News in Depth: Deploying SMR Technology in Canada’s Northern Communities

In mid-April, 2015, Peter Lang, President of Dunedin Energy Systems Ltd, gave a presentation at the Nunavut Mining Symposium, arguing for a radical shift in the way we provide energy to remote communities and mining operations. Traditionally, northern communities have relied upon diesel generators that produce substantial pollution and require costly infrastructure for fuel transport to maintain energy production.

Lang suggests a new approach, one that utilizes new, small modular reactor (SMR) technology to produce energy from floating nuclear power ships. In this week’s News in Depth, we explore Lang’s idea and the potential opportunities and challenges that are ahead.

An Old Idea Given New Life

As Lang noted in his presentation, the idea of utilizing nuclear reactors in unique contexts is not new: small, self-contained nuclear reactors have been providing energy on military ships and submarines (103 in the US Navy alone), and ice-breakers for decades and have been deployed in northern Russian communities since the 1970s.

Lang’s Dunedin Energy believes that their SMART (Small Modular Adaptable Reactor Technology) system would provide a more sustainable and consistent energy source for remote communities in Canada. They describe the systems as a “nuclear battery”:

When the fuel in a nuclear battery is consumed, the entire reactor module (which contains the spent fuel) is removed and shipped to a processing facility for fuel recycling. A new, freshly fuelled reactor module is installed to replace it. The reactor module is a sealed unit and cannot be opened for any reason at the operating site.

In his presentation, Lang compares diesel and nuclear, using a 16MWe common production rate. Notably, the annual fuel logistics of diesel include moving and storing over 31 million litres of fuel and annual greenhouse gas emissions are estimated to be 85,000 tonnes. Compare those figures to the zero fuel logistics and greenhouse gas emissions of their nuclear SMART system. Lang also highlights the issue of carbon taxes, arguing that while diesel may cost up to $1.2 Million for a 16MWe plant, a nuclear SMART reactor would gain a credit of $1.2 Million.

The Challenges Ahead

The incredibly favourable comparison above belies some of the deeper challenges that SMR development may face in northern communities.

The first set of challenges relate to cost and public resistance. Dunedin presents two business cases – a full-ownership option and a “zero-capital cost” option wherein Dunedin handles the operation and logistics of deployment, operation, and decommissioning, and the customer pays approximately 29 cents/kW in return.

However, northern communities and mine operators may be tempted to continue to rely on diesel – owing to the current low price of oil and, in essence, because of the stickiness of the status quo. In addition, northern communities, including many Aboriginal groups, continue to be locked in debates over energy development, mining, and socio-economic development; introducing any new nuclear energy plan may provide more fodder for political debate. Dunedin appears to be aware of these challenges and addresses the regulatory and safety issues on their website. However, as we suggested in a piece on April 23, better public engagement and education would be required to quell any genuine fears or uncertainty that exist.

Lastly, northern communities may demand a clearer set of guidelines and regulations relating to decommissioning and remediation. Lang noted in his presentation that decommissioning funds would be held in escrow, effectively guaranteeing that even if a community or mine is bankrupt, that the money for cleanup and restoration is not subject to claims by creditors or other parties. Dunedin’s approach is unique – in that the whole reactor-in-a-ship concept allows for relatively easy site cleanup – but questions still remain. How much would be necessary for cleanup? What does full restoration look like?

In other words, this ambitious idea is not without issues. However, there appear to be tremendous economic and environmental arguments in favour of SMR development in northern and remote communities. These arguments carry over to other contexts – including Mexico, for example – and may one day translate to a new energy future for Canada’s North.

News in Depth: The Debate over Florida Power and Light’s Turkey Point Expansion Plan

Starting April 22, residents of Florida’s Miami-Dade county have had the opportunity to attend public consultation meetings hosted by the US Nuclear Regulatory Commission to discuss the Florida Power and Light’s (FPL) plan to add two new nuclear reactors at its Turkey Point plant.

For this week’s News in Depth feature article, we explore various components of the debate around FPL’s Turkey Point plans and reflect on what lessons industry officials and regulators can learn from the consultation process.

The Turkey Point Story

According to FPL, Turkey Point Nuclear Plant is located 24 miles south of Miami, on Florida’s Atlantic Coast. Currently, there are two nuclear power units which have been in operation since the early 1970s. Westinghouse supplied the Pressurized Water Reactors (PWRs) and the turbine generators.

