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Atomic Insights

Atomic energy technology, politics, and perceptions from a nuclear energy insider who served as a US nuclear submarine engineer officer

NRC

What Does Westinghouse Bankruptcy Mean To Nuclear Energy Innovators?

April 5, 2017 By Rod Adams

Steve Kuczynski, CNO, Southern Co. <br>Speaking to 7th Annual SMR and Advanced Reactor Summit
Steve Kuczynski, CNO, Southern Co.

Attendees at the 7th Annual International SMR and Advanced Reactor Summit in Atlanta, GA were intensely curious about the effect of Westinghouse’s decision to enter into a Chapter 11 bankruptcy reorganization effort. They are also working hard to learn whatever lessons might be available to help them avoid similar situations.

What About That Westinghouse News?

Westinghouse has been a major nuclear energy company since the earliest days of the technology development. When Toshiba purchased the company a decade ago for $5.4 billion, it was seen as an indicator that the company believed in the future of nuclear energy in the United States.

Like almost everyone with a nuclear energy industry connection, many believe that the Chapter 11 filing is a big deal. Some feel certain that it will have an impact on their future. The problem is that no one has any real comprehension about what the effect will be. Sighs, laments and shoulder shrugs are common responses when the subject is introduced into a hallway conversation.

One of the attendees at the meeting left Westinghouse employment several months ago. When asked for a reaction about the decision to change jobs, the former employee stated that cartwheels might be in order if in different attire and if young enough to still be capable of cartwheels. Interpret that response as an expression of relief about not being personally involved in the angst that must be widespread within the company.

There do not appear to be any current Westinghouse employees at the event; Westinghouse made a decision a couple of years ago to put its SMR project on the shelf in order to concentrate its management focus on the more immediate opportunities to either build, maintain or take apart – decommission – large pressurized water reactors.

One attendee, Marvin Yoder, reintroduced himself and asked if I’d like a copy of his short book about his participation in an project attempting to introduce nuclear energy to the Alaskan “bush.” That started a reminiscence about Toshiba’s aborted effort to introduce a factory manufactured, 10 MWe nuclear power plant that could operate for 20-30 years without new fuel.

Like the larger light water SMR, the 4S project to supply manufactured reactors appropriate for small grids and remote areas was shelved because the company saw more immediate, and larger scale business opportunities in deploying its AP1000 MWe generation 3+ nuclear plant.

Four units under construction in the U.S. southeast have run into such lengthy and costly delays that Toshiba has recognized that the obligations of fulfilling the construction contracts represent a financial loss of roughly $6 billion. The bankruptcy filing is designed to cap that liability and protect the parent company.

A number of deeply experienced industry leaders at the summit have expressed some frustration and confusion about how the four projects could have gotten so far behind their projected schedules.

Several expressed the opinion that Toshiba and perhaps even Japan has an obligation to do whatever it takes to complete the projects. Those sentiments echoed a paragraph found in yesterday’s issue of the Atlanta Journal Constitution.

Southern Co. CEO Tom Fanning, who flew to Tokyo ahead of Westinghouse’s bankruptcy filing, told the Wall Street Journa;l that thousands of Georgia jobs could be endangered if Toshiba doesn’t commit to paying billions in cost overruns.

“The commitments are not just financial and operational, but there are moral commitments as well,” Fanning told the Journal in an interview from Tokyo.

Shared Responsibility Among Several Entities

The situation cries for a higher level of understanding, blame sharing and cooperation. Without a serious effort to better recognize how the situation developed, it is fraught with the risk of every party to the project losing a great deal of money. It also presents the prospect of having four large, incomplete, and unproductive works of industrial art.

Projects that last for as long as building nuclear reactors in the U.S. are roughly analogous to extreme endurance competitions in which overall progress is the sum of all stages of the race. There is no magic reset button that allows recovery of time lost early in the race, even though the specific events that resulted in the lost time might have been forgotten by observers.

After conversing with a number of people at the summit, including a brief question and answer session with Steve Kuczynski, Southern Company’s Chief Nuclear Officer, it became apparent that it’s worth repeating a story about a major event whose effect on project cost and schedule should not be underestimated.

Knockdown Blow From Aircraft Impact Rule Imposition

The June 12, 2009 edition of the Federal Register gave notice of a seminal event in the sad saga of the U.S. AP1000 projects. Titled Consideration of Aircraft Impacts for New Nuclear Reactors; Final Rule, the announcement required a major redesign of the already certified AP1000. The rule was not applied to any existing facility or to any facility for which a construction permit had already been issued. Here is a key excerpt from that final rule.

