Westinghouse Inks Major Nuclear Reactor Deal in Ukraine

Westinghouse Inks Major Nuclear Reactor Deal in Ukraine
Energoatom Answers Key Questions About the Westinghouse Deal
Holtec Inks SMR Design Deal with South Korea’s Hyundai
KHNP Consortium Aiming for Nuclear Plant Projects in Czech Republic and Poland
NRC Indicates Acceptance of Kairos Safety Evaluation
William Magwood / The Way Nuclear Financing Is Politicized Is An Obstacle To Construction

U.S. nuclear reactor vendor Westinghouse Electric announced this week that it signed a contract with Energoatom, the state-owned nuclear utility of Ukraine, to build five 1150 MWe AP1000 reactors at four separate sites in Ukraine. Four of the units will be new and one will complete a partially built reactor at the Khmelnytskyi Nuclear Power Plant.

Map of Nuclear Reactors in Ukraine: World Nuclear Association

The deal, with an estimated value of about $30 billion, initiates engineering and procurement of long-lead items for the first Westinghouse AP1000 unit to be built at the Khmelnytskyi site. Other sites where future AP1000s will be built, presumably under extensions of this initial agreement, include current nuclear power stations – Rovno, South Ukraine, and Zaporozhye. At the Khmelnitski site, the company will complete Unit #4 and build a new Unit #5.

Petro Kotin, acting president of Energoatom, said in a press statement that the agreement includes completion of all new nuclear plants under this agreement by 2035. . He added Ukraine wants eight new units at two new “greenfield” sites between 2032-2040. Overall, the country is planning as much as 11 GWe of new build by 2040. All of the current nuclear plants in Ukraine are Russian built VVERs.

Kotin said Energoatom is also looking at potential new sites for nuclear power in Ukraine, with one option being Orbita near the abandoned Soviet-era Chigirin nuclear power plant in central Ukraine. He said Energoatom was working to get the site approved for this use.

Table: Neutron Bytes – Hypothetical Build Out of AP1000s in Ukraine

Kotin said Energoatom, which operates Ukraine’s fleet of 15 commercial nuclear power units, is looking to both its own resources and external credit to fund its new-build ambitions. He did not provide any additional details.

The problem with this ambiguous statement is that it creates a vacuum into which all sorts of misinterpretations can move to fill the void. For instance, not talking about the finances can be seen as either the principals in the deal don’t have the funding, or at least not yet, or the money is coming from places they don’t want to talk about. The sooner details on the financial structure of the deal are made public, the better.

Brookfield, the private equity fund that owns Westinghouse, last April was reported to be considering selling the firm. Is the firm still planning to cash out? According to the Reuters report, Westinghouse has met expectations in terms of generating new profits as well as covering the initial cost of buying it from Toshiba. The profits come from reactor maintenance services and sales of nuclear fuel not from deals involving new reactors.

Indeed, when Brookfield bought the firm it noted that it was not interested in that part of the industry. The Ukraine deal, which involves five nuclear reactors, is a big change from that position. Is Brookfield onboard with it especially with Russian forces looming on the eastern borders of Ukraine possibly poised for new hostilities there?

Westinghouse did not respond to media inquiries about the financial terms and conditions for the contract or the actual costs involved in it. The U.S. Department of Energy (DOE) formally declined to comment on the massive reactor deal.

At COP26 DOE Secretary Jennifer Granholm announced a deal between SMR builder NuScale and Romania but made no mention of the then pending deal between Westinghouse and Energoatom. The climate conference would have been an ideal platform to announce a deal of this magnitude with a US manufacturer of nuclear technologies including reactors and fuel.

DOE certainly would have been aware of the Ukraine deal being in motion by then as the broad outlines of it were announced last August. DOE did announce in October that Westinghouse had inked a deal to “optimize” some of the current reactors in Ukraine. Westinghouse will work with the country’s nuclear power plant operators to assess the system configurations and maintenance routines of each reactor. There was no mention of a deal to build new reactors.

