Fwd: Entergy, Xcel Defy U.S. Nuclear Slump by Upgrading Their Plants

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Entergy, Xcel Defy U.S. Nuclear Slump by Upgrading Their Plants
2011-01-07 05:00:02.0 GMT

By Simon Lomax
Jan. 7 (Bloomberg) -- The U.S. hasn't approved a new
nuclear plant for more than 30 years. Yet it may add the
capacity of three reactors that would cost $18 billion in the
next five years.
The reason: Reactor owners such as Xcel Energy Inc. and
Entergy Corp. plan to tune up their existing nuclear plants.
The industry's hopes for a renaissance in construction have
given way to a "wait-and-see mode," which favors ramping up
production as much as possible at existing plants, James
Joosten, a senior analyst at the U.S. Energy Information
Administration, said in a telephone interview.
"The near-term renaissance will probably take the form of
uprates," as the upgrades are known, Joosten said.
The 3,422 megawatts in proposed uprates through 2015
approach the 3,600 megawatts approved by the Nuclear Regulatory
Commission from 2001 to 2010, according to the agency.
Regulators started approving small capacity increases at
existing plants in the late 1970s. There is an "accelerating
trend" because utility companies are "moving on to the larger,
more complex uprates," Scott Burnell, an NRC spokesman, said in
a telephone interview.
Existing plants are being revamped as some power companies
struggle to build reactors profitably, even with aid from the
Obama administration. While Southern Co. and Scana Corp. are
moving ahead with proposed facilities in Georgia and South
Carolina, Entergy, Constellation Energy Group Inc. and Exelon
Corp. have put their plans for new reactors on hold.
The NRC hasn't issued a construction permit for a nuclear
reactor since 1978, according to the agency's annual information

Transformers, Rotors

New transformers, bigger turbine rotors and higher-capacity
water pumps are among the changes being proposed at existing
nuclear plants to get more electricity from the same reactors.
The biggest upgrades add as much as 20 percent to a nuclear
reactor's generation capacity and "involve loading the core
with more fresh fuel than had been the case in the past,"
Burnell said.
Usually, the changes yield no more than 200 megawatts per
plant, compared with the 1,000 megawatts or more that can be
added by a single new reactor, said Matt Bennett, a vice
president at Third Way, a Washington-based research and advocacy
organization that supports nuclear power. One megawatt can power
about 800 average U.S. homes.
"Squeezing more megawatts" out of an existing nuclear
plant is an attractive option because it costs "several hundred
million dollars" compared with about $8 billion to build a
reactor, Bennett, who was a deputy assistant to former President
Bill Clinton, said in a telephone interview.
"It's a cheap way of the utilities being more efficient
with the power they're producing," he said.

Operating Safely

To boost the capacity of an existing nuclear plant, a
company must prove to the NRC "they can continue to operate
safely while generating more power," Burnell said.
Some of the reactors being upgraded were built in the 1960s
and 1970s with 40-year operating licenses. Since 2000, 60
reactors have won permission to operate for an additional 20
years, Burnell said. NRC officials are taking more time to
review certain uprate applications to be sure the higher output
doesn't harm reactor components such as relief valves and
emergency core-cooling systems, the agency said in a report last
"Our basic and unchanging requirement is that the plants
have to operate safely," Burnell said.
Risks are nonetheless increased, according to the Union of
Concerned Scientists, an advocacy group based in Cambridge,

Safety Margins

The NRC is "allowing owners to increase the power levels
of their reactors knowing that safety margins are being reduced,
if not eliminated," David Lochbaum, nuclear safety director of
the group, said in an e-mail.
The regulatory agency is reviewing uprate applications for
13 nuclear reactors which, if approved, would boost their
combined capacity by 1,461 megawatts. Applications for an
additional 1,961 megawatts of capacity may be submitted by 2015,
according to the NRC.
To add that much nuclear capacity by building plants would
cost $18.3 billion, based on the Energy Information
Administration's estimate of $5.3 million per megawatt for
reactor construction.
Uprates can boost the capacity of an existing nuclear plant
for about $1.2 million to $1.5 million per megawatt, according
to the the information agency's review of nuclear regulatory
filings and reports to the shareholders of companies that own
nuclear plants, Joosten said.
A power plant fueled by natural gas can be built for about
$1 million a megawatt, and new coal generation costs more than
$2.8 million a megawatt, according to the information agency.