FPL now seeks to obtain a combined license (COL) for two Westinghouse Advanced Passive 1000 PWRs, to be called Turkey Point Units 6 and 7. The original application was tendered in June 2009, and FPL hopes to have the new reactors online by 2022.

FPL operates two nuclear plants in Florida, St. Lucie and Turkey Point. Progress Energy Florida operates a 5 unit plant in Crystal River, on Florida’s west coast, and has proposed another plant in Levy County. Nuclear plants in Florida have been met with skepticism by many, as the general public seeks to understand the safety risks in the event of hurricanes or flooding.

In the Turkey Point debate, critics have asked if the plant is prepared to resist the rising sea levels which have reeked havoc in Miami’s barrier islands. In response, FPL has highlighted that the current plant is 20 feet (6 m) above sea level, enough to withstand severe flooding associated with up to Category 5 hurricanes. In addition, the new reactors would be built at an even higher 26 feet, to take into account rising sea levels.

However, what is perhaps more interesting is not just how FPL is responding to criticism, but how it is using the story of its history and current practices to work with and educate the public.

Public Communication and Consultation: What can we learn?

FPL has used many of the standard, and expected, methods to communicate their rationale behind building these new reactors. On its website and in the press, they have emphasized the economic advantage of their operations, zero-carbon emissions, and the extensive research and safety preparation that goes into the plant.

They have also relied on community specific examples, including most notably their efforts to improve the habitat for the once-endangered American crocodile and their support for wetland recovery programs.

The public consulation process – like the one happening right now at Turkey Point – provides a unique opportunity for the nuclear industry to have an honest, down-to-earth conversation with the public about energy, safety, and the environment. In addition, a more human conversation also allows regulators to get a better sense of the public’s views and concerns. In the future, the focus should not only be on the technical details, but on the realistic compromises we must make to meet our energy needs. That includes talking about everything from transmission lines to crocodiles, depending, of course, on the context.

News in Depth: Nuclear Energy and Mexico’s Radical Quest to Reduce Greenhouse Gas Emmisions

Mexico’s Bold Emissions Goals

On Friday, March 27, 2015, the Government of Mexico announced new targets that aim to cut output of greenhouse gases by 22 percent and its emissions of black carbon and soot by 51 percent by the year 2030. Such a move would make 2026 its peak emissions year.

While Mexico is only responsible for an estimated 1.5% of global emissions, the country felt strongly that is was important to set the goals high and to set them early in the lead up the global climate conference in Paris in December. Roberto Dondisch Glowinski, Mexico’s lead negotiator to the United Nations (U.N.) climate talks, is quoted in Scientific American saying: “we are trying to show that what we say in the negotiations, we stand by our words. Second, we want to show that it is feasible.”

How does Mexico plan to meet these targets? Steven Mufson, writer for the Washington Post, notes that meeting these goals will require higher fuel efficiency standard for cars and an increasing of investment in renewable and nuclear energy for the power sector.

The Future of Nuclear in Mexico

As the World Nuclear Association (WNA) highlights, Mexico currently operates two nuclear reactors that generate approximately 4 percent of its electricity. The country is also a net energy exporter, as it is rich in fossil fuel resources such as oil and natural gas. As the WNA notes, there is political will to further develop nuclear capacity, but the recent drop in oil prices has stymied any significant progress.

Given these new targets, Mexico’s Federal Electricity Commission (CFE) may pursue an earlier strategy which included building six to eight 1400 MWe units and, potentially, more flexible and less cost-intensive Small Modular Reactors (SMR) that could service the agricultural sector. However, putting these plans into action will require new investments in education and training.

In January 2015, ScienceDaily featured the research of Dr. Lorenzo Martínez Gómez, a researcher at the Institute of Physics of the Autonomous Nacional University of Mexico (UNAM). Dr. Gómez’s argues that nuclear energy is key to mitigating climate change and to reducing fossil fuel use in Mexico. The article summarizes Dr. Gómez’s main points, including: 1) that the public in Mexico fears nuclear, despite fossil fuels inflicting more actual damage to the environment and to public safety, and 2) that the key to the success of nuclear in Mexico will be training and education of scientists and technicians.

The federal government manages employment opportunities that will be generated by energy reform efforts (about 135,000 in total) not only in areas of hydrocarbons, but new technologies to develop alternative energy. Given the government’s investment in training, Mr. Gómez argues that now is the time to spark a revival in nuclear engineering in Mexico.

