Starts, Stops & In-between for New Nuclear Projects in U.S.

There is progress, some on-again, off-again, plans, and a whole lot of maybe in the prospects for U.S. nuclear utilities and their vendors to develop new nuclear projects in the U.S. Consider the following;

  • Georgia Power / Southern, which is building two new 1150 MW Westinghouse AP1000 nuclear reactors at the Vogtle site announced this month that it is also considering building another nuclear power station sometime after 2030, Given the long lead time for licensing and construction, the clock is already ticking on a decision for the project.
  • Duke Energy is officially cautious about William States Lee plant and has not formally committed to build what is expected to be a $12 billion, two-reactor power station. However, later this year it is expected to received a license to do so from the NRC. The key issues that will give Duke a green light to take the next step and build are sufficient demand for electricity and the buy-in by rate setting regulators in South Carolina and North Carolina for recovery of construction costs as the twin Westinghouse reactors are being built.
  • GE-Hitachi, which went to great lengths to develop and license a laser-technology based form of uranium enrichment at its Wilmington, NC, site announced this week it is exiting the business. The original developer of the process, Australia’s Silex Systems, says it is considering taking an equity position to further develop the isotope separation process.
  • TVA asked the public what it should do with two partially built 1200 MW nuclear reactors at the Bellefonte site in Alabama. Not surprisingly, anti-nuclear groups want to demolish everything and turn the site into a solar energy center. Efforts three years ago by a private developer to buy the reactors, and finish them, in return for guaranteed rates from TVA, were rebuffed by the utility. A public auction to dispose of the 1600  acre site, and all of its facilities, is the likely next step.
  • Hope springs eternal for Westinghouse that India will relent on its national pride and let the U.S. firm build six AP1000s at a site in the Indian state of Gujarat. Indian PM Narendra Modi, who embarrassed U.S. President Barak Obama by sending him home empty handed with no nuclear deals on two previous state visits, is coming the Washington, D.C. in June. Westinghouse hopes the third go round between the two leaders will be the charm that lands them the contract to move forward and break ground.

Georgia Power Picks Future Nuclear Site

When you are on a roll, it helps to keep rolling. That’s what Georgia Power is doing by telling the state’s Public Service Commission in a March 14 filing that it is evaluating a site about 15 miles west of Lumpkin in Stewart County, GA, along the banks of the Chattahooche River. The river straddles the border between Alabama and Georgia.

Georgia Power said that its integrated resource plan is looking at power sources that will be needed to meet electricity for a projected 2.4 million new residents by 2030. The firm says the objective is to insure reliable power will be in place for them by then.

Given the long lead time it takes to get a license from the NRC, and the 5-10 years its takes to build a new nuclear reactor at a greenfield site, the utility says it is being prudent to start planning now. After all, 2030 is only 15 years away, and that means the timeline for a new reactor to enter revenue service is already inside the planning horizon for one.

The firm emphasized it hasn’t made a decision to build a new nuclear power station at the site. It figures the site evaluation process alone will take about three-to-five years.

In the meantime, it is finishing two new 1150 MW Westinghouse AP1000 reactors at the Vogtle site. Both units are expected to be on the grid by 2020 or earlier.

Duke Hedges Its Bets, But Not Too Much, on Lee Plant

Want to know who is watching Georgia Power like a hawk as it builds two new nuclear reactors in Georgia? The answer is Duke Power which has its own plans for two of them at the Lee site near Gaffney in Cherokee County, South Carolina. Thew site is just over 50 miles due west from Charlotte, NC, which has become a center for nuclear engineering firms including Duke’s corporate HQ. Duke says that nuclear energy is necessary assuming the government and the voters are serious about limiting carbon emissions.

The next step after Duke gets its NRC license will be to ask the South Carolina rate regulators for a ruling that the plant is necessary to meet future electricity demand. The uncertain status of the federal government’s Clean Power Plan affects that process.

In the meantime, Duke is watching to see how well Fluor, Southern’s new contractor at the Vogtle site, is doing to control costs and keep to a schedule with the two new reactors.

