For the past year, two companies have been racing to license designs for nuclear power plants. General Electric (GE) is offering an Advanced Boiling Water Reactor (ABWR), and Westinghouse Electric is offering an Advanced Passive 1000 (AP1000). It looks like General Electric won by a hair.
The new licensing process used by the U.S. Nuclear Regulatory Commission (NRC) separates the reactor's technical design approval from the site permits and operating permits. The idea is that the NRC will certify the reactor's design once for all users and focus on individual site permits for each user. The race between Westinghouse and General Electric is for NRC's coveted design certification.
The facts behind these two reactor designs are interesting. First, these great American reactor manufacturers are no longer American. George Westinghouse's company is a master at building pressurized water reactors, and many companies around the world copied the design. But Westinghouse has been broken up and sold; this piece of Westinghouse is a majority-owned subsidiary of Toshiba.
Thomas Edison's General Electric also went to Japan to shop for nuclear power technologies. GE teamed up with Hitachi to form a new company called GE Hitachi. GE Hitachi owns intellectual property for ABWR.
To make matters confusing, Toshiba also has interests in GE-Hitachi's ABWR. Toshiba currently has an application before the NRC to extend its ABWR design certification.
The second interesting fact is that the NRC already issued design certifications for these reactors. But GE-Hitachi needed to extend its license, and Westinghouse changed its design. This opened the way for each design to incorporate new standards, specifically NRC's new rule regarding aircraft impact.
Third, in spite of all the regulatory activity, there is very little nuclear construction planned for the U.S. NRG Energy (NRG) was the only utility planning to build ABWRs until its partner, Tokyo Electric Power, was forced to withdraw. The AP1000 has two customers: Southern Co. (SO) plans to add two AP1000s at its Vogtle site, and SCANA (SCG) plans to add two AP1000s to the V.C. Summer facility. Other than the two re-start units being built by the Tennessee Valley Authority, no other nuclear construction is planned for the foreseeable future.
Some utilities are seeking NRC site permits. These permits should be viewed as long-term options, not a commitment to build in the immediate futures. Permits are transferrable, have significant value and can provide their owners with the ability to jump-start nuclear construction. The NRC has already issued site permits to Southern, Dominion Resources (D) and Entergy (ETR). Other utilities have initiated their applications and could receive permits over the next several years. These include Progress Energy (PGN), Duke Energy (DUK), NextEra Energy (NEE), PPL (PPL), Ameren (AEE), Constellation Energy Group (CEG), DTE Energy (DTE), Exelon (EXC) and Public Service Enterprise Group (PEG). Many of these companies have significant financial barriers to overcome; about half of the proposed projects are currently not financeable.
Fourth, Japanese manufacturers are dominating the international nuclear power industry using NRC certifications. By earning NRC's coveted design certification, their ABWR and AP1000 reactors have broad appeal and a clear marketing edge in the international community; no country can provide nuclear safety analysis and oversight like the Americans. NRC's design certification is the international seal of approval.
Last, just because Japanese companies have been patiently waiting for NRC design certifications, that does not mean they have been waiting to build new nuclear plants. Five ABWRs have already been built in Japan, and two are mostly built in Taiwan. All five Japanese reactors are currently operational (after Fukushima, some are undergoing safety stress tests), and the Taiwanese reactors are scheduled to go on line next month. Four AP1000s are under construction in two China provinces, with operation dates set for 2013, 2014 and 2015; eight more AP1000s are planned for the same two locations.
Internationally, there is growing interest in building nuclear power plants. This includes Latin America and Middle East. As NuclearEnergy Insider reported, Chile's administration recently reached an agreement with the U.S. to train Chilean atomic engineers.
It is not just Chile. Brazil and Argentina are pushing ahead with plans for expansion post-Fukushima. According to Nuclear Power Daily, Saudi Arabia plans to build 16 nuclear power plants.
Oil countries understand that nuclear power is cheaper than oil. For countries such as Saudi Arabia, it pays to build nuclear power plants to produce energy for domestic consumption and export their precious oil.
No matter which country pursues nuclear power, Japan won the race. Japan will supply most of the large nuclear equipment, and Japan's equipment will be certified by the NRC.