Kotin said the cost of construction of the first new AP1000 will be $5 billion and it will take five years to complete. He noted that the AP1000 technology offers “maximum localization and optimal cost.” After first pilot unit at Khmelnitski is complete, 60% of equipment will be supplied by Ukrainian suppliers.

Energoatom hopes to use some of the abandoned equipment from the failed VC Summer project in South Carolina which was to have built two AP1000s. A delegation from the Ukrainian firm visited the V C Summer site last April to kick the tires.

Energoatom said that earlier this month that Westinghouse engineers visited Ukraine to inspect the Khmelnitski partially built reactors to assess the feasibility of completing one or both of them. As a practical matter it will be much easier to complete a unit which is barely one quarter complete than to tackle the complexity of one that is three quarters complete.

Given the experience of Westinghouse in building four AP1000s in China, a five year schedule for each of the four new units is plausible. The new AP1000s will likely cost more than $5 billion each, but if Westinghouse stages its starts for each unit two year apart, it can leverage staffing and supply chains to achieve some economies of scale. Separately, improvements to the nation’s electrical grid will also be a cost factor.

Units #3 and #4 at the Khmelnytskyi site are partially built Russian 1000 MWe VVER with Unit #3 being 75% complete and Unit #4 being 28% complete. A spokesman for Energoatom told wire services that Ukraine would separately complete Unit #3 with its own resources. No schedule nor a cost estimate was provided for this scope of work.

Table: World Nuclear Association

Ukraine has a current agreement with the U.S. under Section 123 of the Atomic Energy Act which should facilitate clearance of export control requirements for Westinghouse technologies. The signing ceremony for the deal was held in Kiev attended by Ukraine Energy Minister Herman Halushchenko, and US Charge d’affaires to Ukraine Kristina Kvien.

“We are proud to continue our partnership with Energoatom in supporting its objectives to develop nuclear power plants in Ukraine. This contract to build the first AP1000 plant at the Khmelnytskyi site brings the country one step closer to reaching its de-carbonization and energy security objectives. We look forward to continuing our work with Energoatom to ensure that Ukraine is able to utilize clean, reliable, and cost-effective nuclear energy for the future,” said Patrick Fragman, President and CEO of Westinghouse.

Westinghouse said in its press statement that the AP1000 plant is a proven Gen III+ reactor. It has unique fully passive safety systems, modularized standard design, high operability performance and load following capability. The AP1000 projects will provide Energoatom and Ukraine with substantial economic and localization benefits through the construction and operating life of each reactor. Ukraine, based on its industrial capabilities, is likely to request to be tasked with forging the reactor pressure vessels, steam generators, and powerhouse turbines.

Small Modular Reactors in Ukraine

According to a profile of nuclear energy in Ukraine by the World Nuclear Association, in June 2019 the Ukrainian Module Consortium was set up between US company Holtec, Energoatom, and the State Scientific and Technical Center for Nuclear and Radiation Safety (SSTC NRS). It announced that it was considering building six SMR-160s at the country’s Rivne nuclear power station site from 2030.

Energoatom was considering deploying SMR-160 units more widely to complement intermittent renewables. Holtec has an manufacturing center in Kiev which currently makes casks for dry storage of spent nuclear fuel. It is also configured to support factory based manufacturing of the SMR-160.

In February 2020 the SSTC NRS signed a memorandum of understanding (MOU) with NuScale Power regarding collaboration on the regulatory and design gaps between the US and Ukrainian processes for the licensing, construction, and operation of a NuScale power plant in Ukraine.

In September 2021 Energoatom signed an MoU with NuScale to explore the deployment of NuScale units in Ukraine. It said: “We are considering the possibility of building SMRs in Ukraine to replace carbon-emitting thermal power plants and to increase the load-following capacities of the Ukrainian energy system.”

Energoatom Answers Key Questions About the Westinghouse Deal

How will the work be financed? Is Ukraine paying 100% of all costs or is the US providing export loans / credits to Westinghouse or foreign aid to Ukraine to pay for some or all of the costs?

