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atw 2017-12

atw

atw Vol. 62 (2017) | Issue 12 ı December 714 INSIDE NUCLEAR WITH NUCNET Westinghouse Calls for Rethink on Europe’s Treatment of Nuclear NucNet US-based nuclear equipment manufacturer Westinghouse Electric Company has called on European Union legislators to adopt a technology-neutral approach when discussing the future of the bloc’s low-carbon energy policies. In its ‘Clean Energy for All Europeans’ legis lative package, released in November 2016, the European Commission made no mention of nuclear energy, said Michael Kirst, Westinghouse’s vice-president of strategy for the Europe, Middle East and Africa (EMEA) region at a media briefing in Brussels. He said the package did not offer “a real investment signal” to developers. The EC said the legislative package aims to improve the functioning of the European energy market, increase energy efficiency across the EU, achieve European “global leadership” in renewable energy and innovation, and provide a “fair deal” for consumers. “We are a bit surprised how nuclear is treated”, Luc Van Hulle, the company’s president for EMEA said. Mr Van Hulle said Westinghouse believes greenhouse-emission and energy efficiency targets should be set by legislation, but types of technology to be used in achieving those targets should not be specified. This approach inhibits technology innovation, he said. He called for legislation to be created to ensure nuclear is considered among all low-carbon energy sources. Mr Kirst said there is a need for reliable, baseload lowcarbon power and in this respect the combination between nuclear and renewables is a “very good one”. Nuclear power units have an average availability of 85 to 90 % and can be operated in a flexible manner when needed to ensure grid stability and security of supply, he noted. Renewables, however, need back-up power because of their average intermittent availability of only about 30%. If this back-up power came from gas or coal, then the growth of renewables could ironically lead to the use of more fossil sources, he said. “Some people have convinced themselves that we can move to an all-renewables system and do without nuclear. And maybe someday we could, but today the technologies simply don’t allow that”, Mr Kirst said. He said utility-sized energy storage technology, which could potentially cause a “paradigm shift”, has not been developed yet. “Today it gets up to about a 100 MW or so and is extremely expensive”, he said. As part of its criticism of the proposed clean energy package, Westinghouse also said EU legislators did not consider “the totality of system costs” for each source of energy. Overall costs extend beyond the usual generation costs and include system costs such as back-up fuel and ETS (emission trading system) costs, taxes and policy support costs, and network costs like grid losses, grid modification, transmission disturbance and maintenance costs. Mr Kirst said Westinghouse sees sense in a market system that uses auctions for future power development, but such a system takes into account only marginal costs of power generation. “So what we are suggesting is if they are going to implement an auction format and capacity markets, let’s take a look at the total systems cost, because that is what the end consumer is going to pay for”, Mr Kirst said. The approach to system costs needs an open and honest debate in a “once-in-a-generation energy reform package”, Mr Kirst added. He said Westinghouse has not found the EC very supportive on the topic, but is involved in the parliamentary consultation process related to the clean energy package. Mr Van Hulle said policymakers need to be careful about striking a balance between renewables and nuclear in the power mix, but considering the total picture of costs, there is “a sound basis for nuclear going forward”. Westinghouse says renewables and nuclear are both capital intensive energy options, with the largest bulk of the cost being paid up-front. Nuclear’s scale is much larger, but so is the energy output it generates “Energy should be a long-term vision. I understand that nuclear has a very high capital cost to start with. But if there is a long term vision, these are plants which are going to run for 60 years on an energy source which is extremely secure”, Mr Van Hulle said. Foratom, the Brussels-based trade association for the nuclear industry in Europe, said in a position paper earlier this year that the clean energy package could ensure a coherent approach towards meeting energy and climate objectives, provided the EC takes into account the views of the nuclear energy industry. The position paper said the goal of the EU to decarbonise the economy by more than 80 % by 2050 cannot be achieved without nuclear power and called for an effective power market leading to competitive and affordable electricity prices for end-users and the promotion of investments in low-carbon technologies. The European nuclear industry has been calling for some time on the EC to propose a new energy market design that facilitates investments in all low-carbon energy sources including nuclear. In its recent Energy Technology Perspectives 2017 report, the Paris-based International Energy Agency (IEA) argued that the sanctioning of new low-carbon generation has stalled because expected generation from wind and solar capacity has been almost entirely offset by the slowdown in nuclear and hydropower investment decisions, which declined by more than 50 % over the last five years. The report speaks of the need for “strong policy signals” and “multiple policy objectives”. But for the nuclear sector, it says little about what these signals and objectives should be. Westinghouse filed for bankruptcy protection in the US in March 2017 to shelter its core businesses and give time to restructure for continuing operation. The company had been troubled by significant cost overruns on construction of AP1000 reactors at the Vogtle and Summer nuclear power stations. Company president and chief executive officer José Gutiérrez said the problems that led to the Chapter 11 filing Inside Nuclear with NucNet Westinghouse Calls for Rethink on Europe’s Treatment of Nuclear ı NucNet

