The uncertain future of AECL

The window to the future of Atomic Energy of Canada Ltd. (AECL) is far from clear. AECL, the owner and developer of the Canada Deuterium Uranium (CANDU) reactor technology, has been searching for an investor for the past two years to help move the technology forward. Now, the two potential parties that were interested in purchasing the commercial divisions of AECL have reportedly backed away from the negotiations.

CBC News reported that one of the key shareholders of Bruce Power Corp., the only company officially left in the running as of Jan. 1, was opposed to buying AECL. According to a Canadian Press report, Bruce Power's CEO told staff that the firm had dropped out of the bidding process.

So where does the AECL go from here? That is a question that no one seems to know an answer to.

Currently there are 18 operating reactors in three Canadian provinces: New Brunswick, Ontario and Quebec. Three reactors are in the middle of refurbishment projects. And Canada has plans for more reactors. Ontario Power Generation had plans to build up to four new reactors that could generate up to 4,800 MW at the Darlington station. But due to the to the uncertain ownership future of AECL that project has been stalled.

In the December issue of Nuclear Power International magazine, Pierre Gauthier, president of Alstom in the U.S. and Canada, told me that “there is still a need for at least 2,000 MW.” “(And) we know the Ontario government would like to have this supplied by additional nuclear power plants.”

And Ontario Energy Minister Brad Duguid seems to agree. He told The Toronto Star that Ontario still has plans to build two new reactors, but that the province won’t become part of a new ownership group in AECL.

But the AECL does not only develop reactors for the Canadian market. To date, there are 29 Candu reactors in seven countries, according to the World Nuclear Association. And one of the goals of a new ownership would be to continue the exportation of the technology to increase the nuclear renaissance wave.

“We are hoping that the decision in Ontario will be made very soon," said Dr. Neil Alexander, president of the Organization of CANDU Industries. "And that would be us on the front end of the wave in the Western countries in new build.”

But, “I think we would all understand someone not wanting to buy a machine worth billions of dollars that is expected to operate for 60 years from someone who’s ownership remains uncertain.”

And uncertain, it certainly does appear to be.

Duke and Progress merger could produce largest regulated nuclear fleet

On Jan. 10, Duke Energy and Progress Energy announced a $13.7 billion plan to merge the two utilities. If approved, the merger could result in the United States’ largest regulated nuclear fleet.

Currently, Duke Energy operates seven reactors at three sites in North and South Carolina. Between the Oconee, Catawba and McGuire stations Duke has a total nuclear capacity of roughly 6.7 GWe. Duke also has plans to build two AP1000 reactors at the William States Lee in South Carolina. The application for this site was submitted in 2007 and Duke anticipates a license from the Nuclear Regulatory Commission in the 2013 timeframe, said company spokesperson Rita Sipa. But Sipa does not expect the merger to change the course of the application process and Duke “will continue to move forward.”

Progress Energy brings roughly 4.3 GWe of nuclear capacity to the merger. Progress operates five reactors at four sites in the Carolinas and Florida. Like Duke, Progress is also in the license application process with the NRC. Progress has proposed two sites to build new reactors. Two AP1000 reactors are planned at its Levy County site in Florida, although it has been delayed pending the receipt of a license.

Even though, they are still pursuing the combined construction and operating license and the company is keeping that option available for the future and that “will not change with merger” said Progress Energy spokesperson Mike Hughes. Progress also submitted a combined construction and operating license in 2008 for two additional reactors at its Shearon Harris plant in North Carolina.

If the merger is completed, the NRC would have to review license transfer applications for the operating reactors. And NRC spokesperson Scott Burnell said that the regulator has a well-established process in place to ensure the proposed license transfers meet regulations. Proposed reactor applications would have to be updated to reflect the new applicant, as well.

But the two companies are not even to that point yet. The completion of the merger could take up to a year. Yet, Hughes said they do not see that process as a “stumbling block anyway” due to both companies’ strong history and experience in nuclear operations.

“Being part of the nations regulated nuclear fleet and part of a much larger company gives us a great foundation from which not only to enhance existing nuclear operations but to also pursue new nuclear,” he said.

With a combined enterprise value of $65 billion, the company that will be known solely as Duke Energy looks to have the capital to move forward with new nuclear in the U.S.

For now, Duke and Progress will continue to operate their respected plants as is.

VIsiting the nation's first greenfield commercial IGCC power plant

POWER-GEN International 2010 got off to a quick start Monday morning when I, along with 45 other show and conference attendees, had the opportunity to tour the 260 MW Polk Power Station, the nation's first greenfield integrated coal gasification combined-cycle (IGCC) power plant.