In short, it’s likely that the nuclear sector can play a big role in helping Mexico achieve its new emissions goals by leveraging investments in training and education and by capitalizing on new found political will both at home and abroad. Significant progress is hard to predict in the short term, but we’re optimistic that the global climate change conference in December may provide the necessary spark to push the government of Mexico and its partners into action.

News in Depth: Japan’s Shift Towards Fossil Fuels Raises New Questions about Emissions and Nuclear Investment

Introduction

The Wall Street Journal recently reported on Japan’s increasing investment in coal, oil, and natural gas as the country strains to produce enough electricity following the idling of all nuclear plants in the aftermath of the Fukushima disaster in March of 2011.

Japan’s embrace of fossil fuels has a number of implications, most notably the pressure on emissions standards and on medium and long term investments in nuclear and renewable energy sources more broadly. In this week’s News in Depth feature, we explore Japan’s recent moves with respect to fossil fuels and the impact those moves have on emissions and strategies for energy infrastructure investment.

The Low Price of Oil and it’s Impact on Japan’s Energy Sector

As of writing, Oil is priced at ($53.44 for Brent Crude), reflecting a downward trend that began in 2014.

Crude Oil 6 Month Price Trend

Goldman Sachs analysts suggest that we may see the price of U.S. crude drop as far as $40 a barrel in the near-term, as inventories begin to rise.

While we continue to forecast a strong demand recovery in 2015, we believe that sequentially weaker activity, the end of winter and the end of potential restocking demand, will lead to a sequential deceleration in demand-growth as we enter the spring.

These prices, in addition to low coal and natural gas prices, have had a major impact on Japan as it seeks to fill the capacity void left by its 48 idled nuclear plants. Japan brought 14 new gas and coal-fired power plants online by the end of 2014 alone. It’s also been reported that by the end of 2025, Japan hopes to have a total capacity of over 13GW of new coal generation.

Reactions to this shift towards oil, coal, and gas have been mixed. There are clear political and economic advantages to Japan’s diversification. Perhaps most importantly, reliance on the cheaper fossil fuels will help Japan ease it’s energy import bill. In the first half of 2014, Japan’s trade gap reached 4.8 trillion yen. Moves to these cheaper energy sources are projected to lower that deficit and to ease pressure on and lower costs for Japan’s economy and manufacturing sector.

However, with Japan being the world’s fifth-biggest emitter of carbon dioxide, concerns have been raised about its increasing reliance of fossil fuels. Aaron Sheldrick, reporting for the Japan Times, writes that Japan is seeing increasing pressure from other countries, including China and the US, to meet it’s emission targets.

Balancing Short Term and Long Term Energy Investments

While the situation in Japan reflects many unique factors, including the Fukushima disaster and the public distrust of nuclear energy, it also provides a number of interesting angles of analysis. There is the broader phenomena of cheap oil and fossil fuels. However, the concerns highlighted above, including climate change and the regulation of carbon emissions, highlight the importance of keeping a longer term view on energy infrastructure investment. Moreover, it is important to consider the balance of an interest in highly elastic and less capital intensive energy sources, such as fossil fuels, with an interest in longer term infrastructure investments, such as nuclear, that pollute less and provide for greater supply certainty for growing economies.

For more on these issues, listen to The Bulletin with UBS podcast by Monocle, which this weeks focuses on global investment strategies in the oil sector. For further reference and cost comparisons between different energy sources, see also The Economics of Nuclear Power.

Russia makes an offer to tender two nuclear power plants in Argentina

July 14, 2014 – Messi lookalike and Economy Minister Axel Kicillof and other top Argentine politicians met with Russian President Vladimir Putin and Energy Minister Alexander Novak to discuss cooperation and sign a deal to develop two new Rosatom nuclear plants in Argentina. Details of the story are available by  clicking this article in the Buenos Aries Herald.

From an international perspective these negotiations depict the high level of official government involvement that is often required in nuclear energy deals. The united efforts of Russia’s President and Economy Minister is in stark contrast to the noticeably absent support that Prime Minster Stephen Harper has shown for marketing Canadian Candu reactors abroad.  How should Canada compete with Russia and other nations to export Canadian nuclear technology and expertise around the world?

In a recent post we pointed out that Ontario’s Minister of Research and Innovation Reza Moridi was actively supporting and advocating on behalf of Candu and other Canadian interests at a conference in China. In the high stakes game of international energy, heads of state need to get involved. 

