The Pickering hearings – some last comments on evacuation, GE-Hitachi and Orangeville

The treatment of PSA (Probabilistic Safety Assessment) was much better at the Pickering hearings than at the Darlington hearings of last December. In earlier posts I criticized the cavalier way that OPG and CNSC staff tossed around PSA probabilities as representing accident probabilities. I’m happy to say that there was much less of that this time. There was still confusion about limits, goals, objectives and other associated terminology but I had the impression that the problems were more in communications than in fact. I was also heartened to hear CNSC staff acknowledge that unknown unknowns (Black Swans) were the main lesson of Fukushima – “expect the unexpected”. Being a very conservative organization OPG still tends to cling to the dubious use of PSA (or PRA) for overall accident frequency prediction over and above its legitimate value in organizing and focusing safety related issues.

Evacuation plans were taken seriously at these hearings. Six months earlier at the Darlington hearings the fundamental questions concerned the existence of a plan and who was in charge. At the Pickering hearings much credit should go to intervenors from the Canadian Environmental Law Association (CELA) who presented detailed work they had done on evacuation issues. This was useful and contributed both to the hearing process and also on focusing those responsible for detailed planning on the nuclear aspects. Emergency plans are now designed to accommodate generic accidents of all types but there will be problems specific to nuclear emergencies that might not be covered. There was significant drilling down into specific aspects such as the distribution of KI pills, traffic patterns in terms of radioactive deposition, and suitability of building types for sheltering from radioactivity. The latter are issues specific to nuclear accidents and currently not well covered in the broader plans of the various emergency organizations.

Because the Pickering reactors are about 30 km from downtown Toronto this topic was very sobering indeed. A highlight of the hearings for me was an intervention by a person who talked about her experiences as an evacuee during hurricane Hugo in 1989. This put a human face on what might otherwise be considered a theoretical discussion. The consequences of a “doomsday” type accident at Pickering would be unthinkable and I believe most people both within and outside the nuclear industry would agree that it’s time to close down the Pickering reactors. The only issue is when.

In contrast to these worthwhile interventions, a few intervenors complained about the GE-Hitachi nuclear fuel operation in Toronto. Aside from being largely irrelevant to the topic of the hearings, it seemed silly to complain about it. First of all, the facility is completely benign and thoroughly inspected with negligible possibility of any accident. Second, it’s been there for about fifty years and anyone moving in since then who objects to it clearly didn’t do their due diligence in discovering its existence before they bought houses in the area. Boiled down they are essentially admitting that they, their real estate agents and lawyers were asleep when they bought. It’s like those people who move in near an airport and then whine about the noise. These intervenors not only are complaining about a non-existent danger but also by doing so they lower neighborhood property values including their own. In my opinion this is just dumb and I have no patience with them.

Arnie Gundersen, former reactor operator turned prominent US anti-nuke, provided comic relief as he argued in a genial way against granting a renewal. He made disparaging comments about CANDU reactors being “an evolutionary dead end” meaning that with the ACR-1000 dead there will not be any more new versions of CANDU after the EC tweak of the CANDU 6. He’s probably correct but it’s still not easy to hear. His main point was that the Pickering reactors were among the oldest still operating in the world. True Pickering units 1 and 4 started in 1971 and 1973 but he was still wrong. They were refurbished (twice for unit 1) and returned to service in 2005 and 2003 respectively and thus, are in better shape than units 5 to 8 which came on line 1983-6 but have not been refurbished.

The fact that a waste disposal site will be needed to store the large volume of radioactive non-fuel bits and pieces arising from refurbishing and later decommissioning Ontario’s reactors was is not a surprise but the ham-fisted way it came out at the Pickering hearings certainly was a surprise. Someone, I believe in an OPG document, casually opined that this site should ideally be equidistant from the reactor stations and just by looking at a map came up with a site near Orangeville. If you don’t believe in coincidences, that town used to be (still is?) the location of an Ontario Hydro training facility and maybe OPG has some land available there for a waste site. Therefore, I would tend to ignore any subsequent back pedalling on this site by OPG.

