slightly off topic....Our nuclear future: Will new economic realities make plant construction profitable?
From the Huntsville Times
al.com 
Our nuclear future: Will new economic realities make plant construction profitable?
Sunday, May 27, 2007
By BRIAN LAWSON
Times Business Writer, brian.lawson@htimes.com
With concerns growing about greenhouse gas emissions, fuel costs taking a bigger bite out of operations budgets and a track record of good performance, TVA's nuclear power ambitions, once wildly uneconomical and nearly dead, are finding new life.
The utility, which provides power in seven states, including North Alabama, has $24 billion in debt, mostly from a canceled nuclear plant building spree into the early 1980s, but the economics of nuclear power have changed.
There is talk of a nuclear renaissance by the utility industry, with new reactor designs being considered and the never-completed Bellefonte plant near Scottsboro as one of two sites selected for potential use by a industry consortium that includes TVA. That project, dubbed NuStart, will seek a construction and operating permit beginning next year with hopes for a license being granted by 2011.
TVA has indicated strong interest in finishing the Unit 2 reactor at Watts Bar in Tennessee, a $2 billion to $3 billion project, on the heels of the completion of its restart project of the 22-years-idle Unit 1 reactor at Browns Ferry near Athens.
TVA's restart of its Unit 1 reactor, after a five-year $1.8 billion project, is being watched closely, as the plant would mark the first reactor start-up in the U.S. since TVA's Watts Bar Unit 1 in 1996.
Browns Ferry Unit 1 went on line early Tuesday morning and was shut down early Thursday after efforts to fix a small hydraulic leak failed and some 600 gallons of non-radioactive hydraulic fluid spilled in the plant's turbine building.
TVA is taking a very deliberate - meaning several weeks - approach to the restart of Unit 1, raising the power level, testing systems, and bringing the power back down, with the goal of connecting back to the power grid full time this summer.
Unit 1, like Units 2 and 3 at Browns Ferry, is set to produce up to 1,155 megawatts of power, enough to light 650,000 homes.
It is too early to tell if there will be more nuclear plants in the future, but the nuclear industry is making plans in that direction. Melanie Lyons, spokeswoman for the Nuclear Energy Institute, the industry's trade group, said 15 companies are considering some 33 plants around the country. There is licensing and permitting and financing that must take place, but Lyons said the NEI would like to see construction start on a new plant in 2010.
David Lochbaum, a nuclear energy specialist with the Union of Concerned Scientists and a former TVA employee, said there are signs that point in both directions for future nuclear plant construction. He said the fact that TVA restarted Unit 1 speaks for itself. But, he added, if new reactors were as cost-effective as has been suggested, TVA would have likely put in a new reactor, for similar costs, instead of restarting a reactor that began operating in 1973.
"Because of that, if it's an indication of a revival, it is more likely existing plants having a longer lifetime," Lochbaum said. "I'm not so much convinced that it means a whole bunch of new plant construction. The price is still fairly high."
What's different?
Ironically, the same kinds of environmental concerns that gave nuclear power a black eye are helping fuel its reconsideration.
Greenhouse gas emissions, driven by sources such as large coal plants, are now regarded as a major concern by scientists and environmentalists. Since nuclear power doesn't have much in the way of emissions, it is being touted by the nuclear industry as a clean alternative to coal and natural gas plants and finding less public resistance as a result, according to industry surveys.
Jack Bailey, president of TVA's nuclear generation development, said the economics of clean air regulations are helping drive TVA's future planning for power generation. Bailey said TVA's coal plants, with an average age of 50, could run almost indefinitely, if the utility is willing to continue to pour money into the clean air technologies that would be required to keep them running.
"With nuclear against coal and gas, nuclear looks as competitive as any of the other alternatives," Bailey said. "There is not the risk of clean air regulations, and we are developing nuclear options in the event more regulations are imposed."
Along with environmental pressure, the facts that TVA already has permits for its large nuclear plant sites and much construction there is completed remove many of the costs and uncertainties central to any new nuclear plant construction.
That TVA can build, or rebuild, a reactor at a site like Browns Ferry also enables it to simply add to the existing work force at the plant, rather than establish a whole new staff, Bailey said.
Another factor is that while nuclear fuel costs have risen significantly in the past few years, Bailey said, fuel costs are a small part of the operations costs of a nuclear plant. When coal or natural gas prices rise, as has also been the case, the pinch is sharper because fuel is a much bigger piece of the operating costs for those kinds of plants, he said.
But TVA's nuclear program was not simply beset by cost overruns, the utility also had management problems at its plants, as cited by the Nuclear Regulatory Commission. Management problems and safety problems don't inspire public confidence, but the utility has turned around its performance record in the past decade.
TVA officials stress their commitment to doing things the right way and spending the millions of dollars annually for maintenance to operate the nuclear plants safely.
Ashok Bhatnagar, TVA Nuclear's senior vice president for nuclear operations, said TVA's restarts of Units 2 and 3 at Browns Ferry in the 1990s helped inform the process for Unit 1. The same kind of intense planning and troubleshooting would be employed at Watts Bar as well, he said.
"We start with the value of really detailed planning," Bhatnagar said. "We looked at this (Browns Ferry Unit 1) project five years ago and engaged in a very detailed planning and estimating process. There was a very good business case. It already had an operating license for the reactor, therefore the restart would be very predictable from a licensing standpoint. We had significant experience on Units 2 and 3, and they enjoyed excellent performance after restart."
Looking forward, back
The rods that power a nuclear plant are obviously radioactive and will remain that way for a very long time. As more nuclear power is generated, so is more waste. A central repository for the waste was supposed to have been created at Yucca Mountain in Nevada, but that site has had a series of problems, and its expected opening by 2010 is in considerable doubt.
TVA will continue to store its spent fuel rods on site, in pools or in dry cask storage, but the long-term problem remains.
There is the fact that the reactors TVA is running aren't getting any younger. There are plenty of new parts and components and much attention to maintenance, Bhatnagar said, but in any aging system, more problems tend to crop up.
Critics of the Unit 1 restart and the growing number of older plants getting licensed to run longer, including Paul Gunter of the Nuclear Information and Resource Service, maintain that letting the plants run longer and producing a higher rate of power invite potentially serious problems. He said the design of the reactors at Browns Ferry was flawed from the beginning and dismisses the recent years of good performance from Units 2 and 3, as "trying to drive a car using the rearview mirror."
Gunter said safety concerns remain, and he is surprised that the older reactors are being hailed as the start of a new era.
"It's like putting a Chevy Corvair back on the road and calling it a Prius," Gunter said.
TVA obviously sees it differently.
TVA's Bhatnagar said the utility has worked very hard to establish processes and procedures to ensure safety. He said the work at Unit 1 has shown the effectiveness and the consistency of TVA's management.
"What a really rewarding experience it's been for the people at Browns Ferry," he said. "The employees are elated. There is a deep sense of satisfaction in bringing the unit back to service. It was a lot of hard work, by very skilled technicians, excellent engineers and operators over a long period of time to bring this project to reality on time.
"There is a real sense of accomplishment." |