Funds provided by the Export-Import Bank of the United States and other international institutions as well as Energoatom’s own funds are expected to be the main sources of financing the construction of new power units.

Notes:
1. New power units are planned as four 1150 MWe AP1000 nuclear reactors. At $5,000/Kw, the four new units would cost about $23 billion. Completion of two partially built VVERs is discussed below.
2. NeutronBytes has sent an inquiry to the Export-Import Bank in Washington, DC, asking for confirmation and further details on the bank’s scope and level of support.

What is the schedule for completion of the two partially built units and completion of the four new units.

The first 5 power units under AP1000 technology will be constructed at the sites of existing Ukrainian NPPs, which have the necessary logistics and infrastructure. A project of construction of two power units will be launched at the Khmelnytskyy NPP site. Construction is expected to begin in 2022 while connected to the grid – approximately in 2028 and 2029. Furthermore, Energoatom, together with partners from Westinghouse, is considering the possibility of completing KhNPP unit 3 using VVER technology with a possible connection to the grid in 2027. The unfinished power unit 4 can be used as a warehouse or as a location for a training simulator.

How much “localization” is included in the terms and conditions, e.g, what reactor and non-nuclear components will be manufactured in Ukraine?

Given the capabilities of the Ukrainian industry, it is expected that the share of localization of equipment for new power units may reach 50% or more. For example, in Ukraine there are companies capable to manufacture equipment for the turbine island.

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Holtec Inks SMR Design Deal with South Korea’s Hyundai

(WNN) and (South Korean wire services) Holtec International has inked an agreement with Hyundai Engineering & Construction of South Korea for the turnkey supply of Holtec’s SMR-160 small modular reactor (SMR) plant worldwide. Holtec is considering deploying the first SMR-160 at Oyster Creek in New Jersey, where it is currently in the process of decommissioning. It is a former boiling water reactor.

Hyundai Engineering & Construction will perform the detailed design of the balance of plant and prepare the full plant construction specification for the SMR-160, which Holtec has been developing since 2010.

Holtec will serve as the overall architect engineer for the plant and provide the major nuclear components through its US manufacturing facilities and international supply chain, and will provide the instrumentation and control systems through its partnership with Mitsubishi Electric Corporation. Framatome is the selected fuel vendor for SMR-160.

Under a teaming agreement, Hyundai E&C and Holtec would jointly develop a commercialization model, promote joint projects and participate in marketing and bidding together.

“Through this contract, we have laid the groundwork to move away from orders and construction-oriented businesses to a pre-construction solution partner such as the development of new technologies, global sales, purchase, and construction,” Hyundai E&C CEO Yoon Young-joon said in a statement on 11/24/21.

Yoon said his company would be reborn as a total solution creator that encompasses all areas from investment and development to operation by focusing all our efforts on promoting new businesses such as automation and smart cities.

The cooperation with Hyundai combines Holtec’s expertise in design, engineering, manufacturing, and project delivery of nuclear components with Hyundai’s EPC and construction management capabilities for major projects, Holtec said. The framework of the agreement and worldwide collaboration will support standardization of the SMR-160 design.

“The partnership with Hyundai Engineering & Construction enhances our ability to deliver SMR-160 projects on schedule and at a competitive price,” Holtec Senior Vice President of International Projects Rick Springman said.

The SMR-160 is a pressurized light-water reactor, generating 160 MWe (525 MWt) using low-enriched uranium fuel, with flexibility to produce process heat for industrial applications and hydrogen production. The design has completed the first phase of the Canadian Nuclear Safety Commission’s three-phase pre-licensing vendor design review, and is undergoing pre-licensing activities with the US Nuclear Regulatory Commission.

Holtec said it aims to secure a US construction licence in 2025, and is “actively exploring the possibility” of deploying an SMR-160 at Oyster Creek. It acquired the site from Exelon in 2019 following the plant’s closure the previous year.