Russia’s BN-800 fast breeder reactor goes critical

Russia has completed construction of its latest fast breeder reactor or FBR and has begun controlled nuclear fission.  The reactor will slowly ramp up power until it reaches its maximum output of 880 megawatts in early 2015.  It is expected to operate for 45 years producing an incredible 475 million kilowatt hours of electricity in its lifetime.

FBRs are a technological step beyond conventional nuclear reactors.  They have the advantage of being able to “burn” a wider variety of fissile materials than other nuclear reactors including the fissile waste from other reactors.  The name “breeder” comes from their ability to produce more plutonium than they consume.  The ability to consume waste and produce plutonium has many nations, including Russia, India, China, France, and others, as well as the IAEA, envisioning a closed fuel cycle where conventional reactors produce fuel for breeder reactors which produce fuel for conventional reactors.  Russia sees the BN-800 reactor as a  step towards achieving this goal.

The next stage is construction of the BN-1200, which is scheduled to be assembled in the same plant as the BN-800 by the year 2020.  In total, Russia hopes to construct 8 BN-1200 reactors by the year 2030.  While there are other fast breeder reactors operating around the globe, Russia is the only nation to successfully deploy the technology on an industrial scale.

Sources:

RT: Fast reactor starts clean nuclear energy era in Russia

World Nuclear Association: Fast Neutron Reactors

IAEA: Assessment of nuclear energy systems based on a closed nuclear fuel cycle with fast reactors

US Deparement of Energy agrees to fund NuScale SMR to commercialization

The US Department of Energy (DOE) announced this week that it will invest $217 million over five years in the development and commercialization of the NuScale Small Modular Reactor (SMR).  The DOE expects their investment to be matched by private sector investment in the project.  NuScale intends to use the funds to test their reactor and to complete the process of certification through the Nuclear Regulatory Commission with hopes of having the first NuScale reactor online by 2023.

NuScale’s 45MW pressurized water reactor is a unique design making use of an unconventional fuel assembly which is passively cooled and more inherently safe than existing reactors.  In the event of an overheating, the reactor is designed to cool without any human input, without any additional water, and without electricity.  The NuScale SMR will be mass produced in a factory and shipped by truck, rail, or barge in sets of up to twelve for power stations between 45MW and 540MW.

Here, the Chief Commercial Officer of NuScale Power explains some of the benefits of a small modular reactor generally and the NuScale reactor specifically.

If NuScale is able to keep to its schedule for commercialization, it could play a major role in achieving US President Barack Obama’s recently stated goal of reducing the emissions of all US power plants 30% by 2013.

Source: http://www.world-nuclear-news.org/NN-Federal-funding-agreed-for-NuScale-2905144.html

General Fusion Lunch & Learn May 30, 2014

On May 30, 2014, OCI is hosting an event with Michael Delage and Alex Fallon of General Fusion.  General Fusion is a Canadian developer of nuclear fusion technology and was featured in last years Future of Nuclear conference.  This session will outline the supply chain opportunities with Canada’s leading nuclear fusion company.

Non-members can receive a 10% discount by using the discount code OCIGUEST when registering online.

To learn about the event, click here.

case-gfted

More on General Fusion…

“Established in 2002, General Fusion has grown to 65 employees and raised over $50M. The company is supported by leading energy venture capital funds and industry leaders, including: Sustainable Development Technology Canada, NRC-IRAP, Chrysalix Energy Venture Capital, Bezos Expeditions, Business Development Bank of Canada and Cenovus Energy. General Fusion is gathering global attention due to its progress with developing magnetized target fusion technology.

Fusion energy holds immense promise as a clean, safe and abundant energy source.  Fusion generates neither pollution nor greenhouse gases that drive climate change. Fusion energy is fueled by hydrogen isotopes, which are easily extracted from seawater. There is enough fusion fuel to power the planet for hundreds of millions of years.

As Canada explores its nuclear innovation strategy, fusion is gathering more attention. Recently, Jacques Besnainou, Former President & CEO of Areva Inc., joined the General Fusion Board of Directors. Fusion presents potentially huge opportunity for Canadian nuclear suppliers.  General Fusion is a private enterprise tightly focused on developing a commercial fusion reactor (100MW) and is on track to construct a fusion reactor alpha plant within four years.”