What a way to introduce Ontario’s third nuclear waste storage site! I assume it would probably be a DGR (Deep Geological Repository). The first waste site is a DGR now under study by a CNSC-appointed committee. In it OPG will bury low and intermediate level waste from reactor operations at the Bruce site. The reason for the location is simply that the Bruce power station was located on Lake Huron for reactor cooling water and OPG owns a lot of land there (now leased by Bruce Power) at an approved nuclear site. Geological justifications were later found to fit these business considerations. Originally OPG planned to build this DGR under the lake but many in Canada and the US got very excited about potential radioactive contamination of the Great Lakes – the source of drinking water for 40 million people. Now they plan to build it near but not under the lake.

The second nuclear waste site is the long-term DGR for high level used nuclear fuel that some communities around Bruce among others in Canada have expressed preliminary interest in hosting. Once again this has provoked the contamination of the Great Lakes issue. Predictably the two DGRs are being confused deliberately by critics pushing the idea that the first will become the second. With Orangeville on the table, it now appears we have three DGRs in play.

I had thought that Bruce Power’s inept handling of its plan to ship contaminated steam generators for recycling was the leading nuclear waste public relations fiasco in the past few years. However, I’ve changed my mind. The casual Orangeville site reveal by OPG at the Pickering hearings was bungling at an even greater level turning Canada’s nuclear waste disposal efforts into a true three ring circus.

Nuclear Power in Ontario – The Approaching Choke Point

Returning from one of the frequent boat rides (cruises) that I indulge in, I decided to check out the CNSC (Canadian Nuclear Safety Commission) hearings for the licence extension of the OPG (Ontario Power Generation) Pickering reactors for a further five years to 2018. OPG announced they will shut down all six Pickering reactors by 2020. I’ve gone over the transcripts of the hearings and was encouraged by several improvements compared to the Darlington hearings which I intend to discuss in future posts. In this post I want to step back and consider the nuclear picture in Ontario to the end of this decade.

The key strategic issues for OPG are as follows.

Refurbish the four Darlington reactors over the period 2014 to 2018. If all goes well, by 2018 OPG will have four refurbished 880 MW(e) reactors capable of operating for another 25-30 years for a total of about 3,500 MW(e). This plan looks solid in spite of a few mutterings by politicians.

Build some 2,000 MW(e) of new reactors at Darlington. This plan has had many ups and downs over the last five years or so and in fact was what started me writing this blog. The current status seems to be that proponents of the enhanced CANDU 6 (EC6) and the Westinghouse AP1000 have each submitted bids paid for by OPG. The process has been highly secretive since the beginning and the decision to build what if any new reactors will be purely political and various politicians have supported both sides of the issue. It’s not at all certain (50-50?) that new reactors will be built.

Don’t refurbish the Pickering reactors but run them to 2018/2020. The Pickering station was built as two adjacent clusters of four reactors separated by a vacuum building common to all eight reactors. The first cluster, Pickering A, now consists of two operating reactors (numbers 1 and 4) that completed refurbishment in 2005 and 2003 respectively. These refurbishments ran way over budget and schedule and OPG decided not to refurbish reactors number 2 and 3. The four Pickering B reactors are essentially clones of the Pickering A reactors but built a few years later. By and large the Pickering reactors are not performing very well and the B reactors are at the point they need refurbishing. However, OPG has decided them to push the B reactors beyond their pressure tube design limit to around 2020 and then close all six Pickering reactors permanently. This request to push the pressure tube limits was the main issue of the Pickering hearings. The timing is so that the Pickering reactors could provide back-up power in case of delays in the Darlington project. Closure will entail a total loss of some 3,000 MW(e) of nuclear capacity.
Thus, by 2020 or earlier OPG will have between 3,500 and 5,000 MW(e) of nuclear power depending on whether the new reactors are built.

The key strategic issues for Bruce Power are the following.

Refurbish the remaining two reactors in Bruce A. The Bruce plant consists of two widely separated clusters of four reactors each. In the Bruce A group the reactors numbers 1 and 2 completed refurbishment last year and should be good for another 25 years or so (let’s say to 2040). Reactors number 3 and 4 were restarted in 2003 and 2004 but did not have their pressure tubes replaced. However, both of these reactors were shut down for about seven years which makes their pressure tubes roughly comparable in degradation to the Bruce B reactors that came into service in the years 1984 to 1987.