Entergy's Plant

A "laundry list" of planned improvements, including new
transformers, should increase capacity at Entergy's Grand Gulf
nuclear plant in Port Gibson, Mississippi, by about 11 percent,
Suzanne Anderson, a spokeswoman for the New Orleans-based
company, said in a telephone interview.
Proposed changes at Constellation's Nine Mile Point nuclear
plant in Scriba, New York, north of Syracuse, include installing
a high-pressure turbine rotor that can handle more steam "and
thus generate more electricity," Jill Lyon, a company
spokeswoman, said in an e-mail. The upgrade should boost the
capacity of the plant's second nuclear reactor by 15 percent,
according to NRC data.

Xcel Pipes, Pumps

Plans at Xcel Energy's plant near Monticello, Minnesota,
include expanding the capacity of pipes and pumps that move
water and steam between the reactor and the turbine, Charles
Bomberger, the Minneapolis-based company's vice president for
nuclear projects, said in a telephone interview. The change
should increase the plant's capacity by almost 13 percent,
according to NRC data.
"Getting more steam through that system is really where
you're going to get more power," Bomberger said in a telephone
Nuclear power has won backing from the Obama administration
and some lawmakers as a clean-energy source. That hasn't stopped
some power companies from being cautious about the financial
risks of new reactors.
U.S. companies sent 17 applications to the NRC seeking
permission to build reactors from 2007 to 2009, according to the
agency's website. Of those, only Southern, Scana and NRG Energy
Inc. are likely to start construction immediately if they are
awarded a license, NRC Chairman Gregory Jaczko said in a Dec. 3
interview at Bloomberg headquarters in New York.

Natural Gas

The reluctance to build reactors may stem from the decline
in energy demand amid the recession and falling prices for
natural gas, a power-plant fuel that competes with nuclear,
Jaczko said. Since July 2008, natural-gas futures have tumbled
from $13 per million British thermal units to about $4.50 per
million Btu.
"We're not planning on building new nuclear with $4 gas,"
John Herron, president and chief executive officer of Entergy's
nuclear operations, said at a Dec. 7 forum hosted by Third Way.
The case for building nuclear reactors also was set back
when cap-and-trade legislation, in which power-plant operators
pay for the right to emit carbon dioxide, died in Congress last
year, Energy Secretary Steven Chu said at the same forum. Unlike
power plants that run on fossil fuels such as coal and natural
gas, nuclear plants don't release carbon dioxide when generating
electricity and would have benefited from the cap-and-trade law.
President Barack Obama also wanted to encourage reactor
construction by expanding a U.S. program that guarantees loans
for new plants against default. The existing program can
guarantee as much as $18.5 billion in loans, and Obama called
for an expansion to $54.5 billion.
Stop-gap legislation funding the federal government into
March omitted Obama's request.

Two New Reactors

A group led by Atlanta-based Southern Co. has won the only
nuclear-loan guarantee awarded by the Energy Department so far.
It will cover about $8.3 billion of the estimated $14 billion
needed to build two reactors at the existing Vogtle nuclear
plant near Waynesboro, Georgia.
While the industry has succeeded in boosting the output of
existing plants, new reactors are needed to keep pace with the
30 percent growth in U.S. electricity demand that the Energy
Information Administration projects by 2035, Mitchell Singer, a
spokesman for the Nuclear Energy Institute, a Washington-based
trade group, said in a telephone interview.
"Uprates alone are not going to handle it," Singer said.

For Related News and Information:
U.S. reactor status: NRCR <GO>
Top power news: PTOP <GO>
Environmental stories: GREEN <GO>

--With assistance from Tina Davis in New York. Editors:
Larry Liebert, Steve Geimann

To contact the reporter on this story:
Simon Lomax in Washington at +1-202-654-4305 or

To contact the editor responsible for this story:
Larry Liebert at +1-202-624-1936 or LLiebert@bloomberg.net.