More than 24,000 MW of new nuclear energy is currently in the Nuclear Regulatory Commission’s licensing process. Does this mean nuclear energy is set for a comeback?
By Teresa Hansen, Associate Editor
Unstable fossil fuel prices, concerns about global warming and air quality, a growing economy, government support and incentives, advanced technologies and designs, an exceptional safety record, the best capacity factor of any electricity generating technology in the country and the need for more reliable baseload electricity generation have in the past two years pushed nuclear energy into the spotlight after decades of disrespect. Many energy industry experts now believe a nuclear industry resurgence is inevitable. Even Patrick Moore, a Greenpeace founder, has admitted nuclear energy is a “green” source of electricity that can play a big role in meeting the nation’s and the world’s growing energy appetite.
But, is nuclear energy really set for a comeback? Do the newfound support and accolades guarantee that new nuclear power plants will join the electricity generation mix?
Currently, 19 proposed nuclear units representing more than 24,000 MW of electricity are in the Nuclear Regulatory Commission’s (NRC’s) licensing process (Figure 1). NRG Energy said it plans to build two more nuclear units (both to be GE’s advanced boiling water reactors) at its South Texas Project site, bringing the total to 21 planned plants. And in late August, TXU Corp. said it plans to build 2 to 6 GW of nuclear capacity. Most experts agree, however, that the United States isn’t likely to see a new commercial operating plant for many more years. These experts believe the first plants will be ordered around the end of this decade, which, if things go well, will allow them to be operational sometime between 2013 and 2015.
Dan Keuter, Entergy Nuclear’s business development vice president, presented his view on nuclear energy’s future at the American Nuclear Society’s (ANS) Annual Meeting held in Reno, Nev., earlier this year. As the second largest nuclear power plant owner/operator in the United States, Entergy is expected to be the first utility to receive an early site permit (ESP) from the NRC. Keuter said that even though Entergy should receive the ESP in 2007, it is still several years away from actually building a new nuclear power plant.
He believes that the nuclear energy industry is poised for a renaissance, but several things must come together first. Those items include:
- Safe and economic plant designs
- Favorable energy policy
- Risk mitigation
- Adequate financing
- Successful completion of a first new plant
- Streamlined licensing process/10 CFR 52 revisions
Safe and Economic Design
Robert Schumacher, Westinghouse Electric Co.’s vice president of business development, told the ANS meeting, “At no other time in the past decade has nuclear energy received such positive attention from the public. However, nuclear power plants are by no means a shoe-in. They must be safe and competitive with other forms of generation.” To be successful, new plants must reduce capital and operation and maintenance (O&M) costs as well as shorten construction and start-up times.
Power plant designers are trying to meet industry expectations. The new reactor designs from Westinghouse (AP1000), GE (ABWR and ESBWR) and AREVA (EPR) include enhanced, simplified safety features, many of them passive. (See “Nuclear Power: Back in the Game” in Power Engineering magazine’s October 2005 issue for details on these reactor designs.) All three firms are focusing on standardized designs and avoiding the custom designs common of the nation’s first nuclear power plants. According to Schumacher, it is important to design with construction in mind and to identify and address problems early. By doing so, Westinghouse is aiming for a 36-month construction schedule, from concrete pour to fuel load. The company believes that advanced design tools that were unavailable when the existing plants were constructed (such as 3-D and 4-D modeling and planning and scheduling software) will greatly improve the design and construction process. So, too, will a modular, standardized approach to design and construction.
Bob Gamble, a GE Nuclear Energy manager, addressed his company’s perspective on successful design and delivery. “Success of the nation’s current operating fleet is responsible for today’s nuclear renaissance,” he said. “We believe we should build on the proven platform that got us where we are today.”
GE is following three steps during its ABWR and ESBWR design process. In addition to building on the successes of its existing nuclear power plant fleet in the United States, GE is tapping into its experience building new plants elsewhere. “GE has a large BWR footprint worldwide, with 92 operating plants and more than 50 years of experience,” Gamble said.
GE is using what it learned from its earlier designs and is focusing on a simpler design that can be built in 36 months. The new ESBWR can be built for $1,350 per kW and operated and maintained for 25 percent less than its existing BWRs, Gamble said. Through its worldwide construction experience, GE has developed a global supply chain, helping reduce design and construction costs. And because no new plants have been built in the United States in many years, much of the equipment for new plants will likely come from Europe and Asia, making a global supply chain important.