atw Vol. 62 (2017) | Issue 12 ı December had nothing to do with the company’s AP1000 reactor technology and that AP1000 reactors being built in China are proceeding well. In September 2017 Westinghouse said it remained committed to developing a 225-MW small modular reactor in the UK. Author NucNet The Independent Global Nuclear News Agency Editor responsible for this story: Kamen Kraev Avenue des Arts 56 1000 Brussels, Belgium www.nucnet.org The Cost of SMRs: How Rolls Royce Aims to Compete with Wind and Solar NucNet The UK nuclear industry is hoping that claims by Rolls-Royce that small modular reactor (SMR) projects could deliver electricity for a similar cost to offshore wind will provide much-needed impetus to government plans for the country to develop a “best value” SMR and put it into commercial operation by the end of the next decade. Rolls-Royce and its consortium partners, including Amec Foster Wheeler, Arup, Laing O’Rourke and Nuvia, say the UK SMR they are developing could produce energy for as low as £ 60 (€ 66, $ 79) per MWh, which is competitive against wind and solar and significantly lower than the £ 92.50 per MWh agreed by the government and project developer EDF for the new Hinkley Point C nuclear station. According to Rolls-Royce, the capital cost of the UK SMR can be reduced from a first-of-a-kind (FOAK) baseline to Nth-of-a-kind (NOAK) over a relatively short period of time, perhaps as little as eight years. This is less than the time required to construct a single large reactor such as the EPRs planned for Hinkley Point in Somerset. The levelised cost of electricity (LCOE) generated by a FOAK UK SMR power station is forecast under £ 75 per MWh, but this reduces to a forecast £ 65 per MWh by station number five. In the medium term the target is even lower at £ 60 per MWh. The Rolls-Royce cost estimates were a boost for the nuclear industry, coming days after it emerged that offshore wind has fallen in cost over the past few years with a recent UK government auction for subsidy contracts awarding offshore wind projects due to generate power in 2021-22 contracts at £ 74.75 per MWh, while those set to generate in 2022-23 were awarded contracts for £ 57.50 per MWh. That price is half of what new offshore windfarms were being awarded just two years ago. However, Rolls-Royce also warned in its report that the government needs to “move forward with pace” towards establishing the conditions required for a UK SMR to flourish. The rest of the world continues to develop SMR technology and the UK is in danger of being left behind. A key role for government is to provide a fertile “ecosystem” for UK SMR development, starting with policies and support for an indigenous UK SMR market. In 2016 the government launched the first phase of a £ 250 m SMR competition to choose the best design of SMR for the UK, but the second stage of the competition – with design proposals chosen for funding – has not yet materialised. The competition followed an announcement in 2015 when the then chancellor George Osborne promised £ 250 m over five years for a nuclear research and development programme, an undisclosed sum of which was for a competition to pave the way for SMRs. Sources confirmed that officials from the Department for Business were whittling down proposals from various consortia, including Rolls-Royce, keen to work with the government to develop SMRs. The Daily Telegraph newspaper reported on 9 September 2017 that ministers are ready to approve the development of a fleet of SMRs. Industry players including Rolls-Royce, NuScale, Hitachi and Westinghouse have held meetings in past weeks with civil servants about nuclear strategy and development of SMRs, the newspaper said. Tom Greatrex, chief executive of the London-based Nuclear Industry Association, said with a potential global market for SMRs valued at £ 250 bn – £ 400 bn, the government must provide clarity if the energy, industrial and export opportunities of a UK SMR are to be realised. The appeal of SMR designs is that because of their small size, 300 MW or less, they are economic, factory built and shippable, flexible enough to desalinate, refine oil, load-follow wind, and produce hydrogen. And they seek to address the basic economic challenges that larger plants have struggled to overcome in recent years. Those challenges include reducing the overall capital cost, which would allow for conventional project financing; improved certainty of construction, manufacture and project delivery; and a competitive LCOE. Energy analyst James Conca, writing in Forbes magazine, identifies another key advantage of SMRs. The small size and large surface area-to-volume ratio of SMRs, like the one being developed by NuScale Power, that sits below ground in a super seismic-resistant heat sink, allows natural processes to cool it indefinitely in the case of a complete power blackout, with no humans needed to intervene, no AC or DC power, no pumps, and no additional water for cooling. Rolls-Royce says SMRs are attractive because they can produce large savings for a relatively small investment. They avoid the complex challenges associated with nuclear mega-projects that require tens of billions of pounds of investment to progress – and have a general track record of overspend and delay. By reducing plant size, and therefore capital costs, SMRs can be financed via conventional project approaches, with financing limited to under Details of the clean energy package are online: http://bit.ly/2gId2Q INSIDE NUCLEAR WITH NUCNET 715 Inside Nuclear with NucNet The Cost of SMRs: How Rolls Royce Aims to Compete with Wind and Solar ı NucNet