Industry planning ahead to meet needs for new plant construction

Washington (Platts)--16Nov2005

The industry is taking action now to ensure critical elements will be in place
to support the safe and reliable continued operation of existing nuclear power
plants while meeting the needs to construct and operate new reactors, said the
Nuclear Energy Institute's (NEI) Thomas Houghton.

The critical infrastructure is three-pronged, said Houghton, a project manager
in NEI's risk regulation division. Speaking at the American Nuclear Society's
winter meeting in Washington, DC, Houghton said there were financial,
physical, and workforce considerations.

He described the financial requirements as "investment stimulus" or
"protection" against delays over which the project developer has little
control. The new energy policy act has provisions to aid with the financing of
new plants and offers insurance protection against unanticipated delays, he
said. The law provides up to $500-million for each of the first two new plant
projects that encounter delays due to litigation or licensing issues, and up
to $250-million for the next four projects for 50% of the delay costs
following a six-month period. The law provides for debt service or purchased
power costs, Houghton said.

The workforce challenges are impacting the industry and government agencies.
Houghton said a new plant construction project could attract around 2,400
workers. He said that approximately 14,000 workers would be needed if there
were seven plants in construction at the same time. To operate the plant,
between 400 and 700 skilled employees would be needed, he said. An NEI
workforce issues task force is addressing the labor issues, he said.

Another industry task force was established in early August to tackle issues
dealing with physical infrastructure, meaning the key components and
commodities, Houghton said in his Nov 15 talk.

The task force, comprising vendors, architect engineers, utilities, and
representatives from the American Society of Mechanical Engineers, Institute
of Nuclear Power Operations, and Electric Power Research Institute, will
assess the infrastructure gaps in a study to be conducted next year.

The study will look at vendor construction schedules and estimate demand for
long-lead components. It will focus on the fabrication capabilities, and
whether there would be qualified suppliers for equipment and materials, he
said.

In his presentation, Houghton showed estimates of the lead times needed to
fabricate more than a half-dozen large components, including about 50 months
for reactor vessels and steam generators, roughly 40 months for reactor vessel
internals, pressurizers, and turbine generators, and approximately 30 months
for accumulators and heavy component supports.

Houghton said the "good news" for the industry is that there is time to
prepare for new construction. But he said that orders for long-lead components
will need to be made in 2008 if construction is anticipated to begin in 2010.
He said if there is a boom in nuclear construction, it could "rejuvenate" the
US heavy manufacturing sector. He also said that the demand could be met if
existing facilities are retooled with "state-of-the-art" manufacturing
technologies and if the industry looks worldwide to fulfill orders, not just
within the US.

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