Nation facing nuclear crossroads, speakers tell conference

The nuclear power industry in the United States is facing a crossroads, speakers told an industry gathering in Washington, D.C. Feb. 20.

On one hand the industry is building its first new plants in a generation – and at the same time much of the existing reactor fleet could retire by 2040, speakers told the 9th Platts Nuclear Energy conference.

Can renewables replace dozens of retiring reactors by 2040? “The answer is no,” said Dominion (NYSE: D) Chairman, President and CEO Thomas Farrell II in answering his own question.

“Frankly, at $3 gas, it is pretty hard to build anything – including natural gas plants,” Farrell said. The Dominion CEO also said he was disappointed that President Obama spent so much time discussing climate change during the state of the union address without once mentioning nuclear power.

Nevertheless Farrell is “cautiously bullish” on the nuclear outlook.

Dominion reflects complex industry

Dominion might be a good barometer of the complicated state of U.S. nuclear power in 2013.

During the first half of this year, Dominion plans to idle its Kewaunee merchant nuclear plant in Wisconsin for economic reasons. Farrell noted the Midwest ISO offers no capacity payments to power companies for making a plant available.

At the same time, Dominion is continuing pursuit of a license for a third nuclear unit at its North Anna station in Virginia.

Dominion anticipates getting its license by 2015, and will make a decision at some point afterward on whether to actually move toward construction.

Dominion wants to keep its North Anna nuclear option open although it’s in the middle of a combined-cycle gas building spree in Virginia and a large part of its company is now devoted to natural gas infrastructure. Dominion plans to develop a liquefied natural gas (LNG) export facility at a Maryland site about 40 miles outside of Washington, D.C.

“Although current market conditions favor natural gas as a fuel source, maintaining a diverse supply of fuels in your generating portfolio safeguards customers from price volatility – a longstanding concern in natural gas markets,” Farrell said. “So, going all in on gas defies everything we know and preach about diversification and prudent risk management.”

Size matters: Group planning small reactor at TVA site by 2022

Babcock & Wilcox mPower President Christofer Mowry updated the conference on the progress being made by the B&W affiliate and its partners toward developing the nation’s first small modular reactor (SMR) by 2022 at the Tennessee Valley Authority’s (TVA) Clinch River site in Oak Ridge, Tenn.

B&W and TVA announced Feb. 20 that they have signed a contract setting out the process of eventual license submission to the Nuclear Regulatory Commission (NRC). Bechtel is another member of the mPower SMR team, which has already attracted some Department of Energy (DOE) funding.

Detailed design work has begun on the 180-MW units, Mowry said. The mPower official said that the SMR design will address many of the heightened safety and security concerns in a post-Fukushima world, Mowry added.

Flooding issues are addressed through the plant’s passive design. Aircraft impact concerns are resolved with by the unit’s deep embedment. “In fact the entire nuclear island is underground,” Mowry said.

Passive protection can go on for 14 days without any needs for external support, such as off-site power, Mowry said. The mPower group expects SMR design certification by 2018.

So far, the company’s conversations with NRC have not turned up any “show stoppers,” Mowry said.

The B&W group isn’t the only nuclear vendor that’s thinking small.

Westinghouse Electric Vice President Tom Geer noted that his company is working with a group that includes Ameren (NYSE: AEE) to develop an SMR at the Callaway nuclear plant in Missouri.

The Westinghouse SMR is a 225-MW integral pressurized water reactor with all primary components located inside of the reactor vessel. While the Ameren-Westinghouse group did not attract DOE funding in 2012, Geer doubts that DOE will discontinue its SMR incentive program after only one year.

Geer also gave a brief progress report on commercial installation of Westinghouse’s new full-sized reactor – the AP 1000. Subsidiaries of Southern (NYSE: SO) and SCANA (NYSE: SCG) are overseeing installation of the AP 1000 design reactors at the new Vogtle reactors in Georgia and the new V.C. Summer reactors in South Carolina.

This type of reactor is also being installed at the Sanmen nuclear power station in China, Geer noted.

In other conference highlights:

** Nuclear Energy Institute (NEI) Vice President Richard Myers said there are only about 11,000 MW of new coal and nuclear generation under construction in the United States – not nearly enough to make up the expected retirements.

** Idaho National Laboratory (INL) official Kathryn McCarthy updated the Platts conference on her work as director of the Light Water Reactor Sustainability Office. The research currently indicates that some reactors might be able to run 80 years or longer.

** C. Dukes Scott, a veteran official with the South Carolina Office of Regulatory Staff (ORS), said he thought he had seen the last of new nuclear plant construction in the state years ago – before the current development of V.C. Summer Units 2 and 3.

The new nuclear units will move SCANA’s South Carolina Electric & Gas (SCE&G) from 11% nuclear capacity in 2011 to 33% nuclear in 2018, Scott said.

The South Carolina official said he hopes Duke Energy (NYSE: DUK) will buy a portion of state-owned Santee Cooper’s 45% share of the units. Talks have occurred between the parties, and Scott said such a deal would make the Summer expansion a truly regional nuclear project.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.