Hitachi set to halt UK nuclear build project; Connecticut reactors win price support
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Hitachi set to stop UK nuclear new build project: reports
Japan’s Hitachi is set to abandon or shelve its plan to build a 2.9 GW nuclear plant in Wales, UK, according to Japanese and UK media reports.
A lack of firm investor commitments means that Hitachi can no longer keep putting money into the Horizon nuclear plant project at the Wylfa Newydd nuclear site in Anglesey, the Financial Times (FT) reported.
Hitachi board members are expected to meet this week to decide the fate of the plant.
The Wylfa Newydd project consists of two Hitachi-designed ABWR boiling water reactors. Hitachi subsidiary Horizon Nuclear Power said the plant could be operational by the mid-2020s and could be followed by a second plant for a total capacity of 5.8 GW.
Abandonment of the project would be a significant blow to the U.K.'s nuclear build plan. Last year, Toshiba abandoned the 3.8 MW Moorside nuclear new build project in Cumbria. The Japanese company liquidated development company NuGen after it failed to find a buyer.
EDF's Hinkley Point C project is currently the only new nuclear power plant under construction in the UK.
The UK government and Hitachi have been negotiating subsidies for Wylfa Newydd which have seen a strike price of around 75 pounds per MWh ($96.4/MWh) put on the table, according to the FT.
The government is considering using a regulated asset base model to finance new nuclear projects, the paper reported.
The government has been under pressure to reduce the cost of new nuclear power plants after it guaranteed a power price for Hinkley Point C at 92.50 pounds per MWh, considered by many to be uncompetitive given falling renewable energy costs. Cost of capital is one reason for the high power price. EDF and its Chinese partners are bearing all construction risks for Hinkley Point C, which is expected to cost around 20 billion pounds to build and is scheduled online from 2025.
EDF also plans to build an EPR plant at the Sizewell nuclear site in eastern England.
China General Nuclear Power (CGN) is a partner in the Sizewell project and also plans to build a new plant at Bradwell in south-east England. The Bradwell plant would use CGN's Hualong HPR1000 design, currently under review by the UK licensing authorities.
Connecticut selects Millstone nuclear bid in zero-carbon tender
The state of Connecticut has approved a 10-year power purchase bid by Dominion Energy for around half the capacity of its 2.1 GW Millstone nuclear power plant.
The Millstone plant complex hosts one pressurized water reactor (PWR) unit of capacity 870 MW and a boiling water reactor (BWR) unit of capacity 1.2 GW.
Dominion bid the contract in Connecticut's latest procurement of 'zero-carbon' energy sources, alongside solar and wind operators. The Millstone plant was eligible for the procurement round as it was deemed at risk of early retirement. Low wholesale prices are continuing to pressure nuclear margins and New York, Illinois and New Jersey have also introduced nuclear price support mechanisms.
US nuclear plants at risk of closure or set for closure
(Click image to enlarge)
Source: Union of Concerned Scientists (UCS), November 2018.
The price of the Millstone contract reflects an energy-only price submitted by Dominion for 2019-2021, switching to a price which must reflect Dominion's costs for the period 2022-2029, Connecticut's Department of Energy and Environmental Protection (DEEP), said in a statement.
Negotiations over the post-2022 price are expected to conclude by the end of March, DEEP said. The department has called on Connecticut electric distribution companies Eversource and United Illuminating to negotiate a lower price than that sought by Dominion.
"A normal utility rate of return on equity is 9%, however DEEP would consider 12 to 15% reasonable for a merchant power plant with a long-term contract," it said.
"We remain committed to keeping this valuable zero-carbon resource, provided that it is affordable, as we work towards long-term replacement through smart investments in offshore wind and solar paired with grid-scale storage," Robert Klee, DEEP Commissioner, said.
"At the same time, we believe ratepayers deserve, and can get, a more competitive price for Millstone’s output,” Klee said.
Dominion currently operates three nuclear power stations– the 2 GW Millstone Power station in Connecticut and the 1.8 GW North Anna and 1.6 GW Surry power stations in Virginia. Last year, Dominion applied to the Nuclear Regulatory Commission (NRC) for an 80-year operating license for the Surry plant.
