News Brief: China’s Nuclear Energy Developments

Last week, Mike Orcutt at MIT Technology Review wrote an update on China’s nuclear energy development plans.

China is rapidly moving up the global nuclear power leaderboard. Since 2012, as the traditional leaders in nuclear energy production have remained stagnant or backed off of their reliance on nuclear in the wake of Fukushima, China has added 11 new reactors and over 11 gigawatts of nuclear generating capacity.

As Orcutt notes, by the end of this year China is expected to pass South Korea and Russia to become the fourth largest producer of nuclear energy in the world. He links to an interesting infographic that highlights the differential in nuclear energy growth around the world.

graphitix860_6 copy

Image Source: MIT Technology Review

China is clearly in the lead when it comes to capacity growth, with Russia and India not far behind. However, as the infographic notes, it will be important to keep an eye on those nations that have yet to produce nuclear energy but plan to do so. As we’ve highlighted here at Future of Nuclear, those countries – and the new technologies they apply – will be interesting to watch.

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: Global Nuclear Growth in Context

This week, in an article for The Energy Collective, Jesse Jenkins, a writer and current PhD student in Engineering Systems at MIT, aimed at putting the growth of renewable energy in perspective. The article provides more than just an overview of renewable energy however, it also provides some interesting context for discussion of the future of nuclear power.

A year in review: thinking about energy capacity worldwide

Before thinking about what comes next in our energy future, it’s important to have some context. In his article, Jenkins provides a succinct summary of the progress made in the last full calendar year:

The world added 103 gigawatts (GW) of renewable power capacity in 2014… That figure excludes large hydropower projects… and is dominated by wind and solar, which saw growth of 49 GW and 46 GM respectively. More importantly, the share of renewable electricity… in the global electricity mix ticked upwards from 8.5 percent in 2013 to 9.1 percent in 2014.

As is noted, that figure is close to the 10.5 percent of global electricity supplied by nuclear power.

Global_Electricity_Market_Shares_1980-2014

(Image Source: The Energy Collective)

A link to the International Energy Agency’s (IAE) World Energy Outlook 2014 Factsheet is also provided. The factsheet highlights some additional key points:

  • 434 operating commercial reactors worldwide at the end of 2013 (capacity: 392 GW)
  • Nuclear power has avoided the release of an estimated 56 Gt of CO2 emissions since 1971
  • Almost 200 of the 434 reactors operating at the of 2013 are to be retired before 2040

Finally, Jenkins articulates two visions for future growth in renewables. In the first scenario, growth is linear at about 100GW per year. In the second, growth compounds at a 10 percent per year rate. As he notes, neither scenario is perfect, but they “bracket the realm of most likely outcomes.”

What’s next for nuclear power and renewables?

The IAE’s factsheet provides an apt summary of the challenge ahead for the nuclear energy sector, “the industry will need to manage an unprecedented rate of decommissioning, while also building substantial new capacity for those reactors that are replaced.” It is clear that the next few decades will be filled with difficult problems: how do we handle the decommissioning of so many reactors, how do we balance short and long term cost economic and political concerns, and how do we safely and steadily grow nuclear capacity, especially in the so-called BRIC countries?

From a review of conference topics and recent news articles, it’s clear that the industry is well aware of these challenges and is making positive strides. As we’ve highlighted here at Future of Nuclear, companies are continuing to develop new, smaller reactors that can be deployed in both industrialized and developing markets. In addition, governments continue to explore how to safely deal with radioactive waste. In all, the challenges are great but not insurmountable.

This, finally, brings us back to the topic of renewables. As highlighted earlier, there is no single panacea for our energy needs or a clear idea of what the future will bring. Powering a diverse world takes a diverse set of solutions. As Mr. Jenkins points out in his article, the best way to ensure that low-carbon sources continue to grow is to not put all of our eggs in one basket. What is needed is a toolkit of locally relevant and sustainable technologies that can respond to the growing need for reliable, safe, and clean energy worldwide. That is the industries’ north star. The trick, as it were, is to keeps steering towards it.

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. 