Refurbish the four Bruce B reactors. The Bruce reactor reactors, both the A and B ones, are more advanced, of higher power and perform much better than the ones at Pickering. Therefore, it’s almost a no-brainer to refurbish the Bruce B reactors and also the two in Bruce A. This is really the only way to maintain the more than 50% share of Ontario electricity now generated by nuclear power. With all eight reactors now in production the total capacity of the Bruce station is 6,3000 MW(e) which makes it the largest nuclear power installation in the world. The Bruce reactors are now performing very well with high capacity factors but the time for refurbishment is fast approaching given that the Bruce reactors are even older than the Darlington reactors. The experience of refurbishing Bruce reactors numbers 1 and 2 was that the time needed to complete both was about five to seven years at a total cost for both of around $4.5 billion. Extrapolated to the six reactors needing refurbishment this means a huge investment of about $14 billion. The project should be started immediately if the refurbished reactors want to operate much beyond 2018. No doubt softening up investors and government for this very large undertaking is the reason for Bruce Power’s publication this week of its blurb on a Vision for 2040.

Let’s summarize: between now and 2020 OPG will refurbish its four Darlington reactors, Bruce Power will need to refurbish six of its reactors and OPG may even host the construction of two or more new reactors. In my opinion there is no way that the Canadian nuclear industry is capable of doing all of this work before 2020. There are simply not enough highly skilled people available to perform these formidable engineering tasks, the supply chain will not able to support this level of effort and the $30-40 billion investment required is probably not there. This decade will see a huge and probably insurmountable choke point in nuclear activity in Ontario. I can’t see how all these tasks can be successfully accomplished in the time remaining and how nuclear will be able to retain its current share of Ontario’s electricity after 2020.

Reactor Costs – Checking out a bad analogy

The Canadian Nuclear Association has come up with an analogy to address the high capital costs of nuclear plants. It goes something like this:

We could live in a hotel with no upfront capital costs but most of us choose to pay a high initial capital cost to live in a house.

OK so it sounds cute but in my opinion comparing housing options has nothing with do with building nuclear plants. However, it does inspire me to pursue this capital cost argument a bit further.

Consider that a nuclear plant is built for $10 billion overnight cost. The latter means that not only the labour and material costs but also the cost of the funds borrowed during the time it takes to build the plant are all rolled into one overnight cost. The reactor cost quoted is not unreasonable and is probably a good guess for an Enhanced CANDU 6 (EC-6), the most likely candidate for Ontario’s new reactors.

Since we are talking about the housing analogy let’s go to amortization tables and find that the monthly mortgage payment at a 5% discount rate is about $5.34 per $1,000 borrowed in order to pay off the principle and interest in uniform payments over 30 years which was is the amortization period normally used for Ontario reactors. Applying this to the overnight cost we obtain an annual mortgage payment of $641 million.

Let’s assume that the plant is rated at 700 MWe (an EC-6) and it operates at 90% capacity factor. That gives an average annual electricity production of 5.52 billion kWh and thus, to cover the capital cost alone would require a little less than $0.116 per kWh. To this we would have to add O&M, fuel costs, decommissioning and used fuel management allowances and, since we are talking about a CANDU, a provision for refurbishment after 25-30 years.

The wholesale price of electricity in Ontario at periods of normal demand is around $0.02 to $0.04 per kWh. Roughly speaking Ontario Power Generation gets about $0.04 and Bruce Power about $0.06 per kWh wholesale for their generation. The consumer pays about $0.12 per kWh after transmission and distribution costs are added plus subsidies for renewables and debt repayment charges for past reactor construction. The foregoing numbers are a great oversimplification of a complex market structure superimposed over a lot of generally dumb political decisions but they do give us a basis for a rough comparison.

What jumps out at us immediately is that a $10 billion EC-6 doesn’t fit in the current economic framework for electricity in Ontario. Just paying the mortgage means the electricity produced is more than two to three times current wholesale prices before any add-on costs. Of course, there are many ways to play with the assumptions and juggle the numbers. Project finance and accounting experts know a myriad of dodges and tricks to come up with any cost of electricity one might desire. Low balling the initial cost to get the project approved is almost standard in the industry but can be counteracted to some extent by Blackett’s observation that the announced project cost should be multiplied by π to estimate the final project cost.

