Progress Energy Receives Clearance for 2,200-Megawatt Levy Nuclear Power Plant

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Researched by Industrial Info Resources (Sugar Land, Texas)--The Florida Cabinet has unanimously cleared the site certification application for a new nuclear power project initiated by Progress Energy Incorporated (NYSE:PGN) (Raleigh, North Carolina). The application for the Levy County nuclear plant was filed in June 2008, and it is the first such application that has been approved in Florida in three decades.

As a part of this venture, two nuclear units, each with an output capacity of 1,100 MW, will be developed on a 3,105-acre site in Levy County at an estimated cost of $14 billion, with reactor costs accounting for $7.65 billion. An additional expenditure of $3 billion is expected for development of transmission infrastructure, including about 200 miles of associated transmission lines.

Progress Energy has entered into an agreement with Power Group, a subsidiary of Shaw Group Incorporated (NYSE:SGR) (Baton Rouge, Louisiana), and Westinghouse Electric Company LLC (Monroeville, Pennsylvania) for engineering, procurement and construction activities at the proposed facility. Under the contract, two AP1000 reactors of 1,105 MW each will be installed at the site. The units are expected to be operational by 2016-18. In accordance with the Cabinet directive, Progress Energy will simultaneously phase out two coal-based units at the Crystal River Energy Complex in Citrus County by December 2020. With the nuclear power plant scheduled to be brought online by then, carbon dioxide emissions are expected to be reduced by 5 million tons per year.

Progress Energy is also planning to invest about $320 million in Smart Grid, an enhanced electricity transmission and delivery system to be implemented at both of the company's power utilities, Progress Energy Florida and Progress Energy Carolinas. A new Distribution System Demand Response (DSDR) process has been developed in partnership with Telvent Git SA (NASDAQ:TLVT) (Madrid, Spain) and IBM Corporation (NYSE:IBM) (Armonk, New York). The DSDR process will provide Progress Energy with real-time data to control power transmission, automate usage monitoring and billing, and minimize service downtime. The process also will facilitate pricing and grid integrations for new renewable energy ventures. Telvent Git will supply the supervisory control and data acquisition system for the grid, while IBM will provide the necessary optimization software and consultancy services. The first enhanced SAGE 3030 RTU substation gateway from Telvent Git is expected to be delivered to Progress Energy this year. The partners also have applied to the U.S. Department of Energy for a $200 million grant; when approved, the grant will be used for implementing Smart Grid in both Florida and the Carolinas.

In addition to these new ventures, Progress Energy's Crystal River nuclear plant at Orlando is also undergoing a major upgrade, which will increase the output capacity as well as the active life of the facility. The 32-year-old facility will be shut down for the overhaul, which is expected to take at least four to five months, during which time the reactor's fuel will be replenished with 76 new fuel rod bundles at $1 million apiece.

In addition, the mainsteam generator, due for replacement, also will be extracted from the reactor building. The mammoth operation involves drilling an access way of 25 feet by 27 feet through a 3.5-foot-thick outer wall of the reactor building, which is reinforced with steel bars, thick steel plates, and concrete. The critical generator component comprising 15,000 tubes is capable of handling radioactive material at pressures exceeding 2,000 pounds per square inch and temperatures of more than 600 degrees Celsius (1,112 degrees Fahrenheit). When this component is replaced, the lifespan of the reactor will be augmented by at least six decades.

The scope of the uprate operations, which began in 2007, also includes installation of enhanced control systems and turbine equipment. The total overhaul is scheduled for completion by 2011 with an estimated cost of $300 million. The upgraded Crystal River nuclear plant will be able to generate 1,018 MW of power. The facility's pre-upgrade power generation capacity is 838 MW. Progress Energy and several other stakeholders in the Crystal River nuclear plant, including Orlando Utilities Commission (Orlando, Florida), also have applied for a 20-year operating license extension, which is currently being reviewed by the U.S. Nuclear Regulatory Commission.

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