Bechtel And BWXT Quietly Terminate mPower Reactor Project
Generation mPower, one of the early leaders in the development of small modular reactors (SMR), has decided to fully terminate its partnership and put the design material that was developed onto a corporate shelf. Though this isn’t specifically good nuclear news, it is an indication that nuclear energy development has many hurdles that it shares with all other fields of technology development.
It’s challenging, expensive, usually takes longer than expected, requires focus, subject to changing situations and even when substantial resources are available and invested, failure – or giving up – is always both a risk and an option.
What Was Generation mPower?
Generation mPower was a partnership between BWXT – which was a part of The Babcock & Wilcox Company when the partnership was first formed – and Bechtel. BWXT owned 90% of the equity in the partnership and was responsible for designing the nuclear steam supply system, which is the nuclear fuel core, the piping and heat exchangers and the operating machinery inside the containment building.
Bechtel owned 10% and was responsible for designing the structural parts of the containment building, all of the buildings and internal systems for the steam system, and the site support systems. Bechtel also provided its project management expertise, including occupying what is often the most powerful position in any partnership, that of the comptroller with the final say in any major expenditure decision.
The companies worked closely together to design the site layout with an eye towards meeting stringent security and aircraft impact requirements in a cost and manpower effective way.
For a complete power plant, more than 80% of the overnight cost fell within Bechtel’s scope.
What Was The mPowerTM Reactor?
One of the first decisions made in the mPower development process was that the product would be a refined pressurized light water reactor with a steam plant to produce electricity. The system would take advantage of more than 50 years worth of development and gradual improvements in understanding of all aspects of that type of reactor. Part of the decision process was driven by what was seen as a near-term market demand for better, smaller, more flexible nuclear power generators.
The mPower was announced to the world in June 2009, but the initial decision to pursue the project came before the financial crisis that happened in the summer of 2008. At that time, natural gas had been on an eight-year run of ratcheting price increases. In 2000, electric power generators could buy gas for about $2.00 per MMBTU. By June 2008, electricity generating companies were paying as much as $12 per MMBTU for routine deliveries with substantially higher price spikes during periods of especially high demand.
Rather than pursue a technology that was unfamiliar to the Nuclear Regulatory Commission (NRC) and accept the challenges of teaching the regulator how to ensure safety with a different paradigm, B&W chose to keep their design mostly within the known box with conventional fuels and materials that had already been qualified and understood. The expectation was that this choice would lead to more rapid completion of a marketable product with a design certification from the NRC.
After several major iterations during the 7 years of development, the basic mPower unit would have been a 195 MWe pressurized light water reactor. The nuclear steam supply system would have been completely housed inside a tall pressure vessel that minimized the opportunity for large piping failures. The reactor core would be in the lower section of the vessel, the control rod drive mechanisms would be above the core, the once-through steam generators would be above the the CRDMs with a water riser going up the center of the steam generators and finally the pressurizer would be the highest section of the vessel.
With the once through steam generators, mPower reactors would produce steam that was superheated by about 50 F.
There is a passing conceptual resemblance between the mPower reactor and the NuScale power module with one primary difference – mPower would have been a forced convection plant with 8 small canned motor reactor coolant pumps mounted with the motors outside the pressurizer section on what is essentially a very thick shelf. The pump cans would bolt to the top of the shelf and the motor shaft would extend into the section of the pressure vessel contained by the shelf so that the pumps could circulate water through the system.
The NuScale power module, as is well known, has no reactor coolant pumps and depends on natural circulation driven by density differences between cooler water, hotter water and steam at various temperatures.
The forced circulation system chosen for mPower, along with somewhat larger pressure vessel dimensions are what allowed designers to claim a power output capacity of 195 MWe versus the 50 MWe for each NuScale power module.
Generation mPower, while recognizing that numerous power station configurations would be possible, put most of its initial marketing and design efforts into a two-unit station capable of producing 380 MWe.
Reasons Product Couldn’t Find A Market
There’s a famous concept attributed to The Great One – Wayne Gretzky, one of the most prolific scorers in the history of the National Hockey League – that says that the secret to success isn’t in skating to where the puck is, but in skating to where it is going to be when you get there.
In energy technology development applying that advice can be a challenge. There are so many ways in which the puck’s travel can be altered while the engineers, lawyers, process developers and businessmen are doing their necessary tasks. From the time when the B&W board of directors authorized the beginning of the mPower project until its final termination decision, the puck – which in this case wass the market opportunity seen by the internal promoters of the mPower concept – was deflected in unpredicted ways by a number of factors, some internal and some completely beyond the control of anyone involved. Example deflectors included:
- Financial crisis of 2008
- Collapse in natural gas prices as a result in immediate drop in domestic demand as the ensuing recession deepened
- Continuing reduction in natural gas prices as a result of the boom in hydraulic fracturing and horizontal drilling enabled by very low cost capital
- Management challenges associated with growing a major technology project as a fundamentally unequal partnership between two large, established companies, each with their own culture
- The aggressive effort to market the Fukushima events as a nuclear catastrophe in order to suppress a growing interest in nuclear energy development
- The entry of activist investors that purchased a large portion of B&W’s stock and forced a major reevaluation of the project and the overall corporate structure
The end result after spending about $400 million was that the product development was not completed to a point that was sufficiently interesting to investors or to the boards of directors for the primary partners in the endeavor. There was simply too much work left to do, too much money left to invest and an insufficient level of interest in the product to allow continued expenditures to clear corporate decision hurdles.