& & &

KHNP Consortium Aiming for Nuclear Plant Projects in Czech Republic and Poland

Korea Hydro & Nuclear Power (KHNP) held a meeting on 11/23/21 regarding new nuclear power plant construction projects in the Czech Republic and Poland. The meeting was attended by the consortium members including KEPCO E&C, KEPCO Nuclear Fuel, KPS, Doosan Heavy Industries & Construction and Daewoo Engineering & Construction.

In Poland, the tender is scheduled for next year and the South Korean consortium is likely to compete against Westinghouse and EDF. In the Czech Republic, the three are currently competing for the project in Dukovany.

In the Czech Republic, both the ruling and opposition parties are in favor of the project and against Russia’s and China’s participation in it. The security assessment procedure for it was initiated in June this year and the South Korean consortium is planning to submit its bid before the end of June next year.

Trade, Industry and Energy Minister Moon Sung-wook and KHNP President Chung Jae-hoon visited Poland on 11/05/21 to discuss the consortium’s participation in the project. “We are convinced that the South Korean consortium is the best choice in terms of technology, economic efficiency, business capabilities and financing,” they said.

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NRC Indicates Acceptance of Kairos Safety Evaluation

(WNN) The US Nuclear Regulatory Commission (NRC) has issued a draft safety evaluation report indicating its initial acceptance of Kairos Power’s source term methodology for its Kairos Power fluoride salt-cooled high temperature reactor (KP-FHR). The topical report, which Kairos submitted to the regulator in June 2020, is the first of its kind to be reviewed by the NRC. KP-FHR Mechanistic Source Term Methodology

The report, which outlines the company’s approach to calculating the amount of radioactive material that could be released to the environment during an accident, was developed through a cost-shared award from the US Department of Energy (DOE).

If approved, a final safety evaluation report could be issued by February 2022 and could be used throughout the licensing process, reducing risks associated with the licensing and deployment of the reactor.

The KP-HFR uses TRISO – TRI-structural ISOtropic. Research by Idaho National Laboratory has indicated that the source term for TRISO-based fuel is significantly less than for traditional fuels adding that this “further reinforces the enhanced safety and operation of Kairos’s reactor design as it continues with the pre-licensing phase of the NRC process.”

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William Magwood / The Way Nuclear Financing Is Politicized Is An Obstacle To Construction

(NucNet) The world will need about 1,160 GWe of installed nuclear capacity – up from about 400 GW today – if it is to meet its climate targets, but the way financing for reactors is politicized is an obstacle to construction.

William Magwood, director-general of the Nuclear Energy Agency, said the United Nations’ Intergovernmental Panel on Climate Change has drawn up about 90 scenarios for fighting climate change and the average of all 90 would mean 1,160 GWe of reactor capacity is needed by 2050, an increase of almost 200%.

The additional 760 GWe of capacity would be equivalent to about 460 new 1,630-MW (net) EPR units of the type being built by France’s EDF, or 640 Russian VVER V-510K units of 1,175 MW (net) each.

“It seems quite obvious that nuclear will have to play a large role,” Mr Magwood said. “The numbers tell us that if nuclear doesn’t play a role, meeting the climate challenge will be difficult if not impossible.”

Mr Magwood warned, however, that the politicization of nuclear financing makes it very difficult to build new nuclear plants because nuclear “comes with risk factors that do not have anything to do with technology”.

He said there is the political risk that governments change and change their decisions; the market risk because clarity is lacking on revenue from long-term nuclear projects; and construction risk because experience has been so limited that “many western countries have forgotten how to build nuclear plants”.

The only way to address these risks is with government policies, Mr Magwood said. “Policies need to be technology neutral and recognize that we need all technologies,” Magwood said.

Earlier this year Magwood said nuclear power is “coming back to the table” as an option for many countries and can work with renewables provide a very clear pathway to achieve carbon neutrality in 2050.

He said continued operation of nuclear power plants has been identified as the lowest-cost clean energy production. “Countries are beginning to see this. Nuclear power is the only expandable, dispatchable, low-cost and low-carbon source of electricity. It can make a very important contribution in the future to provide a stable grid.”

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