Green Inc. And Others Continue to Be Confused About The Implications Of Construction Delays At Olkiluoto

The New York Times blog Green Inc. which is subtitled Energy, the Environment and the Bottom Line, published a post titled More Delays at Finnish Nuclear Plant that indicates a continuing confusion about the implications of the construction and contract dispute related delays at the Olkiluoto unit 3 European Pressurized Reactor project in Finland. Green Inc. is certainly not the only industry observer that is confused and expects that the project performance is going to have a major negative effect on the progress of the second Atomic Age – Greenpeace (surprise, surprise) has an even more breathlessly negative post titled OL3 EPR wipes out AREVA profits, while ClimateProgress, in another shocking development, published a post titled The Nukes of (Legal) Hazard, Episode 5: Areva Threatens Work Stoppage at Finnish Nuke.

My interpretation of what is going on is, by virtue of a significant geographic distance from the project and lack of personal direct knowledge, a bit vague. However, I have had plenty of professional experience with large and complex projects and with the uncomfortable finger pointing meetings that can occur when significant issues arise, often out of initial confusion with regard to contract terms and delivery expectations. I also know what can happen when people are tasked to do new jobs for the very first time and what can happen when one side of a contract is a government or monopoly utility entity with seemingly inexhaustible pockets.

I am not trying to make excuses, but there is nothing terribly “nuclear” related about a very large, complex construction project experiencing cost and schedule overruns that result in contract disputes and threatened work stoppages. That happens with depressing regularity, especially when the project time line includes some rather dramatic world economic events that resulted in rapid inflationary runs on commodity prices followed by a recession inspired collapse in those same commodity prices.

Here is the comment that I added to the Green Inc. discussion thread.

The project delays and contract related conflicts between customer and constructor at the Olkiluoto EPR project are frustrating, but not surprising. Contrary to what Michael Hogan stated, the nuclear plant construction industry is not mature outside of certain Asian countries. For most of the rest of the world it has been a long time since the last plants were built. Whatever industry there was nearly completely disappeared or faded away. There is a whole new generation of workers employing techniques that have been significantly refined since the 1970s. There is a lot of learning and improving on the construction techniques remaining, leaving lots of room for cost and schedule improvement in future projects.

Some of the lessons learned at Olkiluoto have already been applied at Flammanville, though even that project will be just one more step down a learning curve for EPR’s that should result in a per unit cost for the 4th, 5th or 6th unit that is significantly lower than the First of a Kind.

As DD stated, the AP1000 is a completely different machine with even more refinements in the design and construction processes. If you want to see how it is being built and why many nuclear professionals believe its FOAK unit will start at a lower cost point than the EPR, I recommend visiting http://nuclearaustralia.blogspot.com/2009/08/modern-nuclear-plant-construction.html to see the progress photos and read about the open top, modular assembly that is taking place right now at Sanmen in China. Follow the link to the presentation at the bottom of the post. Then understand that the unit volume of the AP1000 that has already been contracted is at least 2-3 times as high as the EPR, offering the opportunity to more rapidly descend down its own learning curve that will be different from the EPR’s learning curve – the design and the required techniques for completing it are quite different.

If you are at all concerned about continuing economic competition with Chinese companies, you should get motivated to action by the impressive progress that they are making and by the realization that they will soon have a tremendous and rapidly growing source of reliable, emission free, low cost electricity that will be added to their existing manufacturing advantages.

The only solace is that there are Americans and other westerners at Sanmen learning right alongside their partners, but unless we aggressively apply some of the lessons, we will be saddled with ever increasing power costs and increasing risk of the cost of unreliability as we continue to attempt to force weak and intermittent power sources onto the grid.

I am also encouraged by the creative response to the power supply cost challenge that has been displayed by Hyperion, NuScale and especially B&W (with their 125 MWe mPower that can deliver a factory manufactured nuclear steam supply system in a single unit to almost any prepared site) but that is material for other posts.

Rod Adams
Publisher, Atomic Insights
Host and producer, The Atomic Show Podcast
(Note: I did correct my typo in the name of the project location.)

Unlike Green Inc., Greenpeace, ClimateProgress and probably lots of other industry observers that see the Olkiluoto project as a great club with which to beat on the idea of using nuclear technology as a tool in the fight against fossil fuel addiction and climate change, I see it as a great learning opportunity for an industry that needs to pay close attention to the world’s reactions to ever increasing costs and failure to deliver on project schedules and promises. Cost matters, just as safety and reliability matter. Many nuclear professionals have unfortunately come to believe that the major complaints about their technology are driven by safety concerns so they believe that some are willing to pay for extraordinary and unnecessary plant features that address those concerns.

The interpretation is not correct; customers want the plants to operate safely and reliably, but they also want them to be built in a cost effective manner with little risk of schedule delays and without unnecessary bells and whistles. After all, what people really want out of nuclear fission is for the magic stuff that comes out of their wall plug to keep coming out in as unobtrusive and cheap manner as possible. They do not want to be made to feel guilty that they are damaging their children’s world, but they also do not want to pay through the nose for something they have been used to getting at a low, predictable cost.

Nukes need to learn that quality, cost, reliability, cleanliness and schedule are not mutually exclusive. All are measures by which energy supply competition will be judged. Fission has many advantages, but it is not a guaranteed winner without plenty of thinking and doing by the implementers.