In making these additions, the NRC is making it clear that the requirements are not meant to apply to current or future operating license applications for which construction permits were issued before the effective date of this final rule. This is because existing construction permits are likely to involve designs which are essentially complete and may involve sites where construction has already taken place.

Applying the final rule to operating license applications for which there are existing construction permits could result in an unwarranted financial burden to change a design for a plant that is partially constructed. Such a financial burden is not justifiable in light of the fact that the NRC considers the events to which the aircraft impact rule is directed to be beyond-design-basis events and compliance with the rule is not needed for adequate protection to public health and safety or common defense and security.”

The unrecognized implication of issuing this rule and choosing to apply it to projects that had not yet been issued a construction permit is that AP1000 projects had already passed several important decision milestones that made them vulnerable to exactly the kind of unjustifiable financial burden that the NRC stated that it was trying to avoid.

The sales team had already successfully sold the certified AP1000 design to two customers. Though the detailed design was not yet complete, and though no concrete pours or metal forming had begun by June 2009, the plant design was complete enough to provide the basis for a cost estimate. That estimate was solid enough to pass muster with several boards of directors and two public service commissions.

That is no small task for multi-billion dollar projects, especially those that are as controversial and as visible as firm priced orders for the first new nuclear plants in the United States in more than thirty years.

Here is a quote from a document describing the Vogtle 3 and 4 projects to Southern Company customers.

  • Georgia Power filed for an Application for Certification of Vogtle units 3 and 4 with the Georgia Public Service Commission (PSC) in August 2008.
  • The Georgia PSC approved the need and cost-effectiveness, granting approval to implement the proposed Vogtle expansion in March 2009.

Remember, the notice applying the requirement for an aircraft impact assessment, and making appropriate design changes to mitigate the projected effects of such an impact was not issued until three months after the Georgia PSC had invested six months into the review and approval of the project as described in the NRC issued Design Certification Rule for the AP1000.

It is difficult to put a precise figure on the time that the project consortium invested into the cost and schedule analysis before submitting it to the PSC, but it was probably no less than a year’s worth of work.

As it turned out, meeting the new rule ended up requiring three more iterations on the design document and raised several issues of contention including concerns about the revised heat transfer capacity, concerns about the innovative shield building construction process devised, and concerns about the validity of the testing regime for the steel concrete composite modules that make up the shield building.

Those and other related issues were not completely resolved until the issuance of the final design certification document in late 2011, more than 2.5 years after the PSC had approved the project using the previously approved design revision.

During that delay, engineers who should have been working on the detailed design so that it could be as complete as possible before construction start were diligently working on the revisions to the regulated parts of the design that they thought was already complete.

Since the changes had a significant impact on the facility structure, they altered the seismic analysis and had a substantial impact on the design of the foundations.

Why Did Project Participants Soldier On Instead Of Complaining?

As an outside observer, I cannot explain why the damaging decision was meekly accepted without either strong resistance or a complete revision to the project cost and schedule projections. Major components of the assumptions made for the cost estimates were invalidated by the design changes required to satisfy the regulators.

There were other contributing missteps in the nearly eight years that have elapsed since the NRC issued the Aircraft Impact Rule. It is difficult to imagine a reasonable resolution to the current situation that does not include an acknowledgement – along with some kind of financial contribution from the responsible parties – that the decision had a significant and unrecoverable impact on both cost and schedule.


Note: A version of the above was first published on Forbes.com. It is republished here with permission.

Filed Under: AP1000 saga, Atomic politics, Business of atomic energy, New Nuclear, NRC

New Nuclear: North Anna Unit 3 Should Be Approved Before The End Of May

April 3, 2017 By Rod Adams

NRC Chairman Svinicki taking charge at North Anna 3 mandatory COL hearing
NRC Chairman Svinicki taking charge at North Anna 3 mandatory COL hearing

Dominion Resources’s North Anna nuclear power station unit number 3 should be approved for construction by the end of May 2017. It’s possible that the approval – in the form of a Nuclear Regulatory Commission (NRC) 10 CFR Part 52 combined license (COL) – could be issued within the next three weeks.

This would be a major milestone in a project that began in earnest in 2003. It might be the last milestone achieved for that project.

The NRC held the mandatory hearing required by the Atomic Energy Act for the North Anna 3 combined license on March 23. That was one of the very last steps before the commission votes on issuing the license needed to begin construction. According to the NRC’s Internal Commission Procedures document, the staff and license applicant have 14 days after the hearing to file answers to any follow-up questions from the commissioners during the hearing.