Swafford setting course for Candu in China

On February 25, 2014 SNC-Lavalin Inc. (TSX: SNC) announced the appointment of Preston Swafford to the role of Chief Nuclear Officer, President and CEO, Candu Energy. Based in Toronto and reporting to the Company’s Power Group President, Alexander (Sandy) Taylor, Mr. Swafford will be responsible for growing SNC-Lavalin’s nuclear business to meet the needs of its customers for technical services, major refurbishments and new builds across Canada and in key international markets. Mr. Swafford has impressive experience including senior positions at Tennessee Valley Authority (TVA) and Exelon, both companies are major American nuclear operators. On hearing the news industry observers wondered what course would be set by Swafford, and how applicable would his experience be with the iconic, definitively Canadian Candu heavy water reactors. Reports from a major trade show in China earlier this month, China International Nuclear Industry Exhibition, are providing an indication that Swafford is already starting to make his mark.

Candu Energy Inc. has had a rough period in recent years. Demand for new nuclear softened post Fukushima and in the wake of the financial crisis. Nations with stronger economies, such as China and India, have a burgeoning middle class that is hungry for cheap, reliable energy, and also, a need to rein in greenhouse gas (GHG) emissions for air quality, health and climate change reasons. International manufacturers have made inroads in these emerging markets with innovative new technologies, such as the four Westinghouse light water AP1000 reactors that China started building in 2008. With diminished demand, government support and privatization domestically, Candu needs to reinvent and reposition itself for the new 21st century nuclear market.

Swafford has quickly displayed that he understands the unique attributes of the Candu reactors. Some of the reactor features that made Candu a global leader when first developed decades ago are still highly relevant today. Candu reactors have demonstrated that they can use spent fuel to produce energy. Further, they can be most readily modified to use thorium as a fuel and they have superior safety features. Engineers estimate that for every four new reactors that China builds of various designs, they could and should build one Candu reactor to use the spent fuel. If China follows through on plans to build 100 new reactors in coming decades, this could potentially mean 25 new reactor sales for Candu.

Sales cycles in the nuclear industry are long. It is still early in the game for Swafford and the new Candu. One thing is certain, new innovations, partnerships and financial players are emerging. As with other technology industries, your competitor today may be your partner tomorrow. Who would have thought years ago that western companies would be selling nuclear technologies to China? Who would have thought that China, France and Russia would be involved in building and financing a new reactor in Britain? These are the times we are now in. Candu is setting a course to be a player in this new world.

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

 

Westinghouse and OPG agreement a watershed moment for Canadian nuclear industry

With little fanfare, an unassuming tweet came across my screen yesterday afternoon while attending the global carbon leakage seminar at Bennett Jones. Apparently, Westinghouse and OPG had signed an agreement to collaborate and work on selling their nuclear expertise, products, and services in global markets. Under the agreement, the companies will consider a diversity of nuclear projects including refurbishment, maintenance and outage services, decommissioning and remediation of existing nuclear facilities, and new nuclear power plants.

This agreement could represent a watershed moment for Ontario’s economy, certainly for the nuclear industry. Like a sportscaster that tries to call the definitive momentum shifting play in a game, we won’t know for a while yet. But this agreement could be a gamechanger. Let me tell you why. Ontario has been built on the back of cheap energy, first from Niagara Falls and then nuclear. It is cheap energy that allows us to mine economically and manufacture cars with the best the world has to offer. Similarly, in Quebec, the vast hydro projects underpin their economy. In Alberta, oil and gas are key drivers. Any robust economy in the world has an abundant, secure source of energy.

Ontario’s CANDU technology has been a global leader and a gamechanger for many countries in the world. However, as in all technology driven industries, there is great innovation happening, it happens relentlessly,  and CANDU is not the only nuclear technology that growing nations are considering. The thriving economies of the world, China, India and others, are craving cheap, abundant, clean, safe energy. While Ontario does not have the demand to build new reactors now, other countries do. The challenge for our nuclear industry has been to somehow get our tens of thousands of nuclear related jobs serving the global market, not just maintaining our stable domestic market. This means being able to support the multiple and diverse nuclear technologies that are evolving in the global marketplace today.

The significance of the Westinghouse deal is that it ties OPG to a global leader in a non-CANDU technology. OPG is a globally recognized leader in operating nuclear power generating stations. It has an unblemished safety record that is the envy of the world. What a glorious opportunity this represents to market that operating expertise and enter other markets being served by emerging nuclear technologies. There is certainly a place for CANDU in the future. However, Westinghouse has their APS-1000 line of reactors that are making inroads in several countries. Kudos to OPG for seizing this opportunity and diversifying how they deploy their expertise.

