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Beyond Fossil Fuels: David Crane on Nuclear Power

The president and CEO of NRG Energy, Inc., weighs in on the hurdles facing his industry
nuclear power, energy, alternative energy, STP



ERIC MELZER

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Editor's note: This Q&A is a part of a survey conducted by Scientific American of executives at companies engaged in developing and implementing non–fossil fuel energy technologies.

What technical obstacles currently most curtail the growth of nuclear fission? What are the prospects for overcoming them in the near future and the longer-term?
Nuclear power generation in the U.S. has been a very reliable and safe form of power generation since the first reactors came online. There are a number of challenges facing the nuclear renaissance, but we have found that they are less related to the technology and more technical issues related to the constructability of the units in the U.S. NRG has selected the Advanced Boiling Water Reactor (ABWR) design, which was certified for use in the U.S. by the Nuclear Regulatory Commission (NRC) in 1995 and has been successfully built and operated in Japan. In fact, all four units in Japan were built on time with construction schedules between 37 and 43 months. The units now have more than 12 years of operating history. These units proved to have very low instances of typical early operation problems, achieving initial capacity factors of near 100 percent from start-up to their first scheduled outages. We know the quantities of materials, specifications of equipment, and the design requirements of the units. The technical challenges facing NRG with the ABWR are primarily the constructability of the units in the U.S. This is a much lower risk than the first-of-a-kind risks facing an owner building a reactor design that has never been built or operated before.

There have been significant studies since 2004 on how to transfer the successful ABWR construction techniques utilized in Japan to the U.S. Four primary techniques were identified and will be fully utilized in the construction of South Texas Project (STP) units 3 and 4:

• Modularization to reduce congestion and increase quality;
• Use of 1,000-ton cranes to allow for heavy module lifts;
• Use of open-top construction to allow for large modules to be placed in from above;
• Very detailed planning and scheduling.

The STP expansion will have over 95 percent of its detailed engineering completed by the start of construction. This will significantly mitigate the problems in the 1970s and 1980s, where design changes were being made after the start of construction, causing cost and schedule overruns.

In addition to constructability risks, reactor designs that have not been built or operated face technical challenges in the form of first-of-a-kind engineering risks. A significant amount of knowledge is gained after the initial plant is built. To the extent that the initial projects using these new reactor designs are successful, follow-on projects will strive to continually to improve productivity while reducing the schedule and man-hour requirements. Over time, performance will improve through engineering improvements; however, that will most likely lag until the units have sufficient operating history. Early units of new designs will have a limited supply chain available for critical equipment, which over time will become more mature. Units using proven ABWR technology, such as the STP expansion, will have these advantages from the beginning.

Many nuclear opponents raise the issue of spent nuclear fuel as an obstacle to the nuclear renaissance, but that is a political question, not a technical obstacle. There is no technical challenge to storing or reprocessing spent fuel.

Are there obstacles to scaling up nuclear power to serve an even larger national or global customer base?
The biggest challenges to scaling up nuclear in America are rebuilding the nuclear infrastructure to support construction and growing the workforce to operate the plants once they are operating.

In the 1980s and 1990s, much of the American nuclear construction infrastructure left the country for other industries or to support continued development in Europe and Asia, and that will need to be rebuilt. On the positive side, as we rebuild this infrastructure, we will leverage the advanced nuclear technology that has evolved in Europe and Asia over the past two decades. Toshiba is working closely with the American engineering and construction companies that are supporting the South Texas expansion to identify the resources that can be deployed in America to support the first few plants that will be built and to ramp up the longer-term resources that we will need to develop to support longer-term construction.

A number of suppliers that exited the nuclear industry are interested in reentering the market. The NRC has been working with companies building new nuclear plants to ensure that there is a rigorous qualification process for U.S. and international vendors. Many of the non-U.S. reactor vendors are working with constructors, fabricators and equipment vendors in the U.S. to transfer knowledge and build a U.S. capability. Some equipment, such as the large forgings, turbines and pressure vessels, may be sourced globally for some time, but even the initial plants will be sourcing a substantial amount of the material from the U.S., including piping, valves, rebar, compressors and pumps.

Although we believe there will be available labor to operate and build the projects, there will be a need to ensure that the quality and productivity of the labor are sufficient. The industry has already taken steps to train plant operators by partnering with universities and junior colleges to begin, renew or expand nuclear technologies. Our efforts in Matagorda County, Texas, have been very successful in starting a workforce of tomorrow, and comparable programs across the nation are seeing similar success. These programs will soon have to expand training to the craft labor who will be constructing the plants. With the economic downturn there will be great value in retraining construction and industrial workers from other related industries to the very demanding qualifications required by the nuclear industry.

Can the existing energy infrastructure handle growth in nuclear? Or does that, too, need further modification?
America's transmission and distribution network needs to be upgraded no matter what mix of generation is used. It needs to be both stronger and smarter. In addition to nuclear, which tends to be produced at some distance from major load centers, we have enormous renewable energy resources available in various parts of our country that are far removed from our population and industrial centers where the energy is needed. In order to get power from where it is generated by whatever technology, we will need to improve our transmission infrastructure.

A more important question on infrastructure is not what changes need to happen to enable nuclear but rather what changes nuclear enables. With plentiful, reliable, clean nuclear energy, we can power a vast fleet of electric cars that can help wean us off foreign oil.

Given the current economic crisis, can your industry get the necessary capital (from public or private sources) to adequately finance its growth?
Financing a large capital project, whether it is a nuclear generating station or a manufacturing plant, can be difficult at any time. The government has seen a strong value in encouraging the rebuilding of the nuclear power infrastructure in America and backed that value with loan guarantees. Loan guarantee programs, such as the Department of Energy's program in the U.S., will allow nuclear plants to be financeable. Construction contracts with entities such as Toshiba, possessing the financial wherewithal to take on cost, schedule and performance risk, will further mitigate execution risks of owners and lenders.

From a strategic standpoint, which is the bigger competitor for nuclear: incumbent coal, oil and gas technologies or other alternative energy technologies?
We see these as complementary technologies rather than competing. Nuclear power is the only zero-emission resource that can be built at scale and across America to deliver 24/7 base-load power. We are also investing in wind and solar for the attributes that they bring to the mix in zero-cost fuel, zero-emission generation. And we are not going to shut down existing generation, so it is incumbent on us as an industry to find ways to reduce the carbon intensity of these technologies.

Is there a cost target that you and others in your industry are aiming to achieve in, say, five years?
Historically nuclear has high up-front costs but is one of the least expensive generation sources as far as fuel and operations. With commodity prices being as much as 50 percent below their peaks of 2007–2008 and an increase in manufacturing and fabrication capacity in the U.S. and globally, the cost of new nuclear needs to be reassessed from cost ranges seen in 2007 and 2008. Most of the cost ranges that we have seen are relatively consistent on the low end, but the unknowns in the technology cause the high end to be extremely varied. Using the proven technology of the ABWR, we have focused on creating certainty so that we know we can bring the STP expansion in at the low end of the estimates. Additionally, we have an experienced engineering, procurement and construction (EPC) contractor in Toshiba, which has adequate certainty on construction that they can offer us a fixed-price, fixed-schedule contract.

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