed reactors start generating electricity and can pay for themselves.
  • The problem for almost all of the countries involved is that the high cost of upfront capital to build the plants is the financial equivalent of a big fish in a small bowl.
  • The financing problem is so acute that it suggests the need for a European nuclear energy investment bank, and, maybe even a regional grid to wheel power across national borders. These multi-lateral cooperation agreements would be confidence builders for investors

Finland Grants Operating License to Olkiluoto-3 EPR

(NucNet): The Finnish government granted an operating license for Finnish utility Teollisuuden Voima Oyj’ (TVO) to start up Olkiluoto-3 EPR nuclear power unit, which is nearing completion in the municipality of Eurajoki in southwest Finland.. TVO said the fixed-term licence for the 1,600-MW unit is good for 20 years until 2038.

areva epr

The Radiation and Nuclear Safety Authority (Stuk) said its assessment was based on a comprehensive safety review. Stuk said it has assessed the technical and structural safety of the plant and the ability of TVO and its employees to run the plant safely.

TVO will still need separate permission from Stuk for the loading of nuclear fuel. One issue to be resolved before fuel loading is to eliminate vibrations in the pressurizer surge line, which is part of the reactor coolant system. The vibrations were detected during recent commissioning tests.

“Stuk will inspect the plans for the solution presented by TVO, and will oversee the work and verify that the modifications have been completed and the effectiveness of the solution tested before fuel loading,” TVO said.

TVO did not set a date for the start of Olkiluoto-3’s operation in revenue service, but according to a schedule provided by Stuk last month, the plant is expected to deliver electricity to the national grid for the first time in 2020. Fuel loading is expected by the end of 2019.

In France Normandy Puts Itself Forward
As Candidate Site For New Generation Of EPRs

(NucNet): The Normandy region of France has put itself forward as a candidate site for the construction of a new generation of French EPR nuclear power units, Paris-based nuclear society SFEN said.

SFEN said Hervé Morin, president of the Normandy region, and Jean-Bernard Lévy, president of state-owned utility and nuclear operator EDF, had officially put forward the region as a site for two new EPRs, known as the EPR 2.

French President Emmanuel Macron said last month the country will decide around 2022 whether EDF will be allowed to build new nuclear reactors.

He said the EPR must be part of a package of technological options for tomorrow and France must maintain an industrial capacity to build new reactors. Mr Macron said France needed its EPR technology “for sovereignty issues” and said the government and EDF will work together on “the issues of industrial capacity” of the [nuclear] sector.

France has indicated it will shut down up to a half a dozen older, smaller reactors by 2023. and increase the total to 14 units by 2035.

The Flamanville-3 EPR plant under construction in Normandy is the first of its kind in France, but has seen cost overruns and schedule delays. Hot testing at the plant, previously scheduled to start by the end of 2018, is now scheduled to begin sometime this winter. Fuel loading is expected to take place later this year.

Faulty welding discovered last year forced EDF to delay the start-up date for the 1,600-MW Generation III plant to the second quarter of 2020. The cost of the project increased to to €10.5bn and then to €10.9bn (USD$12.14B)

SFEN said that in the long term, between 2030 and 2050, France is planning to renew part of its current nuclear fleet with new units. A study is to be carried out by mid-2021 to define a new-build program that will lead to a reduction in costs, SFEN said.

According to EDF one of the aims of the EPR 2 project is to increase competitiveness. “The goal of the EPR 2 project is to have a competitive model on the new production means market by 2030,” the company said.

Czech PM Calls On CEZ To Speed Up Tender For New Nuclear

Czech Republic Prime Minister Andrej Babiš told state-controlled CEZ, which owns the country’s nuclear power stations, to speed up work on preparing a tender for the construction of new rector units, reports said.

In a televised speech in parliament, Mr Babiš said CEZ should obtain a construction permit and organize a tender. He said this would be the first phase of plans to build at least one new unit at the Dukovany nuclear site and possibly three more either at Dukovany or Temelín. An earlier tender for up to five units was cancelled in 2014 due to a confused procurement process, a refusal of the government at that time to offer rate guarantees, the and lack of investors that resulted from that decision.

The government and CEZ, which is 70% owned by the state, have been discussing possible methods of financing the construction of new units. CEZ has said it will not invest in new nuclear without some form of state support.

This situation does not appear to have improved since then. The Czech Republic is unlikely to hold a tender to build new nuclear power reactors this year because the financing structure has still not been decided, industry minister Marta Novakova said just prior to the PM’s speech.

“If we take into consideration what lies ahead of us, then I personally think that it is not entirely realistic this year, that means to have the tender launched,” Ms Novakova said in a debate aired by public Czech Television.

“The question of state support will be quite significant. It will have to be part of the tender,” she said.

The main problem CEZ faces is lawsuits from minority investors who fear the risk of cost overruns. The solution to the problem, which is well understood by the Czech government, is to buy out the minority investors and make the project a 100% government funded effort.

The country’s energy strategy assumes that the four units, which began commercial operation from 1985 to 1987, will be closed by 2035.

Romania Still Planning For New Nuclear Power Plants

(NucNet): Romania is planning to develop energy production capacity with low greenhouse gas emissions, including new nuclear power plants, the government has said in its draft national energy and climate plan.

The plan also says Romania wants to develop technologies for advanced Generation IV reactors and develop the infrastructure for lead-cooled fast reactors “through European and international partnerships.”

According to the profile of Romania’s nuclear program by the World Nuclear Association, an R&D effort along this lines was announced in 2013. The Advanced Lead Fast Reactor European Demonstrator (ALFRED project), according to its website, is still in a basic R&D project phase.

In November 2015, Romania’s nuclear operator Nuclearelectrica signed a memorandum of understanding with and China General Nuclear Power Corporation for two new units at the Cernavoda nuclear station. Negotiations on an investors’ agreement are incomplete. These units would be similar the to two CANDU 6 PHWR that are already in operation in Romania.

Romania’s plan is online: https://bit.ly/2UMyKWs

Bulgaria Pushes Ahead with Plan to Revive Belene Nuclear Project

(NucNet): Bulgaria will maintain the role of nuclear power in its energy mix by 2030 with the eventual construction of new units at Belene expected to increase energy security, the government’s draft national energy and climate plan says.

According to the plan, the proposed construction of the 2,000-MW Belene nuclear station in northern Bulgaria is expected to increase energy security for Bulgaria and its region.

In 2008, Bulgaria ordered the design, construction and commissioning of two Russian VVER-1000 pressurized water reactor units for Belene. The project was cancelled in 2012 because of financial and political considerations.

Bulgaria is now looking for investors after plans were revived in June 2018. If construction of Belene goes ahead, plans are in place for expanding the national 400kV transmission grid.

According to a report by NucNet Bulgaria wants to build the two-unit Belene nuclear power station within 10 years and at a cost of up to €10bn, Bulgarian energy minister Temenuzhka Petkova told a parliamentary hearing last December.

Ms Petkova said she believes that building the two-unit station is “realistic.” This characterization may be open to question.

The government’s policy to attract private investment for the project, subject to there being no state guarantees or long-term electricity purchase contracts, remains unchanged, Ms Petkova said.

In short, the country wants any vendor to self-finance the project, which is an enormous and essentially untenable risk. Bulgaria may eventually realize it has to put up some of the cash to pay for the project if it expects investors to come to the table.

Ms Petkova said the procedure to select an investor for Belene is ready and will start in early 2019, with the aim of completing it by the year’s end. Earlier reports quoted the minister as saying that the procedure was to start by the end of 2018.

Poland Wants to Avoid Financing Nuclear Power with Debt

(Reuters) – Poland is reluctant to finance the construction of nuclear power stations with debt and hopes to continue talks about the project with the United States, Piotr Naimski, the government official responsible for key energy infrastructure, told the wire service.

