Nuclear Export Trade Deals Come and Go

  • exportsU.S. Experts Brief Congress on How to Expand Overseas Business
  • Jordan Ditches $10 billion Deal with Rosatom for Twin 1000 MW VVERs
  • Hitachi Seeks U.K. Investors for Wylfa Twin 1350 MW ABWRs
  • China Tells U.K. It Won’t Ask for Local Financing for Three 1000 MW Hualong One Units at Bradwell Site

Nuclear Infrastructure Council Briefs
DC Policy Makers on Nuclear Technology Exports

A seven-member U.S. nuclear energy industry consortium addressed key Legislative and Executive Branch policymakers and industry influentials this week at a Special Capitol Hill Briefing. (link to slides below)

The 90-minute exchange was led by leading industry companies and organizations including;

  • Curtiss-Wright;
  • Westinghouse Electric;
  • U.S. Nuclear Industry Council;
  • Nuclear Energy Institute;
  • Nuclear Economics Consulting Group;
  • Edlow International; and
  • Pillsbury Winthrop Shaw Pittman LLP.

The American Society of Mechanical Engineers provided organizational support for the event.

Top International Trade Administration global markets official Ian Steff provided a keynote on “Choosing to Compete in the Global Nuclear Energy Market.”  Steff worked for VP Pence in Indiana when Pence was the state’s governor. He has a background on the business side in trade issues involving the semi-conductor industry.  With regard to the nuclear export world, Steff said,

“The global market potential for nuclear energy is massive, and the United States, where nuclear power was developed, should lead the global expansion. Our U.S. industry must choose to compete at the highest levels and the U.S. government is committed to moving this forward.”

Briefing topics included:

  • Understanding the Export Market;
  • The Export Potential of Small Modular Reactors (SMRs);
  • The Value of Commercial Nuclear Exports to the U.S. Economy;
  • Financing of Nuclear Energy Projects;
  • Commercial Nuclear Exports as a Foreign Policy Tool; and
  • How Industry & Government Can Collaborate for Success.

Discussion focuses included the stakes for the U.S. in the global market and pivotal commercial races for large baseload reactors and advanced nuclear;

  • electrification, megacities, water stress and electric vehicle growth drivers — and SMRs as a game changer;
  • the substantial economic benefits of the domestic nuclear fleet;
  • competition against state-owned entities and the need for the U.S. government as a champion for the global market;
  • the lack of a cohesive policy to compete with China’s “Belt and Road” infrastructure initiative
  • Russia’s new nuclear build program in strategic countries; and
  • an eight-point plan for what Congress and the Administration should do.

All of the presentations (PDF file) may be accessed at: https://bit.ly/2Mt3FUj

Jordan Calls It Quits with Rosatom for Twin 1000 MW VVER
Over Demand for Commercial Financing of the Project

Jordan has cancelled a $10 billion project to build the country’s first nuclear power plant with Russian reactors. The Jordan Atomic Energy Commission (JAEC) said on June 11th that it ended the plan with Rosatom because the Russian side wanted to secure the financing through commercial loans, which the JAEC said were too costly. The JAEC also complained that the higher cost of locally financing the project would result in much higher rates for electricity from the plants.

In a statement, JAEC told The Jordan Times that commercial loans “would have increased the cost of the project and the prices of generated electricity.”

The demand by Rosatom for retail commercial loans in the Jordanian deal is a sharp change from its past practice of offering generous financing for its export deals.  It may reflect the fact that while oil prices briefly rose earlier this year, they are now retreating from the mid $70s to the mid $60s which is where they have been since January 2015 thus apparently hindering Russia’s ability to finance mega nuclear export projects.

The plan for VVERs in Jordan, first agreed to in 2015, would have built two 1000 MW VVERs. With a $10B price tag, the plants would have cost $5,000/Kw thus revealing that claims of costs  of $4,000 Kw for other Rosatom export projects may have been understated.

Egypt recently signed a contract with Rosatom to build four 1200 MW VVER which would bring the cost of these reactors to $24B. Additional costs would be incurred to build out the regional electric grid to deliver the power to customers.

In April Rosatom moved ahead absent local investors in Turkey to begin laying concrete for Turkey’s first nuclear power plant, which will use four VVER-1200 reactors. Rostom has seen Turkish investors backpedal from the project primarily due to the lack of rate guarantees by the government for power from the reactors.

The plan with Russia had been in development since 2014, Since then Jordan had been considering a number of reactor vendors including several nonbinding agreements with developers of small modular reactors; Rolls Royce (LWR SMR), X-Energy (HTGR Pebble Bed), and China (HTGR pebble bed). Rosatom also reportedly offered Jordan an SMR but did not specify the design.

