South Korea Consortium Steals UAE Nuclear Deal

UAE strengthens hand with nuclear deal/Sun Dec 27, 2009 10:28am GMT
DUBAI/SEOUL (Reuters) - South Korean firms Korea Electric Power Corp. (KEPCO), Hyundai Engineering and Construction, Samsung C&T Corp and Doosan Heavy Industries have won a deal worth around $40 billion to build and operate nuclear power plants in the United Arab Emirates, industry sources said today.
http://c.moreover.com/click/here.pl?t2427068707&f=10149

Were U.S. firms contenders? Probably not. Politics alone would have posed a barrier to GE. However, the broader issue is the dearth of U.S. commercial involvement. Although Westinghouse, owned by Toshiba, was one of the winning consortium, the plants are not AP-1000s. Most export income and profit from the project will go to Korea. The irony is that U.S. taxpayers, who footed the bill for commercial nuclear power development, will see no benefit accrue to U.S. companies, U.S. balance of payments, U.S. taxable income or other U.S. strategic concerns. Nor does the current crop of politicos in Washington on Capital Hill even care - they’re off chasing windmills.

The absence of a global U.S. nuclear strategy, as presented by President Dwight Eisenhower when he signed the Atomic Energy Act of 1954, has left the U.S. taxpayer's investments high and dry. Does the Obama administration care to change that picture?

Without a change of direction in Washington DC, the U.S. is headed towards third-rate status in world nuclear design, construction and operations. That should give all U.S. citizens pause for concern.

Will Westinghouse follow GE with its shield building design?

Via press release October 15, the Nuclear Regulatory Commission has said that Westinghouse’s new AP-1000 reactor design reactor shield building needs modification. Although Westinghouse said it would be no problem to comply with NRC’s request, this could slow down final AP-1000 design approval.

Insiders feel the NRC is frustrated with the Westinghouse shield building design, and that public release assures the NRC will slow the AP-1000 timetable. Some question whether utility loan guarantees that support the AP-1000 design should immediately stop, like DOE’s risk-ranking did when GE’s ESBWR design ran into similar licensing troubles.

Although rumors allege shield design problems, the details aren’t clear. Two stories relate them: (1) with modular construction of the Westinghouse shield structure design, and (2) NRC's design licensing approach. Both will affect new plant construction - the latter already has. With people who lack practical experience in design or construction, NRC is more into technical details than ever before. This story realizes everyone's worst fears, exactly. If the NRC won’t hold to a schedule, and dwells on technical details that may be beyond the technical skills of the staff, they can’t hold to a schedule. Furthermore, they‘ve never liked technical oversight of their work. Based on how the DOE evaluated the GE's ESBWR design for completion probability success, OMB should also hold up Congressional NP 2010 loan guarantees for the Westinghouse plants. That would put Areva's EPR design out front to construct, with multiple AP-1000 and lead plant Vogtle 3 owner Georgia Power (Southrern Nuclear) on hold. That would kill new nuclear construction momentum.

The bigger story is the NRC – and how they work. They aren't transparent like they claim, internally aligned, or objective. They don't follow schedules (how can safety be scheduled?) nor allow themselves to be held accountable for decisions. They worry eternally over technical details they can’t evaluate. Ironically, the loan guarantees were to protect against regulatory delay, but now they (loan guarantees) could exclude a "U.S." design from loan guarantees a second time. Loan guarantees are an essential prerequisite to funding. (GE’s case was the first.) Of course, now Toshiba owns most of Westinghouse. Although it’s a good time to get it out on the table, challenging the NRC and being delayed poses great risk.

Technical opinions on the validity of NRC claims against the AP-1000 speculate on this point; NRC experience is the best indicator. The AP-1000 containment approach is new. The US NRC does not do new well. They're still resolving digital IC controls, approved by the rest of the world 20 years ago. Since the NRC cannot work to a schedule, everyone must prepare for more cost. So much for Part 52's certified design risk-free development process. Converting a high-level design into construction is always complex. A tremendous amount remains ahead, for every design, constructing every plant even with a complete high-level design.

People have proposed more transparent methods to license new designs. So far, the NRC’s Commissioners, Executive Director for Operations and reactor venders have chosen to not raise the license process issue. Although we believe it would make the licensing more truly transparent and accountable, and speed it up, it would also take away power they currently hold.

If only based on what "others" said, Westinghouse has a problem. Going public NRC chooses an alternate path instead of resolving the technical issue directly. That's a bad sign - they're using their trump card. Prefabrication methods that accelerate construction in Japan are foreign to the US. The US NRC could delay licensing Westinghouse AP-1000 over them. Insistence on using modular construction techniques, including post-stressing systems, could be the focus of threats (under their owner, Toshiba that is) could delay approval of the Westinghouse AP-1000 recertification.

Scuttlebutt at a meeting in Washington DC asserted that in effect Westinghouse told the NRC, "Well, since the Japanese accepted the AP-1000 Shield Building design, it must be acceptable." The implication was that the Japanese regulator - with whom Toshiba presumably is in touch - was a tougher smarter or at least as qualified a regulator as the NRC. That’s hearsay, but if it happened, it would explain why the NRC would be upset. Of course, the Chinese are building four AP-1000’s today, with no specific concerns. (Remember, the US NRC already certified the early AP-1000 design in 2004.)

Should the NRC take Westinghouse to task - or visa versa? Calling press conferences for issues such as shield building modifications only foreshadows more problems. Many more are behind this one - digital controls, combustion turbine emergency backup power, Cyber Security, and others like them. Will this influence Westinghouse's marketing plans or stock price? It’s hard to tell now, but the worry is that it will. In the past, delays killed US nuclear programs. This threat realizes the banker’s worst fear, and emphasizes the role loan guarantees will have on retaining the US nuclear option - if it still exists.