Reactor Coolant Pumps for AP1000 still a problem

This is a story that I really don’t want to tell, but bad news is like old fish. It doesn’t smell any better as it ages.

All eight AP1000 construction projects are at risk “for want of a nail.”

In this case the nail is a reactor coolant pump, the largest one in the world, equipment that evidently doesn’t exist and for which there is only one supplier.

In May 2010, Nuclear Engineering International published an article that announced that the coolant pumps for the first AP1000 reactors had been successfully tested at normal operating temperatures and pressures. Those tests were witnessed by the customer.

But RCPs were a significant topic during the July 30 investor call held by Curtiss-Wright (NYSE:CW) on its second quarter earnings, five years after the triumphant announcement that testing had been completed.

The company’s presentation during the call included the following statement from chairman, president and CEO David Adams [no relation]:

Regarding an update to our long-term operating margin guidance, we are not prepared to provide any target at this time. As the AP1000 program is quite significant to our future growth rates, we need to finalize the pending China order before fully resetting long-term expectations for margin growth….

Next I would like to provide an update on the AP1000 program. Overall we continue to make progress in the production of our first of a kind reactor coolant pump or RCP, supporting the AP1000 nuclear program. We have successfully completed the engineering and endurance testing phase and are now working with our customer and the Chinese as we evaluate the results of those tests. We expect to begin deliveries of our RCPs to China in the latter half of the third quarter. Regarding our next AP1000 order, we anticipate contract negotiations to resume once we begin shipping pumps and remain hopeful for the order by the end of the third quarter.
(emphasis added)

CEOs of public companies are required to inform investors about issues that can materially affect their finances. That task is not always easy or welcome.

Preparing the exact wording can require an almost unbelievable amount of effort and is often a painful process for several players who must contribute. It takes experience and discernment to unravel the words.

Adams was providing forward-looking statements using words that clearly indicated he was making predictions based on currently available information. As earnings statement disclosures warn, predictive statements might not be correct.

“Working with our customer” and “expect to begin deliveries” are statements indicating that work is not only incomplete, but still somewhat undefined.

Uncertainty about completion became even more apparent during the Q&A period, as Adams answered related questions:

I said on the last call as well that we had anticipated that we would get through the E and E testing and we did over the end of last quarter and that was excellent. We were very happy. We proved out the design modifications that we had made at that point. The thrust runner, bearing and so forth. The whole purpose was to go through and to really prove that we got a 60-year-life pump.

And so everybody’s happy that we did accomplish that. And now as a result we are doing some tweaks and we anticipate that we are going to be shipping hardware in the very near term to China. And that was always the premise with our customer both domestic and China that once we started shipping product that met the requirement (of efficiently passing the E and E testing) then we would be starting resuming negotiations. So you’ve heard me say before I’ve been cautiously optimistic; I remain so. And third quarter is still what we are looking at to pick up an order as I indicated. We’re going to be shipping hardware pretty soon.
(emphasis added)

For anyone who is experienced in nuclear energy-related engineering and quality assurance programs, “doing some tweaks” is a red-flag statement.
It means that changes may still be necessary. There are few changes that can be made to critical equipment without going back into the testing and evaluation phase.

Because of the critical nature of these pumps and the harsh working environment that they must endure during their 60-year design life, testing and evaluation are time-consuming endeavors.

The current redesign and retesting effort began sometime before April 2014 when statements issued by the responsible companies indicated that some pumps that had already been delivered to China passed post installation testing and others did not. That was almost 18 months ago.

As Curtiss-Wright statements indicate, there will not be any new AP1000 commitments until after the coolant pumps have been proven. Customers have growing reasons to wonder if that finish line will be reached before they run out of patience or money.

When contacted via email about the reactor coolant pump situation described above, a Westinghouse spokesperson offered the following:

Construction of four AP1000 units in China continues to move forward at an impressive pace, with milestones being achieved on a regular basis. The related RCP issue is being resolved by all parties working together in the safest and most timely manner possible. Westinghouse does not comment on confidential project or commercial matters. Westinghouse remains focused on, and committed to, the safe and successful delivery of AP1000 units in China and around the world.

Let’s hope that the parties are working together to complete their work safely and effectively in the very near future.

The above article was first published in the August 20, 2015 issue of Fuel Cycle Week and is republished here with permission.

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