Nuclear News Roundup for June 26, 2017

Terrestrial Energy to Evaluate Canadian Lab Site for its Molten Salt Reactor

Terrestrial Energy has commenced a feasibility study to explore siting the world’s first commercial Integral Molten Salt Reactor (IMSR®) power plant at Canadian Nuclear Laboratories (CNL). The study is being conducted by CNL. A key piece of their vision is to create a technology hub at CNL to support the commercialization of small modular reactors, a potentially transformative technology.

“This is an important milestone for Terrestrial Energy. It maintains our momentum for 2020s deployment of IMSR® power plants” said Simon Irish, CEO of Terrestrial Energy.

“We are pleased to be working with CNL to begin the process to identify a suitable location on the CNL site to build the first commercial IMSR® power plant.”

“Supporting the research, licensing and siting of Canada’s first advanced reactors is an important part of CNL’s long-term plan” said Mark Lesinski, President and CEO at CNL. “We are excited to begin these efforts by supporting these studies for Terrestrial Energy’s IMSR® commercial power plant.”

The work is being carried out in parallel with an industry wide Request For Expression Of Interest (RFEOI) recently launched by CNL. The responses to the RFEOI will inform a roadmap that takes in account the considerations of reactor developers, the supply chain, end users and other stakeholders.

terrestrial energy points

The parties are cooperating under a business framework set out in a 2016 Memorandum of Understanding (MOU) agreed between Terrestrial Energy and CNL. It facilitates a collaborative working relationship to conduct testing and validation activities to support Terrestrial Energy’s engineering program for IMSR® deployment. It covers a broad set of CNL’s nuclear services including reactor.

South Korean President Pushes Plans To End Role of Nuclear Energy

(NucNet): South Korea will abandon plans to build new nuclear power plants and will not extend the lifetime of existing reactor units, the country’s new president Moon Jae-in was quoted by Reuters as saying.

Mr Moon, who spoke at a ceremony marking the closure of the Kori-1 nuclear unit near Busan, said the government will “end the nuclear-oriented power generation plan and pave the way for a nuclear-free era.”

Mr Moon also said the government will “soon” reach a consensus on the future of the part-completed Shin-Kori-5 and -6 nuclear units after fully considering their construction costs, safety and potential compensation costs.

Reuters reported that Mr Moon vowed also to shut  down Wolsung-1, South Korea’s oldest reactor unit, “as soon as possible”, but subject to an assessment of the country’s power supply needs.

Mr Moon had campaigned on a program of cutting South Korea’s reliance on coal and nuclear in its energy mix. In May 2017, Korea Hydro and Nuclear Power (KHNP) suspended the design process for the planned two-unit expansion of the Shin-Hanul nuclear power station because of uncertainty around the new government’s energy policy.

South Korea has 25 reactor units in commercial operation. In 2016, they generated 30% of the country’s electricity according to the International Atomic Energy Agency.

It is believed that Moon plans to import natural gas from Russia via an undersea pipeline from Sakhalin Island. This action would tie South Korea’s energy security to the potential for political influence and meddling in that nation’s affairs by Russia.

What does it mean for South Korea?

For an excellent and comprehensive analysis of Moon’s decision and what it means for energy security for South Korea, readers are referred to an article by Mark Hibbs at Arms Control Wonk titled, “Moon’s Phase-Out: What Does it Imply.” 

Hibbs is a Germany-based senior fellow in Carnegie’s Nuclear Policy Program. His areas of expertise are nuclear verification and safeguards, multilateral nuclear trade policy, international nuclear cooperation, and nonproliferation arrangements. Prior to this role he worked for Platts as a reporter and analyst of the global nuclear industry.

KEPCO CEO Expected to Pitch NuGen for Equity Stake

(The Investor) A top Korea Electric Power Corp. executive is expected to meet NuGen’s chief on the sidelines of a London energy conference later this month, to discuss stake acquisition in a nuclear plant, according to industry sources. NuGen, owned by Japan’s Toshiba, is planning to sell substantial stake in a nuclear plant.

KEPCO Chief Nuclear Officer Park Jong-hyuck and NuGen CEO Tom Samson will be giving presentations at the Nuclear New Build 2017 scheduled for June 27-28. Industry watchers say that the two are expected to have a one-on-one meeting during the conference.

Park played a key role in KEPCO’s nuclear project in the United Arab Emirates, considered as one of the state-run firm’s biggest deals. In October 2016, KEPCO signed an agreement to operate nuclear power plants in the UAE, a project he headed as vice president.

NuGen was formed in 2009 as a joint venture between France’s ENGIE, Spain’s Iberdrola and the Scottish and Southern Energy to build a new nuclear reactor in Northwest England with a capacity of up to 3.6 gigawatts. SSE and Iberdrola have since withdrawn from the project. Japan’s Toshiba now holds 100 percent stake. Neither Toshiba nor KEPCO have stated the size of stake on the block.

Meanwhile, KEPCO’s plans to pursue the deal are facing concerns due to President Moon Jae-in’s policies to reduce Korea’s reliance on nuclear power.

“As a state-owned company, it’s a dilemma for KEPCO,” an industry source told The Investor on the condition of anonymity.

“KEPCO wants another major deal like the one with the UAE, but at the same time, it’s afraid it may appear ironic to export nuclear technology when the country is busy shutting down its own facilities.”

US District Court Blocks Sale Of Waste Control Specialists To Energy Solutions

(NucNet) A US District Court in Delaware has blocked the sale of Texas-based Waste Control Specialists (WCS) to Energy Solutions, a Utah-based nuclear fuel cycle services provider. The district court’s decision to bar the acquisition came after a two-week trial.

In November 2016, the US Department of Justice (DOJ) filed a lawsuit against the proposed $367m (€328m) acquisition on anti-trust grounds. DOJ said at the time that the transaction would combine the two most significant competitors for the disposal of low-level radioactive waste available to commercial customers in the US.

