Remember the Past

The expansion of nuclear power globally was front-and-center on Day 1 of the 3rd Annual Nuclear Power Congress in Atlanta. Like travelers’ flights getting to the conference, some around the industry seem to believe the "renaissance" of nuclear power generation is in a delay.

With a continued increase in power demand and growing environmental concerns, 65 countries in the world are now interested in developing new nuclear said Stephen Kidd, director of strategy and research for the World Nuclear Association.

“By 2030, I think we have to accept that there are a lot of uncertainties about where nuclear power is going to go,” he said.

The three regions that house the largest amount of nuclear reactors are the east coast of North America, western Europe and east Asia, specifically Korea and Japan. But China and India are both planning major growth, with 24 reactors currently under construction in China.

While the U.S. does not have the build out taking place like China, dirt is moving for new reactors. And cost is always brought up when talking about new build in the U.S. Commissioner Stan Wise of the Georgia Public Service Commission said that while rates may go up for Southern during construction, being in a regulated market, “Five to 10 to 20 years from now, that is where we benefit from new nuclear.”

Other than cost, licensing in the U.S. is a large topic of discussion at the Nuclear Power Congress. Chuck Pierce, AP1000 licensing manager for Southern Nuclear Operating Co., summed it up great with a quote from George Santayana.

“Those who cannot remember the past are condemned to repeat it,” the quote read.

Dealing with regulatory changes following the 1979 accident at Three Mile Island, Vogtle Units 1 and 2 ran into construction delays and cost far more than expected. Today, state regulators are monitoring cost and construction as the Southern Co.-led consortium moves forward with plans to add Units 3 and 4, adding potentially another 2,200 MW of generating capacity.

And Pierce mentioned the Institute of Nuclear Power Operations (INPO) Principles for Excellence in Nuclear Power Construction:

1) Leaders Demonstrate Alignment on a Commitment to Excellence
2) Strong First-Line Supervision is Key to Success
3) Personnel are Qualified for Their Jobs
4) Schedules are Realistic and Understood
5) Construction of a Nuclear Plant has Special Requirements
6) Personnel Safety is Highly Valued
7) The Plant is Built as Designed
8) Deviations and Concerns are Identified, Communicated, and Resolved
9) Transition to Plant Operation is Started Early

Meeting these principles, or goals, are important to avoid consequences of mistakes in nuclear construction; consequences that Edward Finley, chairman at the North Carolina Utility Commission, said are much more devastating at nuclear plants than at other power generation facilities.

And the Nuclear Regulatory Commission is helping in the process. The agency has increased the workforce from 3,000 in 2004 to 4,000 in 2008, said Luis Reyes, regional administrator for the NRC. And the NRC is now “more hands-on than it was in the 70s and 80s.”

So the message was clear; learn from the past to succeed in new nuclear build out. And Finley said there is a “much improved process today, as had in the past.”

Someone will get the loan, right?

Over the last few days, two recent developments in the wait for the final Department of Energy loan guarantee have sparked conversation.

According to reports, the Japan Bank for International Cooperation (JBIC) plans to lend up to $4 billion to fund the NRG South Texas nuclear project. If this loan goes through it would be the country’s first state financing for an atomic power station abroad. But for the government-run bank to hand over any cash to fund the project, it must be guaranteed by the U.S. government. This loan deal could encourage utilities to invest in nuclear projects abroad which would support Prime Minister Naoto Kan’s goal of exporting infrastructure to boost the Japanese economy.

In the second development, The Washington Post reported that Constellation Energy is in disagreement with its French partner, Electricite de France, over a business deal. Both Constellation and EDF are equal partners in UniStar. UniStar wants to build a fleet of new reactors in the U.S. starting with a third unit at Constellation’s Calvert Cliffs plant in Maryland.

The disagreement reportedly stems from the $2 billion option that would force EDF to buy several of Constellation’s gas, coal and hydro plants. Like the South Texas project, Calvert Cliffs is waiting on a decision from the DOE on the federal loan guarantee.

I interviewed Mark Marano, Areva senior vice president of U.S. new build operations, for Power Engineering magazine’s Nuclear Power Executive Roundtable being published in the November issue.

“Both UniStar and NRG have been forced to scale back due to delays in receiving the conditional loan guarantees. The delay will clearly slow any efforts to spur any growth and any investment and any creation of jobs,” he said. “And the result sadly enough - we won’t be just talking about stimulating and adding jobs - the lack of action on loan guarantees could inherently cause the reverse reaction which is just the opposite of what its intent was.”

The November issue of Power Engineering magazine features my complete roundtable discussions with five industry experts. Among the topics discussed: Federal Loan Guarantees.

The industry as a whole and especially those looking at new build out continue to wait to see what the DOE’s next move is. But someone will get the loan, right?

Stay tuned.