The Tampa Electric Co.-owned Polk Power Station was constructed on a 4,300- acre piece of land that was once used for phosphate mines. The IGCC plant, referred to as Unit 1, is a first-of-its-kind combination of two technologies, coal gasification and combined-cycle, that began commercial operations in 1996.

Oxygen-blown gasification, a technology originally developed by Texaco and then purchased by General Electric, combines coal that is stored on-site in two 5,000 tons silos at the Polk plant with oxygen in the 40-foot-tall GE gasifier to produce the fuel syngas. After processing, the clean coal gas is used in the GE 7FA combustion turbine to produce electricity.

To generate even more power at the same plant, the combined-cycle design takes the "waste" exhaust heat from the 7F turbine, recovers it in the HRSG to produce high-pressure steam that then passes through GE D11 steam turbine. When firing with syngas, the IGCC heat rate at Polk is about 9,300 Btu/kWh.

Vernon Shorter, a consultant for TECO who led the plant tour, said power providers “should consider this technology because of the environmental benefits and efficiency.”

Built with $140 million of support from the U.S. Department of Energy as part of its Clean Coal Technology program, the Polk station operates at 90 percent availability with over 98 percent SO2 reduction, and 90 percent NOX control. The plant is also considered zero process water discharge, which DOE recognized as among the world’s cleanest. The combined-cycle technology requires less cooling water than conventional technology and TECO was able to modify the existing mine cuts to act as the plant’s cooling reservoir. And in March 2009, TECO established an agreement with the City of Lakeland and the Southwest Florida Water Management District to supply Polk Power Station with up to five million gallons of treated reclaimed water daily that would otherwise be discharged into Tampa Bay.

For TECO to meet summer demand, the Polk station has four additional simple cycle GE 7FA combustion turbines on site that were brought online between 2000 and 2007. Unit 2 and Unit 3 are 180 MW duel fuel turbines that are fired with natural gas and distillate oil, while the 160 MW Units 4 and 5 operate using only natural gas.

The Polk IGCC station has operated on over 20 different fuels, including coals, coal blends, coal/petroleum coke blends and coal/coke/biomass blends.

“This plant has produced more megawatts than any other IGCC plant in the world,” said Shorter.

Although the plant was not in operation the day we toured it due to a problem with the sulfur removal plant, an occurrence that is rare, added Shorter, the tour was informational. It was my first tour of an IGCC facility, along with many of the other visitors, and I recommend visiting the facility if the opportunity ever becomes available.

Oyster Creek plant closing, will others follow?

On Dec. 8, Exelon announced that the Oyster Creek nuclear power generating facility in New Jersey will be shut down by 2019, roughly 10 years before the plant’s operating license expires. The 619 MW Exelon-owned nuclear plant, the oldest in the U.S., is shutting down instead of building cooling towers that the New Jersey Department of Environmental Protection has been pushing for. Exelon’s Chief Nuclear Officer, Christopher M. Crane, told the New York Times that installing cooling towers “would cost us significantly more than the current value of the plant.”

Exelon received an estimate in 2006 that it would cost $700 to $800 million for the 40-year old plant to install cooling towers. Because every nuclear plant is unique, cooling towers must be designed specifically for each site. When I spoke with plant spokesman David Benson for a story in the October issue of Power Engineering magazine, he also said the retrofit estimate is “more than the plant is worth.”

“If we were forced to put up cooling towers, we would have to close the plant.”

Now, it appears that Benson was correct. Many nuclear power plants in the United States are going through feasibility studies to consider technologies to comply with an expected revision to Section 316(b) of the Clean Water Act, which sets out rules related to fish impingement and entrainment. 316(b) requires that the location, design, construction and capacity of cooling water intake reflect the best available technology for minimizing the environmental impact on fish and other aquatic life. Regulations for existing facilities under section 316(b) were previously made known in both 2004 and 2006 under Phase II. Litigation followed both of these actions, and now EPA is looking to combine and re-proclaim rules for all existing cooling water intake structure facilities.

The biggest push has been for power plants to install cooling towers to reduce the amount of water used to cool the plants. EPA estimates that over 200 billion gallons of water per day are withdrawn by manufacturing facilities and power plants.

But Benson said Exelon has made investments over a number of years to reduce the plant’s impact on Barnegat Bay, the body of water that the plant uses for cooling. According to Benson, “DEP has pointed out that we have wedge wire technology that is as good as it gets and we are always looking for updated technology.”

After Oyster Creek is closed by the end of 2019, Exelon will take about two years to put its components in layup. The company has about $750 million for decommissioning, but will not tear down the plant for at least 10 years after closure.

This announcement comes on the same day that The Brattle Group, an economic consulting firm, released a report that said around 11,000 to 12,000 MW of coal-fired generation could retire if cooling towers are mandated.