Kudos also to Westinghouse. Westinghouse recognizes that in the 21st century the world will need more nuclear energy if it is to stem the effects of GHG driven climate change. In a post Chernobyl world there has been a relative shortage of young engineers and trades trained in the nuclear sciences. Ontario has almost 300 companies in the nuclear supply chain. There are more than 25,000 jobs related to the nuclear industry. There are nine universities that have courses in some sort of nuclear science. We have Chalk River and AECL, world leading nuclear research in medical isotopes and other applications beyond energy. And we have the Canadian Nuclear Safety Commission (CNSC) which is increasingly being viewed as an innovator and leading exemplar in nuclear regulation by emerging economies and jurisdictions that need to model their own regulatory regimes.

Ontario’s Green Energy Act has spurred wind and solar energy. Cumulatively, renewables represent a single digit percentage of our energy mix. There are thousands of jobs related to renewables, depending on how you count them. This is wonderful news as renewable energy represents an important part of the energy mix. The Westinghouse OPG agreement reminds us that Ontario’s existing nuclear industry, expertise and workforce are an order of magnitude larger than the current renewable industry.

The full press release may be viewed at http://bit.ly/1m7nPmg .

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

Topic announced for Future of Nuclear Seminar #3 – Nuclear Energy Finance: the UK Experience

On May 8, 2014, Jonathan Dart, Consul General at the British Consulate in Toronto, will speak about the UK’s recent experience in nuclear energy finance and lessons that can be learned.  Below is the abstract for the event:

“Financing nuclear energy projects has become increasingly complex in recent years. The potential for projects going over budget and difficulty in quantifying project risk contribute to financing complexity and cost. The large capital requirements in nuclear energy projects have typically required that national governments become involved in order to guarantee payments or backstop projects. In many jurisdictions the high level of complexity have made nuclear projects prohibitively expensive. Coupled with negative public sentiment towards nuclear energy there has been a decline in nuclear power useage in several Western economies. Concurrently, there are numerous countries such as China and India, that are ramping up their nuclear energy capabilities. In the United Kingdom, after years of decline in nuclear energy the government has decided to proceed with building a new reactor. How was this financed? What changed in the eyes of policy makers that they decided to proceed with new nuclear? Is there an opportunity for Canadian funds and investment bankers to participate in the large nuclear projects that will be deployed globally?”

Click here to learn more and to register.

ADM Rick Jennings to speak re LTEP at Future of Nuclear Seminar on January 21

Rick Jennings, Assistant Deputy Minister, Ministry of Energy, Ontario, will speak about Ontario’s recently released Long Term Energy Plan (LTEP) and the role of nuclear energy as part of that plan at this year’s first Future of Nuclear Seminar on January 21. The LTEP report entitled Achieving Balance addresses the growing role of renewables in the energy mix, the ongoing need for safe, reliable base load energy and the export business development potential for the nuclear industry. This session is targeted at senior executives and stakeholders that would like an opportunity to engage in a private dialogue regarding important nuclear energy issues in an objective, collaborative learning environment.

The Future of Nuclear Advisory Board has organized a series of six seminars to be held through 2014 to discuss important nuclear energy issues. The dates for the 2014 seminars are January 2, March 4, May 6, June 24, September 23 and November 4. Topics and speakers for each session will be announced on this Future of Nuclear website, the Future of Nuclear Conference Facebook page, the @futureofnuclear twitter feed and via our direct newsletter which you may register for by clicking here.  Seminars are conducted during lunch in meeting rooms at Torys, 79 Wellington St. W, 30th Floor, Toronto, ON. You may register for the first event by clicking here. Subscriptions for the entire six seminars are available, please Contact Us if interested.

The Future of Nuclear Series is funded by the registration fees of participants, revenues from resultant reports and the support of sponsors. Supporters to date include Babcock and Wilcox, Canadian Nuclear Safety Commission (CNSC), McMaster University, Ontario Power Generation (OPG), Power Workers’ Union, Torys, University of Toronto, and Westinghouse. The Seminar Series is organized by Mindfirst Inc. under the direction of Future of Nuclear Advisory Board chaired by Henry Vehovec, Adjunct Professor, University of Toronto, Innovations in Technologies and Organizations in Global Energy Systems. Seminars are conducted under Chatham House Rule format. If interested in volunteering as part of the Mindfirst team, part of the Advisory Board, or sponsoring the Future of Nuclear Seminar Series please contact us.

