The U.S. nuclear industry has made considerable progress in the reliability of new nuclear units over the past five years. However, utilities and merchant power companies face a growing struggle of how to fund the increasing total cost of large new nuclear units. The sheer size of the investment is turning into the biggest challenge, not the cost per kilowatt
– Edited by April Murelio –
Bob Coward, a Principal Officer of MPR Associates, recently gave a speech entitled Competitiveness, Economic and Intangibles of New Nuclear Power Plants – An Implementation Perspective at a conference sponsored by the U.S. Nuclear Infrastructure Council.
In his presentation, Coward highlighted the rising total cost of new nuclear units as the greatest challenge facing the new nuclear industry.
”The U.S. nuclear industry has made considerable progress in the reliability of new nuclear units over the past five years. However, utilities and merchant power companies face a growing struggle of how to fund the increasing total cost of large new nuclear units. The sheer size of the investment is turning into the biggest challenge, not the cost per kilowatt,” said Coward.
With the total cost to build a new nuclear unit estimated between $6 billion and $8 billion, the total cost is rivaling the market capitalization of several utilities and merchant power companies in the U.S., essentially turning large new nuclear projects into “bet the company” projects. On top of the soaring total cost of new units, cash flow issues and potential diluted earnings incurred during construction are presenting further barriers to development of new nuclear units.
“A company might have to spend as much as 30 percent of the entire project costs before an NRC (Nuclear Regulatory Commission) license is secured, and those up-front expenditures are especially difficult to finance,” Coward explained.
Alternatively, the rising cost of large new nuclear units has increased interest in investing in Small Modular Reactors (SMRs). SMRs can be constructed and brought online faster with a reduced total cost compared to large new nuclear units, thus providing more flexibility in approaching new nuclear implementation.
Coward’s speech advises a “societal approach” to addressing cost-related issues associated with new nuclear unit development. Coward’s “societal approach” calls for increased effort to promote energy company collaboration on new unit projects, consideration of additional incentives to ease cash flow and diluted earnings issues even before obtaining government licenses, and for an industry-wide review of total cost drivers of new units with proposed ways to reduce total cost of new nuclear implementation.
Please contact MPR to receive a full copy of Coward’s presentation on the competitiveness and implementation of new nuclear units referenced in this press release.
Coward will share a similar speech on the new nuclear renaissance at the 2010 Women in Nuclear Conference in Seattle, Wash., at the Westin Hotel on July 19.
Bob Coward’s specific expertise includes work in the areas of project management, safety analysis, and design and development of new nuclear power plants. Coward has been an industry leader in the design, licensing and development of new nuclear power plants, with leadership roles on the Electric Power Research Institute’s Advanced Light Water Reactor Program; the Department of Energy’s NP2010 Program; and the South Texas Project, Units 3 & 4, to construct two Advanced Boiling Water Reactors at the STP site in Texas. Coward regularly serves on “blue ribbon panels” addressing important design, regulatory, and operational challenges regarding advanced reactor systems, extended power uprates, safety system performance, significant event evaluations, and new plant projects.
MPR Associates is an employee-owned engineering services firm founded in 1964. The company is headquartered in Alexandria, Va., with offices in Houston, Texas; Clifton Park, N.Y. (near Albany); and East Lyme, Conn. MPR maintains a staff of 200 and actively recruits promising engineers and scientists from major U.S. colleges and universities.
MPR specializes in serving the nuclear power, energy, federal government and health and life sciences market segments. The company supports clients in 50 countries and six continents. The company is responsible for more than 100 patents and “first-of-a-kind” proprietary solutions.