So the U.S. could see large amounts of power generation begin to go offline, like Oyster Creek, if the EPA does require plants to install cooling tower technology. Although the rule would not pertain to only nuclear plants, in the U.S. 35 of the 104 active nuclear power reactors currently use closed-cycle cooling towers while 60 use once-through cooling technology. EPA said that while their information on impact is limited, the agency claims it does know that trillions of aquatic organisms are impinged or entrained annually. EPA also said that 40 percent of all cooling water intakes are on water bodies that have threatened or engaged species.

“If the new rule is prescriptive and states that everyone needs to install cooling towers, that is huge for the industry,” said Greg Allen, director of environmental and engineering services for Alden Research Laboratory. “It is very difficult to retrofit cooling towers at existing plants.”

So now the power industry must wait for EPA to make a decision on 316(b) in order to determine the fate of numerous power plants. Retrofits may be an option for some plants. But like Benson and Crane said, it can also be expensive. EPA is finalizing an estimation of the proposed rule's likely cost and plans to issue a final rule in mid-2012.

Grabbing the Headlines

New build. Small reactors. Life extension. These are topics that continued to grab headlines throughout 2010 surrounding the nuclear power industry.

In the U.S. alone, the Nuclear Regulatory Commission has received 13 applications to license 22 new reactors. And with the Southern Co.-led consortium receiving the first conditional loan guarantee from the federal government, new build seemed to be moving forward in the U.S. But as utilities and vendors both wait, the Department of Energy has yet to hand out another loan guarantee to any others seeking to build the first new nuclear reactor in the U.S. It seemed that DOE was on the verge until Constellation Energy backed out on plans to build a new reactor in Maryland.

At the NUCLEAR POWER International conference this year new build will be one of the topics discussed during the three-days of sessions in Orlando, Fla.

“The main drivers for nuclear expansion, both globally and in North America, have not changed,” said Deva Chari, Westinghouse senior vice president of nuclear power plants, during the November Nuclear Power Executive Roundtable discussion in Power Engineering magazine. “The global need for energy, and particularly for electricity, will continue to grow, environmental issues and greenhouse gas emissions will continue to be a concern, and countries and regions will continue to be concerned about the security of their energy supplies.”

New reactor designs that are generating interest in commercial power circles throughout the world will be discussed in a session headed by four industry experts.

“There are some applications where a small reactor may make sense assuming there is some significant change in regulatory framework that can be made,” said Areva Senior Vice President of U.S. new build operations Mark Marano, whom also participated in the Nuclear Power Executive Roundtable discussion. “But the main challenge for the small modular reactor technology will be their ability to be competitive in this regulatory environment.’

Outside of new build and new reactor designs, nuclear power plant operators and the NRC work together to achieve license renewals for nuclear facilities. Currently, the NRC has approved license renewals for 57 of the 104 operating reactors in the U.S. Another conference session will discuss the everyday challenges that operators face in terms of safely operating and maintaining the aging nuclear fleet while preparing for life extension projects of nuclear reactors. And when completing those projects, Entergy Nuclear CEO and Chief Nuclear Officer John Herron said predictability and stability are key to both the license renewal process and the new nuclear licensing.

“For anybody to want to go and invest in nuclear, and bet your company on the size of an investment that may be the market cap of the company, you have to have regulatory predictability and stability,” he said. “I would tell you that we have a long way to go in that area.”

This year has been active for the nuclear power industry and with the possibility of more funding from the DOE for nuclear power, 2011 shows no signs of slowing down. At NUCLEAR POWER International attendees will get to discuss some of the new activities and challenges that face the nuclear power industry. And according to Herron, “with respect to clean, baseload energy, nuclear is the only way to go.”

I look forward to meeting you in Orlando!

The fate of nuclear power after midterm elections

In the largest shift of power since 1948, Republicans took over the U.S. House on midterm election night. And the nuclear industry could benefit from the Republican takeover as part of the clean energy legislation.

In a statement released the morning of Election Day, Don Gillispie, CEO of Alternate Energy Holdings, Inc., said that if Republicans won, the other big winner would be nuclear power. Well, we do know that Republicans have won the House and have made up ground in the Senate as well, even though Democrats still hold the majority.

Historically there has been more support from Republicans for nuclear power. But Steve Corneli, senior vice president of market and climate policy for NRG Energy, said there is an increasing awareness from Democrats that nuclear power can be an important part of energy independence and a zero-carbon emission future.

Michigan representative Fred Upton, like many Republicans, is a supporter of nuclear power in the U.S. Upton is also a strong contender to head the House Energy and Commerce Committee; the committee that sees over the national energy policy.

"Through a greater commitment to nuclear, we have a unique opportunity to cut greenhouse gases, provide stability to our electrical supply and create jobs," Upton told Reuters.