Complete Project Termination
On March 3, 2017 Bechtel notified BWXT that it was unable to secure sufficient funding to continue the Generation mPower program and was invoking the settlement scenario provisions of the framework agreement announced in March 2016 for terminating the program.
Bechtel’s communication marked the end of a one-year period during which Bechtel assumed the project lead from BWXT, the original developer of the mPower concept. During that period project partners shared the primary goal of securing additional investments that would allow the reactor development and certification process to be completed.
As a result of the termination notification, BWXT will pay Bechtel a $30 million settlement as Bechtel’s sole and exclusive remedy, as agreed by both companies in the framework agreement filed in 2016. (This amount has already been recognized in BWXT’s financial statements as of March 31, 2016.)
BWXT will bring its mPower technology development efforts to a close in the next few months, and Generation mPower LLC will terminate its mPower program.
BWXT and Bechtel have worked diligently over the past several years to attract additional investor interest in the mPower reactor project. Jud Simmons, Director of Communications for BWXT provided the following statement.
We are disappointed that additional interest has not materialized, but BWXT will move forward in other areas where our unique expertise matches our current and potential customers’ needs.
It’s also important to note that BWXT believes in its SMR technology and is proud of its development efforts to date. We will keep a complete archive of our work to date, and should conditions warrant in the future, BWXT will be in a position to evaluate any opportunities for design and manufacture using that technology, as guided by our senior leadership and Board of Directors.
It’s my understanding that one of the areas that BWXT will pursue rests on its long history as a skilled manufacturer of high-quality components. Much of its expertise and experience is directly applicable to small and advanced nuclear systems. BWXT might now be able to be a substantial participant in the supply chain for some of the other system vendors that are still developing their products.
When it was working on its own complete product as part of the Generation mPower partnership, it was unable to participate as a potential supplier to other vendors.
Disclosure I worked for B&W mPower as the Process and Procedure Development Lead from 2010-2013. This is an opinion piece based on experience and continued observation of the public information released about the partnership, both in the press and at industry events. I have not tapped any company sources other than my communication with the B&W communications organization.
Note: A version of the above was first published on Forbes.com with the same headline. It is republished here with permission.
I wonder how long the NRC will continue to exist after all existing nuclear power plants are decommissioned. How many people will they require to regulate medical waste and well logging devices?
Probably a better than even chance Westinghouse will file for bankruptcy in the next few weeks. If the allegations of “inappropriate pressure” by WEC management to pretty up the books for a Toshiba purchase are substantiated, that also implies criminal activities. Kepco would probably be interested in buying WEC for the nuclear fuel and services part of the business but would they have any interest in sustaining the AP1000? They would be smart to wait for a WEC bankruptcy to unfold as well as any criminal investigations to reveal all the creepy-crawlies. I don’t think there will be a great rush of bidders for WEC compelling Kepco to act quickly.
Could a WEC bankruptcy decision allow WEC to cancel the AP1000 contracts with Vogtle and Summer? Summer has the existing AP1000 intellectual property in escrow but if the design is not yet complete can what’s left of WEC or a third party pick up the pieces nd complete the project? Can WEC hold on to the essential designers through a bankruptcy and the subsequent period of austerity?
After reading enough things about receivership and “debtor-in-possession financing”, my guess is “yes”. But “can” vs. “will” is always a question.
One option that strikes me right off the bat is a split of WEC into two companies, “good-WEC” and “bad-WEC”. “good-WEC” owns all the IP and has all the workers, and “bad-WEC” owns all the debt… plus 100% of “good-WEC”. “good-WEC” being a separate entity, it can finish its work while the sharks swim around “bad-WEC” resolving its issues.
Looks like NuScale is setting itself up to dominate the emerging SMR industry in the 2020s.
I wouldn’t mind seeing the Federal Power Marketing Administrations and the TVA being allowed to go into “Coal Country’ and other regions of the country to offer communities the opportunity accommodate small modular reactors and renewable systems in their area for the production of electricity and for the plasma arc pyrolysis of urban and rural biowaste into synfuels for peak load energy production and carbon neutral methanol and gasoline production.
Natural gas power plants can be easily and cheaply modified to burn carbon neutral bio-methanol. Adding hydrogen through electrolysis could triple the production of bio-methanol. Recycling the carbon dioxide produced from methanol electric power plants could continuously increase the amount of bio-methanol production.
This would create high paying jobs in these poor communities while also allowing them to lead the way in carbon neutral energy production in the US and around the world.
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