POWER December 2014 - 6

SPEAKING OF POWER
Nuclear Power Pivot Points
"
Pivoting " is a popular business buzzword,
particularly in the context of startups,
which often quickly change strategic
direction. The global nuclear industry
isn't exactly a startup, but it is at or facing
multiple pivot points.
That's evident from recent U.S. developments,
including the Nuclear Regulatory
Commission's (NRC's) pivot on spent nuclear
fuel: Onsite storage is now the only foreseeable
disposition. The practice of collecting a
" nuclear advance fee " from customers prior
to bringing new capacity online may be another
pivot point, at least in the case of Duke
Energy Florida, which is under pressure to return
$3.2 billion collected for the cancelled
two-reactor Levy County nuclear project and
the Crystal River plant upgrade.
The pivot culture was also evident at the
first World Nuclear Exhibition (WNE) held
just outside of Paris in mid-October.
Pivot: Competition to Cooperation
The WNE had nearly 500 exhibitors-evidence
that nuclear power remains big business.
Though sponsored by the Association of
French Nuclear Industry Exporters, organizers
emphasized that the event was intended to
be a multinational one, to " encourage international
alliances and partnerships. "
The 2011 Fukushima disaster was clearly
a factor in the pivot toward increased international
information and technology sharing,
which, as AREVA CEO Luc Oursel noted,
is " something new " for the nuclear industry.
(Personnel pivots: Since the WNE, Oursel has
resigned, and the French government announced
that it would not renew the contract
of his counterpart at EDF, Henri Proglio.)
In addition to safety initiatives and project
execution, workforce development is another
area requiring cooperation. With so many
countries eager to join the nuclear club, the
demand for appropriately trained personnel
is growing. For countries like Saudi Arabia
that lack a history of nuclear operation, that
means partnering with more-experienced nations
for training. That's the route China has
taken with France for decades.
Pivot: Domestic to Global
Although the civilian nuclear industry began
as a domestically based one in the
6
U.S., UK, former Soviet Union, and Canada,
the resources needed to develop a nuclear
power program meant that major suppliers
soon entered foreign markets. Nevertheless,
nuclear technologies and project development
have tended to be largely associated
with specific nations, with France being a
prime example, where the state is at least
partial owner of the major equipment manufacturers,
utilities, and fuel-cycle players.
Yet even in France, which derives a higher
percentage of its electricity from nuclear
power than any other nation (roughly
75%), those nuclear industry players are
looking abroad more than usual. France
was a logical location for the WNE not only
because of the number of industry participants
based there-EDF's Proglio said that
the nuclear industry is the country's thirdlargest-but
also because France is not a
growth market. In fact, the same week as
the WNE, the French lower house voted to
cut nuclear generation to 50% by 2025.
That makes it imperative for French companies
to increase global market share. Only
six of the 70 projects under development
worldwide (including the Hinkley Point C
units) are using AREVA's newest reactor,
but that still leaves room for involvement
with such areas as other plant components,
training, and fuel reprocessing, transportation,
and storage.
Rosatom CEO Sergey Kirienko also commented
that the " future is multinational,
not national. " In a different session, William
D. Magwood, former commissioner
of the NRC and current director-general
of the Organisation for Economic Co-operation
and Development Nuclear Energy
Agency, observed that nuclear power is
" no longer a market for countries. . . . It's
a global marketplace . . . whether you like
it or not. "
In fact, " the overseas market is keeping
the U.S. industry alive, " Daniel S. Lipman,
executive director for policy at the Nuclear
Energy Institute, told POWER. However, " a
lot of that market is not available to the
U.S. " Going " toe to toe with state-owned
enterprises " is challenging, but while companies
like Westinghouse will continue to
license current technology, they will also
continue to innovate, he added.
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Pivot: Utility to Consortium
Financing
Though cost challenges weren't headlined
at the WNE, they did seep into a couple of
panel discussions. Anne Lauvergeon, chairman
and CEO of ALP and former CEO of
AREVA, admitted that utilities can no longer
finance nuclear projects on their own; the future
requires more cooperative ventures-a
view also voiced by her successor, Oursel, in
a different session. Most pointed was Gérard
Mestrallet, GDF Suez chairman and CEO, who
noted that " cheap, low-cost nuclear " days
are over. " Today, for me, " he said, " it's impossible
to finance nuclear in a completely
deregulated environment. "
That is part of the market dynamics for
nuclear in the U.S. as well, though Joseph
Dominguez, Exelon's senior vice president,
governmental & regulatory affairs and public
policy, pointed to shale discoveries and
resulting low gas prices as the reason that
smaller and single-site U.S. units are not recovering
their costs of operation. " The future
for nuclear is bright, " he said, " but will require
some policy adjustments, " including " a
price on carbon " and a capacity market.
Magwood noted that financing nuclear
power is " a country-specific issue. " In the
UK, the latest approach is public subsidies
and a guaranteed strike price for 35 years
for electricity from the Hinkley Point C units
for France's EDF, which will own and operate
the plant. The £92.50/MWh price for power
from the new units, expected to be online by
2023, is double current rates. WNE panelists
praised the " innovative approach " and the
European Union's approval of the plan, which
came the week before the industry event,
though project opponents have pointed to
the cost as one reason for their opposition.
No Standing Still
Companies and countries won't all pivot
on nuclear issues in the same direction at
the same time, but all are eyeing their next
move. As for how current leaders maintain
their stature while other nations increase
localization levels and develop closed fuel
cycles, the plan is what it has always been:
Innovate. ■
-Gail Reitenbach, PhD is editor of POWER
(@GailReit, @POWERmagazine).
POWER | December 2014
http://www.powermag.com
POWER December 2014

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