In separate statements, both Energy Solutions and Valhi Inc., WCS’s owner, expressed their disappointment with the court’s decision. WCS’s president Rod Baltzer was quoted by Valhi as saying that litigation took over 18 months and brought “great” expenses to WCS and the company must now decide if it will appeal the court’s decision.

WCS operates the only centralized low-level waste disposal facility in the US, licensed to receive all types of low-level waste from 36 states. It is located in Andrews County, western Texas.

WCS has suspended its license application with the NRC for an interim storage site for spent nuclear fuel citing the anti-trust suit. Separately, WCS said that expenses for preparing the license application and the NRC review have been far greater than expected. The NRC rejected the first application as not containing sufficient technical detail prompting an expensive do over.

Key Schedule & Cost Documents Missing from Westinghouse at V C Summer

(Post & Courier) SCANA got a rude shock to the system this week when it discovered that the detailed construction schedules for the twin Westinghouse A 1150 MW AP1000 nuclear reactors at the V C Summer site does not exist.

The failure of Westinghouse and its subcontractors to produce the schedule, and related cost documentation, has created a crisis of confidence for rate payers and regulatory agencies who have been given assurances by the utility that the two new units can completed by 2020 and for a cost of $14 billion.

The missing data has added new uncertainty to the utility’s efforts to decide whether to continue construction or stop the project.

The Post & Courier newspaper reported that the news about the missing data went down hard with the utility.

“Westinghouse has clearly failed to perform according to our contract for the V.C. Summer project,” Santee Cooper spokeswoman Mollie Gore said, adding that the utility “is participating in a comprehensive review of data and documents that will help us clarify some of the details. Once that evaluation is complete, we can talk more completely about the situation and our plan for the next step.”

And critics of the project, some with a long history of opposition to it, were equally surprised.

The lack of the needed documentation was called a “stunning admission” by environmental groups opposed to the V.C. Summer expansion.

“I’m just floored that they haven’t been able to produce a schedule for their own project,” said Tom Clements with Friends of the Earth, a network of environmental groups and activists.

“That violates a basic tenet of sound construction management, and I think it reveals that there are more problems to be encountered if the project continues.”

Friends of the Earth and the Sierra Club filed a complaint with state regulators, calling for a hearing on whether construction should be allowed to move forward and whether the utilities should be forced to pay back money customers have already spent through higher rates to build the reactors.

The S.C. Public Service Commission has approved the request and a hearing date is set for Aug. 14 in Columbia.

The state’s Office of Regulatory Staff, which represents the public’s interests in utility regulations, said it supports the hearing but stopped short of endorsing the environmentalists’ complaint.

South Africa to Review Nuclear Plans in Response to Recession

(Reuters) South Africa will review its nuclear plans as part of its response to the economic recession in the country, Energy Minister Mmamoloko Kubayi said last week.

South Africa is planning to build 9,600 megawatts (MW) of nuclear capacity, a project that could be one of the world’s biggest nuclear contracts in decades. Numerous questions have been raised whether the country can afford it or even pay for it.

Kubayi said she was a member of a cabinet committee chaired by President Jacob Zuma which was drawing up responses to recession and that the committee would study the nuclear plans.

The country has technically entered recession after two quarters of economic contraction, and the procurement process for the nuclear project has been disrupted by a court ruling which declared a nuclear pact between South Africa and Russia unlawful.  Additionally, several finance ministers have been cycled through the government each one apparently fired for concluding that the project was unsustainable as currently envisioned by President Zuma.

Taking a cue from that experience, the Energy Ministry offered a caution flag about what can be done.

“We will do the nuclear project at a scale and pace that we can afford. So we will look at that completely, if we need to review the scale we have obviously to go back,” Kubayi told a news conference.

In response to a question on the firm that South Africa could choose to build new nuclear reactors, Kubayi said it was important to go for “the most experienced people who have a track record”.

Russian state firm Rosatom is a contender to build the nuclear reactors and has been talking up its chances of winning the contract, given delays and cost overruns at French competitor Areva and Japanese-owned Westinghouse being embroiled in backruptcy.

India’s Nuclear Regulatory Agency Give OK for First Concrete for Unit 3 & 4 Of Kudankulam Nuclear Power Project

(Business Standard) The Atomic Energy Regulatory Board (AERB) has granted clearance to the ‘First Pour of Concrete (FPC)’ for the third and fourth units of Kudankulam Nuclear Power Project (KKNPP).

In a meeting held on June 19, the Nuclear Power Corporation of India Ltd (NPCIL) has been granted clearance for the FPC, said AERB in an announcement. The clearance for FPC implies commencement of first pour of structural concrete and continuation of construction works of the safety related structures.

The KKNPP-3 and 4 are Water-Water Energetic Reactor (VVER) designed by Russian. These pressurized water reactors are to be constructed in Kudankulam, Tamil Nadu. These reactors will take a design cue from KKNPP-1 and 2, but with improvements based on commissioning and operational experience feedback.

Units 1 & 2 were commissioned and entered revenue service in July 2013 and in Juky 2016 respectively.  Plans for Units 5 & 6 are in final negotiations between Rosatom and NPCIL.

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Turkey’s Akkuyu Nuclear Project to break ground in early 2018

  • akkuyu nuclearTurkey has issued a power generation license to Rosatom’s Akkuyu Project
  • But to use it Rosatom has to get a construction permit and build the reactors.

(NucNet/WNN)): Turkish Energy Market Regulatory Authority (EPDK) has issued a power generation license to Akkuyu Nuclear, the joint stock company developing Turkey’s first nuclear power station project. The license will be valid for 49 years from June 2017 until June 2066.

The company said it applied for the generation license to EPDK in February 2017. The €20bn ($22bn) Akkuyu, near Mersin on Turkey’s southern Mediterranean coast, is to be built in cooperation with Russian state nuclear corporation Rosatom under a contract signed in 2010.

