Nuclear Renaissance Faces Formidable Challenges

The world’s growing appetite for electricity, coupled with concern about global warming, are promoting the idea of new nuclear power plant construction worldwide. Like many countries, the United States is looking at nuclear power as a solution to its growing need for clean energy. During a visit to the newly restarted Browns Ferry Unit 1 nuclear power plant in June, President Bush said no single solution exists to climate change, but there is no viable solution that does not include nuclear energy. Yvo de Boer, the executive secretary of the United Nations, also said recently that he has never seen a realistic solution to climate change that did not include nuclear energy.

Based on such statements, one could assume that a nuclear renaissance is inevitable. However, as participants in the American Nuclear Society’s (ANS) 2007 Annual Meeting in Boston pointed out, a nuclear renaissance is far from a sure thing.

Art Stall, FP&L’s senior vice president and chief nuclear officer, co-hosted the event’s opening plenary and told attendees that the euphoria surrounding the nuclear renaissance has been slowed by the realities of the challenges to be faced in building new nuclear power plants. Stall said one of the biggest challenges is finding qualified people (including craft labor, technicians, engineers and scientists) to support construction and operation. He pointed out that 40 percent of the current nuclear power plant workers are eligible for retirement within the next five years. Furthermore, he said only 8 percent of the current nuclear plant workforce is under 32 years old. While technical and engineering college graduate numbers are increasing, Stall said much competition exists from other industries for these graduates and the nuclear industry must become creative if it is going to entice these graduates to enter and remain in the field.

Dana Mead, chairman of MIT Corp., the Massachusetts Institute of Technology’s governing body, also spoke at the plenary session as an industry outsider. Mead said that another formidable challenge is the public’s and politicians’ failure to understand nuclear power’s important role. He that few people outside the industry realize that nuclear power not only represents 20 percent of the nation’s generating capacity and 25 percent of the generating capacity worldwide, but also 70 percent of the non-carbon generating capacity worldwide. “The story is there is no story,” Mead said. Most people simply are not aware of nuclear power’s important role.

To emphasize his point, Mead presented statistics drawn from public opinion surveys conducted by MIT’s political science department. In 2002, nuclear power was the least liked energy source in the United States. In a 2007 survey, however, the public’s opinion of nuclear power improved and today is approaching the same approval level as natural gas-generated electricity. Mead cautioned, however, that even though favorable public opinion is rising, industry leaders must be aware of “the danger of being lulled into complacency and assuming that nuclear energy will be a part of the energy future.” He said nuclear power faces competition from other forms of energy and must have public support and approval as well as support and commitment from government.

Mead said that garnering public and political support in the U.S. will require a two-pronged approach. First, the industry must show early progress once construction begins on an initial plant. Second, the industry must address concerns and perceptions, especially about nuclear waste. A waste repository at Yucca Mountain will require nuclear waste to be transported through as many as 40 states. Mead said that those states are represented by 80 U.S. senators and well over 100 congressmen and that the majority of these lawmakers will have to “buy into” Yucca Mountain. He also said that nuclear power generates the most varied public opinion of any power generation type. According to MIT studies, 39 percent of those polled feel it should be reduced, 35 percent feel it should be increased and 11 percent don’t believe it should be used at all – the highest fraction of people who are opposed to any type of generation. Mead said many more would support nuclear power if the nuclear waste issue was resolved.

Supply chain challenges also received attention at this year’s ANS meeting. Carol Berrigan, Nuclear Energy Institute’s (NEI’s) director of industry and infrastructure, provided an overview of NEI’s Nuclear Manufacturer’s Study. In 1980, more than 500 companies in the United States carried N-stamps, a required qualification to sell equipment to the nuclear industry. Today that number hovers around 100. In addition, during the first nuclear plant construction period, most suppliers were domestic and competition was limited to companies within the United States. Today, competition and the supply chain are international. Currently, Japan is the only supplier of ultra-heavy forgings to the nuclear industry. And there are two companies in the world that can provide heavy forgings and rigging and neither is in the United States, Berrigan said. There are few companies in the United States that can provide large component castings and only one U.S. company that can manufacture large nuclear-grade components. This lack of U.S.-based manufacturing means that constructors/owners of new U.S. nuclear power plants will be competing with nuclear plant constructors/owners around the world.