For more information: www.generalfusion.com

 

China leading the way with first nuclear IPO estimated at USD $2.6 billion

Western nations typically cite finance reasons for not being able to fund new nuclear projects. The projects are either too large, costing ten billion dollars or more, or they are deemed to be too risky with too much potential liability and therefore not financeable. What makes a finance project too big or too risky? Certainly projects worth tens of billions of dollars could be syndicated to large pension or sovereign funds. And what makes a project too risky or difficult to insure? Certainly risks associated with nuclear power are not infinite and therefore they are quantifiable. If they are quantifiable then an associated price and risk premium could be calculated. The actuaries and insurance people that first put numbers to the risk and liability issues around nuclear energy will be able to create an entire new category of infrastructure finance to support the buildout of nuclear power reactors in the 21st century.

While many western nations debate the merits of new nuclear, China is progressing aggressively. As a nation with high population density and arguably the world’s worst air quality, China has determined that nuclear will be a critical part of their energy mix. In response to the related finance issues it appears they are using another western innovation, the IPO. For full details, read the linked Reuters article which describes a $2.6 billion IPO planned by China Nuclear Power.

http://www.reuters.com/article/2014/05/05/chinanuclear-ipo-idUSL3N0NR07020140505

If you are interested in nuclear energy finance, please consider attending the Future of Nuclear seminar on May 8 on the topic Nuclear Energy Finance: The UK Experience.

Henry Vehovec,
Chair, Future of Nuclear Advisory Board
President, Mindfirst Inc.

 

 

 

 

 

Westinghouse has inside track on sale of 8 reactors ($24 billion) in China

On Mon Apr 21, 2014 Reuters reported:
* Westinghouse in talks to sell eight AP1000 Reactors
* Nuclear plants, with machinery and services, may cost $24 billion
* Liaoning’s Xudapu and Guangdong’s Lufeng part of discussion
* Sanmen 1 to connect to grid in 2015

“China may sign as early as next year the first of several contracts for eight new nuclear reactors from Westinghouse Electric Co, as the government presses ahead with the world’s biggest civilian nuclear power expansion since the 2011 Fukushima disaster in Japan.”

“China’s main nuclear power companies are moving forward with talks to buy the third-generation Westinghouse AP1000 reactors, said Timothy Collier, China managing director of the U.S.-based company. The eight projects, including machinery and services, are expected to cost $24 billion.”

“We are currently in various stages of negotiations for eight new units,” Collier told Reuters. Westinghouse is majority owned by Japan’s Toshiba Corp and its reactors are the blueprint for China’s own nuclear technology.”

“China currently has 20 nuclear power reactors online, with another 28 under construction, as it seeks to reduce its reliance on costly and polluting fossil fuels to generate electricity. Sun Qin, chairman of major nuclear plant operator China National Nuclear Corp (CNNC) recently told Reuters another 20 nuclear reactors may be built within the next six years.”

“China has vowed to more than double the installed nuclear generation capacity to 58 gigawatts (GW) by the end of the decade. Nuclear installed capacity currently stands at 15.69 GW, according to the latest official data.”

“China’s nuclear expansion is attracting many equipment suppliers, including French power firms Alstom SA and Areva.”

“Candu Energy Inc., a subsidiary of SNC-Lavalin Group , is also working with CNNC to start converting two Candu 6 reactors at Qinshan in Zhejiang province, to burn reprocessed uranium fuel.”

“There’s a huge potential for Canada and Candu energy,” Ontario’s Minister of Research and Innovation Reza Moridi told Reuters during a visit to Beijing last week.  The Reuters article further quoted Moridi, “If China is going to build 100 reactors in the next 20 years, they require 25 Candu reactors to burn the spent fuel coming from the light-water reactors.”

Candu has been criticized in China for not having built any new reactors domestically in Canada in recent years. The Chinese apparently have a hard time understanding that in Canada with a relatively stable population of about 30 million there just isn’t the demand to build new reactors at the rate required in China. As population size and density grows and GHG effects and air quality become greater concerns new nuclear becomes a more attractive option because of the great inherent density of nuclear energy and virtually no GHG emissions.

Kudos to Minister Moridi for making the trip to China to support Candu’s marketing effort. Ontario has created hundreds of jobs by encouraging renewable energy through the Green Energy Act. In comparison, Ontario’s nuclear industry employs more than 20,000. In light of the recent announcement between OPG and Westinghouse to market nuclear services globally, Minister Moridi may have been well served to be cheering on the Westinghouse sales efforts as well.