Reuters reported that the energy ministry plan to have a total of 6-9 GW of nuclear power by 2043 surprised analysts and came shortly after U.S. Energy Secretary Rick Perry visited Poland. Warsaw and Washington signed a declaration on enhanced energy security cooperation, including nuclear power.

Energy Secretary Rick Perry visited Poland in late 2018 as part of an effort to get that country to buy LNG from the US.

While Perry also talked about nuclear energy with his Polish counterparts, it isn’t clear he offered either financing or technical assistance to them for new reactors. Poland’s version of a 123 Agreement with the US is rolled into a European Atomic Energy Community agreement (Euratom) that is renewed every five years.

It is also unclear whether any US nuclear vendors are in talks with Poland for building new nuclear reactors. Over the past decade almost all of Poland’s contracts for nuclear energy feasibility and safety studies have been with European engineering firms. Absent a financial plan from Poland, no US publicly traded firm is going to enter into serious negotiations for a deal.

According to the World Nuclear Association profile of Poland, the Ministry of Economy set out a new nuclear power program in 2012. The Polish Energy Ministry estimated then that the cost would be €2500-3000/kW for a modern plant. The total project cost would be an estimated €10.5 billion or about $USD 12 billion for two units.

It estimated the cost of generating electricity from nuclear power plants at between €6.5 and €6.8 cents per kWh, which “justifies construction of plants under most scenarios.

“I can say one thing – the financing model should be based on capital and not debt,” Naimski told Reuters, adding that he would like the financing structure to be worked out in the coming year. It would need to include rate guarantees and a term sheet for equity investments since debt deals are off the table.

The energy ministry said it expects its first nuclear power station to start operating in 2033. A long-term strategy that cites that date, published in November, still needs government approval.

  • Role for HTGRS?

Deployment of high-temperature reactors (HTRs) for industrial heat production is included in the government’s energy plans. The Ministry of Energy has estimated that using nuclear high temperature heat for industrial applications could reduce carbon dioxide emissions by 14-17 millions tonnes per year in Poland, which has 13 large chemical plants that need 6500 MWt at 400-550°C.

The government plans to build a cogeneration HTR of 200-350 MWt for process heat. An early effort is reported to include a 10 MWt experimental HTR at Swierk. Japan has recently inked an MOU with Poland to participate in that project although it does not have an HTGR design ready for export.

Hungary to Modify Funding for Russian-built Nuclear Plant

(Reuters) Hungary is working to modify financing for a nuclear plant being built by Russia so it only starts repaying the loan once the two reactors begin supplying power, a Hungarian minister said, after an EU review of the plans contributed to delays in the project.

Hungary awarded Russia’s state-owned Rosatom a contract to build a 2000MWe plant to replace the existing one. However, the project has been embroiled in disputes with the European Union over the way it is to be funded leading to delays.

“Once we know the deadlines for the technical contract, we will modify this (financing) contract,” said Janos Suli, the minister in charge of the project, adding that this would meet procedures set by the EU executive.

“We will begin repaying installments once the blocks begin production,” he said. “There is no damage, no extra payment involved, only a rescheduling of the financial payments.”

Under the deal, Moscow will build two reactors to supply the capacity and offered a 10 billion euro ($11.3 billion) state loan to help finance the project. This would cover about 85% of the cost.

After parliament voted to build new nuclear capacity in 2009, Prime Minister Viktor Orban bypassed releasing an international tender for bidder response and signed a deal with Russian President Vladimir Putin. As a practical mater Russia consider Hungary to be a captive market being a former Communist block nation who’s current prime minister has forged close ties with Russia.

The move drew intense international criticism, especially from the United States, which is concerned about Central and Eastern Europe’s heavy reliance on Russian energy sources.

~ Other Nuclear News ~

US Nuclear Industry Praises ‘Vital Step’’
Towards Resolving Ex-Im Bank Impasse

The US Senate banking committee’s approval of four nominees to the Export-Import Bank is a vital step towards restoring the bank to full functionality and boosting the competitiveness of US exports – particularly in the global market for nuclear energy hardware and services, the Washington-based Nuclear Energy Institute said in a press statement.

“As the official export credit agency of the United States, the Ex-Im Bank provides loans, loan guarantees and other forms of financial assistance to the foreign customers of US exporters to help the sale of American goods and services,” the NEI said.

“A competitive credit agency is absolutely necessary for US companies to win bids for international nuclear power plant contracts.”

In 2015, the US inflicted “massive harm” on its own industry by failing to confirm new directors to the Ex-Im Bank’s board, thus bringing its operations to a halt. The Ex-Im Bank has lacked a quorum on its board of directors, preventing it from approving transactions valued over $10m.

The NEI said while the Ex-Im Bank has been neglected, other nations, including Russian and China, have used generous export finance methods to gain global market share.

Conservative members of congress had labeled the bank a form of “corporate welfare.” Boeing and GE, two of the primary beneficiaries of the Ex-Im bank’s operations, retaliated by cutting off campaign contributions to the re-election of 17 members of congress. The tide turned in December 2017 when the Republican led Senate Banking Committee rejected a Trump nominee as chairman who had once pledged to shut down the agency.

NEI called on the Senate to hold a vote without delay to confirm the president’s rour nominees to the Ex-Im Bank board of directors. The bank’s charter also comes up for reauthorization this year which may reopen some of the earlier industry disputes.

Terrestrial Energy Named in Bill Gates’
List of Top 10 Breakthrough Technologies of 2019

MIT Technology Review this month published its annual list of technologies that will “change the world for the better.” This year’s top 10 list was curated by Bill Gates and includes “new-wave nuclear power,” which spans advanced fission and fusion technologies.

Terrestrial Energy’s advanced fission Generation IV IMSR technology has been cited as one of the “key players,” along with TerraPower which is developing another Generation IV technology.

“Narrowing down the list was difficult,” writes Mr. Gates in an introductory essay. “I wanted to choose things that not only will create headlines in 2019 but captured this moment in technological history…Advanced nuclear reactors could provide carbon-free, safe, secure energy to the world.”

Advanced nuclear reactor designs are “promising to make this power source safer and cheaper,” reads the cover story in the magazine’s March/April edition.

“Developers of Generation IV fission designs, such as Canada’s Terrestrial Energy…have entered into R&D partnerships with utilities, aiming for grid supply by the 2020s.”

A related article in MIT Technology Review discusses the promise of new advanced nuclear technologies to combat climate change and describes the potential of molten salt designs.

“Canadian company Terrestrial Energy plans to build a 190 MW plant in Ontario, with its first reactors producing power before 2030,” notes writer Leigh Phillips.

Read the full articles here:
10 Breakthrough Technologies 2019
Bill Gates: How we’ll invent the future
The new, safer nuclear reactors that might help stop climate change

X-energy Dedicates TRISO-X Fuel Fabrication Pilot Line at ORNL

X-energy announced the dedication of its TRISO-X Fuel Fabrication Pilot Line located at the Department of Energy’s (DOE) Oak Ridge National Laboratory (ORNL). The ceremony was attended by X-energy and ORNL leadership and included remarks from Congressman Chuck Fleischmann (R-TN, District 3).

Rep. Fleischmann said, “The development and production of fuel is an essential step to the deployment of advanced nuclear reactors.”

He added that the the pilot facility, which is a partnership between DOE and X-energy, will help to move to market for advanced reactors.

The HALEU Demonstration Program will culminate in the production of 19.75% enriched uranium using U.S.-designed and operated advanced centrifuge technology. To deploy Generation IV reactors, many of the designs require a stable and reliable source of fuel utilizing HALEU. X-energy’s Xe-100 design, a high temperature gas-cooled pebble bed reactor will employ 15.5% U235 enriched uranium.

The announcement integrates with X-energy’s plan to design, license, and construct the TRISO-X Fuel Fabrication Facility (FFF). It will be a cross-cutting facility capable of supplying numerous advanced reactor designs with fuel.