I like the following quote by David Fessler writing about investing in uranium (Jan 29, 2013)

“With regard to plant construction costs, natural gas is to nuclear as Wal-Mart is to Saks Fifth Avenue.”

This observation is proved yet again in Ontario. To fit current economics it looks like the new reactor capital cost should be in the range of $3-5 billion which won’t happen. (The capital cost of a comparable natural gas plant would be in the order of $1 billion but after that the economics depends on gas prices.) The usual way of getting around paying realistic amortization on the high capital costs of reactors is to have a government as your banker/guarantor which historically has proven to be the only feasible way of building them.

This also explains why refurbishing existing reactors to extend their useful lives is a much more attractive proposition economically than building new ones. In Ontario we’ve already paid for many of the older reactors but I hasten to add that we are still paying on our monthly electricity bills the construction debt for the four Darlington reactors, completed some 20 years ago.

Maybe the “hotel” in the CNA analogy is natural gas although there are comparatively lower capital costs? Strong reasons for building nuclear plants include mitigating climate change and reducing harmful pollution from fossil fuels but attractive economics isn’t one of them. However, in my opinion government subsidizing of nuclear power, as is done for wind and solar energy, is completely justified and necessary.

The house/hotel analogy just draws attention to this reality and in my opinion should shelved by advocates of nuclear power.

Adieu Gentilly 2

It came as a surprise to no one that the newly elected PQ government in Quebec announced that it would not go ahead with the refurbishment of the Gentilly CANDU-6 reactor. As I fearlessly predicted in my original Fukushima post of June 3, 2011 reprinted in the rebuilt blog on May 30 this year:

“The only possibility of a Canadian retreat from nuclear power that I think we’ll see in Canada is Quebec will not go ahead with the refurbishment of the Gentilly II reactor and ultimately decommission it. Much of the reason for this decision will be based on the poor performance of the Point Lepreau project with only a small push from Fukushima.”

Of course, the “only possibility” part may be wrong in terms of Ontario’s stalling on a commitment to new build.

There was never a good electricity production argument for a reactor in Quebec.  The province has a huge hydroelectric capacity, more than 30 GW, that’s around twice the power of Ontario’s nuclear fleet. The extra 0.68 GW produced by the Gentilly reactor is just a drop in the hydraulic bucket. In fact Quebec exports surplus electricity to the US Northeast.  As I recall it was, paraphrasing the song, an “everything’s up to date in Quebec city” sentiment that drove the establishment of the Quebec nuclear program. Gentilly was meant to show the world that the province was a modern and high tech society but it didn’t work out that way.

The reactor to be shut down is actually Gentilly 2. The first Gentilly reactor completed in 1971 was an experimental CANDU design from AECL with a grisly combination of bad ideas such as vertical fuel strings and light water coolant. It could never be made to work since among other things the neutron flux tilted all over the place. It ran for a very short total time spread over a period of a few years but enough to activate it and so it requires full decommissioning. Gentilly I was rightly nick -named “le citron” or the lemon.

Perhaps it was persistence on the part of Hydro Quebec, the utility supplying Quebec’s electricity, or the federal government making good on AECL’s fiasco with the first reactor. Whatever the reason, a CANDU-6 was built at Gentilly.  It started up in 1983 and has worked fairly well with a few minor glitches recently. It’s now at the very end of its useful lifetime and needs immediate refurbishment. With the government announcement that isn’t going to happen.

There has been some unfounded chattering about negative health effects from Gentilly but that isn’t relevant to the decision to close. Economics is driving the issue – “it’s the economy stupid” is the right cliché for this occasion.  The latest reports show the Point Lepreau refurbishment cost $2.4 billion. A similar job at Gentilly would cost at least the same and most likely more.  Why invest these funds when Quebec has an electricity surplus large enough to take it through the next few decades? The decision not to refurbish will yield a net economic gain to Hydro Quebec in the long run after decommissioning costs are covered because the company will be able to shed the nuclear infrastructure overheads needed to support a single reactor.  The bottom line is the bottom line: there’s a better business case for not refurbishing the reactor than for doing it.

Ontario New Build – Treading Water

There have been developments this summer that reinforce my assessment that it will be some years before we see the new build reactors at Darlington.