At one time Duke considered taking an equity stake for 500 MW of  SCANA’s new twin nuclear reactors being built at the V C Summer site in South Carolina. It later decided not to pursue that option. Since then it says its analysis of future demand shows that even with the completion of Southern’s two new nuclear reactors, there will be a need for additional generating capacity and that Duke would rather own it than buy it.

Duke also said at a North Carolina energy conference this week that it might revive mothballed plans to seek an NRC license for the Shearon-Harris project that will also involves two new Westinghouse reactors. A lot is riding on the lessons learned from building reactors at Vogtle and future demand for electricity as more industrial plants move south and international manufacturers, especially in the automotive and aviation industries, build plants in the U.S. These aspirations may be challenged by U.S. international trade deals which have led to plant closings throughout the South caused by cheap imports in paper, textiles, steel, and home electronic consumer goods from China and other Asian countries.

GE-Hitachi Exits Laser Enrichment

It is becoming clear that the way to make a small fortune in the uranium enrichment business in the U.S. is to start with a large one. GE-Hitachi has spent millions developing the technology, including successfully building a test loop, and getting a license from the NRC to build a full-scale isotope separation plant in Wilmington, NC.

The company has also started contract negotiations with the Department of Energy to build a $ 1 billion plant with its new technology to re-enrich high-assay depleted uranium tails at the agency’s former gaseous diffusion enrichment plant in Paducah, KY. That facility was built as part of the Manhattan Project during World War II. It was shut down due to the high energy and environmental costs of continued operation. It left behind a huge inventory of depleted uranium in the form of UF6 which has enough of the U235 isotope to be run through the laser process to make the bottom rung basis for nuclear fuel (U-235 0.7%) which can be further enriched for commercial reactors, usually to 3-5% U235.

GEH is the second major nuclear vendor to exit plans for the business without breaking ground. In 2013 French state-owned nuclear giant Areva suspended plans to build a $3 billion advanced gas centrifuge uranium enrichment plan in Idaho after getting an NRC license and a $2 billion loan guarantee from the U.S. federal government’s Department of Energy. Areva, which is over-extended financially, said that the lack of outside investors caused it to cancel plans to break ground.

The U.S. does not lack for nuclear fuel given the operation of Urenco’s gas centrifuge plant in Eunice, NM.  An April 2016 survey by the World Nuclear Association shows the Eunice plant will grow between now and 2020 from 3.5 million SWU/year to 4.7 million.

GE-Hitachi said the key reasons for its decision not to move forward is “its desire to reduce its equity interest in Global Laser Enrichment (GLE) due to evolving business priorities at GEH and following the restructuring of GLE operations announced in 2014.”

Silex told World Nuclear News the reason is conditions are not favorable for getting new investors to put up the money to build a full-scale facility in Kentucky. The project is a joint venture in which GE has a 51% stake, Hitachi 25% and Canadian uranium miner Cameco has a 24% stake. There are no uranium enrichment facilities in Canada nor Australia despite the fact that both countries have some of the world’s richest uranium ore deposits.

GEH has signed a Term Sheet with Silex effectively providing Silex the option to take an equity position in GLE and allowing potential introduction of new investors in GLE. According to an email from a GEH spokesman sent to this blog, the Term Sheet contains provisions to support funding for operations while discussions progress.

The spokesman also said in an email statement,

“GEH remains committed to maintaining the safety and security of the technology and any sale or transfer of GEH’s interest in GLE would be subject to government review and approval. GLE remains optimistic regarding the progress of the technology and will continue to negotiate the agreement with the Department of Energy to purchase depleted uranium hexafluoride for re-enrichment at a potential enrichment facility in Paducah, Kentucky.”

Another factor is that the price of uranium is at a record low and so are contracts for nuclear fuel for commercial reactors. Industry analysts point our there is an excess of nuclear fuel available due in part to the fact that Japan has only restarted a few of its large fleet of reactors. Uranium producers are also contending with DOE which has plans to release its own inventory of uranium into the market in part to pay for cleanup at the Paducah, KY, gasseous diffusion site which is now being decommissioned and demolished.