John Boehner (R-OH) is expected to take over as the new Speaker of the House and is also a strong proponent of nuclear power.

"The new Congress will be more pro-nuclear than any Congress we've seen in decades," said Gillispie.

And President Obama continues to promote nuclear power, too.

“There’s been discussion about how we can restart our nuclear industry as a means of reducing our dependence on foreign oil and reducing greenhouse gases,” Obama said during a speech the day after the midterm elections. “Is that an area where we can move forward?”

As of now, that seems to be possible. The White House has requested an additional $36 billion in federal loan guarantees for new nuclear plants and it seems that Republicans are likely to support the measure, even with a big focus during the campaign on reducing government spending.

But Corneli said the interesting part is that the important policy measures that are needed to help jump start the nuclear renaissance are the ones with the lowest cost to federal treasury, and those are the federal loan guarantees, “which really don’t cost the treasury anything.”

“Essentially it is self-financing,” he said. “It seems like the stars could be lining up right now for a boost in nuclear power development.”

Corneli said nuclear is established and the existing fleet of nuclear reactors provide the lowest cost power currently on the grid, but there hasn’t been a new plant built in roughly 30 years.
“We actually think that nuclear power has the potential to be the real foundation of clean energy technology,” he said.

Gillispie seems to agree.

“When the history of nuclear power is written, Nov. 2, 2010 will be a major turning point for the industry," said Gillispie. "It will mark the beginning of a dramatic resurgence for nuclear power."

Can nuclear plants operate beyond 60 years?

The United States clearly wants to lower emissions from power generation facilities and of the 104 operating emission-free nuclear reactors in the United States, about half of them are more than 30 years old. Nuclear plants in the U.S. are initially licensed for 40 years of operation and have the ability to receive a license extension for 20 additional years of power generation. While more than half of the reactors have received extensions, and most of the remaining plants are expected to as well, the question now is, “Can these nuclear power plants operate beyond 60 years?”

A survey conducted by the Electric Power Research Institute in early-2010 of executives representing 57 of the 104 operating units found that more than 60 percent believe there was a greater than 75 percent likelihood of extending operations beyond 60 years to 80 years and beyond.

Recognizing the challenges facing the extension of plant operation from 60 to 80 years and beyond, EPRI launched the Long-Term Operation project to “provide value by identifying and developing research and development activities that will provide the technical basis for license renewal beyond 60 years and for extended high-performance operation.” Along with EPRI, the Department of Energy, the Nuclear Regulatory Commission, some U.S. and international utilities and industry vendors are participating to modernize and improve plant operations, as an example.

Maria Korsnick, chief nuclear office and senior vice president of Constellation Energy Nuclear Group, said the goal is to harness the “known benefits of nuclear power, which right now provides more than 70 percent of emission free electricity in the U.S.”

Korsnick said it is an opportunity for Constellation, as they still have very much life in their current license, to look ahead and understand what potential issues could be present. Constellation currently operates two of the oldest reactors in the fleet, Nine Mile Point 1 and Ginna, both of which turned 40-years-old last year.

Neil Wilmshurst, chief nuclear office and vice president of EPRI, said the LTO project “is around helping us all understand what challenges may be in front of us to secure continued operation of the existing fleet.”

He said technical issues have arisen and will continue to rise which has lead to EPRI deploying an Issue Tracking Table – a live document that is updated when new issues and questions come to light. Wilmshurst said that one key area that EPRI is gathering more information on is the issue of concrete aging. EPRI does not currently see concrete aging is a problem, but do acknowledge that they “need to understand what aging is in order to answer any questions regulators may have during the relicensing process.”

And the relicensing of a plant to extend its life to 80 years or beyond could be significantly more difficult than the first round of relicensing, according to Korsnick.
She said that unlike the first round of relicensing, which involved an inspection of the plant, she “would envision that going from a 60 to 80 year time frame would be an ongoing inspection of the plant to insure the fact they are aging as you have estimated.”

And she does have some experience in the field of relicensing as she was working with Calvert Cliffs when it became the first plant to submit for original license renewal.

Both Korsnick and Wilmshurst agree that nuclear has be a part of the generation mix in order to combat climate change and to achieve CO2 reduction.

“Nuclear can’t answer the whole problem,” said Wilmshurst. “But it is hard for us to envision CO2 reduction happening without sustained nuclear generation out into the future,” especially operating at 90 percent capacity.

Korsnick said the country still needs new nuclear plants to take shape, but did say they may be built at a slower rate perhaps than forecasted just a few years ago.

Nevertheless, “there is a compatibility, if you will, between the construction of new nuclear as well as the extension of our current operating assets,” she said. “A combination of extending the life of current assets as well as new technology positions us strategically as a nation for success.”