At that point, the commissioners will have access to all of the information that has been or will be assembled to support their vote. If the chairman of the commission calls for a vote two weeks from now, it can happen almost immediately.

If the commission follows its publicly available process (Chapter IV pg 15-16), the vote should take place before May 17, which is four months after January 17, the date on which the NRC staff issued the North Anna 3 Final Safety Evaluation Report (FSER).

Impressions From The Mandatory Hearing

Shown are about 1/2 of the NRC staff members who were sworn in as potential witnesses during the North Anna Unit 3 COL hearing. Chairman Svinicki is administering the oath.
Shown are about 1/2 of the NRC staff members who were sworn in as potential witnesses during the North Anna Unit 3 COL hearing. Chairman Svinicki is administering the oath.

The hearing room at the NRC Headquarters held a large audience, the majority of whom were members of the NRC staff. Some of those staff members have devoted a substantial portion of their government service careers to various aspects of the approval process, begun in 2003 when Dominion first submitted its application for an early site permit (ESP).

The North Anna unit 3 (NA3) application process wasn’t typical. It included changes in the proposed plant design from the initial ESBWR to the APWR and then back to the ESBWR. It also included a significant period of angst and regulatory uncertainty caused both by the Fukushima events in Japan and by a surprisingly strong earthquake centered about a dozen miles from the site.

The company also had the challenging experience of realizing that their company-owned and created lake had become a popular recreation area for some politically active and wealthy property owners. Those new neighbors weren’t terribly keen on the idea of hosting a large industrial construction project that would result in changes to that lakeside living environment.

Most of that opposition has been overcome with several design changes, including a closed cycle cooling tower instead of direct lake cooling, but there may still be resistance met during any future construction effort.

During the break periods when the hearing was not in session, numerous conversation snippets could be heard discussing the comings and goings of people who had been assigned to the project. Others chatted about the innumerable number of meetings, phone calls, requests for additional information and public meetings associated with getting to where they were on the day of the hearing.

There are reasons to believe that the next time a COL referencing the ESBWR design gets submitted, the NRC could complete its evaluation in less than 14 years and require fewer than the 105,000 professional staff hours that were expended on the NA3 review.

Unfortunately, there are no other such applications in the current NRC queue and no publicly announced plans to begin one.

Will North Anna’s COL Result In A New Nuclear Plant In Virginia Anytime Soon?

Dominion has publicly asserted that it is not planning to begin building NA3 immediately after receiving its COL. During the hearing, however, Dominion stated that it continues to need additional capacity for producing electricity. The company explained that NA3 is one of its higher ranked power options, but that the decision is still being influenced by outside forces.

Each year, the company submits an Integrated Resource Plan to its state regulatory body. Its plans are under continuous review as situations change.

During the fourteen years since the project began, natural gas prices tripled from $4 to nearly $12 per MMBTU and then fell as low as $2.00 per MMBTU. At one point, it seemed nearly certain that the federal government would improve the project’s ranking in the Integrated Resource Plan by restricting CO2 emissions in one way or another.

So far, however, there are no formal restrictions or costs associated with producing CO2 in the state of Virginia. The combination of currently low market prices and acceptable quantities of pollutants that have specific limitations (often called criteria pollutants) makes natural gas a lower cost option for reliable power production.

Even with the current negative external pressures that keep Dominion from making a final investment decision to build NA3, the company likes having it as a reasonably near term nuclear option. An NA3 COL provides at least some amount of virtual fuel diversity by giving the company a path away from an abject dependence on a single fuel source.

Exercising that option might be a bit harder than Dominion executives would like to believe, however. GEH, the partnership between General Electric and Hitachi that owns the ESBWR design, has not achieved the kind of sales success that encourages additional investment. There are only two projects in the US, NA3 and Detroit Edison’s Fermi Unit 3. Neither company has indicated a near term interest in beginning construction.

According to industry sources, GEH has broken up the engineering team that was supporting the ESBWR and moved the members to other tasks. There has been little or no detectable effort to establish a functional supply chain for the specialized components that make up the new and improved design.

The current challenges facing Westinghouse in its four reactor projects in the U.S. southeast are causing some industry observers to wonder if capability to build large light water reactors in the U.S. has been suspended for too long to expect it to ever be able to be competitive or successful.

Fortunately, the regulatory work accomplished for North Anna might still be advantageously applied even if there are no new large light water reactors. The company’s Early Site Permit used a Plant Parameter Envelope approach. That choice makes it possible to substitute a different technology – yet again – as long as the new technology has characteristics that fit within the allowed box envisioned.