X-energy has initiated preliminary design and pre-application activities with the U.S. Nuclear Regulatory Commission (NRC), with plans for an operational facility in the 2023-2024 timeframe.

The TRISO-X Pilot Line enables X-energy to manufacture TRISO fuel forms using HALEU. It will produce fuel that will begin qualification irradiation testing by early 2020.

“Advanced nuclear reactors are the future of nuclear power and X-energy’s objective is to be the leading TRISO fuel fabricator in the U.S. and globally,” said X-energy’s Chief Executive Officer J. Clay Sell.

“The availability of high-assay low-enriched uranium (HALEU) fuel and a U.S.-based production line for HALEU-based fuel forms are critical elements for advanced reactor deployment. Our next stage is to complete the commercial TRISO-X fuel fabrication facility, which will produce fuel for these advanced reactors – serving commercial, government and U.S. Department of Defense applications.”

HALEU fuel is believed to be a key element of a DOD plan to procure very small transportable reactors to insure tactical readiness in terms of electricity supply at forward bases.

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Army RFI for SMRs Could be Boon for Commercial Developers

Small v bigThe Army Times reports in an good article, with fascinating graphics, that the US Army is seeking to develop and put in the field a number of very small mobile nuclear reactor to power forward operating bases.

The basic approach is to acquire mobile nuclear reactors the would produce electrical power in the range of one-to-ten megawatts of power.  An earlier report on the Army’s interest in SMRs was published by Defense One in September 2018.

The specifications for the acquisition of these mini-reactors, sometimes referred to incorrectly as “nuclear batteries,” was published in the Federal Business Opportunities aka FedBizOps on 22 January 2019. The announcement came with a detailed list of operational and physical requirements. This announcement is a “Request for Information,” or RFI.  A full blown Request for Proposals (RFP) could be issued later this year.

Note to Readers ~ 04 March 2019the correct designation of the issuing office of the RFI is the Office of the Secretary of Defense, Strategic Capabilities Office aka OSD/SCO as an acronym. References to the US Army actually refer to this part of the Pentagon.

080103-F-2034C-008The reactors would produce 1-10MWe of electrical power, weight less than 40 tons, be capable of being set up and running after delivery by a C-17 in less than 72 hours; and, run more or less unattended for up to three years.

Benefits for Commercial SMR Developers

If the Army is successful in developing and deploying these mini reactors, the supply chain created by producing them could be capitalized by current and future developments of small modular reactors.

Additionally, assuming the US Army produces enough of them, that cost and schedule data from the line might finally answer the question of how many orders a commercial SMR developer needs to start up its own production line. Note the Army is unlikely to  want to share a production capability needed to assure tactical readiness at forward bases.

The testing and safety review processes for the military reactors would also provide test cases for use by commercial reactors and also inform the NRC about getting smart on these types of reactors. According to the Army Times report test efforts are expected to take place at the Idaho National Laboratory. A spokesperson for the INL told this blog the lab is in discussion with several entities interested in demonstrating reactor concepts in Idaho.

The RFI says that the Defense Department could pick three prototypes for its phase I portion of development. That would require prototype designs and other plans. That phase would go for nine to 12 months, according to the post. The Idaho National Laboratory is cited as offering an estimate that testing and demonstrations could begin as early as 2021.

Use of High Assay Low Enriched Fuel

The  requirements for the reactors, and their small size, indicate that conventional light water reactor designs won’t meet the Army’s needs for portability and rapid set up in forward areas.  It follows that to avoid using highly enriched fuel (HEU), the Army will be more likely to see proposals from vendors that involve the use of high assay low enriched fuel (HALEU) which is uranium fuel with levels of U235 between 5% and 19%.

Note that the Department of Energy has several initiatives underway to produce HALEU and potential military mini SMRs have long been seen as one of the early users of this type of fuel.

Background to the Request for Information

The Army Times reports that Defense Science Board task force published a detailed report in August 2016 (large PDF file) with details of the power requirements in the range of 1-10 MW.  In 2018, the Times notes, the Army’s deputy chief of staff, G-4, published a 148-page study on the use of mobile nuclear power plants for ground operations, adopting the recommendations of the 2016 Defense Science Board. It also advocated, as the board did, that the Army manage ground nuclear reactor programs and pursue existing or near-to-maturity technologies.

In August, 2016, the Defense Science Board identified key gaps in its report: Energy Systems for Forward Remote Operating Bases that the Army is interested in responding to these needs by developing a small mobile nuclear reactor design that can address electrical power needs in rapid response scenarios.

The report said that small mobile nuclear reactors “can make the DOD’s domestic infrastructure resilient to an electrical grid attack and fundamentally change the logistics of forward operating bases, both by making more energy available and by drastically simplifying the complex fossil fuel logistical lines which currently support existing power generators operating mostly on diesel fuel.”

Additionally, a small mobile nuclear reactor would enable a more rapid response during Humanitarian Assistance and Disaster Relief (HADR) operations.

Current Technical Requirements in the RFI

For purposes of this RFI, the Army is interested in small mobile nuclear reactor concept designs that produce electricity and which satisfy, at minimum, the following requirements:

  • Threshold Power: 1-10 MWe of electric power generation
  • Size/Transport: < 40 tons total weight, sized for transport by truck, ship, and C-17 aircraft
  • Inherently safe design, ensuring that a meltdown is physically impossible in various complete failure scenarios such as loss of power/cooling.
  • Ultimate heat sink: Ambient Air, capable of passive cooling
  • Time to Install and reach Point of Adding Heat (POAH): Threshold: <72 hrs
  • Life: Able to generate threshold power (1-10 MWe of electric power generation) for >3 years without refueling
  • Time for planned shutdown, cool down, disconnect and removal for transport:  Threshold: < 7 days
  • Operation: Semi-autonomous – Not requiring manned control by operators to ensure safe operation. Minimal manning to monitor overall reactor and power plant system health
  • Safe Shutdown: Series of both automatic shutdowns as well as failsafe shutdowns with passive cooling upon loss of power
  • Health & Safety: No net increase in risk to public safety by either direct radiation from operation or contamination with breach of primary core. Minimized consequences to nearby personnel in case of adversary attack
  • Proliferation: Technology, engineering, and operations must demonstrate minimization of added proliferation risk.

Key Advantages of SMRs

The military’s interest in SMRs comes from understanding of five distinct features of solid state designs.

Black Start – SMRs can start up from a completely de-energized state without receiving energy from the grid. This can help an electricity grid meet system requirements in terms of voltage, frequency and other attributes when recovering from an outage.

Islanding– SMRS can operate connected to the grid or independently. If attached to a microgrid with islanding, an SMR could power critical facilities such as hospitals, data centers and military bases.

Fuel Security – SMRs can easily store fuel on-site, allowing them to run, in some instances, for a decade or more without the need of an external fuel supply.

Plants can also stagger the refueling of its modules—allowing them to stay online and provide constant power to the grid without any disruptions.

Modularity – SMRs have a modular design that minimize the use of electrical parts. Many of them use passive cooling features that don’t require any safety-related electric pumps or operator intervention to safely shut down.

Construction – If needed SMRs can be built underground—making them less vulnerable to extreme weather events, earthquakes, electromagnetic pulse (EMP) threats and other intentional destructive acts.

Los Alamos Design for a Mini SMR and  by Others

In September 2018 officials at Los Alamos National Laboratory released details of work taking place there to build a very small reactor to meet the military’s needs.

In the LANL microreactor, the nuclear fuel is HALEU. The fuel is encapsulated in a solid steel monolith to form a sub-critical nuclear core, which is surrounded by a neutron reflector and contains a simple shut-down rod that allows the core to go critical on demand.

