On Tuesday November 15, 2005, at the ANS Winter Meeting, Thomas Houghton, Senior Project Manager, New Plant Development, Nuclear Energy Institute talked about various aspects of the physical and industrial infrastructure that will be needed to support new plant development. He began his presentation with a rather startling slide for people that had not been keeping up with the flurry of announcements of interest by US utilities in new plant construction – according to his organization’s most recent estimate, there may be as many as 12 new plants under construction by 2012, with the first one starting by 2010. Worldwide, based on announced programs (not yet supported with firm orders), there might be as many as 50 new plants under construction in 2020.
This ramp up from current production rates will place a strain on many pieces of the infrastructure that must provide the raw materials and qualified parts needed to build new nuclear plants. In many cases, there will be competition for the production capacity from these suppliers, not only from the nuclear construction industry but also from industries like oil refining, LNG processing, and transportation that use common parts, materials and work forces. What Mr. Houghton did not emphasize is that the resulting competition in certain key supply areas will provide significant profit potential for agile producers as it causes prices for those key materials and components to increase.
Mr. Houghton described a planned industry study that will be conducted by the NEI in partnership with other industry groups that will attempt to quantify the possible needed parts and materials and compare that against the current slate of qualified suppliers and their capacity. There are several key capabilities that are already recognized as potential bottlenecks or schedule drivers:
- Large component fabrication including pressure vessels, steam generators, pressurizers, pumps, valves
- Plant simulators
- Digital controls and instrumentation (remember, these digital systems have incredible QA requirements)
- Commodities like pipes and nickel
- Transportation for large components
Mr. Houghton concluded his talk with a mention that there might be a need for some government assistance in rebuilding key components of the nuclear supply infrastructure and noted that this provides an opportunity to rebuild America’s heavy manufacturing capabilities.
Unfortunately, there are already issues that will inhibit this rebuilding. One major problem is that the dash to gas powered electricity generation of the 1990s has driven the price of natural gas, a key ingredient in many industrial processes, so high in comparison to the rest of the world, that the US manufacturing sector is under severe competitive strain. Many producers are closing US facilities because they cannot compete against suppliers with cheaper access to natural gas. I highly recommend that you visit the Manufacturers Blog and look for their November 18, 2005 post titled The NAM Energy Survey: A Grim Picture.
Assuming that the gas supply situation somehow moderates, there is, of course, a lot of time between now and 2010 that can be used to expand the capacity available, but most suppliers cannot take action to do so until they have assured orders in hand. Many of the suppliers that produced components for the current generation of nuclear plants in the US have gone out of business, converted or closed the facilities that were used – the dry spell between orders was simply too long to keep the capabilities around waiting for a rebound.
I certainly hope that the utilities that are planning new nuclear facilities do not expect that they will be able to hold off on lining up suppliers until they are ready to build, if they do so, they are going to find a long line with plenty of waiting before parts actually get delivered. Though there is room for some industry coordination, project leaders should understand that the suppliers are going to be motivated by the same potential for rewards that motivates all business – if a customer wants service they are going to have to show some money.