The Implications of Postponing New Nuclear

November 11, 2013 – Toronto, ON – It is starting to sink in for many people how broad the repercussions will be of the recent decision to postpone new nuclear in Ontario. On November 22, 2013, the Economic Club of Canada will present Prof. John Luxat speaking in favour of building new nuclear in Ontario. In this morning’s Globe and Mail, Konrad Yakabuski wrote the article quoted below which can be linked here.

“Former NASA scientist James Hansen earned a reputation for hyperbole with his claim that unlocking Alberta’s oil sands would mean “game over” for the climate. So, his latest assertion – that saving the planet requires a big increase in nuclear power – naturally warrants skepticism.

It turns out Dr. Hansen, now of the Columbia University Earth Institute, has illustrious company. Scientists at Stanford, the Massachusetts Institute of Technology and the University of Adelaide joined him last week in signing an open letter warning that “there is no credible path to climate stabilization that does not include a substantial role for nuclear power.”

The post-Fukushima hysteria that led governments in the developed world to close nuclear plants and halt development of new ones will do major, certain damage to the planet. Despite the tiny odds of a serious nuclear accident, Germany has cranked up production at its coal stations after shuttering eight nuclear plants since 2011.

Politicians who suggest that “renewables” will pave the way to a carbon-free future are either delusional or deceptional. Wind and solar power are unreliable options with short track records. Their power can’t be stored and, unlike new reactors with 50-year lifespans, they have exhibited alarmingly high failure rates.

It is simply irresponsible to suggest that wind, solar or biomass can be more than complementary power sources. They may not even be that green. Ontario’s increasing reliance on natural-gas-fired generation to back up intermittent wind proves that overinvestment in renewables can actually lead to higher carbon emissions. And while the province will soon close its last coal plant, plans to reduce nuclear will result in more carbon over time.

Last month, Ontario Energy Minister Bob Chiarelli confirmed that the province has scrapped the purchase of two new reactors for the Darlington nuclear site. And as The Globe’s Adam Radwanski has reported, it may postpone refurbishing existing reactors at government-owned Darlington and the private Bruce station. It could also close Pickering ahead of schedule.

“It’s not wise to spend billions and billions of dollars in new nuclear when that power is not needed,” Mr. Chiarelli said in announcing his government’s decision.

Ontario’s electricity consumers might be grateful to the minister if he didn’t represent a government for which cost has never been an object. Consumers are now on the hook for the $1-billion cancellation of two gas plants, and they will pay through the teeth for the superfluous wind and solar power former premier Dalton McGuinty commissioned to look green.

No, what’s likely motivating the sudden nuclear rethink is fear of more unflattering pre-election headlines about out-of-control spending. The fiascos have paralyzed energy policymaking at Queen’s Park. Nuclear plants have a history of big cost overruns and the government can’t risk reinforcing its spendthrift image or alienating anti-nuclear New Democrats.

It’s true that Ontario currently has large electricity surpluses, but with hotter summers and (hopefully) more economic activity in its future, the province needs to take action soon to ensure it has reliable baseload electricity years from now.

The anti-nuclear Ontario Clean Air Alliance is pushing the province to sign a long-term contract with Quebec to buy cheap, emission-free hydro power. But while Quebec is currently sitting on big hydro surpluses and facing unattractive U.S. export prices, it has shown no interest in sharing its energy advantage with Ontario. Past lip service to interprovincial energy co-operation was just that.

Besides, by banking on nuclear decades ago, Ontario has accumulated a critical mass of atomic expertise. Mr. Chiarelli’s decision amounts to condemning the industry to death row. If Ontario doesn’t buy next-generation reactors from homegrown Candu Energy, there is little hope it will get any business as India, China and other countries seek emissions-free power.

For while Fukushima rattled Western politicians and empowered the anti-nukes, an atomic renaissance may be just around the corner. Dr. Hansen’s conversion to the cause is one sign of that. But Ontario’s suddenly gun-shy Energy Minister still seems stuck in the dark ages.”