Like GE, AREVA is also relying on its experience and proven technology. The company has built more than 90 nuclear power plants throughout the world, representing almost 30 percent of total worldwide installed nuclear capacity. It has more than 30 years of operating results and is using those to design what it hopes will be a more competitive reactor. AREVA says its reactor design will generate electricity at a lower cost than a gas-fired power plant, which it sees as one of nuclear power’s main rivals.
AREVA plans to accomplish this by increasing plant output to 1,600 MW; extending its service life to 60 years (previously designed plants have a 40 year service life); and reducing the amount of uranium needed to fuel the plant by 17 percent, saving fuel costs and reducing waste volume. This is aimed at lowering the entire fuel cycle cost-from enrichment to reprocessing. AREVA claims its design will provide easier access and simplified maintenance operations, further reducing maintenance costs. It also plans to shorten scheduled refueling outages.
Although AREVA’s new reactor design has not yet been licensed in the United States, it is currently being built in Finland and will also be built in France, giving AREVA hands-on experience and offering the NRC valuable information that can be helpful during the licensing process.
In early February of this year, Toshiba Corp. announced that it will enter the U.S. market through its $5.4 billion acquisition of BNFL USA Group Inc. and Westinghouse Electric UK Limited (collectively known as Westinghouse Electric). Toshiba says the acquisition will position it as a global competitor with capabilities in the two most important standards for nuclear power systems: the BWR and the PWR (pressurized water reactor). Toshiba is already a BWR technology leader, with a strong presence in the Japanese market.
Mitsubishi Heavy Industries (MHI) announced in July plans to enter the U.S. market with a version of its advanced pressurized water reactor (APWR), which will be called the US-APWR. This version will be a modification of Mitsubishi’s Japanese plant that includes features that MHI says U.S. companies demand. Features will include greater economy through increased capacity, a 20 percent reduction in plant building volume and a 39 percent thermal efficiency level, which MHI claims is the world’s best. The company expects to receive NRC design certification for the US APWR by the end of 2011.
Mitsubishi’s APWR was developed from Westinghouse’s PWR designs during collaboration between the two companies to produce a reactor for the Japanese market. “Now that our development partner Westinghouse Electric has been bought by Toshiba, we need to start doing business on our own, and decided to enter the U.S. market,” said Hiroshi Inoue, vice president of MHI Nuclear Energy Systems, Mitsubishi’s Washington-based subsidiary launched to market, attract and process U.S. orders.
Construction Finance and Risk
Reactor designers may be committed to providing more efficient, simpler and safer nuclear power plants. But even the best nuclear power plant design will likely face financing challenges.
Construction costs for the last nuclear power plants completed in the United States ranged from $2 billion to $6 billion, averaging more than $3,000 a kW, according to the Congressional Research Service. Nuclear industry experts predict that the advanced plants being designed can be built for less than half that if identical plants are built in a series, creating advantages through economies of scale. Of course, this remains a prediction until a new plant is actually constructed. Therefore, building the first new advanced nuclear power plant is considered a high-risk venture by both the U.S. nuclear power industry and by Wall Street. John Polcyn, Bechtel USA’s New Nuclear Generation vice president, said, “Expectations are high. Whoever goes first must have the backing of the entire industry. The first project must succeed; it must be on schedule and within budget if a second, third or fourth project is going to be built. If the first plant isn’t successful, we may not get another chance.”
Favorable Energy Policy
Because of its commitment to the nuclear power industry, the U.S. government has created some financial incentives to “jump start” the industry. The Energy Policy Act of 2005 (EPACT2005) includes several provisions aimed at making nuclear power plant investments more attractive. It provides risk insurance to the owners of the first six advanced nuclear power plants. The insurance would pay 100 percent of the cost for delays at the first two plants (up to $500 million each) and 50 percent for delays at the next four plants (up to $250 million each). EPACT2005 also provides up to an 80 percent loan guarantee (similar to Federal Housing Administration mortgage insurance) should the power plant owner be unable to repay the loan. These two programs will cost the government nothing, provided the licensing process works properly and the new power plants are built on time, on budget and operate as expected.