The station will have four 1,200-MW VVER units expected to come online in 2023. Once on the grid it is expected to provide about seven percent of Turkey’s electricity. The estimated $22bn cost indicates the reactors will come in at $5.5 billion each or about $4,600/Kw as an “overnight cost.”

These numbers do not include upgrades to local infrastructure to support the construction effort nor significant improvements to the regional and national grid to deliver the electricity from the reactors to customers.

If built the project will be the second largest nuclear power station in the Middle East following the construction by South Korea of four 1400 MW PWR for the United Arab Emirates.

In March 2017, Akkuyu Nuclear applied for a construction license to the Turkish Atomic Energy Authority. Akkuyu Nuclear said it expects to obtain in the “nearest future” a limited construction permit. It will allow start of works on the non-nuclear phase of the project. Akkuyu Nuclear said the main construction permit and first concrete pouring at Akkuyu are expected in March 2018.

Financing remains an issue with Rosatom looking for international investors for shares in its 49% equity stake in the project.

Financing

When Rosatom first committed to the project almost seven years ago, the price of oil was on its way to over $100/ bbl. However, by 2015 it had dropped to just half that amount.

With Russia depending on its oil and gas revenues to support its generous financial terms for nuclear reactor exports, the market downturn poses a big problem. Where will the money come from for all of its nuclear export commitments?

Rosatom has inked numerous deals for nuclear reactors to be built in developing countries under a model by which Russia finances, builds and operates the nuclear plant and sells power to its customer – a model that has also raised questions about Russia using energy policy as a means to political ends.

In Turkey Russia’s plan has always been to initially build and operate the plant, but to eventually sell it to equity investors. Rosatom has hopes that Turkish construction companies might take early equity stakes in return for getting the contracts to build the plants. So far these firms have been cautiously interested in making these kinds of commitments.

(NucNet)(Updated for 20 June 2017): Russia’s state-owned nuclear corporation Rosatom has agreed to sell a 49% stake in Akkuyu Nuclear, the joint stock company developing Turkey’s planned Akkuyu nuclear power station project. The stake will be acquired by a consortium consisting of three large Turkish industrial holding companies

  • Cengiz Holding
  • Kolin Insaat Turizm Sanayi ve Ticaret, and
  • Kalyon Insaat

Akkuyu Nuclear said the value of the sale will not be disclosed until the signing of a final investor agreement, expected before the end of 2017. The Akkuyu plant is to be built near Mersin on Turkey’s southern Mediterranean coast for €20bn ($22bn).

The site will have four 1,200-MW VVER units expected to come online in 2023. Six Rosatom subsidiaries, including Rusatom Overseas and Rosenergoatom, together own 100% of the Akkuyu project. Last week, the Turkish Energy Market Regulatory Authority (EPDK) issued a 49-year power generation licence to Akkuyu Nuclear. The company said at the time that the main construction permit and first concrete pouring at Akkuyu are expected in March 2018.

&  &  &

Turkey has plans to build two other nuclear power stations. These sites are Sinop on Turkey’s Black Sea Coast and Igneada on the western edge of the Black Sea.

Sinop

According to the World Nuclear Association (WNA) preparations have been underway since 2008 at Sinop on the Black Sea coast to build a second nuclear plant there, along with a €1.7 billion nuclear technology center. A 4400 MWe nuclear plant there is expected to cost about $22-25 billion.

A feasibility study is due for completion in mid-2017, and the announced timeline is for construction start sometime later in 2017 and with start of operation from 2023. These are likely to be the first Atmea1 units built. The reactor is a scaled down Areva EPR and is a joint effort of the French state owned nuclear giant and Japan’s Mitsubishi Heavy Industries (MHI).

WNA notes that the four reactors would be designed for load-following and use the same steam generators as Areva’s large EPR (but three instead of four). Cost is projected at $4.89 billion for the reactors alone.

MHI has set up a new business unit, the Turkey Nuclear IPP Development Department, to handle the feasibility study, negotiate contracts, prepare financing and undertake other functions in Turkey. MHI will lead the engineering-procurement-construction (EPC) consortium.

Financing arrangements have not been announced for the project. Neither Areva nor Mitsubishi are likely to be interested in taking equity positions in the reactors which means either Turkey must pay for them or find investors to take on some of the costs.

Igneada

According to the World Nuclear Association Turkey has plans to build further nuclear capacity at another site, as part of 100 GWe required by 2030. TAEK has identified Igneada in Kirklareli province on the Black Sea, 12 km from the Bulgarian border, and this was confirmed in October 2015.

In November 2014 the Turkish energy ministry signed an agreement with the State Nuclear Power Technology Corporation (SNPTC) of China and Westinghouse to begin exclusive negotiations to develop and construct a four-unit nuclear power plant in Turkey.

Two AP1000 and two CAP1400 are included in the agreement which also covers all lifecycle activities including operations, nuclear fuel, maintenance, engineering, plant services and decommissioning. SNPTC was the agent introducing Westinghouse AP1000 technology into China, and has developed it further to the CAP1400.

Eight AP1000 units are under construction in China and the USA, and the first CAP1400 is due to start construction at Shidaowan in China.

Turkey has an opportunity to seek financing from China which is looking for a place to show success with export of the CAP1400.

Argentina and China Sign Contract for Two Reactors

(WNN) China is to supply Argentina with two nuclear power reactors – one a Candu pressurized heavy water reactor (PHWR), the other a Hualong One pressurized water reactor (PWR). The contract was among 19 agreements in Beijing during a meeting of Chinese president Xi Jinping and Argentinean president Mauricio Macri.

In November 2015, Argentina signed deals with China for the construction of its fourth and fifth nuclear power plants: a third Candu PHWR at the Atucha site and a PWR at an unspecified site. The projects were said to be worth around $15 billion, with China contributing 85% of the required financing. The favorable terms undoubtedly contribute to the decision by Argentina’s government to accept the as yet unproven Hualong One reactor design.

