• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Home
  • About
  • Podcast
  • Archives
  • Links

Atomic Insights

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

Will North Anna 3 be lead ESBWR?

July 1, 2015 By Rod Adams

North Anna - from NRC archives

North Anna – from NRC archives

There is a growing perception that the Nuclear Renaissance in the U.S. is dead, killed off forever by low natural gas prices. Some members of the American Nuclear Society (ANS) are not so sure.

At the June 7 President’s Reception for the 2015 ANS annual meeting, there were several intriguing discussions about new projects that might achieve final investment decision and physical ground breaking in the next couple of years. I was allowed to listen on condition of non-attribution and anonymity.

One of the more logical and intriguing prospects for near term new build is North Anna unit 3. Over the past ten years, Dominion, the site owner, has continued to push the project forward.

Progress has not been steady; there have been bumps and jolts along the way. Those include changes in the specified technology from ACR-700, to ESBWR, to US-APWR, and back to ESBWR, which recently received a design certification document from the Nuclear Regulatory Commission.

A sharper-than-expected shudder from the earth happened on August 23, 2011, in the form of an earthquake centered just a few miles from the site, which also inserted a substantial delay in the combined construction and operating license (COL) review.

I carefully used the word “sharper” because though the peak acceleration from the Mineral, VA, earthquake exceeded the expected value documented in the safety analysis, it was a short-lived peak—a spike, if you will—that didn’t contain enough energy to do any damage.

I’m no seismic expert, but those who are have convinced me—and are making good progress in convincing skeptical NRC regulators—that structures like those used in the construction of nuclear power plants don’t get damaged because of short-lived peaks; they need sustained shaking.

The revised site-specific seismic analysis for North Anna 3 is not yet complete and approved, but it has apparently reached a stage where it seems unlikely to prevent the issuance of a COL in 2017.

The NRC COL decision is one of the last remaining “necessary, but not sufficient” conditions for Dominion to make a final investment decision. Other conditions that seem likely to be met at this point include the following:

1. The electricity market in the regulated commonwealth of Virginia will have to remain relatively well-behaved and not experience a decrease due to a strong economic recession ap- proaching a depression.

2. Dominion must complete the addition of a $3.8 billion liquefaction facility at Cove Point, the company’s lightly used LNG import facility. That addition will give the facility the capability to export LNG.

3. The ESBWR vendor, GE-Hitachi, will have to make sufficient progress on the detailed design work that is being done with Dominion funding, to support a positive board decision.

When those conditions are met, probably by the end of 2017, North Anna 3 will likely become the lead ESBWR. Unlike the market near Fermi 3, the designated ESBWR lead plant, Virginia already needs the power.

After California, it is the state that makes the second highest volume of electricity purchases from the open market outside its borders.

Virginia’s need for reliable electricity supply will continue to increase as coal plants retire. The state corporation commission has already indicated that it will ask hard questions about capacity plans that replace all of the coal generation with natural gas, because of a deep concern about the impact of over-reliance on a single fuel source.

It’s worth a little extra space to explain why Dominion chose to invest $3.8 billion into turning Cove Point into an LNG export facility as a more immediate spending priority over North Anna 3, and why the company is unlikely to stop that project even if markets change.

Cove Point, built and placed into service before the Natural Gas Act of 1978, has received far fewer cargoes than expected.

The owners haven’t worried too much because the facility generated solid returns on investment even when there were no ship arrivals.

During periods when natural gas prices were high and imports seemed economical, salespeople successfully obtained long term, “take-or-pay” commitments from well-qualified customers.

Even though Cove Point customers often decided that domestic gas was a better value than imported LNG, they have continued to make their obligatory payments.

Taking advantage of conditions from 2011-2014 that included low domestic prices in the U.S., high prices in Europe, supply uncertainty from Gazprom, an already developed pipeline net- work and U.S. foreign policy, Dominion successfully found long term customers for LNG produced from domestic natural gas.

Even if future market conditions change Dominion will receive an excellent rate of return on its investment, as long as the liquefaction facility is completed.

