What happens next after DOE gets conceptual designs from its $40 million investment?

On March 8, 2010, the U.S. Department of Energy awarded $40 million to two firms (General Atomics, Westinghouse) for conceptual designs of a high temperature gas cooled reactor (HTGR). The designs are expected to focus on process heat applications for the petro-chemical industry.  The reactor is generally known as the ‘Next Generation Nuclear Plant” or NGNP.

The first question is this – once DOE gets the conceptual designs, when will one be built?  The second question is what’s the competition likely to be doing while NGNP is coming off the drawing boards? 
These comments make no assumption about the type of conceptual design DOE gets for its money. There are lots of alternatives in the GenIV family of ideas. This blog post hits some of the highlights of getting the NGNP to market. It doesn’t dive into the level of detail that would make an engineer happy.

Small reactors out in front

While all this is going on with NGNP, a half dozen or more small reactors are also doing everything in their power to reduce time-to-market. Two of them, the B&W (125 MW) LWR) and NuScale (45MW) LWR have the best chance of getting NRC reactor design certification and inking deals with customers by 2015.  This milestone would be achieved five-to-ten years before customers will be able to put their chop on an order for a HTGR reactor.
The two small LWR reactors are targeted at electricity generation for U.S. customer. Deuces, quads, and six-packs are possible combinations for expansion for utilities after they’ve bought the first units.

Two other small reactor designs, which are liquid metal cooled nuclear batteries, may achieve market penetration outside the U.S. by 2020 or earlier. These units are targeting so-called “distributed power,” which means the applications are literally off-the-grid at remote locations including military bases, mining camps, and lesser developed countries that simply don’t have the T&D to get the power to customers.

The application mentioned most frequently in the breathless marketing literature of several of the developers of small reactors is to provide process heat for steam in the tar sands region in northern Alberta, Canada.  The oil companies there taking heavy crude out of the ground currently burn natural gas to produce the steam needed for the primary extraction process and for primary refining to turn the bitumen into crude oil that can be shipped via pipelines to customers.

The oil companies are understandably skeptical that nuclear reactors can be delivered for their use in a timeframe that makes sense relative to their current business plans.  For this reason, it is worth looking at the time-to-market for an HTGR and the major milestones along the way.

Next stop – detailed design

DOE’s press release calls for the two contractors getting the $40 million completing their tasks by August 2010. That’s a very unlikely date and may be a typo in the press release.
The reason is that spending $40 million on conceptual design work in five months would represent a new land speed record for spending government money.

Given the number of partners in each contractor’s team, and the technologies they bring to the table, these people may not  be able to decide on where to have lunch much less sort out their ideas on what to submit to DOE by August 2010.  More likely, the completion due date is August 2011, which makes a lot more sense. I’ve asked DOE about it.  I’ll update this part if I get an answer. 

Update: 03/09/10: DOE said in an email the agency is still negotiating with the contractors and the August 2010 date will change.

Assuming August 2011 is the correct date for DOE to get the results of its $40 million in conceptual design studies, someone has to evaluate it.  My thought is DOE would do well to have the Idaho National Laboratory (INL) do that work.  The INL could evaluate the pros-and-cons of each study, identify gaps, and even provide an overall evaluation on the likelihood the designs could be built with today’s technologies.  It would be up to DOE to pick a winner. This way it would be an informed choice.

Update: 03/09/10: An informed source said the Idaho lab will not be doing the evaluation. DOE has arranged for independent reviewers.

Once DOE gets the evaluation, which could easily take a year to produce, it is now August  2012.  It would take DOE another six months to develop a contract to fund the developer of the successful conceptual design to produce a detailed design. That job could take a couple of years and several hundred million.  This puts the project at 2015. 

Another five-to-seven years to get an NRC license

Once a detailed design is done, the next step to actually building a reactor is to get the reactor certified by the U.S. Nuclear Regulatory Commission (NRC).  Since the NRC has never seen a license application for a high temperature gas-cooled reactor, the review for safety is basically a first-of-a-kind experience for a first-of-a-kind reactor.  This is a double dose of “known unknowns.”  Clearly, it will take longer than the standard review process for a light water reactor. 

The time frame here would be about two years to prepare the reactor design certification package. It would take another three-to-five years for the NRC to get their job done.  This puts us at 2020 or 2022 depending on how fast all parties in the mix work to achieve results.  Of course, this assumes NRC and the vendor get some help from Congress to fund the license review.  Otherwise, NRC will be forced to juggle priorities and LWR applications will go first.

Ground breaking in 2025 or later?

Even if the NRC issues a report that certifies the design in 2022, the company that wants to build one still has to apply for a combined construction and operating license.  The vendor has the option of submitting the license application in parallel with the design certification which could speed things up.  Even so, NRC won’t act on certain parts of the license application until it has wrapped up all regulatory steps to certify the safety of the design.

Where will NGNP be built?

Most likely, NGNP won’t be built in Idaho. The vendor will want a revenue stream as soon as possible. This means the first plant will be built at a customer site.  Most likely such a site would be a major petro-chemical facility like a refinery or chemical manufacturing plant.  The objective is to swap out two sets of costs – the cost of crude oil and other fossil fuels and the carbon taxes that surely will be in place by 2012.

A significant challenge for the customer will be learning how to operate a first-of-a-kind nuclear reactor in the context of absolutely depending on it for steam.  That suggests a breaking-in period of at least several years running the reactor in parallel with existing fossil fuel boilers.

Why process heat first?
The process heat applications for an HTGR would operate at 450-550C.  This  lower temperature isn’t very efficient for generating electricity.  To get real value from the reactor in making electricity, experts say it would have to operate at 800-1,000C. The problem is these temperatures pose substantial challenges in terms of the types of materials used in the secondary loop to transfer heat from the reactor core to a turbine. 

It makes a lot more sense for a petro-chemical plant to take the process heat application, using temperatures it knows how to control, as well as the steam, with equipment it already owns.  it eliminates the need for a whole new round of R&D to develop turbines and heat exchange technologies that would operate reliably at the much higher temperatures to cost-effectively generate electricity.

The process heat niche takes some of the competitive pressure off NGNP since the two LWR designs most likely to get to market in the next five-to-ten years are targeting electricity generation.  The size of the NGNP suggests it would not be suited for off-the-grid applications since it would be difficult to transport its components to such sites.  This leaves large petro-chemical plants that have both the water access for barges and the need for 600 MW (thermal) of process heat.

Competitive costs?

The best case scenario for payback to process heat customers for a  commercial version of the reactor looks like this. Assume a member of the NGNP Alliance burns 1 million barrels of oil/day at $70/barrel. That's a daily cost of $70 million. Every 30 days it burns $2.1 billion in crude oil for process heat and over 300 days it burns $21 billion.

If a new 300 MW high temperature gas-cooled reactor costs $3,500/Kw, or $1.05 billion, the payback occurs in the first or second year assuming all the oil used for process heat is eventually swapped out for heat from the reactor. The actual payback will be much longer due to the need to amortize R&D, NRC licensing, and start-up costs, which could be an additional $3 billion. Also, the plant would have to reconfigure steam lines and control systems to deliver heat from reactor instead of fossil fueled boilers.

There are plenty of challenges ahead, and they will take the better part of two decades to resolve them.  Readers are encouraged to suggest ways to achieve a shorter time-to-market.

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Idaho Samizdat is a blog about the political and economic aspects of nuclear energy and nonproliferation issues.  It covers the nuclear energy industry globally.  Additionally, the blog has regional coverage on uranium mining in the western U.S. and Canada  Link to original post