According to the agreement, construction will begin in 2018 of a 700 MWe Candu-6 PHWR and work will begin to start building a 1000 MWe Hualong One PWR in 2020. CNNC will provide goods and services under long-term financing. The accord provides for Argentina to be designer, architect-engineer, builder and operator of the new reactor.

China is building two Hualong One units in Fujian Province. Fuqing 5 and 6 are scheduled to be completed in 2019 and 2020, respectively.

Construction of two Hualong One units is also under way at China General Nuclear’s Fangchenggang plant in Guangxi province. Those units are also expected to start up in 2019 and 2020, respectively.

These units will be the reference designs for exports to other countries including the UK. Once operational, the units will be available to train reactor operators for work on export units. The experience gained building four Hualong One units will facilitate more cost effective construction of exported units.

China’s CGN Forms Three Companies To Manage UK Projects

(NucNet) Chinese state-owned nuclear developer China General Nuclear Power Corporation (CGN) has set up three companies in the UK to manage its proposed local projects.

  • Bradwell Power Corporation will be responsible for developing the twin-unit HPR1000, or Hualong One, reactor project at Bradwell B in Essex.
  • General Nuclear System Limited will be in charge of facilitating the five-year UK licensing process for the Hualong One technology.
  • The third company, General Nuclear International, will manage CGN’s projects in the UK.

CGN’s chairman He Yu was quoted by China Daily as saying that the new companies will help growing CGN’s nuclear technology business in the UK.

CGN will invest £6bn ($7.6bn, €6.8bn), or a 33.5% share, in the Hinkley Point C EPR project in southwest England under an agreement signed with France’s EDF in 2016.

CGN also signed a number of agreements related to plans to build two 1000 MW Hualong One reactors at Bradwell B. Additionally, it has signed on as an equity investor in two Areva EPR units at Sizewell C in Sussex. CGN will have a 66.5% stake in Bradwell B and a 20% stake in Sizewell C. All remaining stakes in the three projects will be held by EDF.

Rolls-Royce Unveils Some of its SMR plans

(WNN) Small modular reactors (SMRs) offer the UK socio-economic benefits that would last 100 years, said John Molyneux of Rolls-Royce, but today’s government must make its mind up how it wants to proceed. World Nuclear News reported his remarks to a conference of nuclear energy organizations held in the UK.

Molyneux said a team of about 150 people have been working on it for around two years. A group of ten UK companies have been recruited over the last year, including operators, turbine island designers, civil engineers, researchers and engineering consultants.

The first months were taken with major design decisions including the use of a light-water as coolant and moderator and to select the close-coupled arrangement of steam generators as opposed to integrating them into the reactor vessel, or adopting a more spread out design similar to today’s large reactors. According to World Nuclear News Rolls-Royce’s design is a PWR type in a close-coupled four-loop configuration.

The UK SMR program stalled in the face of the Brexit vote a year ago, while uncertainty has continues even after last week’s general election. This is a source of frustration for all SMR developers in the UK.

“Government needs to decide whether it wants SMRs; if they do, what technology solution they are after, ” Molyneux said.

For Rolls-Royce, the primary market would be the UK where up to about 7 GWe of small units could be deployed, probably at existing nuclear power sites.

“The UK market is important,” Molyneux said “but to really make them fly you have to look internationally so support from the UK government to international markets becomes really important” requiring further long-term political commitment.

Molyneux said he expects strong competition from Chinese, Russian and US offerings to mean that Europe and the Middle East would be more likely sales targets for Rolls-Royce.

The firm has not said much about customers or financing of construction of the SMRs. While the reactors will cost less to build, they are not likely to be significantly costly to operate than larger versions of PWR type reactors.

The savings for customers will come when firms like Rolls-Royce and others like NuScale, which has opened a UK office, can get enough ink ink their order books to justify building factories to turn out SMRs rather than custom construction on each site.

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ANS President Announces Nuclear Grand Challenges

American Nuclear Society (ANS) President Andy Klein announced nine ANS Nuclear Grand Challenges (PDF file) that need to be resolved by 2030 at the society’s Annual Meeting in San Francisco today. They are:

1. Establish the scientific basis for modern low-dose radiation regulation.
2. Transform the way the nuclear technologies sector thinks about public engagement.
3. Close the nuclear fuel cycle.
4.  Ensure continuous availability of radioisotopes.
5.  Rejuvenate the nuclear technology infrastructure and facilities.
6.  Accelerate development and qualification of advanced materials.
7.  Accelerate utilization of simulation and experimentation.
8.  Expedite licensing and deployment of advanced reactor designs.
9.  Expedite nuclear education and knowledge transfer.

“America’s nuclear sector stands at a crossroads. Our organization aims to address some of the major technical nuclear challenges, so we can continue to enjoy the economic, political and social benefits from this vitally important technology for decades to come.”

“We received nearly 300 suggestions, and countless others were discussed within our professional divisions,” said Klein at a media briefing during the ANS Annual Meeting in San Francisco on June 12.

Andy Klein(left) ANS President Dr. Andy Klein (right) at the ATR complex at Idaho National Labs (INL)  with Dr. Sean O’Kelly (left), INL Assistant Laboratory Director for the Advanced Test Reactor.  Rejuvenating nuclear technology infrastructure and facilities is one of the ANS Nuclear Grand Challenges that was announced on June 12 during the ANS Annual Meeting.

The results described in the ANS Nuclear Grand Challenges report provide focus for those who will continue the mission to share information and engage with the public and policymakers to foster advancements in nuclear technology.

“The nuclear industry faces an exciting future as evidenced by the large number of private companies forming, all desiring to commercialize an advanced nuclear product,” stated Todd Allen, professor of engineering physics at University of Wisconsin and Third Way senior visiting fellow.