The thermal energy created by the fission reactions is efficiently removed from the metal core by high-temperature, alkali-metal heat pipes, a technology in wide use both on earth and in space since the 1970s. Thermal energy is converted into electrical energy—and power is delivered.

lanl mini smr cocnept

A related patent was filed by staff working for the prime contractor at Los Alamos in 2014 for a very small SMR.

The start up HolosGen has some interesting approaches to portability for its 3-13MWe design that comes in a 4-pack configuration that, according to its briefing materials on its web site, would fit inside a truck trailer that could easily navigate ordinary highways.  A slide deck (PDF file) dated April 2018 walks a reader through the details of their design concepts and potential applications including military uses for reliable power.

See also a July 2017 report by the technology blog Next Big Future on various designs by developers of very small fission reactors for military and space applications. Note that some developers of applications for NASA might also see an opportunity to meet the ARMY’S needs.

A directory of developers and related supply chains for advanced reactors was published by  the Gateway for Accelerated Innovation in Nuclear (GAIN), at the Idaho National Laboratory, in January 2019.  Several developers listed in the directory are working on very small reactors.

How feasible or acceptable any of these designs would be to the military is up to DOD.

How the Program Decisions Will Develop Over Time

The language of the RFI is couched in typical government speak. Here is a summary of the decision process.

  • Up to three (3) different reactor design efforts may be awarded under Phase I.

The Phase I effort will be a full-scope reactor prototype engineering design study, complete with a programmatic plan to address specifically enumerated risks, along with engineering and manufacturing concerns to articulate feasible path from design to build.

Phase I is anticipated to be a 9-12 month effort, with a defined schedule and specific milestones to be identified in a follow on announce once the acquisition method is determined.

Phase I awardees will work to develop a prototype design for a small mobile nuclear reactor, and produce a programmatic design-to-build plan including a risk reduction testing path for a successive Phase II award.

Routine updates will be required to be submitted to the government for technical progress and evaluation purposes. Final deliverables will require specific risk mitigation actions germane to the specific reactor type design being developed, as well as reaching the equivalent of a Preliminary Design Review (PDR) for full scale design and build.

Phase II will include a complete build and testing of the system prototype.Following a down select to one of the Phase I awardees, a Phase II may proceed with material purchases, execution of the delivered program plan, and building on the existing prototyping design work produced under Phase I.

An announcement following determination of acquisition method is expected for release in Spring 2019. It will include the specific technical requirements, which will be informed in part by the information solicited in the current RFI.

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Posted in Nuclear | 3 Comments

A Really Big Nuclear Energy Decision for DOE and INL

vtr logoU.S. Secretary of Energy Rick Perry announced (02/28/19) the launch of the Department of Energy’s Versatile Test Reactor (VTR), one of the top priority projects specified in the Nuclear Energy Innovation Capabilities Act of 2017.

The VTR is a project detailed in the Nuclear Energy Innovation Capabilities Act of 2017. The main take away from this announcement is that the DOE initiated a Critical Decision 0 (CD-0) on Versatile Test Reactors (VTR). A CD-0 means that a mission need has been identified and DOE will begin work on R&D, prototyping, conceptual designs, management plans, and cost and schedule estimates.

INL director Mark Peters said in an online statement, commenting on the significance of the announcement;

“U.S. test reactors and user facilities are one reason the United States has maintained an international leadership role in nuclear energy research and development. We currently do not have the fast neutron spectrum research facilities in the U.S. necessary to enable a robust future for advanced reactors.”

“DOE’s announcement about the versatile test reactor project is the first important milestone in establishing this capability, and prioritizes investment in this user facility that will serve the science community, industry, regulators and the future of nuclear energy research and innovation.”

World Class Materials Testing

Nuclear abstract

The fast neutron testing capability will help the United States meet its goal for advanced nuclear reactor technology development. The VTR project will provide leading edge capability for accelerated testing of advanced nuclear fuels, materials, instrumentation, and sensors.

It will allow DOE to modernize its materials testing within the United States in a safe, efficient and timely way.

Secretary Perry spoke to the importance of the VTR project when he announced it at a joint press conference with International Energy Agency Executive Director, Dr Fatih Birol.

“The Versatile Test Reactor will give American companies the ability they currently lack to conduct advanced technology and fuels tests without having to go to our competitors in Russia and China.”

Enabling Legislation for the VTR

The Nuclear Energy Innovation Capabilities Act of 2017 (NEICA, S. 97, which was enacted into law in September of 2018) included provisions for a Versatile Neutron Source and directs the Secretary of Energy to determine the mission need for a versatile reactor-based fast neutron source operating as a national user facility, as well as a deadline, to the maximum extent practicable, to complete construction and approve the start of the VTR operations by December 2025. DOE’s Idaho National Laboratory (INL) will lead the VTR project.

The U.S. has not had a fast neutron spectrum testing facility for over 20 years, precluding the ability to conduct the types of accelerated irradiation testing needed by non-light water advanced reactor concepts. The proposed VTR project could provide accelerated neutron damage rates 20 times greater than current water-cooled test reactors. These higher damage rates are needed within the U.S. to accelerate the testing of nuclear fuels and materials needed by scientist and developers of transformational reactor technologies.

“The U.S. has the largest number of operating reactors compared to any other country, and there are a lot of U.S. companies working on technologies to make the next generation of reactors even more inherently safe and more economically competitive,” said Ed McGinnis, NE Principal Deputy Assistant Secretary.

“Having this domestic capability is critical to our national security and our ability to re-establish ourselves as a global leader in advanced reactor technologies.”

If DOE approves a design and construction of the VTR, it will be located at the site on at the Idaho National Laboratory located about 50 miles west of Idaho Falls, ID. INL also has extensive facilities and offices in the city in addition to its infrastructure on the Arco desert.

Prior coverage on this blog

GE Hitachi Nuclear Energy is working with Idaho National Laboratory on the Versatile Test Reactor concept design that is based off of its PRISM reactor.

Congress passed and the president has signed into law in late September the Nuclear Energy Innovation Capabilities Act of 2017

The legislation has an ambitious agenda and its implementation may test the limits of the Department of Energy’s capabilities to fully execute its intent. The outlook for additional legislative efforts to link nuclear energy investment to dealing with climate change remain uncertain.

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Posted in Nuclear | 1 Comment

Canadian National Lab Advances Three SMR Designs

  • small reactorsThree technology developers advanced in CNL’s SMR process to build a demonstration unit of a small modular reactor (SMR) at a CNL site
  • The three firms are moving through a rigorous stage gate process having been selected from 19 applicants and 80 expressions of interest

Canadian Nuclear Laboratories (CNL), one of Canada’s premier science and technology organizations, announced on 2/15/19 that two firms, Starcore Nuclear and Terrestrial Energy have successfully completed the pre-qualification stage of CNL’s invitation, and have been invited to enter the Due Diligence stage.

In these stages, CNL will evaluate with increased rigor, the technical and business merits of the proposed designs, assess the financial viability of the projects, and review the necessary national security and integrity requirements.

  • StarCore Nuclear’s proposed SMR design is a 14 MWe high-temperature gas reactor. StarCore is proposing to build reactors at both the Whiteshell and Chalk River sites.
  • Terrestrial Energy’s proposed SMR design is a 195 MWe integral molten salt reactor. CNL did not indicate what site(s) the firm has chosen if selected to build. In the US the firm has been looking at different candidate sites including the Idaho National Laboratory.
  • Update 2/27/19 – On 2/27/19 Terrestrial Energy issued a press statement that it has completed its siting study with Canadian Nuclear Laboratories (CNL) that short-lists a number of sites suitable for a commercial power plant that uses the company’s Integral Molten Salt Reactor (IMSR®). The study recommended further detailed investigation of several sites within the Chalk River Laboratories property.

