Lower demand: Nuclear renaissance being pushed aside in favour of refurbs, uprating
Are the wheels falling off the nuclear renaissance?
There’s a lot of rethinking going on in the utility sector these days. Utilities once intent on building new nuclear plants are now scrapping those plans and focusing instead of refurbishing existing reactors. Last week Canadian nuclear operator Bruce Power announced it was withdrawing two new-build site licensing applications from the Canadian Nuclear Safety Commission. The company said it would concentrate resources instead on refurbishing several reactors at its site northwest of Toronto. Then Russia’s state nuclear company said it would cut back its new-build program by half. Exelon, the biggest nuclear owner and operator in the United States, has said it would halt all new-build efforts for at least three years (and possibly as much as 20) and instead move toward uprating the capacity of its existing 17 reactor units.
The common theme is simple: the economic downturn has reduced electricity demand and with it the need for new reactors. Utilities are also realizing that refurbishing/uprating units is cheaper than build anew. Exelon has said that uprating existing plants costs half as much as building new and carries far less risk. Investors, apparently, don’t like the risk involved with spending billions and billions of dollars on a 1o-year project when electricity demand is dropping, not climbing. As Murray Elston, a vice-president at Bruce Power told me, “We were not prepared for the decrease in electricity demand. I think it’s been a surprise to almost everyone.” And while you can argue that the downturn is a blip and that long term the power will be needed, it comes down to who’s paying the money. “We have to be prudent with our investors’ money and it makes us really refocus ourselves so we can be the best with the site we have.” Bruce Power has already been hit by the downturn because power coming from its existing fleet is often surplus and must be given away to balance the grid. This has affected the company’s cash flow and in some cases has forced it to temporarily shut down reactors to cope with the excess power supply.
China is forging ahead with its new nuke strategy, so the renaissance is taking off somewhere around the world — but not North America. Not yet, anyway. The hope is that renewables and conservation will have a chance to take root and show a meaningful contribution before electricity demand starts to pick up again. Maybe then, even in the face of an improving economy, we’ll realize that we can get by without building new nukes. Or maybe not. At least we’ve got two or three years to show what’s possible.
Tags: bruce power, exelon, nuclear
Tyler Hamilton is associate publisher and editor-in-chief of Corporate Knights magazine and former business columnist for the Toronto Star. This blog is a personal project started in April 2005.
July 28th, 2009 at 3:16 pm
It’s not *just* that, although the drop in energy demand is certainly part of the halting. The Polywell project (funded in part by the US Navy) is estimating that it will take them another 18 months to figure out whether or not their promising prototypes of hybrid inertial/magnetic containment micro-fusion reactor will scale up properly to power-plant size. They and their backers are stating that *if* their reactor turns out to scale up properly, it would take little effort to have a commercial fusion plant *online* (not under construction, but active) by 2020.
Course, the Navy doesn’t know whether or not the rectors will work yet, or whether this will turn out to be a dead end;).
But if it does work, then it will be substantially cheaper than a standard fission plant, or a tokamak fusion plant. (Plus it doesn’t produce any substantial amounts of neutron radiation due to the fact that it uses a boron-11/proton fusion process rather than a D-T fusion process… although it would produce a lot more energy using a D-T process.)
http://en.wikipedia.org/wiki/Polywell
July 28th, 2009 at 3:31 pm
(Clicked submit before I wrote the conclusion section of my post):
If a utility company starts building a new fission plant, and in 18 months the US Navy (and its commercial partners in this venture) reveals that it has a working fusion reactor prototype, that utility will have just wasted a bucketload of money on an outdated power plant design. If they wait a couple years and it turns out that Polywell does indeed not scale up as it’s creators hope that it will, then all the utility company has done is postpone a decade long project by a couple of years — no big loss.
The same line of thought applies to several other possibly dud, but possibly revolutionary technologies, such as EEStor’s ultra-capacitor. Any one of these (potentially) emerging technologies might be nothing but a load of crap, but if even one of them has a chance to turn out to operate-as-advertised, it would be better off for the utilities to take a wait and see approach to the whole situation.
So it’s a bit of a no brainer for them. If they wait, then they can be the first companies to take advantage of an interesting new technology, should that technology be developed. If they don’t wait, they risk being clobbered by their competition who waited, and has retained enough capital to capitalize (heh) on any one of the new technologies that might be just around the corner.
(This is the same – somewhat flawed – line of thought which has led me to keep my GF8500 video card rather than buy a new, better one:P.)