“In many cases, the performance of advanced materials is critical to making a concept commercially attractive. The material science nuclear grand challenge asks ANS members to use the most advanced tools to support the pace demanded by commercialization,” he continued.

The ANS Nuclear Grand Challenges will form a basis for ANS research and policy recommendations to government officials and agencies, partner organizations, and others interested in the future of nuclear technologies.

Media Contact:

Tracy Marc
Communications Manager, American Nuclear Society
Ofc: 708.579.8224
Mobile: 630.710.8216
tmarc@ans.org

Established in 1954, ANS is an international professional organization of engineers and scientists devoted to the peaceful applications of nuclear science and technology. Its more than 10,000 members represent government, academia, research laboratories, medical facilities and private industry.

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Zero Emission Credits for First Energy Out of Reach for Now

FirstEnergy_logoThe effort by the giant nuclear utility to get Ohio legislators to create new regulations enacting zero emission credits (ZEC) for the Davis-Besse and Perry nuclear power plants has stalled out according to news media reports.

Over the past year Ohio state legislators in both the House and Senate have held multiple hearings on the request by First Energy to put its nuclear power plants under a regulated regime to give them credit for not emitting CO2. If enacted the new arrangement could produce more than $300M/year for the financially troubled firm.

Outlook Dim

Legislative leaders in both chambers have made it clear that despite hearing hours of testimony they are in no mood to call for a vote either to bring a measure to the floor or ask for a full vote on such a measure. Neither committee considering the legislation in either the House or Senate reached a conclusion.

With other legislative matters pending it could be that any further consideration of the proposal could be put off until Fall 2017.

In an effort to broaden the basis for the ZEC legislation, on June 1 Exelon Corp VP for government affairs Joseph Dominguez said in testimony to the Ohio Senate’s Public Utilities Committee that six nuclear reactors in five states have shut down and another seven nuclear reactors will shut down prematurely by 2019, because electricity markets are not properly valuing the benefits that baseload electricity power plants provide.

“These markets do not address many environmental externalities, the need for fuel diversity, or concerns about grid resiliency arising from terrorism or operational catastrophes that threaten the natural gas infrastructure system that supplies gas-fired power plants. As a consequence, traditional baseload resources are not valued for their contribution to fuel-mix diversity or for the increased resiliency they provide by virtue of having a 30-day supply of fuel at the plant,” Dominguez said.

The key reason that legislators in the House and Senate are gun shy about calling for a vote is not that they don’t understand the issue. What has then frozen in their tracks is the intensity of the opposition.

aarp logoIn addition to industry, consumer groups and interest groups like AARP mobilized to stop the proposal. AAREP called the ZEC a “subsidy” designed to “prop up a failed business model.”

Also, AARP pointed out that ZECs have been handled in different ways in other states and asked why Ohio was considering a direct subsidy by rate payers. It called ZEC “a scam.”

“FirstEnergy should sell its power to other buyers at a premium price instead of seeking a ratepayer subsidy. In Illinois, Exelon recently announced it would sell power from its Byron nuclear plant to Michigan and other states, rather than seek a bailout. Several other states voluntarily let their aging, uneconomic power nukes close without debating a bailout. Court filings across the country- including Illinois-are challenging similar zero-emission credit scams because they interfere with the wholesale energy market and distort favorable pricing that results from healthy competition in the supply and demand.”

AARP reminded the legislature that it has 1.54 million members in Ohio and that the over 50 crowd votes out of proportion to its numbers compared to other age cohorts.

Absent First Energy making good on its threat to close the reactors if it does not get ZECs, the legislature’s response to this kind of opposition is to bottle up the proposal without reporting it out of committee.

In Fall 2016 First Energy said it would get out of the business of competing for market share for electricity generated by the reactors within 18 months.  That puts the deadline in late winter 2018.

Financial Report Gloomy in 2016

For 2016 First Energy (NYSE:FE) recorded a loss of $14.50/share. The firm was profitable for the three years prior to 2016 recording earnings of $1.36/share in 2015. The company paid dividends of $1.44/share for the past four years.

The stock price has not been particularly volatile over the past year, but has recorded a downward trend from a 52-week high of $36.51/share in July 2016. Market close on June 9, 2017, was $29.11 and the 52 week low was just slightly below that at $27.93. The market cap is $13 billion with 444 million shares outstanding.

First Energy’s reactors – Davis-Besse located near Toledo and Perry located northeast of Cleveland – operate at a disadvantage in bidding wars for power in highly competitive wholesale electricity markets. Companies that sell power in these markets get it from natural gas turbine plants that generate power at about half the cost of getting the power from nuclear reactors.

The utility has threatened to close the two reactors if the change to authorize ZECs is not made. The firm has also threatened to file for bankruptcy though it has not formally filed any paperwork with a court.

chart (1)

Why ZEC is a Legislative Headache

State legislators complain that they get a case of cogitative dissonance about First Energy’s request for higher rates for power from nuclear plants. The utility fought air pollution rules for years, but now wants financial support for its plants that don’t emit CO2. If granted, ZEC would take money from rate payers in proportion to the amount of CO2 emissions avoiding by keeping the nuclear plants open.

According to the legislative proposal, the utility would get a zero emission credit, or ZEC, of about $17 for every ton of CO2 the nuclear reactors do not produce for the equivalent amount of electricity if generated by a coal fired power plant.

For instance, the Gavin coal plant located in Cheshire, OH, which was operated by the American Electric Power Co., emits 18.7 million tons of CO2 per year.  The plant produces 2600 MW of electricity a year.

Note: In January 2016 American Electric Power sold the Gavin coal plant and three others, for a total of 5200 MW, to Lightstone Generation LLC, a joint venture of Blackstone (NYSE: BX) and an affiliate of ArcLight Capital Partners LLC (ArcLight), for approximately $2.1 billion.