The firm Global First Power (GFP), with its key partners Ontario Power Generation (OPG) and Ultra Safe Nuclear Corporation (USNC), has progressed through the second stage of the invitation process, and has been invited to participate in preliminary, non-exclusive discussions regarding land arrangements, project risk management, and contractual terms (Stage 3). These negotiations are not an indication of project approval, and the proposal and proponent must satisfy further stringent evaluation.

  • GFP/OPG/USNC Team’s proposed SMR design is a 5 MWe high-temperature gas reactor.

The fourth and final stage, Project Execution, would include construction, testing and commissioning, operation and ultimately decommissioning of the SMR unit.

All of these projects are subject to regulatory processes and requirements. The licensing process with the Canadian Nuclear Safety Commission (CNSC) is independent of CNL’s invitation and evaluation stages. Should a project advance to a license application, proponents will be required to undertake meaningful project engagement with the public and Indigenous communities. CNSC is currently conducting pre-licensing vendor reviews with a number of SMR developers.

Background on CNL SMR Program

cnl logoIn June 2017 CNL set the ambitious goal of siting an SMR on a CNL-managed site by 2026. To achieve this, CNL launched a Request for Expressions of Interest to gather input and feedback from stakeholders across Canada and internationally.  CNL received 80 responses from academia, energy utilities, potential end users, host communities, and the nuclear supply chain.

Included in those responses were 19 formal responses from technology developers interested in building a prototype or demonstration reactor at a CNL site. Based in part on that strong response, CNL moved forward with announcing a staged invitation process for those vendors interested in siting their demonstration unit.  Even as this work is ongoing, the deployment of small modular reactors in Canada is still several years away. .

The proposed flexibility of operations for these new designs enables a wide range of end uses, including pairing SMRs with intermittent renewable sources such as solar or wind energy to ensure grid reliability.  In addition to electricity production, the energy from an SMR could be used for the production of hydrogen, for local area heating, or in industrial processes which require heat or steam.

Holtec’s SMR-160 Attracts Support in Ukraine and US

(WNN) Holtec International has made progress with its work on an SMR-160 system through agreements with Energoatom and Exelon Generation announced during the winter meeting of the Holtec Advisory Council for SMR-160, held on 2/8/10 in Jupiter, Florida.

The SMR-160 application is under review by the Canadian Nuclear Safety Commission and is in Phase 1 of the three-phase evaluation cycle. State Nuclear Regulatory Inspectorate of Ukraine, the nuclear regulatory authority in Ukraine, is expected to coordinate its regulatory assessment of SMR-160 under a collaborative arrangement with its Canadian counterpart.

At the same meeting, Holtec signed a memorandum of understanding with Exelon Generation, adding Exelon to the SMR-160 team, which currently includes SNC-Lavalin and Mitsubishi Electric.

Chris Mudrick, Exelon Generation senior vice president, Northeast Operations, said in the Holtec statement:

“As the largest nuclear operator in the United States, Exelon Generation is pleased to partner with Holtec to develop an operating model for the SMR-160. This project is a great example of how innovation and new technologies are bringing our industry together and driving the future of nuclear power.”

Under the terms of the MoU, Exelon Generation plans to support SMR-160’s market acceptance, develop a generic deployment schedule and staffing plan, and assist to improve its operability and maintainability features, Holtec said. As SMR-160s are built around the globe, Exelon Generation could provide reactor operating services to customers that lack an established nuclear industrial infrastructure, it added.

Exelon’s move to sign on to support the molten salt project is the second by a US nuclear utility. Southern Nuclear is working with a consortium of developers, including TerraPower, to develop a molten salt reactor.

Holtec describes the SMR-160 as a “passive, intrinsically safe, secure and economical” small modular reactor that has the flexibility to be used in remote locations, in areas with limited water supplies or land, and in unique industrial applications where traditional larger reactors are not practical.

The Holtec meeting was led by the incoming chairman, Michael Rencheck, CEO of Bruce Power, Canada, and attended by invited industry experts from several leading organisations, including Bruce Power, Energoatom, Entergy, Exelon Generation, Southern, Talen Energy, NEI, SNC-Lavalin, Mitsubishi Electric, and several major suppliers. The international contingent consisted of business and technology leaders from Canada, Japan, Saudi Arabia, Ukraine and the United Arab Emirates.

  • Holtec Technology Development Partners

On February 14,  2018, GE Hitachi Nuclear Energy (GEH), Global Nuclear Fuel (GNF), Holtec International and SMR LLC announced a collaboration to advance the SMR-160 small modular reactor primarily in the area of fuel development.

The firm also has a joint development agreement with SNC Lavalin and Mitsubishi. Under the agreement, SNC-Lavalin will provide Holtec with a range of nuclear engineering services, including supporting the licensing of the SMR-160 reactor. While the SMR-160 is based on light water reactor technology, it should be noted that SNC-Lavalin is the parent company of Candu Energy.

In August 2015, Mitsubishi signed a long-term partnership agreement with Holtec to develop the instrumentation and control systems for the SMR-160.  Holtec has previously secured engineering, design and qualification support for its work on the SMR-160 from the Shaw Group and URS Corporation.

UK-Japan Venture Seeks to Build an HTGR in UK

The firm Penultimate Power has agreed to form a joint venture with the Japan Atomic Energy Agency (JAEA) to build a novel small modular reactor in the UK to provide power and process heat for heavy industry according to a trade press report.

The partners want to build a 10 MWe high-temperature gas-cooled nuclear reactor (HTGR) in the North East of England, based an R&D design that has been running in Japan since 1998.

Ian Fells, technical director at Penultimate Power and former consultant to the UK Atomic Energy Authority, said the venture is seeking approvals from authorities and he expects the £500m (US$651m) plant will be constructed within the coming 48 months.

The firm has ambitious goals for its HTGR.

“We talk about distributed electricity generation with wind, solar and biomass generation,” says Fells. “Now we’re talking about distributed nuclear generation.”

At this power rating the unit will likely be built as an R&D project to demonstrate the feasibility of the technology. Also, developers haven’t addressed how they plan to license the unit nor take it through the UK GDR process for safety review and environmental assessment.

Long term plans include scaling up the technology to 100 MWe, and building a factory, preferably in Teesside, to construct the modular plants for use across the UK. Though Fells said a timeline for this has not yet been agreed.

The UK Government’s support for SMRs has been a disappointment for developers. It launched a £250m competition in 2015 aimed at commercializing the technology but in 2017 scaled back its ambitions, announcing it would offer just £44m to prove the feasibility of a wider set of designs and then for development activities.

In other SMR news NuScale has said it aims to deploy its SMR design in the UK with the first 60 MWe units aimed for operation in the mid-2020s. Rolls-Royce has submitted design plans to the government for a 220 MWe unit.

Note to readers: AAAS Science Magazine has this week published a terrific article on NuScale with first rate writing and stunning graphics.

China has been developing a 230 MW HTGR with two units attached to a single turbine. However, according to some reports, plans to build 20 of them for domestic use have been postponed in order to revamp the design to be more efficient.

~ Other Nuclear News ~

RAB Financing Model Could Attract
Private Investment To Nuclear Energy Projects

(NucNet): The regulated asset base financing model (RAB) for nuclear power plants could attract private investment in the sector because investors are able to see a fixed rate of return as the project is being built, Harminder Singh, a power analyst at London-based data and analytics company GlobalData told NucNet in an email.

Mr Singh said the key problem that RAB addresses is that of the high cost of capital for nuclear power projects. He said the RAB model has been used in other infrastructure sectors in the UK, such as the £4.2bn Thames super sewer project, to provide “comfort to investors in private utilities, especially in water”.

But he warned that the RAB model could shift the risk from the developers to consumers, leading to higher electricity bills.

“The model has so far not been used for projects as expensive as nuclear power plants, which is seen as a key cause for concern.”

The UK government is said to be considering RAB financing for new nuclear following recent decisions by Hitachi to suspend the Wylfa nuclear project in Wales and by

RAB financing is essentially a type of contract drawn up with the backing of government, which calculates the costs and profits of a project before it is started, and allocates an investor’s profits from day one.

