Saturday, November 21, 2009

The B&W mPower and TVA

Some time ago I wrote a series of posts titled the Keys to Lowering Nuclear Costs. Although my primary focus was on lowering LFTR costs, use of many of the cost lowering approaches I suggested was not by any means limited to LFTR type reactors. Most of the ideas did not originate with me, and most of them are obvious to anyone who thinks seriously about methods of lowering nuclear costs. I would thus expect that lowering nuclear costs will become increasingly important during the next few years, and that parts of the Keys formula will be repeated over and over again in new nuclear projects. Rod Adams posted a discussion of the B&W mPower reactor yesterday.

In my estimation the mPower has a far better chance of becoming a reality than he Hyperion reactor does. Rod's post points to Babcock & Wilcox's existing production system, now engaged in the production of reactors for the Navy. Much of skepticism about the future of nuclear power has to do with supposed production bottlenecks. Those bottlenecks would not be a problem for B&W, and at any rate if orders start flooding in, B&W will have ample time to expand their production capacity. Rob also links to an article in Nuclear Engineering International that focus on the B&W reactor. We see clearly how much of B&W's thinking parallels the Keys. We have a small factory built modular reactor, intended to be sited underground. Small reactors can be built in a shortened construction time, B&W estimates as little as two years. The "m" in mPower probably stands for modular, and modules can be clustered in sets of from two to eight reactors. Building the cluster one reactor at a time means that part of a project can be producing power and thus income while other parts are under construction, and still others are in the planning stage. These features substantially lower the accrual of interest, and thus lower capital costs. That is straight out of The Keys.

The mPower can be either air or water cooled, and thus becomes the first site anywhere reactor. B&W says that the reactor will cost $500 million. For the water cooled mPower that comes to $3.70 per watt. It is not clear if this is an overnight figure, or the actual cost of ownership. The B&W mPower would save its owners around $30 million a year in coal costs. The mPower at $3.70 per watt will be price competitive with wind. It will offer a capacity factor of .90 to wind best of .30 to .40 depending on location. Wind costs $2.50 per will produce less than half of the power, and the mPower can produce power on demand.

The mPower would be an excellent investment at the $500 million price. The market would perceive an mPower based project to be low risk, because of the relatively short manufacturing time, and its affordable price. The market has a long memory of the Washington Public Power Supply System's (woops) $2.25 billion default its five reactor nuclear project. The market is likely to be far less intimidated by a project of the modest size of the mPower. At that point the mPower story will begin selling itself. B&W can point to not only the reliability and safety of the nuclear power industry, and to the reliability and safety of the thousands of reactor years of safe operation for small naval reactors it has built by B&W. The combination of small risk and a competitive rate of return is likely to ease investor fears. B&W has the deep pockets needed to make the mPower happen, and they have TVA backing. The first mPower TVA is committed to evaluating a possible site, located in Roane County near Oak Ridge, as a potential site for the lead mPower reactor. In addition, B&W states,
A Memorandum of Understanding has been signed by B&W, TVA and a consortium of regional municipal and cooperative utilities to explore the construction of a fleet of B&W mPower reactors to meet the consortium’s need to diversify its power generation assets.
This sounds like something other than direct TVA ownership for the fleet of mPower reactors might be in the works.

TVA confronts a statutory debt limit of $30 Billion with an existing debt of $25 billion. Thus TVA cannot afford more than one large reactor project, at the most. TVA is currently finishing the Watts Bar II unit, and that will add $2.5 billion to its debt. That would leave room for only one more large project, completion of the long delayed Bellefonte I project, probably for around another 2.5 billion 2009 dollars. That will leave TVA with very little wiggle room, but the Alexander-Webb 100 reactor imitative might provide TVA with an out. At the moment TVA's best large new reactor option, the Westinghouse AP-1000, is under a very silly regulatory cloud at the NRC, and may have to undergo a major containment housing redesign. No such redesign would be requited with the underground mPower reactor. If TVA gets reactor money out of Congress, without a small debt limitation revision, I would expect Bellefonte II and more mPower reactors, perhaps with some arrangement that keeps the debt off TVA's books, to be added to TVA's plans before long. The hand writing on the wall says, "carbon taxes on fossil fuel fired electrical generation are coming soon." TVA faces an utter lack of viable wind resources. and with as many as 209 cloudy days a year, solar reliability is a big joke in the Tennessee Valley. If TVA is going to go green, it will have to go Nuclear Green.


Marcel F. Williams said...

The TVA could fund nuclear power expansion by selling its coal and natural gas power facilities to private utilities. The TVA needs to get completely out of the business of providing electricity through coal and natural gas.

Focusing on developing small centrally manufactured nuclear reactors will be the key to energy re-industrialization in this country. We need to have nuclear reactors like the B&W mpower reactor on line within less than ten years through the TVA or through a Federal Nuplex Corporation. Centrally mass produced small nuclear reactors designed for export all over the country and perhaps the world are going to dramatically reduce the capital cost of nuclear reactors.

These things are going to change the world!

Frank Kandrnal said...

Technically there is nothing standing in the way of nuclear renaissance to finally finish the good work started 50 years ago.
The only obstacles that face new nuclear power reactor designs are political in the form of insanely crazy regulations.

Anonymous said...

Just FWIW, Bellefonte Unit 1 is a 4.5 Billion dollar project. There are several reason for that. First off the biggest one is the fact that you have to think of both these plants as having THREE units. There are the obvious Unit 1 and Unit 2, but there is also a Unit 0. These units have a ton of common equipment since they were designed before the NRC revised standards on unit separation. At Watts Bar Unit 0 and Unit 1 are both running and you just have to start up Unit 2. At Bellefonte you will need to start up both Unit 0 and Unit 1. After that the second biggest cost comes due to most of the plant being sold for scrap metal. The steam generators, main feedwater heaters and alot of other equipment was sold. Watts Bar II did not have to replaced any of this equipment and Bellefonte will. That equipment which was sold for scrap metal was worth at least 500 million Third is of course the time value of money which is another 500 million.


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