David Barry, Shaw Group, said that not only will there be global competition for nuclear components, but the nuclear industry will be competing against many other industries for materials and supplies. “The nuclear portion is miniscule compared to other industries,” Barry said. To make matters worse, most bulk commodities must be qualified to nuclear standards, he added.

Given the small number of existing U.S. suppliers and the fact that ultra-heavy and heavy forgings are not available domestically, it becomes clear that the nuclear power industry is not a domestic industry, said Tom Sanders, vice president, Council on Global Nuclear Competitiveness and manager of Sandia National Laboratory’s Global Nuclear Futures Initiative. Most components “except the concrete” are imported and the United States has little to contribute to the world’s emerging nuclear power markets, Sanders said. “The United States and its national security interest hardly have a seat at the table when it comes to providing anything to the emerging markets,” he said. “We are involved only because we have a ‘big stick.’ We have little or nothing to offer other countries when it comes to nuclear power.”

Sanders’ comments were aimed at the federal government’s lack of organized initiatives over the past few decades, not at the commercial nuclear power industry. According to Sanders, the last time the federal government meaningfully promoted nuclear energy was in the 1950s during President Eisenhower’s Atoms for Peace program. He said that the current administration deserves credit for “at least proposing a path forward that includes nuclear energy and nuclear research and development.” There isn’t a free and fair market when it comes to nuclear, Sanders said. Nuclear power has a key role to play in the world’s future and the United States needs to do more to promote it.

Other challenges discussed during the weeklong ANS meeting included nuclear proliferation, financing and fuel cost and supply. These topics, as well as more detail about the issues mentioned above, will be discussed in a feature article on nuclear energy in Power Engineering magazine’s September 2007 issue. -Teresa Hansen

Natural Gas Poised to Fill the Gap

While no one is predicting a repeat of the natural gas plant construction boom of the 1990s and early 2000s, a combination of factors – including higher material and construction costs affecting all kinds of power plants along with increasing awareness of issues related to carbon emissions – are spurring a resurgence in new gas-fired generation across North America.

In June, Siemens Power Generation CEO Randy Zwirn predicted U.S. utilities will likely build more gas-fired power plants over the next few years due to resistance to new coal plants. He told an industry conference in New York City this spring that uncertainty about costs from greenhouse gas emissions will drive many power providers toward gas plants. “By default, the only technology that’s going to be available is gas-fired generation,” said Zwirn. “From an environmental standpoint, gas is still the best choice of the fossil fuels.”

Noting that utilities have backed away from building a substantial number of coal units that were in development or under construction a year ago, Zwirn said a lack of greenhouse gas legislation leaves utilities with no clear idea about what coal plant costs are going to be. Siemens, he said, has begun to see signals of interest in new gas-fired units, especially in Texas.

In late June, Duke Energy filed a preliminary certificate of public convenience and necessity with North Carolina regulators for new 600 to 800 MW natural gas combined cycle (NGCC) units to be built next to existing coal units at its Buck Steam Station in Rowan County and at the Dan River Steam Station in Rockingham County. Representing as much as 1,600 MW of new NGCC capacity, the proposal would match the largest installations of any utility or independent power producer during the gas boom of a decade past.

Florida utilities are also looking to build new gas-fired capacity in lieu of coal after state regulators rejected two proposed coal projects. Florida authorities turned thumbs down on the proposed 800 MW coal-fired Taylor Energy Center in northern Florida, which was to have been built by Jacksonville Energy Authority and four municipal electric utilities. The Florida Public Service Commission also denied a proposal by Florida Power & Light to build a 1,960 MW coal-fired power station in Glades County. Regulators cited concerns about rising construction costs and future coal prices. After the rejection, FPL warned the state might be putting all its eggs in one basket by overrelying on natural gas. More than half of the Sunshine State’s power already comes from natural gas, with another 20 percent from oil. Less than 20 percent comes from coal and less than 10 percent from nuclear.