EPACT2005 also includes a production tax credit of $18 per MWh for the first 6,000 MW of new nuclear power for up to eight years, capping at $125 million per plant (similar to the wind energy tax credit that has been in effect since 1992). By enacting these incentive programs, the government hopes to ensure that nuclear energy remains a major part of the nation’s generation mix.
Streamlined Licensing Process/10 CFR 52 Revisions
During his address at Limerick Generating Station, at Pottstown, Pa., on May 24, 2006, President Bush said the nuclear energy industry is an “over-regulated industry.” He emphasized his administration’s and Congress’s commitment to creating a positive environment for the nuclear energy industry, including a streamlined NRC licensing process.
According to Nils Diaz, who addressed the ANS meeting shortly before retiring as NRC chairman, the Commission now has a workable and manageable process that evaluates risk at the “front end” of the licensing process. “We are breaking the old mold; changing to be more responsive and focused,” he said. With support from Congress, he said the NRC is preparing for new reactor licensing.
Over the last several months, the expected number of new reactor licensing activities has increased significantly. For example, the NRC’s expected number of construction and operating license (COL) applications rose from four to 11. Diaz said the NRC is preparing to review these applications, as well as others that are expected to be submitted during federal fiscal years (FY) 2007 and 2008, by identifying, hiring and training the management, technical and support staff needed to review the anticipated applications. Table 1 lists the NRC’s anticipated activities for FY 2006 through FY 2008. The activities listed for FY 2008 reflect the NRC’s best estimates for applications based on industry information.
The NRC staff also plans to update and maintain current and effective reactor guidance documents for the staff and the applicants to use during new site and new reactor licensing. In addition, the Office of Nuclear Reactor Regulation staff is working with each region to determine what organizations will support implementation of the construction inspection program.
The NRC is focusing on new reactor licensing activities by reviewing applications for design certifications (DCs) and ESPs, and it is prepared to review multiple COL applications.
“We are ready to review the applications in parallel,” said Diaz.
The Commission also plans to create reference COLs for each reactor design. “This process should resolve the technical issues one time, very well for all applicants,” Diaz added. The NRC is asking the industry to identify a reference COL application for each standard design (AP1000, ESBWR or EPR). The reference COL application would identify the technical areas to be considered standard among all the COL applications that reference that particular design. The NRC plans to perform concurrent reviews of COL applications that are based on the reference COL application. This information will determine the schedule for reviewing applications. However, if a plant deviates from the standard design, the application will be considered “custom,” meaning the schedule and resources will be set on an application-by-application basis. The NRC says that reference COLs for other reactor designs being developed will be considered when commitments are made to submit multiple COL applications using the design.
The NRC is also working with external stakeholders to develop a set of guidelines to define the expectations for interactions between the NRC and the applicants during the licensing process. The guidelines are aimed at providing a predictable and consistent method for application acceptance and technical review.
While this is a good start, Entergy’s Dan Keuter says a lot remains to be done. He said Entergy is hopeful its COL will be completed in 27 to 30 months even as the NRC says it may take as long as 42 months. “The process is working,” he said, “but it must work in a timely manner.”
Keuter added, some 30 areas (across more than 150 pages) in the licensing process exist where utilities and the NRC disagree. In addition, he said that as of late May, the COL contained 42 areas that must be addressed. Workshops had been conducted covering 12 of those 42 areas.
Despite the concerns and potential barriers, conditions appear right for nuclear energy to make a comeback. No other technology can offer such large amounts of emissions-free, reliable baseload electricity at a competitive and stable price and with a safety record second to none. Although a negative light has been cast on the industry for almost three decades, Americans are beginning to accept what those in the industry have known all along: nuclear energy makes sense.
Regulatory Requirements for New Construction
The NRC set three key requirements that must be met to build a nuclear plant. They are:
- Early site permit (ESP). This gives a company approval for a plant site before a decision is actually made to build. The energy company makes the application and the approval process takes approximately two and a half years.
- Design certification (DC). This signifies the NRC’s approval that the reactor design meets regulatory safety standards. The reactor manufacturer submits the application. Once the decision to seek certification has been made, the regulatory interactions leading to approval take between five and eight years.
- Combined construction and operating license (COL). This permits the construction and subsequent operation of a specific nuclear reactor design at a specific site. Energy companies and reactor manufacturers may apply for a COL. The approval process for the first COL could take up to three years, while subsequent COL approvals for identical plants should take only about a year and a half.
Source: Nuclear Energy Institute