DOE Names SEAB Members

U.S. Secretary of Energy Rick Perry announced last week the first members of his Secretary of Energy Advisory Board (SEAB).

The SEAB has historically provided advice and recommendations to the Secretary of Energy on the priorities for the Department of Energy including promoting America’s energy security.

Secretary Perry’s SEAB will include the following individuals. Additional members may be named at a later date.

  • Norman R. Augustine, Retired Chairman and CEO, Lockheed Martin Corporation
  • David H. Dewhurst, Co-founder, Chairman & CEO Falcon Seaboard
  • Vicki Hollub, President & CEO, Occidental Petroleum
  • David Lockwood, Former Chairman & CEO, Energy Solutions, Inc.
  • Richard W. Mies, Admiral U.S. Navy (Ret.)
  • Pedro J. Pizarro, President & CEO, Edison International
  • Dr. Samantha Ravich, Chair of the Center on Cyber and Technology Innovation at the Foundation for Defense of Democracies
  • Dr. Daniel Yergin, Vice Chairman, IHS Markit

Ms. Hollub and Admiral Mies will serve as Chair and Vice Chair of SEAB, respectively. Board member bios here

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Posted in Nuclear | 2 Comments

Flynn’s Nuclear Deal Promoted Despite Warnings About Risks

  • nuclearartThe Washington Post reports that key members of the Trump administration pushed a plan to sell nuclear power plants to Saudi Arabia in the months after the inauguration despite objections from members of the National Security Council and other senior White House officials, according to a new report from congressional Democrats.
  • The New York Times reports the House of Representatives Oversight Committee report said former national security adviser Michael Flynn and two aides promoted the plan with Tom Barrack, the chairman of Trump’s inaugural committee, and a consortium of U.S. firms led by retired military commanders and former White House officials.

According to a press statement from the House Oversight Committee, on Feb 19, 2019, US Rep. Elijah E. Cummings, the Chairman of the Committee on Oversight and Reform, issued an interim staff report after multiple whistleblowers came forward to warn about efforts inside the White House to rush the transfer of highly sensitive U.S. nuclear technology to Saudi Arabia in potential violation of the Atomic Energy Act and without review by Congress as required by law—efforts that may be ongoing to this day.

The report states anonymous whistleblowers came forward with information about Flynn’s plans.

“The whistleblowers who came forward have expressed significant concerns about the potential procedural and legal violations connected with rushing through a plan to transfer nuclear technology to Saudi Arabia.  They have warned of conflicts of interest among top White House advisers that could implicate federal criminal statutes. 

They have also warned about a working environment inside the White House marked by chaos, dysfunction, and backbiting.  And they have warned about political appointees ignoring directives from top ethics advisors at the White House who repeatedly and unsuccessfully ordered senior Trump Administration officials to halt their efforts.”

The report warns that that White House efforts to transfer sensitive U.S. nuclear technology to Saudi Arabia may be accelerating after meetings last week at the White House and ahead of a planned visit to Saudi Arabia by the President’s son-in-law, Jared Kushner:

“The Committee’s investigation is particularly critical because the Administration’s efforts to transfer sensitive U.S. nuclear technology to Saudi Arabia appear to be ongoing. 

On February 12, 2019, the President met with nuclear power developers at the White House about sharing nuclear technology with countries in the Middle East, including Saudi Arabia.  In addition, next week Mr. Kushner will be embarking on a tour of Middle Eastern capitals—including Riyadh—to discuss the economic portion of the Administration’s Middle East peace plan.”

The report highlights concerning events involving Saudi Arabia, including the brutal murder of Washington Post columnist Jamal Khashoggi, which was met with equivocation by President Trump and other top Administration officials, and the refusal by the White House to submit a report on Mr. Khashoggi’s killing that was requested on a bipartisan basis by the Senate Committee on Foreign Relations.

The report indicates that there is now serious, bipartisan concern with the Trump Administration’s efforts to transfer sensitive U.S. nuclear technology to Saudi Arabia.  For example, on October 31, 2018, Republican Senators Marco Rubio, Todd Young, Cory Gardner, Rand Paul, and Dean Heller sent a letter to President Trump urging him to “suspend talks related to a potential civil nuclear cooperation agreement between the United States and Saudi Arabia” due to “serious concerns about the transparency, accountability, and judgment of current decision makers in Saudi Arabia.”

The report describes new documents and communications between White House officials, including former National Security Advisor Michael Flynn, former Deputy National Security Advisor K.T. McFarland, and former NSC Senior Director for Middle East and North African Affairs Derek Harvey, as well as with Thomas Barrack, President Trump’s personal friend of several decades and the Chairman of his Inaugural Committee, and Rick Gates, President Trump’s former Deputy Campaign Manager and Deputy Chairman of the Inaugural Committee who has now pleaded guilty to financial fraud and lying to investigators.

  • See Cheryl Rofer’s Nuclear Diner for updated bios of the key people working with Flynn.

Cummings also sent letters to multiple entities involved with promoting this plan, including the White House; the Departments of Commerce, Defense, Energy, State, and Treasury; the Joint Chiefs of Staff; the Central Intelligence Agency; Flynn Intel Group; IP3; ACU Strategies; Colony NorthStar; and Mr. Barrack.

Previous Coverage on this Blog

Mike Flynn’s Nuclear Deal was a Non-starter for Business Reasons

The Russian deal presented by former National Security Adviser Michael Flynn was a non-starter. It made no sense from a commercial perspective.

He attempted to ink a deal between Saudi Arabia and Russia for nuclear reactors linked to the lifting of U.S. sanctions under the Majnitsky Act. The mainstream media continues to describe Flynn’s involvement in the Saudi nuclear deal as driven by greed.

It isn’t clear that this was his sole motivation. What does appear to be true is that most of his wires for this project were crossed and shorted out before his plane ever took off from the U.S. to the Mideast in April 2015.

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Posted in Nuclear | 2 Comments

A Plausible Scenario for Saudi Arabia’s Nuclear Energy Plan; Goodbye US AP1000, Hello China Hualong One via Pakistan

  • The Kingdom of Saudi Arabia (KSA) has long maintained that if it doesn’t get what it wants from a US 123 Agreement for export of nuclear reactor technologies, it has other options including buying Chinese Hualong One PWRs, at 1100 NMW each, similar to the two units now being built at a coastal site in Pakistan near Karachi.
  • Such an scenario would be a win for China, which would benefit from a long-standing relationship, first documented in 2003, between KSA and Pakistan, involving KSA’s financial support for Pakistan’s nuclear weapons program.
  • The Chinese Hualong One, a PWR at 1100 MW is comparable in electrical power output to the Westinghouse AP1000 at 1150 MW.
  • For its part, the US reiterated at the Munich Security Conference on Feb 16 that the U.S. will not open door to Saudi Arabia building nuclear weapons by abandoning the “gold standard” set with a similar agreement with the United Arab Emirates.
  • Saudi Arabia may be playing a double game with the US. On one hand it makes fiery disclaimers that if it doesn’t get a modified 123 agreement, it will talk to China. On the other hand, getting the reactors from Westinghouse and big chunks of its supply chain makes protecting Saudi Arabia from Iran much more in the US interest. Because . . . they will now have our nuclear reactors and we will want to keep an eye on them.
  • Is Saudi Arabia strong enough to make good on its “disclaimer” of having other sources? Maybe they do have a China option, but would China also come with a security guarantee? I don’t think so.

US DOE Official Repeats Official Line
for a 123 Agreement with Saudi Arabia

DAN_BROUILLETTE_Official_photo_DOE

DOE’s Dan Brouillette

In a report by CNBC reporter Hadley Gamble at the Munich Security Conference on Saturday Feb 16, U.S. Deputy Energy Secretary Dan Brouillette, (right) said the U.S. will not open door to Saudi Arabia building nuclear weapons.