The two First Energy nuclear plants produce a combined 2128 MW of ZEC power (Davis Bess 900 MW, Perry 1269 MW).  That’s 81.8% of the power produced by Gavin which would be equal to 15.3 million tons of CO2 in a year. The ZEC for First Energy, based on this hypothetical comparison, would be equal to $260.2 million.

The actual rate case would be a good deal more complicated but this example illustrates how the system would work in principle.

Residential customers might not feel much of a bite from this system, but industrial users of electrical power could see significant increases in their costs. The bottom line is no one wants to pay for reductions of CO2 emissions.

First Energy Nuclear Plants Survive PJM Auction

For the moment there isn’t much of a threat that First Energy will close the reactors even if they don’t see legislative progress this year. A recent auction for power to be delivered in 2020, run by the PJM Interconnection firm that operates the high voltage wholesale grid in the Midwest, included the two plants.

By making commitments to provide power First Energy gets cash from PJM whether it buys the power or not. What First Energy must do when called on is to provide the power when other plants go offline. The success with the PJM auction means First Energy has an incentive to keep the reactors running through May of 2021.

The NRC license for Davis-Besse was renewed for 20 years in December 2015. The current NRC license for the Perry Plant is good until 2026.

Energy Production and Use in Ohio

First Energy is not exclusively a nuclear utility. It operates coal and gas plants, as well as nuclear, in six states. What’s interesting about Ohio is that the largest segment of the state within the state is serviced by gas plants.  Taken together the two reactors provide about 14 percent of the electricity used in Ohio.  See map below of service areas and links to generation facilities. 

first energy generateion map

The eastern end of the state is a hotbed of natural gas production based on fracking and the state has a long history as a major coal producer.

The renewable energy sector is so small in terms of production that it barely registers on the chart below. Requests by wind and solar energy producers for ZECs would have an even harder time with the legislature than nuclear.

chart (2)

chart

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Japan’s METI Divided About Future of Nuclear Energy

Over the course of two days the Japanese government’s powerful Ministry of Economy, Trade, and Industry (METI) endorsed development of new nuclear power stations and then denied that it had ever said such a thing.

If you are reading the English language news media reports coming out of Japan about the future of the nation’s fleet of nuclear reactors, and the question of whether it will ever build any new units, you might want to take a deep breath.

  • On June 8th METI told the Nikkei wire service that it was setting up a expert panel this month to “discuss new or updated capacity” for the nation’s fleet of nuclear reactors. Significantly, the wire service report did not cite a named spokesperson for the ministry.
  • On June 9th METI told the Reuters wire service there are no such plans. METI Chief Hiroshige Seko said, “we are not thinking of new construction or replacement at all.”

Now news speak by government officials in Japan may be different there than in the U.S., but when a high level government official calls a media report he doesn’t like “groundless,” it’s usually because someone let a very confidential cat out of the bag before its time.

The root of this appearance of a split personality at METI appears to be the government’s strategic energy plan which has the role of defining the nation’s path to establishing a stable energy supply over the long term.

According to Energy World, a trade journal, overall Japan’s energy use of all types of fuels has been declining and reached new lows for 2016.

energy use in Japan

Rising supplies of renewable energy and the return of some nuclear power plants, amid falling demand as Japan’s population declines, mean the world’s third-largest economy has more diversity in its sources of energy. Thermal coal imports declined to just below 110 million tonnes in 2016, down from a record-high 113.84 million tonnes in 2015 according to the Ministry of Finance.

Japan is the world’s biggest importer of LNG, gas chilled to liquid form for transportation on ships, and demand had surged to successive records after the March 2011 meltdowns at the Fukushima Daiichi nuclear plant led to the eventual shutdown of all reactors in the country. Shipments of liquefied natural gas (LNG) dropped for a second year last year, down 2 percent to 83.34 million tonnes, while their value fell 40 percent.

japan gas imports

Despite these trends, the METI statement released on June 8th said that the strategic plan would focus on nuclear energy and would position it as an “important base-load power source” that is stable and and inexpensive to operate.  How much nuclear energy would be needed over time is open to debate given the trend of declining energy use in the nation.

Back in 2014 the Japanese government scrapped the goal of eliminating nuclear power entirely, announced in 2012, but remained silent on the issue of new construction.

According to the World Nuclear Association, in September 2010 Tepco, Japan’s biggest utility, said it planned to invest $30.5 billion long term in nuclear energy. The profile also lists nuclear reactors that are under construction as well as plants slated for life extension beyond 40 years. The listing is too extensive to go into here, but the bottom line is that there is no shortage of opportunities for Japan to strengthen its energy security with investments in nuclear power. (World Nuclear – large JPG image;  status of nuclear energy in Japan)

Another driver of nuclear power in Japan is that under the Paris climate change accord, Japan targets an 80% reduction in greenhouse gas emissions by 2050.  Every year the government dithers over the future of nuclear energy makes it harder to meet that goal. The major nuclear power utilities have complained to the government that a lack of clarity makes it difficult to commit to long term strategies.

A key item is that Japanese nuclear firms who want to export nuclear technologies to countries like India, the UK, and elsewhere would see an erosion of their capabilities, and workforces, if future investments in domestic nuclear power are frozen in the government’s long term plan.

Even if the government called for new investment in nuclear energy, it would likely face strong public resistance. In 2015, according to Reuters, a METI statement that nuclear energy should provide 20% of of the country’s electricity by 2030 met with “widespread criticism.”

Japan Nuclear Export Strategy Stalls Out

According to the Nikkei wire service, efforts by Toshibia to export Westinghouse nuclear technology to India has stalled due to the bankruptcy filing by that business unit. The plan, first agreed to in 2010, and since modified, was until recently focused on building six 1150 MW AP1000 reactors at site in Andhra Pradesh on the country’s east coast.

Even if Westinghouse had not filed for bankruptcy, Toshiba, the parent firm, was plunged into financial turmoil when it was revealed it had falsely claimed $1.2 billion in earnings.