DEEP also approved a power purchase bid for the 1.2 GW Seabrook nuclear power plant in New Hampshire, operated by NextEra Energy Resources. The bid was priced at $33/MWh, on a levelized basis, for a volume of 1.9 TWh starting in 2022.
Entergy completes sale of closed Vermont Yankee plant to Northstar
Entergy has completed the sale of its shutdown 620 MW Vermont Yankee nuclear plant to specialist decommissioning group NorthStar, Entergy announced January 11.
"The sale is a first-of-its-kind in the nuclear power industry – a permanent ownership and license transfer to a company that is slated to perform timely and efficient decommissioning and site restoration," the operator said.
The Vermont Public Utility Commission approved the sale December 6, authorizing Northstar to own the Vermont Yankee license and decommission the plant.
The sale marks a significant step forward for the U.S. decommissioning market. Entergy and Holtec have agreed a similar license transfer transaction for Entergy’s Pilgrim and Palisades plants after they close in 2019 and 2022. Holtec will also purchase Exelon’s recently-closed 636 MW Oyster Creek plant.
Until recently, operators generally favored the deferred SAFSTOR decommissioning option which allows them to build up funds over decades, but growing demand for decontamination and dismantling (D&D) services has spawned new decommissioning business models.
US announced nuclear plant closures
Source: US Energy Information Administration (EIA), September 2018.
The license transfer approach substantially cuts decommissioning timelines and lowers risks to utilities associated with decommissioning, spent fuel management and site restoration, Susan Raimo, Senior Counsel at Entergy, told a conference in October.
Specialist decommissioning operators are able to cut costs and accelerate the potential economic benefits of re-using the site, Raimo said.
"We see this approach as having benefits for both sides. Both for as a utility and for our external stakeholders," she said.
NorthStar will continue to own or hold the physical plant asset, real estate, decommissioning trust fund, spent nuclear fuel and Department of Energy (DOE) Standard Contract.
Northstar plans to begin decommissioning work in 2019 and achieve partial site release, discounting the independent spent fuel storage installation (ISFSI) and switchyard, "no later than the end of 2030, possibly even as early as 2026," Raimo said.
Entergy will be able to learn from the Nuclear Regulatory Commission's license transfer application (LTA) process and decommissioning activities at Vermont Yankee to optimize its plans at Pilgrim and Palisades.
Entergy and Holtec hope to close the license transfer transaction for Pilgrim by the third quarter of 2019, Raimo said.
"It's a significant acceleration of our SAFSTOR schedule. Holtec expects to complete partial site release and partial site restoration…by end of 2027," she said.
Diabolo Canyon public group calls for 10-year decommissioning target
The decommissioning of Pacific Gas and Electric’s 2.2 GW Diabolo Canyon plant in California should be performed immediately after shutdown under the DECON process to minimize safety risks, the Diablo Canyon Decommissioning Engagement Panel (DCDEP), a group representing local interests, said in a new report.
The Diabolo Canyon plant consists of two 1.1 GW reactors which are scheduled to be shut down in 2024 and 2025. PG&E convened the DCDEP to provide local non-regulatory public education and feedback on its Diabolo Canyon decommissioning plans.
"The decommissioning (decontamination) process should begin immediately upon shutdown with a goal of 10 years for completion of radiological decommissioning and decontamination," the DCDEP said in their report.
Until recently, nuclear utilities generally favored the deferred SAFSTOR decommissioning option which allows them to build up funds over decades. As low wholesale prices accelerate reactor closures, operators are increasingly turning to ownership transfers to accelerate decommissioning activities and control costs.
PG&E has estimated the cost of decommissioning the Diabolo Canyon plant at $4.8 billion, according to the latest cost estimates published in December 2018. PG&E’s nuclear decommissioning trust fund for the plant is currently at around $3.2 billion, it said.
On January 14, PG&E announced it would file for bankruptcy protection after several recent deadly wildfires left it with billions of dollars of potential liabilities.
"PG&E expects to have approximately $5.5 billion of committed debtor-in-possession (DIP) financing at the time it files for relief under Chapter 11 on or about January 29, 2019, and has received highly confident letters from a number of major banks," the utility said in a statement.
"The DIP financing will provide PG&E with sufficient liquidity to fund the Company’s ongoing operations, including its ability to provide safe service to customers," it said.
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