“We won’t allow them to bypass 123 if they want to have civilian nuclear power that includes U.S. nuclear technologies,” Brouillette told CNBC.

“As you know this technology has a dual use and in the wrong hands it becomes a dangerous, dangerous world,” said Brouillette.

CNBC reported that he added that while countries should pursue nuclear energy technologies, they must do so under a U.S. law that is intended to prevent the proliferation of nuclear weapons.

The Saudis have, so far, refused to rule out their right to enrich uranium for nuclear weapons, pointing to neighboring Iran’s ability to do so under the 2015 nuclear agreement that world powers signed with Tehran. The US has since pulled out of it, but all other nations that are party to it are staying in.

Section 123 of the United States Atomic Energy Act of 1954 (full text PDF file) , titled “Cooperation With Other Nations,” (plain English summary) requires that any nuclear deals between the U.S. and any other nation prohibit to dual use of the technology to produce weapons. Banning enrichment of uranium or the reprocessing of plutonium using US supplied nuclear reactors technologies is the first step.

UAE’s Gold Standard 123 Agreement

The United Arab Emirates (UAE) signed such an agreement with the US prior to kicking off its construction of four South Korean designed reactors that are based in part on US reactor technologies. It is often referred to as the “gold standard.” The bilateral agreement bans any work by the UAE to use nuclear reactor technologies supplied by US vendors directly, or supplied by other nations, to enrich uranium to any level and it also bans reprocessing of spent nuclear fuel.

Brouillette told CNBC such an agreement is an imperative to any nuclear deal with Saudi Arabia.

“We won’t allow them to bypass 123 if they want to have civilian nuclear power that includes U.S. nuclear technologies.”

Saudi Arabia Not Budging on Enrichment Issue

The Kingdom of Saudi Arabia (KSA) last year issued a request for proposal to build two full size nuclear reactors and received responses from the U.S. Russia, China, France, and South Korea. Energy ministry officials have said they plan to choose a vendor later this year. The construction of two units, at a potential cost of $5-7 billion each is seen as a precursor to an ambitious plan to build 14 more units spread over three coastal sites.

In its negotiations with a U.S. team led by DOE Energy Secretary Rick Perry, KSA has refused to rule out their right to enrich uranium for nuclear weapons, They claim that the U.S. has given Iran the ability to do that under a 2015 nuclear agreement.

The difference being ignored in this “what about” stance is that the Iran nuclear deal is not a 123 Agreement and Iran has no plans to buy nuclear technologies from the US.

In an interview in March 2018 on CBS’s “60 Minutes” Saudi Crown Prince Mohammed bin Salman said the country wasn’t interested in developing weapons, but would develop nuclear capability should Iran ever develop a working nuclear bomb.

On Sunday Feb 17, Saudi Arabian Prince Turki Al-Faisal responded directly to Brouillette’s words, telling CNBC the country had more options than just U.S. technology.

“Well the nuclear energy market is open. It is not just the United States that is providing nuclear technology,” he told CNBC’s Hadley Gamble in Munich.

“We have France, we have Russia, we have China. We have our friends in Pakistan and in other places as well, so if they want to remove themselves from that market, well, that’s up to them.”

Is Al-Faisal bluffing or does he really mean it? It turns out the links between Saudi Arabia and Pakistan in all matters nuclear related are long standing and involve several levels of cooperation both in terms of finances and technology development. Al-Faisal is not making an empty threat.

The Pakistan Angle Comes into View

  • An entirely plausible scenario is that KSA could buy reactors from China and get its enrichment tech from Pakistan.
  • The Pakistan angle in terms of KSA’s nuclear ambitions is of particular interest and hasn’t been covered recently in the US mainstream media.
  • The US nuclear industry, which recently presented a case for expanded exports to the White House, may not have yet fully grasped the competitive threat posed by China’s progress in Pakistan.

China’s advantage in selling nuclear reactors to KSA is that it is pretty far along in construction of two Hulalong One reactors in Pakistan, which are 1100 MW PWRs of Chinese design. Completion time is planned for 2020 or more likely occurring in 2022. Success there for China there would then be key confidence item for KSA.

Also, the history of development of Pakistan nuclear weapons program rife with reports of KSA cash to help pay for it. It points to a long standing relationship between the two countries in precisely the area where a 123 Agreement with the US would seek to ban any activities.

According to a Wikipedia article, in news media reports and think tanks studies it is widely believed that Saudi Arabia has been a major source of funding for Pakistan’s atomic bomb project since 1974.

In 2003, globalsecurity.org reported that Pakistan and Saudi Arabia had entered a secret agreement on nuclear cooperation providing Saudi Arabia with nuclear weapons technology in return for access to cheap oil for Pakistan. Pakistan is outside the Nuclear Non-Proliferation Treaty which means it has no international constraints on sharing uranium enrichment technologies with Saudi Arabia.

A Brookings study published in 2008 provided details of one key aspect of this support.

“In May 1998 when Pakistan was deciding whether to respond to India’s test of five nuclear weapons, the Saudis promised 50,000 barrels per day of free oil to help the Pakistanis cope with the economic sanctions that might be triggered by a counter test. The Saudi oil commitment was a key to then Prime Minster Nawaz Sharif’s decision to proceed with testing. It cushioned the subsequent U.S. and EU sanctions on Pakistan considerably.”

The AFX wire service reported in 2006 that Saudi Arabia was working secretly on a nuclear program, with help from Pakistani experts, the German magazine Cicero reported, citing Western security sources.

Since 1998, Western diplomats and intelligence agencies have believed that an agreement exists in which Pakistan would sell Saudi Arabia nuclear warheads and its own nuclear technology should security in the Persian Gulf deteriorate. Both countries have sharply denied the existence of such an agreement.

In 2013 a BBC report covered many of these previous developments and added this alarming description of the KSA relationship with Pakistan with regard to nuclear weapons.

“One senior Pakistani, speaking on background terms, confirmed the broad nature of the deal – probably unwritten – his country had reached with the kingdom and asked rhetorically “what did we think the Saudis were giving us all that money for? It wasn’t charity.”

Another, a one-time intelligence officer from the same country, said he believed “the Pakistanis certainly maintain a certain number of warheads on the basis that if the Saudis were to ask for them at any given time they would immediately be transferred.”

The BBC also reported that Gary Samore, who served as President Barack Obama’s counter-proliferation adviser, has told Newsnight: “I do think that the Saudis believe that they have some understanding with Pakistan that, in extremis, they would have claim to acquire nuclear weapons from Pakistan.”

More recently in January 2019 the Washington Post reported that the Pakistan shared ballistic missile technologies it bought from China with Saudi Arabia.

Given these existing relationships, nonproliferation experts worry that if Saudi Arabia decides it wants enrichment technology, its long time partner in Pakistan could be the first stop. Differences among analyst include the question of whether Saudi Arabia would risk its security relationship with the US to buy Pakistan weapon systems.

Why China Might Have an Edge in Competing
for KSA’s Nuclear Commercial Reactor Business

In January 2012 the Wall Street Journal reported China and Saudi Arabia inked an accord that lays the groundwork for the two nations to jointly establish atomic energy facilities and combine efforts in spheres such as the generation of nuclear fuel. Work between the two countries to develop nuclear energy technologies is not something that just popped up. It’s been going on for a long time.

What’s important for Saudi Arabia is that it wants commercial nuclear reactor technologies with proven track records. For this reason, the EDF/Areva EPR, with significant cost overruns and schedule delays at sites in Finland and France, is not a front runner.

Pluses & Deltas for South Korea’s Competitive Edge

On the other hand, South Korea’s contract to build four 1400 MW PWRs for the United Arab Emirates is a key factor that would be a competitive match for China. Note that South Korea also has a long standing relationship with KSA to develop a 100 MW small modular reactor.