Meanwhile, Fluor Canada has received a $250 million procurement, construction and commissioning contract from independent power producer St. Clair Power of Chicago to build a 570 MW natural gas combined cycle plant in Ontario, Canada slated for completion late next year. Despite the relative lull in new gas generating capacity in recent years, Fluor has completed 44 gas power projects over the past seven years totaling almost 35,000 MW.

In Alberta, Canada, Enmax Corp. has announced it will build 1,200 MW of new gas capacity at a cost of $2 billion in the southern portion of the province – in part to help boost grid reliability needed because of Alberta’s aggressive expansion into wind energy. Since deregulating its electricity market eight years ago, enough wind capacity has been added in the southern part of the province to provide 4 percent of Alberta’s electricity. The increased reliance on wind has made Alberta vulnerable to power disruption because capacity factors for the turbines is never higher than 35 percent. Alberta’s grid operator has banned construction of new wind farms until reliability issues are resolved.

“We now have so much wind generation that we need to fall back on reliable sources of power,” said Peter Hunt, an Enmax spokesman. The higher the percentage of dependence on wind, the more vulnerable the electrical system becomes to disruption when the wind stops blowing.

Even though natural gas plants produce only about one third the carbon dioxide per kilowatt as a coal plant, they don’t get a free pass from some environmental groups. Quebec’s plans to build additional gas capacity is incurring the wrath of some environmentalists. As a result, Hydro Quebec will delay a second new plant after it received approval for what would be the first major gas plant in that province. The government approved construction of the $500 million Becancour plant, a cogeneration facility that will produce power and provide steam to surrounding industries. It goes into operation this year. The utility is looking for additional combined heat and power opportunities that might allow it to build additional gas-fired capacity with minimal environmental opposition.-Steve Blankinship

Construction & Contracts

Bechtel has been awarded a contract valued at $2.9 billion to perform engineering, procurement, construction and management for Peabody Energy’s 1,600 MW Prairie State supercritical mine-mouth plant in Illinois. Prairie State has signed purchase orders with Babcock & Wilcox for the boiler system, Toshiba for the turbines and Siemens Power Generation for emission controls.

TXU will pay Fluor $1.8 billion to design and build its two-unit, 1,600 MW coal-fired Oak Grove plant in Robertson County, Texas. Fluor and TXU set a November 2009 deadline for the first unit to meet minimum performance criteria. A deadline of May 2010 has been set for the second unit.

Duke Energy Carolinas LLC contracted Stone & Webster National Engineering for the engineering, procurement and construction of a $1.29 billion, 800 MW pulverized coal unit at Duke’s Cliffside generating station. Startup of the unit is expected by the summer of 2012. The project includes a coal-fired boiler, steam-turbine generator and systems to filter sulfur and other contaminants.

Fluor Canada Ltd., was awarded a procurement and construction project by St. Clair Power L.P. to build a 570 MW combined cycle power plant in Ontario, Canada. Project completion is projected for the fourth quarter of 2008. The approximate contract value of the award is $250 million. Fluor’s scope of work will consist of procurement, construction and commissioning of the plant at a greenfield site.

Progress Energy said it selected the Westinghouse AP1000 design for potential new nuclear plant construction at its Levy County, Fla. site. Duke Energy, SCANA and Santee Cooper, and the team of Southern Company and Georgia Power previously have selected the AP1000 design for possible future nuclear capability expansion.

First Solar Inc. said it has entered into five agreements for the manufacture and sale of solar modules totaling 685 MW. These new agreements are expected to allow for sales of approximately $1.28 billion between 2007 to 2012.