“Conditions have changed due to Toshiba,” Takeo Kitsukawa, a professor at Tokyo University of Science told the Nikkei wire service.

“The first issue is to get the nuclear reactor manufacturers back on their feet.”

In the Japanese Diet, opposition to nuclear technology exports continues to muddy the waters. Some members of the Diet say that the agreement may offer insufficient legal guarantees that would limit their use to peaceful purposes. They point out that India is not a member of the Treaty on Nonproliferation of Nuclear Weapons and has refused to consider doing so.

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Toshiba Caps Liability for Vogtle at $3.68 Billion

  • It covers about 60% of the total liability for Vogtle and V C Summer
  • Toshiba is still in talks with SCANA

Japanese YEN

The Financial Times reports that Toshiba has agreed a deal to cap its liability for the Vogtle reactor project managed by its nuclear engineering unit Westinghouse, but this agreement does not address the future of the SCANA plant which remains in doubt.

Georgia Power (Southern Nuclear)  has entered into a new agreement with Toshiba, the parent company of Vogtle’s contractor Westinghouse. The agreement confirms the value of Toshiba’s guarantee at $3.68 billion.

The agreement has been approved by the U.S. Department of Energy (DOE). The agency has a stake in the outcome of the negotiations because it approved an $8.3 billion loan guarantee for the Vogtle project. SCANA did not apply for and does not have loan guarantees from the federal government.

Additionally, Georgia Power and Westinghouse have completed a new service agreement which allows for the transition of project management at the Vogtle expansion from Westinghouse to Southern Nuclear and Georgia Power. The service agreement is subject to approval of the Westinghouse Board of Directors and the bankruptcy court. This agreement could be a model for SCANA.

Southern CEO Thomas Fanning said in a prepared statement he approved the agreement because it provides additional protections for Georgia electric customers following Westinghouse’s March bankruptcy.

“We are happy to have Toshiba’s cooperation in connection with this agreement which provides a strong foundation for the future of these nuclear power plants.”

Meanwhile, there are efforts by both the Vogtle and V C Summer projects to bring new EPC contractors onboard to manage the completion of construction of all four reactors. Bechtel and Fluor are reported to be preparing bids to separately manage the Vogtle and V C Summer nuclear reactor projects. Bids are expected by mid-August.

  • It’s a question whether either utility has firm “walk away” numbers regarding their negotiations for costs and schedules that might be submitted in the proposals nor have the utilities announced timelines for reviewing and deciding whether to accept the bids. In any case working out the terms and conditions of projects this large is never a quick process.
  • Southern CEO Thomas Fanning says he wants to see the bids before deciding on a course of action. SCANA’s management has been more outspoken about the risks of deciding to complete their two reactors, but it also wants to consider the EPC bids.
  • The combined cost overruns for all four reactors are estimated to be $13 billion and the delays for both projects are in the range of three years from the original completion dates.
  • The expected cost at completion of both projects is now estimated to be about $30 billion. More than 10,000 workers are employed at these sites.

Paul Bowers, chairman, president and CEO of Georgia Power said in a prepared statement that the next step will be to engage the Georgia Public Service Commission.  It will be expected to review the EPC costs and schedules as input to future rate cases for covering the construction costs of the two Vogtle reactors.

“We are continuing to work with the project’s Co-owners to complete our full-scale schedule and cost-to-complete analysis and will work with the Georgia Public Service Commission to determine the best path forward for our customers,” Bowers said.

In addition to affirming the value of $3.68 billion in parent guarantees from Toshiba, the new agreement also adds clarity on the timing and form of payments for that obligation. Toshiba guarantees were put in place to protect Georgia electric customers as part of the original contract and the first payment under the new agreement is due from Toshiba in October 2017.

The scope of the service agreement with Westinghouse includes engineering, procurement and licensing support, as well as access to Westinghouse intellectual property needed for the project.

The agreement will take effect after approval of the bankruptcy court. The interim assessment agreements with Westinghouse, which has allowed progress to continue at both  construction sites, have been extended to June 26th. Additional extensions are expected as both utilities grapple with one of the most complex construction projects in the nation.

The Financial Times noted that Mr Fanning suggested on a call with analysts last month that US government support might be available to help complete the new reactors.

“This is a national security issue,” he said “If the United States wants nuclear in its portfolio for the future, we’ve got to figure out a way to be successful here.”

If the reactor projects cannot be salvaged, it could influence decisions by other utilities to put off projects which have received NRC licenses but which do not have construction commitments by their respective utilities. These projects include Duke’s William States Lee III, Dominion’s North Ana, and DTE’s Fermi III.

Under the umbrella of the “prudent investor” paradigm, all of them will have to take into account the outcomes, whatever they may be, of current negotiations at Vogtle and V C Summer. Failure to craft credible and sustainable plans to complete the reactors could cripple the future of the nuclear industry in the U.S.  The country’s energy security would be at risk.

So far this risk has not been accepted by the government. Efforts to obtain congressional approval of $2 billion tax credits for Vogtle and V C Summer against future revenues, assuming the reactors are completed, have failed to gain traction. An effort to attach the measure to an omnibus appropriations bill did not work out as expected. A new effort to tie the measure to a future tax reform bill will have to wait for that legislation to be introduced in Congress.

Meanwhile, talks continue over the two new reactors under construction at VC Summer. Toshiba said in its statement that it is in talks with the plant owners, led by South Carolina-based utility SCANA, about its guarantee obligations and the payment schedule for completing the project.

On May 15, Toshiba said it had set aside a provision of ¥670bn for the cost of its parent company guarantees to Westinghouse for both Vogtle and VC Summer. The $3.68 billion cost cap for Voglte is about ¥400bn, or about 60 percent of the total provision. This would leave an estimated $2.21 billion for SCANA

Both utilities have said previously they have to agree their settlements with Toshiba are acceptable. The public utility commissions in both states have to agree as well. There’s a long way to go.