The first was the statement by Ontario’s Energy Minister Chris Bentley – that’s right the half-hour plan guy mentioned earlier in this blog. The Toronto Star reported on June 8 in an article entitled “Energy minister hedges on new nuclear plant”:

“Ontario’s energy minister ducked Friday when asked whether the province intends to go ahead with building new nuclear reactors at Darlington. Chris Bentley said the province is still mulling the options of new nuclear reactors, and refused to comment directly when asked whether one option is no new reactors at all.”

The other to me even more interesting  development was the news in July that that Ontario Power Generation is paying $26 million to CANDU Energy (SNC Lavalin) and Westinghouse to develop detailed plans for the new reactors. An OPG spokesman quoted in a July 11 article in the Toronto Sun (“OPG paying $26 million for estimates on building new nuclear reactors”) said:

“This is common in large projects like this as there is recognition that firms will incur expenses in order to provide the level of detail we require”

Really – is this true? I don’t know of another case where bidders for reactor projects were paid by the purchaser to produce their bids. Perhaps, a reader can provide one? In any case my interpretation is that it hedges the Ontario government against complaints and maybe lawsuits from the bidders if the reactors are not actually built. It also puts in place a process that postpones for a two to three year period the need to make a definitive decision on going ahead with the new reactors.

What also leaps out is that there are only two bidders left. What happened to the Areva EPR? Certainly construction of the EPR in Finland has had serious cost and schedule overruns and is now enmeshed in legal and regulatory challenges. The second EPR being built in France has fared somewhat better but still has regulatory difficulties. I haven’t been able to determine how the two in China are doing but overall it seems fair to say that saying the EPR hasn’t attracted the buyers Areva expected. Westinghouse with more AP1000 sales has out-competed the EPR.  It also appears that Areva’s sales effort has shifted to their ATEMEA1 reactor and away from the EPR.  However, as usual the secrecy under which the Ontario government loves to operate and which I detest so much, prevents the public from knowing whether Areva jumped or was pushed out of the contest.

One can speculate there are many reasons that Ontario is unwilling to commit to new build although it’s hard to judge which ones are most important?  Ontario is in a serious budget crisis and is trying to reduce expenditures. Therefore, they are very reluctant to embark on a reactor building adventure that will be perceived by many as escalating the already swollen provincial debt. Since the government has a minority in the legislature in practice it would be necessary to have the support of both opposition parties; with the Conservatives in decline and the smaller socialist NDP on the rise this would be tricky. If the anti-nuclear NDP wins the next election then there would be no new built. I believe the fiscal and political issues are the main reasons but we could also add decreased public support as a result of Fukushima, the current surplus of electricity in Ontario, static or very low growth in power demand for the last decade, recent lower prices of gas fired electricity, the substantial cost and schedule overruns for the Bruce and Pt. Lepreau refurbishments, the government’s ideological commitment to renewable energy, and the credibility gap in energy planning from cancelling two gas plants under construction apparently to counter strong local NIMBY sentiments blocking the election of local government candidates.  Take your choice it could be any of the above or none of the above.

The Ontario government is now treading water on the new reactors so probably there won’t be a definite decision until after the next election.

Refurbishment: maintaining Canadian nuclear expertise

If it ain’t broke, we didn’t build it.

 

Well not really, it just seems that way.

 

The need to replace the pressure tubes in CANDU reactors after 25 years or so of operation has always been considered a significant disadvantage of the design. Retubing is very complex since the tubes are integral parts of the reactor core. The whole operation must be done in high radioactivity fields in cramped spaces within the reactor confinement structure. Special remote handling tools and techniques need to be developed on a custom basis since each reactor will be somewhat different. To make matters even more complicated, often the owners “take the opportunity” to replace many other components, steam generators for example, while the reactor is down. The whole process has come to be called refurbishment.

 

To be fair other types of reactors also need mid-life repairs. In the past ten years or so the tops (lids) of several US light water reactor pressure vessels have had to be replaced due to premature corrosion. This is a big undertaking in itself but is still a much smaller job than retubing a CANDU. Many US reactors are licensed for 40 to 60 year lifetimes and the possibility of an 80 year or longer lifetime is being researched. 