Several NuScale power stations, for example, could fit into the siting parameters allowed on the permitted piece of land.


A version of the above was first published on Forbes.com. It is republished here with permission.

Filed Under: New Nuclear, NRC, Nuclear regulations

NRC Vision And Strategy For Licensing Advanced Reactors Needs Improvement

January 24, 2017 By Rod Adams 9 Comments

The Nuclear Regulatory Commission has published its vision and strategy for preparing to review applications for permission to begin building reactors that do not use light water as the coolant. Policy makers who are interested in ensuring that American reactor developers have the opportunity to lead in the nascent – but potentially very lucrative field – of […]

Filed Under: Advanced Atomic Technologies, New Nuclear, NRC, Nuclear regulations

Enabling atomic innovation

April 20, 2016 By Rod Adams 3 Comments

During the past several weeks there have been a number of developments supporting a growing movement to enable nuclear energy innovators to succeed in the US. Leaders are realizing that nuclear energy, which has deep roots in the US and has proven its capability to produce reliable power without producing any air pollution, should be […]

Filed Under: Advanced Atomic Technologies, NRC, Politics of Nuclear Energy

What does the “open phase condition” petition mean for US nuclear plants?

March 14, 2016 By Rod Adams 26 Comments

On March 1, 2016, Reuters published an article titled U.S. NRC engineers urge fix for nuclear power stations. Here is how the article seized my attention. A group of engineers within the U.S. nuclear power regulator is concerned that a design flaw in nearly all U.S. nuclear plants could endanger emergency core cooling systems. The […]

Filed Under: NRC, Nuclear regulations

Proposal: Fund NRC by a fee on each kw-hr generated by nuclear energy

February 28, 2016 By Rod Adams 29 Comments

Initial conditions: NRC is an independent safety regulator working for the US public Its services mainly benefit customers that in electricity service areas that include nuclear power plants as suppliers Customers will benefit by cost efficient, effective safety regulations that enable continuous improvement in plant operations and performance. Customers will benefit by cost efficient, effective […]

Filed Under: NRC, Nuclear regulations

NRC needs an independent budget process to match its independent mandate

February 27, 2016 By Rod Adams 11 Comments

The Nuclear Regulatory Commission is an independent regulatory agency whose focus is the safe use of radiation and radioactive materials. I cannot tell you how many times I have heard from regulators, commissioners, and elected officials that the agency must make its safety decisions without regard to their cost implications. However, as any teenager, project […]

Filed Under: Atomic politics, NRC, Nuclear regulations

Senator Feinstein deserves better staff support. Crystal River concrete NOT age related issue

February 27, 2016 By Rod Adams 24 Comments

Apparently, someone on Senator Feinstein’s staff believes that the concrete delamination (cracking) issue at Crystal River was an age-related issue. With that incorrect knowledge of the situation, they decided that it could be used to publicly discredit the Nuclear Regulatory Commission’s cooperation in an industry-led initiative to extend the operating lives of nuclear plants beyond […]

Filed Under: Aging nuclear, Atomic politics, NRC

Licensing demonstration reactors in the United States

September 8, 2015 By Rod Adams 72 Comments

During the joint DOE-NRC workshop on advanced non-light water reactors held last week (Sep 1-2, 2015), John Adams of the Nuclear Regulatory Commission (NRC) Office of Nuclear Reactor Regulation gave a presentation on reactor license classification terminology. It made me squirm in my chair with the desire to interrupt. Probably because he has read and […]

Filed Under: Atomic history, Atomic politics, New Nuclear, NRC, Nuclear regulations

No intrigue at NRC regarding Stephen Burns

October 30, 2014 By Rod Adams

On September 16, 2014, Stephen Burns and Jeff Baran were confirmed as Commissioners at the Nuclear Regulatory Commission by the Senate. Thirty days later, on October 14, 2014, Jeff Baran was sworn in and began serving out the remainder of the term of William Magwood, who left the commission to take over as Director-General of […]

Filed Under: NRC, Nuclear regulations

"Small and Medium Reactors" or "Small Modular Reactors" – Either Way, The US NRC and US DOE Notice a Growing Interest in SMR, Are Listening Carefully and Ready to Engage

October 13, 2009 By Rod Adams

On Thursday, October 8 and Friday, October 9, the US Nuclear Regulator Commission hosted a workshop to discuss generic issues related to licensing of small and medium-sized nuclear reactors. The meeting was billed as the first in a series on the topic. The NRC managers responsible for Advanced Reactors organized the meeting because they have […]

Filed Under: Smaller reactors, Atomic politics, NRC, Small Nuclear Power Plants

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