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Released August 15, 2017 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--The U.S. nuclear power industry faces a number of challenges, ranging from costs to loss of market share, as it struggles to stay a part of the energy mix for the long-haul. Even so, there are opportunities for the industry to flourish, including the advent of small modular reactors.
Previously, Industrial Info looked at the challenges facing nuclear power. In this article, we will look at operational overviews and new developments that are being developed in the nuclear industry sector. For more information, see August 14, 2017, article - U.S. Nuclear Generation Faces Steep Challenges as Costs Rise, Demand Flattens.
Ninety-nine operational units in the U.S. generate an impressive combined base load capacity of about 99 gigawatts (GW), with Illinois, South Carolina, and Pennsylvania carrying the largest number of units.
Click on the image at right for a graph showing commissioned nuclear units by state.
One of the country's largest nuclear generation owner-operators, Exelon Corporation (NYSE:EXC) (Chicago, Illinois), recently gave a presentation at the Energy Information Agency's (EIA), summer business convention in Washington, D.C. Chris Mudrick, senior vice president northeast operations, spoke in depth about the challenges to nuclear power operators, and the steps being taken by not only Exelon Energy, but also fleet operators as whole to ensure nuclear power generation is here for the long haul.
Some of these factors have been covered before and will always continue to be major drivers in the energy sector's fight for a piece of the market. First is overall operational costs. As reported previously, operators are striving to lower costs, which have increased to about $36 to $41 per megawatt-hour (MW/h) this decade.
Secondly, nuclear operational groups have spent billions working to make sure their units are extremely efficient during the past decade, and that capacity factors stay in operational ranges of 95% to 100%. This has been achieved via numerous unit upgrades and uprates, as well as other in-plant capital improvements. This trend continues. Mudrick referenced Exelon and other nuclear operators throughout the country who are looking at extending the operational life time of these units to approximately 80 years.
Through the relicensing process with the Nuclear Regulatory Commission (NRC), Exelon and other operators are seeking the relicensing of more than 30 facilities. They have submitted and completed the application process, and have either received their extensions or have a date for a decision to be made very soon. Applications have been submitted for review for another five to six facilities, with the possibility of applications for another three to four facilities being submitted in the next four to five years. This shows exactly how serious these operators are about continuing nuclear operations in the U.S.
But there are setbacks as well. Dwindling market profits, and the loss of market share, as well as closures, have kept some operators from moving forward, whether their applications were approved or not. The lack of a national energy policy or even a CO2 emissions plan is another setback for this process. But some states like Illinois and New York have stepped up and written legislation that incorporates nuclear power generation in their push for clean energy. We believe this type of legislation is necessary and will be enacted by several other states.
Another front faced by the industries revolves around maintenance outages and their associated costs and budgetary demands. Each nuclear unit outage runs between $17 million to $25 million in just direct expenses, not factoring in the cost of purchasing replacement power as needed during the outage. Some operators have stated that number can be as large as $1 million a day or more.
Nuclear power operators have succeeded in reducing the duration of such outages. During 2011, a nuclear outage would last about 28-41 days. Today, these same outages can occur within 20-37 days. Some outages are even less, which marks a great accomplishment for these operations and maintenance staff. With approximately 105 offline events taking roughly 90 GW of generation offline in the next 18 months, the duration is quite important.
Beyond what is referred to in the industry as life extension projects and maintenance, the industry has been looking forward on a number of fronts, such as small modular reactors (SMRs), and Gen IV nuclear reactors. Currently, Industrial Info is tracking seven such projects in the U.S. that have been approved by the NRC.
Construction has already begun on Gen IV nuclear reactor projects at the Alvin W. Vogtle Nuclear Power Station in Georgia and the Virgil C. Summer Nuclear Power Station in South Carolina. Both of these projects have been riddled with issues, to the point that SCANA Corporation (NYSE:SCG) (Cayce, South Carolina) recently announced it has halted construction of the Summer nuclear power project because of the costs.
With a standard two-unit project running close to $25 billion, we do not believe there will be any further new-build construction for quite some time, leading to the question of where will new generation come from.
In our opinion, small modular reactors (SMRs) are the next step in the evolution of the U.S. nuclear fleet. These reactors are being designed to generate no more than 300 megawatts (MW). Currently, there are three projects in the U.S. using SMR technologies. One of these is the NuScale Power LLC (Portland, Oregon) demonstration project at the Utah Associated Municipal Power Systems (UAMPS) SMR Nuclear Power Station located in Atomic City, Idaho, which is supposed to receive approvals within the next 30 months.
The second project is an extension of the original project, and then another is being evaluated by the Tennessee Valley Authority Tennessee Valley Authority (Knoxville, Tennessee) at its Clinch River facility. All of these projects are still in very early stages of development. Factors that make this type of technology very appealing are clean energy, with lower investment costs, factory fabrication of units, as well as its utilization in other sectors, such as water desalination facilities, industrial manufacturing for industrial energy production process, and its utilization in microgrid planning.