Take or pay contracts, however, cannot obligate a customer if the service provider is incapable of delivering contracted product because it doesn’t have the capacity to deliver on its promise. That’s why the liquefaction project will be completed.

After that has happened, Dominion will be well positioned to begin an ESBWR at North Anna unit 3.

The above first appeared in Fuel Cycle Week No. 619 • June 11, 2015 under the headline “Whither North Anna Unit 3?”. It is reprinted here with permission.


During the period since I wrote the above article, I received some confirmation that my interpretations were correct. A different person than the people I spoke to at the ANS meeting pointed out that North Anna Unit 3 is in Dominion’s 2014 Integrated Resource Plan as an open option. My source indicated there is a good probability that its planning status will be upgraded in the next version of the plan.

Related Posts

  • What did the Cove Point protest on Monday Night Football have to do with nuclear energy production in Virginia?

Filed Under: Advanced Atomic Technologies, New Nuclear

About Rod Adams

Atomic energy expert with small nuclear plant operating and design experience. Financial, strategic, and political analyst. Former submarine Engineer Officer. Founder, Adams Atomic Engines, Inc. Host and producer, The Atomic Show Podcast. Resume available here.

Please subscribe to the Atomic Show RSS feed.

Reader Interactions

Comments

  1. Tom Bearden says

    July 1, 2015 at 2:40 PM

    A small nit in the fourth paragraph.

    It should read: “…from ACR-700, to ESBWR, to US-APWR, and back to ESBWR…”. The US-APWR was Mitsubishi’s ill-fated foray into the N. American nuclear power business.

    They also had a 2-unit project at Comanche Peak in TX that was suspended when Mitsubishi pulled out of N. America in 2013. It didn’t help that Luminant Power, the operator of Comanche Peak, was owned by a utility that later declared bankruptcy.

    • Rod Adams says

      July 1, 2015 at 5:39 PM

      @Tom Bearden

      Nit corrected. (For the record, I also received a correction request from a friend in Canada. The early version of the article said CANDU-6 instead of the correct ACR-700.)

  2. Jeff S says

    July 1, 2015 at 4:09 PM

    Interesting – I remember hearing years ago about the ESBWR design, but it didn’t seem, at the time, like GE had any interest in marketing it. This is the first I’ve heard of any activity for ESBWR builds.

    By the way – regarding Cove Point – could Dominion also use it as an EXPORT facility for LNG? It would seem like, right now, the profitable path for gas is through LNG *export* terminals, to Japan, Europe, and elsewhere. . .

    Of course, if Dominion has customers paying them to not grow corn, that’s a good business too, for as long as it lasts. . .

    • Rod Adams says

      July 1, 2015 at 5:44 PM

      @Jeff S

      Thank you for your question. It helped me realize that the following statement from the article is not as clearly stated as it should be for non specialists in the field of LNG.

      2. Dominion must complete the addition of a $3.8 billion liquefaction facility at Cove Point, the company’s lightly used LNG import facility.

      A liquefaction facility is the modification required to turn an LNG import facility into an LNG export facility. Facilities for importing LNG simply heat and expand the liquid into a pipeline quality vapor and then compress it for transport. A liquefaction facility takes delivered gas from a pipeline and compresses/cools it to turn it into a liquid that can be loaded onto a ship for transport.

      As indicated by the $3.8 billion price tag, it’s not a cheap facility. It is, however, a known technology with a reasonable chance of on time, on budget (or close) execution without too much regulatory interference.

      • Jeff S says

        July 1, 2015 at 8:29 PM

        Rod,

        Thanks for the clarification – I was confused because I kind of thought that a Liquefaction facility was used for turning gas into liquid, which seems like what you’d do to export. So, sounds like Dominion will use the profits from selling gas overseas to pay for building a new nuclear reactor in the US in order to use cheaper and more abundant nuclear energy, and profit off of premium prices abroad. That’s smart.