The ROK / KSA deal for 100 MW SMART reactor could be a model for U.S. A deal inked in 2011 between ROK and KSA could be seen as a model to form the basis for an agreement for U.S. firms to export nuclear technology to KSA. So far the US hasn’t sought to develop an approach based on it.

Working against South Korea is the fact that commissioning the first of four of the 1400 MW PWRs in the UAE has been delayed. Reuters reported in May 2018 the start-up of first nuclear reactor in the United Arab Emirates has been delayed by nearly 18 months to late 2019. The UAE utility that will operate the plant has since said that it forecasts that the loading of nuclear fuel assemblies required to start nuclear operations at Barakah Unit 1 will occur by the end of 2019 or in early 2020.

Nawah Energy Company, the operator of the Barakah Nuclear Energy Plant in the Al-Dhafra Region of Abu Dhabi, told Reuters it “has completed a comprehensive operational readiness review” for an updated start-up schedule for the reactor. Clearly, there were open items in the review that will take more work to close.

Reuters also reported in March 2018 that the start-up had been pushed back again due to training delays and unspecified issues with the safety culture at the plant. An earlier delay in training reactor operators was caused by the shutdown of a similar reactor in South Korea due to the discovery in 2013 of counterfeit electrical cables in the plant. It was not available to develop nor deliver the required training to UAE plant operators. This was the second such incident to hit South Korea’s nuclear fleet.

There have not been any reports of counterfeit components being discovered in the UAE reactors. However, the delay in commissioning them may tarnish South Korea’s profile as a successful vendor in the Middle East. How much depends on an internal Saudi evaluation which, given the unpredictable nature of the current leadership, may take into account political and noncommercial issues as well as project-related factors.

Progress with the Hualong One in China

By comparison to South Korea’s headaches in the UAE, China’s first reactor adopting its domestically developed third-generation ACPR-1000 design has completed its trial operation and has begun commercial operation.

china h1 cgn

Yangjiang Nuclear Power Plant

CGN Power, a subsidiary of China General Nuclear Power Corp., announced that the 1000-MW Unit 5 of the Yangjiang Nuclear Power Plant (right) in Guangdong province completed a 168-hour period of trial operation on July 12, 2018. Construction of the unit began in September 2013, and it was connected to the grid on May 23, 2018.

Four Hualong One units are being built in China. CNNC is constructing two units at its Fuqing plant in Fujian province, while China General Nuclear (CGN) is building two at its Fangchenggang site in Guangxi province.

All four units are expected to enter commercial operation in 2019-2020. CGN proposes to use a UK version of its Hualong One design at the planned Bradwell B site in the UK.

Progress with Hualong One Reactors in Pakistan

The nuclear trade publication Nuclear Engineering International reported in January 2019 that all the reactor internals have been installed at the first Hualong One being built by China National Nuclear Corporation (CNNC) in at Pakistan’s Karachi nuclear power plant (Kannupp).

Construction of Kannupp 2&3 began in 2015 and 2016. They are scheduled to begin commercial operation is 2021 and 2022.  KSA’s leadership could be very comfortable buying the same designs from CNNC given its success in Pakistan.

Schematic of a Hualong One

HPR1000,_cooling_systems_schemata

Image Credit: By Ji Xing, Daiyong Song, Yuxiang Wu – http://www.sciencedirect.com/science/article/pii/S2095809916301515 (from PDF version of paper)Journal: Engineering. 2 (1). doi:10.1016/J.ENG.2016.01.017, CC BY 4.0, https://commons.wikimedia.org/w/index.php?curid=57429503

What About the Westinghouse AP1000?

China has completed and commissioned all four Westinghouse AP1000 units being built there. However, Saudi Arabia is also mindful of the failure of Westinghouse at the V C Summer project which resulted in cancellation of construction with less than half the work done.

Also, China is not interested in exporting the Westinghouse AP1000 since it would have to pay royalties for use of the intellectual property associated with the design. On the other hand, the Hualong One is an entirely domestic design which China is aggressively promoting to the UK, Argentina, and elsewhere.

& & &

Is Saudi Arabia the next stop for the Hualong One? If the US says no to KSA’s intense lobbying for a modified 123 Agreement, its certainly a plausible scenario. Plus, Saudi demands for the right to enrich uranium need to be seen in the context of its relationship with Pakistan which, it appears, could offer that technology to the Saudi nuclear effort if asked for it.

So what is KSA’s end game in pushing for enrichment as part of a 1-2-3 agreement with the U.S?

It’s to send a the message, one among many, to Iran from KSA that looks like is this – back off the ballistic missile program or we’ll get enrichment and maybe also get a bomb. Note that Iran backed rebels in Yemen in 2018 lobbed several Iranian supplied ballistic missiles into KSA barely missing the airport in Riyadh. That’s almost 700 miles. Saudi reactors would also be targets for Iran’s aggression either directly or through surrogates.

The whole thing about the KSA approach to a 123 agreement looks a effort by the Saudi to send Iran a message about its security guarantees from the US.

See what we think we can get our friends in the U.S. to do for us, If we succeed you’re behind the eight ball. Keep in mind that President Trump repeatedly called for tearing up the Iran nuclear deal which has U.S. nuclear trade groups that want to sell reactors to KSA tearing their hair out. If the Saudi government takes an extreme position on enrichment, there will be no 123 agreement and no reactor deals at least for US firms.

As far as Westinghouse getting any of the reactor business, which is the media narrative in DC, that’s unlikely since South Korea’s success, and experienced Arab speaking workforce, in the UAE building four reactors there positions it as a front runner.  The commercial factors are not in Westinghouse’s favor.

~ Other Nuclear News ~

UK PM May Says Hitachi Wants To Continue Discussions with Hitachi on Wylfa Nuclear Project

(NucNet) Hitachi said in a statement last week that it wants to continue discussions on building new nuclear at Wylfa Newydd in north Wales. In response, UK prime minister Theresa May has said the government will support those discussions.

In January 2018 Hitachi announced it would suspend work on plans to build the two UK Advanced Boiling Water Reactors because of rising construction costs and a failure to reach an agreement on financing with the UK government.

The Japanese company had been in talks with the government since June about funding for the project, which was being built by its Horizon subsidiary. The government said it had failed to agree terms with Hitachi.

The decision was made from the viewpoint of Hitachi’s financial rationality as a private enterprise, Hitachi said in a statement. Hitachi said the decision would cost it an estimated 300bn yen (€2.3bn) in expenses, plus another 300bn yen as “extraordinary losses”.

“We did offer [Hitachi] a package of support,” Mrs May said. “We offered a package of support that no previous government had been willing to consider of one-third equity, all debt financing and a strike price of no more than £75 per megawatt hour.

Hitachi president Toshiaki Higashihara said at a press conference in Tokyo recently that the company might consider “unfreezing” its plans to build Wylfa Newydd if the UK government can demonstrate a viable financing scheme.

South Africa Might Resume Nuclear Plant Talks With Russia

(NucNet) South Africa might be willing to resume talks with Russia on the possible construction of new nuclear power plants, despite Pretoria’s decision last year to drop nuclear from a long-term energy plan. The cost of 9600 MW of power was seen as too steep for South Africa to take on even with Rosatom providing 50% of the financing.

Complicating matters in April 2017 a Cape Town court ruled that a series of preliminary procurement deals for new nuclear construction between the government of South Africa and Russia, China, the US, South Korea and France were illegal. The court ruled that the procurement process was not sufficiently public and did not involve adequate environmental and financial assessments.

Lindiwe Sisulu, head of the ministry of foreign affairs, was quoted in South African media reports as saying the construction of new nuclear units in South Africa with the participation of Russian state nuclear corporation Rosatom will be discussed during a planned visit by president Cyril Ramaphosa to Russia.

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