In order for the nuclear power industry to move forward, it must spend the next couple of decades in research and development, as well as seeking policy changes, legislation and industry interaction from several different sectors.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
Previously, Industrial Info looked at the challenges facing nuclear power. In this article, we will look at operational overviews and new developments that are being developed in the nuclear industry sector. For more information, see August 14, 2017, article - U.S. Nuclear Generation Faces Steep Challenges as Costs Rise, Demand Flattens.
Ninety-nine operational units in the U.S. generate an impressive combined base load capacity of about 99 gigawatts (GW), with Illinois, South Carolina, and Pennsylvania carrying the largest number of units.
One of the country's largest nuclear generation owner-operators, Exelon Corporation (NYSE:EXC) (Chicago, Illinois), recently gave a presentation at the Energy Information Agency's (EIA), summer business convention in Washington, D.C. Chris Mudrick, senior vice president northeast operations, spoke in depth about the challenges to nuclear power operators, and the steps being taken by not only Exelon Energy, but also fleet operators as whole to ensure nuclear power generation is here for the long haul.
Some of these factors have been covered before and will always continue to be major drivers in the energy sector's fight for a piece of the market. First is overall operational costs. As reported previously, operators are striving to lower costs, which have increased to about $36 to $41 per megawatt-hour (MW/h) this decade.
Secondly, nuclear operational groups have spent billions working to make sure their units are extremely efficient during the past decade, and that capacity factors stay in operational ranges of 95% to 100%. This has been achieved via numerous unit upgrades and uprates, as well as other in-plant capital improvements. This trend continues. Mudrick referenced Exelon and other nuclear operators throughout the country who are looking at extending the operational life time of these units to approximately 80 years.
Through the relicensing process with the Nuclear Regulatory Commission (NRC), Exelon and other operators are seeking the relicensing of more than 30 facilities. They have submitted and completed the application process, and have either received their extensions or have a date for a decision to be made very soon. Applications have been submitted for review for another five to six facilities, with the possibility of applications for another three to four facilities being submitted in the next four to five years. This shows exactly how serious these operators are about continuing nuclear operations in the U.S.
But there are setbacks as well. Dwindling market profits, and the loss of market share, as well as closures, have kept some operators from moving forward, whether their applications were approved or not. The lack of a national energy policy or even a CO2 emissions plan is another setback for this process. But some states like Illinois and New York have stepped up and written legislation that incorporates nuclear power generation in their push for clean energy. We believe this type of legislation is necessary and will be enacted by several other states.
Another front faced by the industries revolves around maintenance outages and their associated costs and budgetary demands. Each nuclear unit outage runs between $17 million to $25 million in just direct expenses, not factoring in the cost of purchasing replacement power as needed during the outage. Some operators have stated that number can be as large as $1 million a day or more.
Nuclear power operators have succeeded in reducing the duration of such outages. During 2011, a nuclear outage would last about 28-41 days. Today, these same outages can occur within 20-37 days. Some outages are even less, which marks a great accomplishment for these operations and maintenance staff. With approximately 105 offline events taking roughly 90 GW of generation offline in the next 18 months, the duration is quite important.
Beyond what is referred to in the industry as life extension projects and maintenance, the industry has been looking forward on a number of fronts, such as small modular reactors (SMRs), and Gen IV nuclear reactors. Currently, Industrial Info is tracking seven such projects in the U.S. that have been approved by the NRC.
Construction has already begun on Gen IV nuclear reactor projects at the Alvin W. Vogtle Nuclear Power Station in Georgia and the Virgil C. Summer Nuclear Power Station in South Carolina. Both of these projects have been riddled with issues, to the point that SCANA Corporation (NYSE:SCG) (Cayce, South Carolina) recently announced it has halted construction of the Summer nuclear power project because of the costs.
With a standard two-unit project running close to $25 billion, we do not believe there will be any further new-build construction for quite some time, leading to the question of where will new generation come from.
In our opinion, small modular reactors (SMRs) are the next step in the evolution of the U.S. nuclear fleet. These reactors are being designed to generate no more than 300 megawatts (MW). Currently, there are three projects in the U.S. using SMR technologies. One of these is the NuScale Power LLC (Portland, Oregon) demonstration project at the Utah Associated Municipal Power Systems (UAMPS) SMR Nuclear Power Station located in Atomic City, Idaho, which is supposed to receive approvals within the next 30 months.
The second project is an extension of the original project, and then another is being evaluated by the Tennessee Valley Authority Tennessee Valley Authority (Knoxville, Tennessee) at its Clinch River facility. All of these projects are still in very early stages of development. Factors that make this type of technology very appealing are clean energy, with lower investment costs, factory fabrication of units, as well as its utilization in other sectors, such as water desalination facilities, industrial manufacturing for industrial energy production process, and its utilization in microgrid planning.
In order for the nuclear power industry to move forward, it must spend the next couple of decades in research and development, as well as seeking policy changes, legislation and industry interaction from several different sectors.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