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NRC license to be sought for GEH PRISM Advanced Reactor

  • prismFour U.S. nuclear energy firms have teamed to develop the basis for seeking an NRC design certification under 10CFR50 for the GE-Hitachi (GEH) PRISM advanced nuclear reactor. (PDF slide deck)
  • Team members plan to seek DOE funding as part of a public / private partnership. If the team receives an award of the federal funding, it would be focused on the technical preparation of an NRC application.
  • The effort is being led by High Bridge Energy Development Co. with participation by GE Hitachi Nuclear Energy (GEH), Exelon Generation, and AEDCOM subsidiary URS Nuclear LLC
  • This is the second teaming arrangement by GEH for the PRISM reactor.  In November 2016 GEH and Southern Nuclear agreed to work jointly on the development and licensing of the sodium-cooled fast reactor.

PRISM is a sodium-cooled, high-energy neutron (fast) reactor design.  The PRISM design has benefited from the operating experience of EBR-II, an integral fast reactor prototype, which was developed by Argonne National Laboratory, and operated for more than 30 years at the Idaho National Laboratory near Idaho Falls, Idaho. (PDF Technical Brief)

“We believe that no U.S. fast spectrum reactor technology has more testing, design or operational basis than PRISM. PRISM is well positioned to provide a regulatory path for licensing and deployment of advanced reactor technology in the U.S,” said Steve Maehr, CEO of High Bridge Energy Development Company. (PDF Press Release)

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On the webLicensing the Integral Fast Reactor / ANS Nuclear Café  11/02/2011

“What we know now is that there are no technical gaps that would preclude a licensing application if using known technology. Gaps might arise if a developer chooses to use a new fuel which would need testing. That process could be completed faster if simulation and modeling tools could be brought to bear on the problem.”  – John Sackett

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Timeframe for Licensing Process & CNSC Effort

The press statement by GEH and High Bridge did not specify a time frame for submitting a license application to the NRC.  A spokesman for High Bridge told this blog in an email that licensing discussions have not yet started with the NRC.

Without having details on the schedule to seek a license, one could assume that even if the partnership has all of the technical data it needs, the effort could still take a year or longer to put it into an electronic format that could be accepted by the agency.  If the data is incomplete, that timeline would be difficult to estimate. The NRC’s review cycle would likely be longer than the 42 months usually set for LWR type reactors.

Separately, on March 13, 2017, GEH and ARC Nuclear announced they will jointly develop and license an advanced small modular reactor (aSMR) based on their sodium-cooled reactor technologies.

GEH and ARC Nuclear plan to enter the Canadian Nuclear Safety Commission’s Vendor Design Review process, the companies said in a joint statement.

“This collaborative commercialization program also includes the near-term goals of confirming projected construction and operating costs, as well as the identification of a lead-plant owner/operator for the joint aSMR,” the companies said.

GEH and ARC Nuclear have been  developing separate advanced reactor designs based on the EBR-II, an integral sodium-cooled fast reactor prototype.

The ARC-100 is a 100 MWe aSMR designed for efficient and flexible electricity generation and can operate for up to 20 years without refueling. GEH’s PRISM reactor is a 300 MW+ reactor designed to refuel every 12 to 24 months and has primarily been focused on closing the fuel cycle by, among other things, consuming transuranics.

PRISM Technology Profile

In its report on the GEH partnership with Southern Nuclear, World Nuclear News noted that Prism is a sodium-cooled fast neutron reactor design built on more than 30 years of development work. It benefitedng from the operating experience of the EBR-II prototype integral fast reactor which operated at the USA’s Idaho National Laboratory – formerly Argonne National Laboratory – from 1963 to 1994. According to GEH, the history, testing, design and operational experience underlying Prism makes the design well positioned to continue the licensing process. (Power MagHistory of the PRISM Concept)

PRISM Conceptual Image

Each Prism reactor has a rated thermal power of 840 MW and an electrical output of 311 MW. Two Prism reactors make up a power block, producing a combined total of 622 MW of electrical output.

Using passive safety, digital instrumentation and control, and modular fabrication techniques to expedite plant construction, the design uses metallic fuel, such as an alloy of zirconium, uranium, and plutonium. It can therefore be used to close the nuclear fuel cycle, recycling used nuclear fuel to generate energy.

According to GEH, commercialized Prism technology could be used eventually to consume all the nuclear material contained in the world’s used nuclear fuel. Assuming 178,000 tonnes of nuclear material are contained in worldwide stocks of nuclear fuel and a per household consumption of 3400 kWh per year, the company claims this could provide enough energy to power the world’s households for up to 200 years.

Reducing the UK Plutonium Stockpile

GEH has proposed the Prism reactor as a possible option for managing the UK’s plutonium stockpile. In 2013 The Engineer, a UK publication, provided its readers with a detailed walkthrough of the PRISM proposal to the Nuclear Decomissioning Authority (NDA).

The UK has a lot of plutonium — the largest civil stockpile in the world, totaling some 112 tonnes, most of it from reprocessing spent fuel over the years. The question of what to do with Britain’s plutonium has vexed subsequent governments for decades.

GE offered PRISM technology to the UK because it believes it offers a better way of treating the plutonium than converting it into MOX. Britain’s plutonium stockpile is complicated as not every storage canister contains the same isotope of plutonium.

Different reactor processes produce different isotopes; and this poses problems for converting the fuel into MOX, because isotopes have to be selected carefully.

The article goes on to describe the fuel fabrication process as proposed by GEH. According to an interview with Eric Loewen, Chief Consulting Engineer for the PRISM reactor project, the plutonium oxide would be mixed with uranium oxide, then reduced to a metal by electrolysis. This is made into an alloy with zirconium, then cast into slugs that would be stacked in a stainless steel case to form a fuel pin.

Readers are referred to the cited URL above for a longer explanation of the process.

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