Silex Systems of Australia, which developed the laser enrichment technology, told World Nuclear News on April 19 it is considering taking an equity position in the laser enrichment project. The firm said it is considering committing about $8 million. CEO Michael Goldsworthy told WNN this amount would effectively keep to doors open and the lights on while both companies continue the search for new investors for the Paducah project.

TVA Hawks Two White Elephants

The Tennessee Valley Authority (TVA) has big problem on its hands, in fact two of them, in the form of the incomplete Bellefonte nuclear reactors located near Scottsboro, AL. For the past several months it has been taking public comments on what to do with the 1,600 acre site that includes two massive containment buildings, cooling towers, a switchyard and other buildings and facilities.

TVA removed most of the useful components from both reactors years ago. It is one of the the largest unfinished construction sites in the country.  Work began on the twin reactors in 1974 and stopped in 1988.

TVA says it has no plans to finish either reactor and repeatedly rebuffed offers by private developers to do so. The reason, it says, is that its integrated resource plan for future electrical generating capacity sees no need for new nuclear plants and finds that any increases in demand can be met by building natural gas fired plants. TVA has also cancelled plans to build two new Westinghouse reactors at the site. The record low price of natural gas, which is expected to remain that way for a long time, is the key reason.

The utility has not set a price tag on the site which, if offered for sale, would go via a public auction process. Anti-nuclear groups have called for demolition of all buildings and construction of solar energy farm. Local economic development groups would like to see mixed uses for the site because of its access to roads, railroads, and TVA’s power grid.

At the TVA board meeting scheduled for May 5 it will likely declare the site as being “surplus” which will set in motion plans for an auction. So far no potential bidders have announced their intention to seek to purchase the site. TVA carries the site on its books as being worth less than $2 billion, but this estimate is most likely negotiable. TVA has not stated how long the auction process would be open for bids. Given the size and complexity of the facility, getting a bid that the utility would find acceptable, and settling on terms, could take a while.

Third Time Could Be the Charm for Westinghouse with India

You have to give Westinghouse CEO Daniel Roderick credit for being a patient man.  Since 2007 he’s been hoping that U.S. support for letting India buy uranium on global markets would translate into that country opening up to allow American nuclear firms build reactors in that country. So far, India has gone in exactly the opposite direction with its parliament passing a harsh nuclear supplier liability law.

The law locked out U.S. publicly traded firms, like Westinghouse and GE-Hitachi, and hamstrung state-own French nuclear giant Areva. Only Roastom, which self-insured via the Russian government, proceeded to complete two 1000 MW VVERs at Kudankulam and break ground for two more similar units at the same site in Tamil Nadu.

Slow but steady progress has been recorded due to two state visits to India by U.S. President Obama.  While the president came home empty handed in terms of signed deals in both trips, he left behind diplomatic working groups to hash out the barriers to opening India’s nuclear market to American firms. The results have been that India has put in place a government-funded insurance pool that would cover liabilities in the event of an accident. India’s move to sign an international convention on nuclear liability has also been a confidence builder.

These developments have given Westinghouse hope that when Indian Prime Minister Narendra Modi visits Washington in June that contracts can be signed to break ground to build the first two of a planned six AP1000s at the Mithi Virdi site in the Indian state of Gujarat. The Nuclear Power Corporation of India Ltd (NPCIL) would be the customer and operator of the plants.

Westinghouse told news media sources earlier this month that all the technical paperwork needed to sign off on the deal is in place. Also, a bilateral agreement between Japan and India signed last December for joint civilian nuclear projects was a shot in the arm for Toshiba which is Westinghouse’s parent firm.

Japan had been resisting completing the agreement due to concerns over India not having signed the nuclear nonproliferation treaty. Now that it is in place, and India has set up the insurance pool, Westinghouse is hoping its project in Gujarat will see the light of day.

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