 

Refurbishment of CANDUs has had a chequered history. The first two Pickering reactors had to be retubed in the 1970’s because a poor alloy was originally selected for the pressure tubes. This set the precedent for refurbishment as an expensive and lengthy undertaking. Refurbishing all four of the Pickering A reactors by OPG cost at least $3 billion total for just two of the reactors. It was subsequently decided that refurbishing the other two was too expensive and they were essentially shut down permanently.  Bruce Power has been soldiering on for the last few years refurbishing two or three of the four Bruce A reactors at a total cost apparently approaching $4 billion. The New Brunswick reactor overhaul, as reported previously in this blog, continues to be over budget and is lagging months behind  schedule with no end in sight.      

 

As for future CANDUs, it’s disappointing to me that the ACR -1000 design envisages refurbishment after 25-30 years. My hope was that they could have avoided this problem by designing more robust pressure tubes. It could be more even difficult to retube an ACR (if one is ever built) because the core has much smaller dimensions – hell in a very small place?

 

In spite of all its problems, there is an upside to refurbishment. With no possibility of building new reactors for five or ten years or more, it’s the only game in town for Canada’s nuclear industry. 

 

The funding for these projects buys goods and services provided by the many companies, great and small, that comprise the nuclear industry. Without it many of them wouldn’t survive.  Cost overruns are mainly labour costs which keep highly skilled engineers employed; preserving the specialized expertise needed to eventually build new reactors. Furthermore, it is apparent that even though refurbishing an existing reactor is costly, it is still much cheaper than building a new one.

 

So roll on refurbishment, it will likely continue to be the sustaining activity of our nuclear industry for years to come.

Why not the CANDU- 6?

“The best way to skin a bear is to skin a bear”

I’m told the foregoing is an aboriginal proverb that points out the virtues of the direct approach to problems.  To be direct we need to be absolutely clear about the objective of building new reactors in Canada. Clearly the aim is to supply much needed electricity for the nation. It is not the development and testing of new reactor types such as the ACR-1000.  

If governments decide that the best course is to construct Canadian reactors for domestic use then I strongly believe the CANDU-6 is now a much better bet than the ACR-1000.

The CANDU-6 has been the workhorse of the AECL fleet for the last 25 years. It’s a tried and tested design with good performance that’s been successfully built and operated in New Brunswick, Quebec, Korea (4), Rumania (2), and China (2). The last CANDU-6’s were built in time frames in the order of five years and (miraculously for the nuclear industry) on budget. This reactor is now called the EC-6, Enhanced CANDU-6, and I can only hope that this renaming is mostly for marketing purposes and the fundamentally robust design is there. 

 The CANDU-6 is an unmitigated AECL success story achieved well before the MAPLE disaster and without the uncertainties of the ACR-1000.

Three of the first CANDU-6’s (in NB, Korea and just announced in Quebec) are now undergoing refurbishment. This means that the technical knowledge, personnel with necessary skills and the supply chain for this reactor type are all currently available domestically and ready for new construction. Furthermore, the design has been licensed by the CNSC for many years and recent environmental assessments related to refurbishment projects have been done.

It would not be an exaggeration to say that several CANDU-6 reactors could be quickly put in place using only Canadian resources.

I simply don’t understand why a small province like New Brunswick would want to go through the long and painful process of bringing the first ACR-1000 on line particularly with the risks raised by the MAPLE fiasco. Why not just build a second CANDU-6 beside the current one now being refurbished? There are so many obvious advantages in terms of operations, maintenance, training and so forth.  Needless to say there’s no way that Generation III+ reactor projects would be feasible in Alberta or Saskatchewan.

As for Ontario, the McKinsey report said “[the differences in life time costs] are not enough to rule out a contending design as fundamentally disadvantaged — save the EC6, which would not benefit from the same economies of scale as its Generation III+ competitors.” My feeling is that the report underestimates the longer times and higher costs associated with bringing Generation III+ reactors into service. In my opinion they’ve got it wrong.

As for the argument that Canada needs to successfully build and operate an ACR-1000 at home so it can export them, that falls under the category of nuclear R&DD and not electricity supply. Assuming, of course, that there is any export market left after the domestic demonstration is done. AECL may want to continue developing the ACR-1000 which would be OK for the future. For the present, let’s build CANDU-6’s.

The one problem I can see with is strategy is the heavy water supply issue discussed previously on this blog.