Mergers & Acquisitions

Clyde Bergemann Power Group has acquired Delta Ducon’s U.S. operations. Delta Ducon is a supplier of dilute phase pneumatic conveying systems in the U.S. power market. The business will be integrated as Clyde Bergemann Delta Ducon (CBDD) into the Clyde Bergemann Power Group Americas.

Bicent Power LLC completed its previously announced acquisition of the domestic independent power production business unit of MDU Resources Group Inc. in a transaction valued at $636 million. The acquired business consists of Centennial Power Inc. and Colorado Energy Management LLC. Centennial Power’s generating assets include 603 MW of electric generating capacity in Montana, Colorado, California and Georgia.

Business Briefs

The Independent System Operator New England (ISO-NE) has approved the deactivation of New Boston Generating Station’s Unit 1. Mark Schiavoni, Exelon Power President said that without a “reliability must run” (RMR) agreement with ISO-NE Unit 1 is “not profitable.” Initially built in 1965, New Boston Unit 1 is a 350 MW natural gas intermediate unit. Unit 2 was capable of producing 350 MW, but was damaged in a 2002 fire and is no longer in operation. The 20 MW L Street Gas Turbine, a Pratt & Whitney peaking unit that operates on distillate fuel oil, will be the only remaining unit under merchant operation at the site. Exelon Generation said it is assessing future potential use of the property and has not made a decision about the site.

A 150 MW, $131 million peaking power plant for AEP unit SWEPCO near Tonitown, Ark. began operation. Another two turbines are scheduled to come online in December, generating up to 340 MW. Initially, SWEPCO said it would build 480 MW. Officials now say they will continue to look at their options on expanding the Tonitown plant.

Duke Energy says it successfully tested soybean oil in one of its backup power plants that typically runs on diesel or natural gas. Duke said the tests at Mill Creek, a combustion-turbine peaking plant, were the largest U.S. trial of biodiesel on a plant of that type and size. Duke tested 100 percent biodiesel and three biofuel-diesel blends ranging from 20 percent to 80 percent biodiesel. Before it can become part of the plants’ fuel mix, biodiesel must show financial, operational and emissions benefits. The company said it still has some technical issues to work out, particularly with the fuel blends containing mostly biodiesel.

Peabody Energy and ConocoPhillips said they will explore developing a commercial-scale coal-to-substitute natural gas facility using ConocoPhillips’ trademarked E-GAS technology. The project would be developed as a mine-mouth facility where Peabody has access to large reserves and existing infrastructure. It would annually produce 50 billion to 70 billion cubic feet of pipeline quality SNG from Midwest sourced coal. The project scope would provide for carbon capture and storage. Preliminary design and economic assessment is expected to be complete in early 2008.

People & Personnel

PG&E Corporation said that Thomas B. King, president, is leaving the company to join National Grid plc to join its board as an executive director. King will oversee National Grid’s electricity and gas business. Effective with King’s departure, current Pacific Gas and Electric Co. President and CEO, Bill Morrow, will report directly to Peter A. Darbee, PG&E Corp. chairman and CEO.

Exelon said that executive vice president Jack Skolds will retire effective Sept. 7. Skolds joined Exelon in 2000 and serves as the president of Exelon Energy Delivery and the president of Exelon Generation.

DPL Inc. promoted Gary Stephenson to senior vice president, power production. He will be responsible for operating and managing DPL’s 3,750 MW of electric generation. In addition, he will maintain responsibility for DPL’s commercial operations, which include fuel procurement, wholesale sales and unregulated retail sales and will continue to report to Paul Barbas, DPL president and CEO. Stephenson replaces Pat Swanke who retired July 31. Teresa Marrinan, formerly managing director of portfolio management, has been promoted to vice president of commercial operations, assuming Stephenson’s former role. DPL also said that Dennis Lantzy will join DPL as vice president, power production engineering and construction. And Kevin Crawford, formerly director of power production, has been promoted to vice president of power production. Marrinan, Lantzy and Crawford will report to Stephenson.

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