The president-elect of the American Nuclear Society said the US
Department of Energy's loan guarantee program needs changes if it is to
increase the number of nuclear power plants in the country.
The current program "is in need of reform," Eric Loewen said Monday at a
Nuclear Energy Insider-sponsored conference in Charlotte, North Carolina,
citing Constellation Energy's withdrawal earlier this month from consideration
for a loan guarantee for a planned reactor project in Maryland.
The government's offer of a $7.5 billion loan guarantee with an attached
fee of $880 million shows the program needs revisions, Loewen said.
"The Office of Management and Budget has set terms and conditions [that]
may destroy the project's economics and prevent the project from going
forward," he said.
The program could be changed to improve the chances of success along the
lines of a bill Lamar Alexander, a Tennessee Republican and Jim Webb, a
Virginia Democrat, introduced last year. The senators proposed adding $100
billion to the federal government's loan guarantee authority and increase
direct government support for the industry.
Nuclear power projects are large and complex, with the investment
representing a large portion of the market value of even the biggest
utilities, Loewen said. Partners or government credit support is needed for
such projects to be built, he said.
Although there have been delays in development of new nuclear units,
Loewen said there are signs that many projects are under way, with four to
eight new nuclear operators entering operation by 2020.
Talk of a nuclear revival or renaissance is not accurate, Loewen said,
since nuclear energy has not been in decline. Nuclear units have been
providing energy to the power grid for decades and new capacity has been added
to existing plants equivalent to 16 new units, he said.
Michael McGough, senior vice president of Constellation-EDF Group joint
venture UniStar Nuclear Energy, said his company is still active despite the
dispute between its parent companies.
UniStar is continuing to go ahead with efforts to seek NRC licenses for
associated projects, including the Calvert Cliffs site in Maryland. Detailed
engineering work also continues, McGough said.
UniStar was associated with four applications for new nuclear reactors,
although two of those projects have since suspended activity.
Projects in the US have begun work that the NRC defines as
pre-construction work, including excavation, installation of roads and
utilities, clearing land and erection of temporary buildings, said Dave
Matthews, head of the division of new reactor licensing at the US Nuclear
Regulatory Commission. New construction rules updated in 2007 "allow a great
deal of activity without prior NRC approval," Matthews said.
Even so, many applicants for combined construction permit-operating
licenses are planning multiple amendments as soon as they receive the COL,
Matthews said. NRC is working with industry to develop rules for changes that
licensees could make during construction without NRC approval, similar to
existing rules that allow such changes at operating reactors, he said.
Defining the process for making changes during construction is "a top
priority" for NRC, Matthews said.
NRC has adapted following lessons learned during the last period of
nuclear reactor construction in the 1970s and 1980s, said Loren Plisco, deputy
regional administrator for construction at the agency. The agency is spending
more time planning the scheduling of inspections and will perform more
inspections early in construction, he said.
NRC will have more inspectors stationed permanently at construction
sites, and on Monday added a second "resident inspector" at the Georgia
Power's Vogtle site, Plisco said.
Southern Nuclear Operating, which is seeking licenses to build and
operate two new reactors at the Vogtle site for owners including Georgia
Power, is learning from construction in China, said Cheri Collins, general
manager for external alliances at Southern Nuclear.
Four Westinghouse AP1000 reactors are being built at two sites in China,
and Southern Nuclear has a memorandum of understanding with one of the
developers in China to share operating and construction experience, she said.
That agreement is pending DOE review, she said.
Southern Nuclear and Georgia Power are both subsidiaries of Southern
Company.
--William Freebairn, newsdesk@platts.com
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