Crazy, busy, exciting week
I am normally an early to bed, early to rise kind of guy. Any of you who have ever paid much attention to the time stamps on my posts will know just how early that rising part is; usually the “to bed” part happens before 9:00 pm. For the past three nights, I have been on late phone calls with strangers and friends about the opportunities associated with a global shift in energy priorities. I’ll leave it at that. (NDA’s are not limited to the computer tech world, you know.)
There have been several items in the news recently that indicate to me that there are other company leaders in the nuclear business who are also not getting much sleep. Within the past week or so, Westinghouse, the nuclear power plant developer whose majority share is owned by Toshiba, has closed a deal to purchase IST Nuclear of South Africa. IST has contracts associated with the Pebble Bed Modular Reactor (PBMR) project that is part of Westinghouse’s future, but it is also a key supplier of nuclear expertise and services to the one nuclear power plant currently operating in the country.
The other part of the deal that interests Westinghouse – according to an article in Creamer’s Engineering News titled US nuclear firm seeks to align SA business to State’s localisation goal – is that the purchase provides a path to allow Westinghouse to meet rules regarding local content of large projects without giving up any of the control or profits from the project. By purchasing a South African company that is already in the nuclear business, Westinghouse can claim to be a local supplier with South African employees itself. As far as I can tell, the purchase does not seem to have added a single new South African job.
To be fair, it does look like the company is visiting local manufacturers in hopes of finding some that are close to being able to be certified to produce parts as part of Westinghouse’s global supply chain for nuclear reactors. I am just not sure whether those visits are with the purpose of finding additional acquisitions or with the purpose of assisting South African companies in their quest for new work.
Yesterday, 28 November 2007, CNBC – the largest business focused television network in the United States – published an article titled Nuclear Energy Industry Powers Back Up that starts off by framing the issue as one driven by the rising cost of natural gas. Unfortunately, it rapidly shifted the focus to give the impression that the incentives provided in the Energy Policy Act of 2005 – production tax credits, risk insurance, and loan guarantees – were the real drivers behind the move. There are also some quotes provided by industry leaders indicating that the prospect of carbon limitation actions is also a factor.
My summary is that there are a lot of good reasons for believing that nuclear power is going to grow here in the US after three decades of stagnation. The closing for the article provides a thought that makes me smile:
Legacy issues aside, supply-and-demand fundamental in a carbon constrained world has made producers and consumers more receptive to the nuclear option, leaving some, like NRG’s Crane, to proclaim that “all roads lead to nuclear.”
Based on my own activity in the past week or so, it looks like those roads are going to be as packed as the Washington Beltway on the Sunday after Thanksgiving.
My favorite blogger over on NEI Nuclear Notes (sorry Eric, but Lisa is prettier) is happy that her company has joined the queue at the Nuclear Regulatory Commission by filing a Construction and Operating License (COL) application for a third reactor at its North Anna site, about 60 miles outside of Washington, DC. You can find her comment at Dominion’s Press Conference about its COLA. At first I was not sure what the article would be about – for many people in the DC area, a COLA is a “Cost of Living Adjustment” or a brown soda water brand name. I guess there is always room for one more acronym using the same letters.
There is a dark spot in the news surrounding nuclear power, however, and that is the numerous announcements by company leaders that they will not embark on any projects unless the federal loan guarantee system promised by the Energy Policy Act are actually in place. Right now, because intensive lobbying efforts by a variety of energy interests and anti-nuclear activists like like Bonnie Raitt, Graham Nash and John Hall, Congress has not passed a budget that includes the appropriations needed to fund the program. (Someday when you are bored, you can do some googling to find out the difference between an authorization and an appropriation under the US form of democracy.)
I think it is a grave mistake by the industry to subjugate its future to activists. There will always be opposition to the development of nuclear power, it is a technology that can be too strong a competitor in a very profitable industry. The existing players are always going to work to hamper the industry’s progress and will certainly strive to ensure that it never receives fair treatment.
Under the current brinksmanship that some industry leaders are practicing, all the activists need to do is to encourage inaction. If Congress does not take the required action, insufficient funds will exist to supply the financial backstop for the loans and no projects will move forward. That would not be a good decision for the country’s future, but that does not appear to be the primary measure of effectiveness for any of the current participants in the debates.