  3. Engineer-Poet says

    July 2, 2015 at 5:59 AM

    It’s interesting that LNG exports are one of the things that could drive N. American NG prices up close to world levels, which would destroy the cost advantage that NG-fired plants have over nuclear.

    • Jeff S says

      July 2, 2015 at 4:40 PM

      Not only that, but for those seeking to profit off LNG, and who are involved in both markets like Dominion is, it may make more sense to build nuclear plants for domestic power, and sell the gas elsewhere at significant markup.

      • Ed Leaver says

        July 2, 2015 at 7:35 PM

        Oh. You mean like Saudi Arabia, and UAE?

        Unrelated, but what does the market potential need to look like in order for GE-H to commit to the lead ESBWR? Will they know it when they see it?

  4. Eino says

    July 5, 2015 at 10:15 PM

    The Bard (EP) wrote:

    “which would destroy the cost advantage that NG-fired plants have over nuclear.”

    Is that an example of necessity being the mother of invention and spurring full development of nuke plants? Alternatively, from previous postings on this site, there appears to be ample supply of natural gas. It just may be at a higher price.

    The time it may take to build a nuke plant may still favor natural gas even at a high price. Gas plants can be built more quickly.

    The distance from the electrical market (load) may favor a natural gas plant. Siting nuclear plants has got to be quite difficult these days. Longer transmission lines are also more costly. If I remember correctly, they try to site them 40 miles from major population centers

    The regulation may serve as an almost impenetrable barrier or shield to building a new nuke plant. In conjunction with this, of course, is the public fear which will be very difficult to overcome.

  5. Ed Leaver says

    July 6, 2015 at 2:50 AM

    Michele Kearney has linked Energy rules have Virginia weighing new nuclear reactor at North Anna, from the Richmond Times-Dispatch. Towards the end are some interesting quotes from Walton Shepard, an attorney with NRDC:

    Shepherd said the numbers he’s working through show that Virginia could reach its goal if Dominion Virginia Power’s follows through with its already planned coal-plant retirements and keeps all gas plants running at the same level as 2012, and if the state meets its optional targets of 10 percent electricity savings and 15 percent more renewable energy.

    “The main story in Virginia so far has been this disconnect between what is actually the rule versus what is posed as this insurmountable challenge,” Shepherd said.

    “Dominion is in position to say ‘We have all these plants, how are we going to reduce emissions enough?’ Then they’d say ‘Let’s build this shiny new nuclear plant.’ The environmentalists will come in and say ‘Wait, you don’t need to do that.’

    I think we’re all in favor of increased energy efficiency where practical. But I’m somewhat troubled (alternately amused) by this underlying “environmental” meme that the Clean Power Plan is something to be barely met by the skin of our teeth, rather than a first baby step on a long road toward drastically decreased emissions. I realize Dominion probably thinks they can make more gas money by buying low and selling high than they can by buying high and burning it, but who’s exerting the environmental leadership here, anyway?

  6. James Greenidge says

    July 8, 2015 at 7:43 AM

    Re:
    “A sharper-than-expected shudder from the earth happened on August 23, 2011, in the form of an earthquake centered just a few miles from the site, which also inserted a substantial delay in the combined construction and operating license (COL) review.”

    Wow!! What fragile gigantic eggshells all these nuclear plants are! Pad ’em up quick!!!
    Er, no oil and gas and chem facility checks?

    James Greenidge
    Queens NY

Primary Sidebar

Search Atomic Insights

The Atomic Show

Atomic Insights

Follow Atomic Insights

Recent Posts

The Fearless Green Deal

Did US Navy patent a functional fusion device?

Sharing message at #StrikeWithUs – We can use nuclear energy to address climate change

Atomic Show #267 – Dr. Lauren Jackson addresses radiophobia

What exploded in Russia on Aug 8? My estimate is a (chemical) booster rocket for a nuclear powered cruise missile.

  • Home
  • About Atomic Insights
  • Atomic Show
  • Contact
  • Links

Search Atomic Insights

Archives

Copyright © 2019 · Atomic Insights