Jordan’s other major concern about nuclear power deals is where it will get the water supply for the steam system. A coastal site would provide sea water for the cooling loop for steam coming off the turbine. However, Jordan’s preferred site for a nuclear power station is not on the coast.

It might reconsider the site location if it looks further into coastal sites based on what Rosatom has hinted that it could offer Jordan one of its floating nuclear power plants as an SMR. In May, the Akademik Lomonosov, Russia’s first floating nuclear power plant, left the Baltic Shipping Company in St. Petersburg bound for Chukotka.

The plant, modeled on two KLT-40 nuclear icebreaker-style reactors, took over 13 years and $480 million to build. The reactors use uranium fuel at 35% U235.

The project took much longer to complete, and cost a good deal more than expected, but it is an investment Russia is anxious to now promote for export sales.

The problem for any customer is that the floating plant is enormous (472 feet long, 98 feet wide, displacement of 21,500 tonnes) for the amount of power it provides which is 70 MW electrical, 135 MW thermal, each reactor and for transfer of power to onshore grids.

The combined power of 140 MW electrical requires a crew of 69 people which includes staff to operate the non-nuclear systems of the ship itself. Also, some of the power generated by the reactor doesn’t go to the customer because it is needed to operate the ship.

So far Rosatom has not announced any export deals for the floating units.

Hitachi Seeks Japanese Partners
in Building $27B UK Nuclear Plant

(Nikkei)  Hitachi continues to search for ways to share the burdens of building a British nuclear power plant and now is sounding out the Development Bank of Japan (DBJ) and several Japanese power companies about taking stakes in the project.

The firm is looking to Japanese power companies for both funding and expertise. That may be difficult as these firms are reportedly still struggling with the heavy financial fallout from the 2011 Fukushima disaster.

The cost projection for the Wylfa project on the Welsh island of Anglesey has rocketed to $27 billion.  It is unclear why the cost of the two reactors is so high as 2700 MW at $5000/Kw would come in at half that amount.

To keep it commercially viable, the British government pledged on June 4 to offer a loan estimated to be worth $18 billion. Negotiations between Hitachi and the UK government are ongoing.

In addition, $2.7 billion is to be invested in the Hitachi subsidiary responsible for developing and building the plant, with $900 million coming from a consortium of Japanese companies and the Japanese government.

Signing on for investment are the Chubu Electric Power, Tokyo Electric Power Co. Holdings, Kansai Electric Power, Chugoku Electric Power and Hokuriku Electric Power as well as Japan Atomic Power. A government export bank, the DBJ, is also being asked for support. TEPCO, which is facing decades of multi-billions in costs to decommission the Fukushima plant, is unlikely to support the Hitachi effort.

Hitachi is also asking the utilities for technical support. Japan Atomic Power already plans to support such aspects as operation and maintenance of the U.K. plant with U.S. energy provider Exelon. Tepco and Chubu Electric both operate in Japan boiling water reactors, the same type that will be built on Anglesey which are 1350 MW ABWRs.

There are still major details to determine about Hitachi’s U.K. nuclear project, such the price of the power that it produces, and completing these estimates will be essential in order bring investors to the table.

Chinese Nuclear Firm Will Not Seek
UK Gov’t Investment for Bradwell Effort

(Reuters) A planned nuclear plant at the Bradwell site will not require state investment, the Chinese company expected to build it said after the U.K. government was criticized for helping the Hinkley and Wylfa projects.

According to Reuters, Robert Davies, chief operating officer of CGN UK, a UK subsidiary of China’s General Nuclear Power Corporation (CGN), said  “It is not our plan to seek direct investment from the UK government for Bradwell B.”

The project is expected to involve construction of three 1000 MW PWR type Hualong One, which is the export design offered by China General Nuclear (CGN). At $5,000/KW the $3000 MW plant would cost $15 billion.

That number will surely be revisited as the decision to break ground moves closer to reality. Also, the size of the project may be revisited as work on it won’t start until the Hinkley C site is finished. CGN has a one-third equity stake in that project.

CGN’s Davies told Reuters “it was too early to discuss funding in detail but, but the fact that the Chinese-owned firm said it will not need such direct investment shows it is confident of funding the project itself, or being able to raise the cash.”

A second challenge the project faces is to come in with an affordable rate structure for power produced by the plant.

Davies told Reuters CGN’s Bradwell project would expect a much lower minimum guarantee price.

“We know we have to get within a realistic range of (the cost of) offshore wind,” he said.

Reuters reports that some U.K. offshore wind projects were awarded a minimum price as low as 57.50 pounds per megawatt hour (MWh) in the latest round of subsidies, compared with the 92.50 pounds per MWh guaranteed for Hinkley.

The Hualong One is in the second phase of the generic design approval process for nuclear safety review in the U.K. Davies said he expects the GDA process to be completed by the end of 2021. A final decision to invest in the plant will be made at that time he said.

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