Westinghouse deal for Poland ushering in a new nuclear wave. Can it deliver on time and on budget?

Westinghouse spokeswoman Cathy Mann said last week that it was “too soon to say how financing will play out until we get further into developing the agreements and contracts.”

“The U.S. EXIM bank will offer robust financing,” she said, and because of its involvement, “U.S. content will be maximized.”

It was the first year that the International Atomic Energy Agency, which monitors nuclear power plants all over the world and ensures nonproliferation, had its own pavilion at the global climate event, Director General Rafael Mariano Grossi boasted on Wednesday in Egypt. He spent the day hosting panels and answering questions about how this nuclear wave differs from the ones that came before it.

ANYA LITVAK Pittsburgh Post-Gazette alitvak@post-gazette.com 14 Nov 22

Sebastian Barkowski, Poland’s special envoy for international climate and energy cooperation, arrived at the global climate summit in Egypt as a member of a new club: the nuclear club.

Earlier this month, his government picked Cranberry-based Westinghouse Electric Co. to supply the first three nuclear reactors to Poland, with another three units to be awarded in the future.

The deal, which is estimated to be worth about $20 billion, was in the works for a few years and represents Westinghouse’s first sale of its AP1000 plant abroad since it launched the reactor design in a deal with China in 2007.

Until the last moment, it was a geopolitical nail biter, with high-ranking U.S. officials such as Energy Secretary Jennifer Granholm and Vice President Kamala Harris intervening on Westinghouse’s behalf, and the U.S. nuclear firm filing a lawsuit against Korea Electric Power Corp. which had also submitted a bid for the Polish project.

Poland is surrounded by countries with nuclear power fleets but the large European nation never got its only attempt at nuclear off the ground.

Burning coal supplies 75% of its electricity needs, Mr. Barkowski said during a panel at COP27 on Wednesday, and driving that number down to meet climate goals was the main motivation behind Poland’s plan to build between 6 and 9 gigawatts of nuclear power. In 2020, the Polish government signed an intergovernmental agreement with the U.S. and Westinghouse to pursue this plan.

It was the first year that the International Atomic Energy Agency, which monitors nuclear power plants all over the world and ensures nonproliferation, had its own pavilion at the global climate event, Director General Rafael Mariano Grossi boasted on Wednesday in Egypt. He spent the day hosting panels and answering questions about how this nuclear wave differs from the ones that came before it.

In a conversation with Mr. Grossi, Fatih Birol, the executive director of the International Energy Agency, revised his year-ago prediction that “nuclear may well make a comeback” to a more definitive “nuclear is making a comeback.”

When asked what could derail that, Mr. Grossi talked of his fear that a Ukrainian nuclear powerplant in the warzone might suffer an attack that causes a nuclear accident — “the background music of my visit to Zaporizhzhia was bombs and mortars” — and that the fallout from that would ruin nuclear’s momentum the same way that Chernobyl and Fukushima had done.

Mr. Birol, meanwhile, zeroed in on the more mundane issue that has taken the wind out of nuclear’s sails before.

“The nuclear industry, to be honest with you, doesn’t have a very good reputation in terms of delivering on time and on budget,” he said.

With all the new reactor orders piling up, “It is important that the nuclear industry have more discipline,” he said.

That was something that Westinghouse’s future owner, the Canadian nuclear fuel company Cameco Corp. which signed a deal last month to acquire a 49% stake in Westinghouse, thinks about as well.

The Chinese and the Russians are good at building new nuclear plants, Cameco’s CEO Tim Gitzel said during a World Nuclear News podcast last week. 

“We in the west now need to show that we’re back in the game and that we can take our share of the market,” he said.

Poland’s project with Westinghouse is a big deal, he said.

“I think there are more to come. And so we need to show the world that we can deliver our projects on time, on budget.”

In the U.S., Westinghouse’s attempt to restart large nuclear construction with a pair of reactors in South Carolina and another two in Georgia ended in bankruptcy in 2017. The South Carolina project was cancelled after billions had already been spent. In Georgia, nuclear fuel was finally loaded into the first reactor last month and the unit is slated to start producing power this year — 15 years after construction began. …………………………………………….

Westinghouse was bringing the lawsuit now, the company wrote in the complaint, because it had gotten word that KEPCO was about to sign a memorandum of intent with a group in Poland and that it had been invited to bid on projects in Czech Republic and Saudi Arabia.

Providing the technical information requested in those bids would trigger Westinghouse’s responsibility under U.S. nuclear export regulations, the company argued, and KEPCO has been non-committal about cooperating in the process.

So Westinghouse is asking the court to “enjoin defendants from delivery of technical information regarding Korean reactor designs outside the Republic of Korea,” specifically in Poland, Saudi Arabia and Czech Republic.

KEPCO had not filed a reply as of Wednesday.

Show me the money

A 15-year construction project is extremely difficult to finance, Dario Liguti, director of Sustainable Energy at the United Nations Economic Commission for Europe, said during a COP27 panel on nuclear financing.

That’s partly why “the nuclear plants that have been built, have been built with public money,” he said.

Countries like China, Russia, or France, where nuclear companies are at least partially owned by the government, offer the backing of the government when financing new builds.

In the U.S., that role, albeit much diminished, is filled by the U.S. Export-Import Bank, which provides financing for entities to buy American products and services.

The U.S. government has a variety of reasons to help such projects along.

A recent analysis of nuclear financing by researchers at Columbia University’s Center on Global Energy Policy includes this list: “supporting American jobs, assisting other countries’ decarbonization efforts and confronting the broader problem of climate change, reducing other countries’ fossil fuel dependencies for geopolitical reasons, limiting Chinese and Russian influence in general, and the national security value in the United States having some role in international nuclear reactor commerce.”

Export-Import Bank, which helped to finance dozens of nuclear export deals, mostly in the 1970s, hasn’t done any in decades.

Westinghouse asked for up to $5 billion in export assistance from ExIm when it sold the first four AP1000 units to China, the analysis said, and while the bank approved the request, the project did not end up using the offer.

In Polish newspapers, government officials suggested that the Westinghouse offer included $17 billion in financing, including through ExIm.

Elias Gedeon, Westinghouse senior vice president of commercial operations, said during an interview at an economic forum in September that the proposed financing also includes money from Westinghouse and Bechtel, the engineering and construction firm that took over the AP1000 project in Georgia in 2017.

“This is something that we have not done before,” Mr. Gedeon said, “but we have committed to put equity in this project in Poland.”

Westinghouse spokeswoman Cathy Mann said last week that it was “too soon to say how financing will play out until we get further into developing the agreements and contracts.”

“The U.S. EXIM bank will offer robust financing,” she said, and because of its involvement, “U.S. content will be maximized.”

Westinghouse is also continuing to sign agreements with companies in Poland and in other European countries to establish a European supply chain that could handle not just the Polish nuclear project but the others that might follow. Last year, it opened a shared global services center in Krakow which now employs 165 people and more will be hired, she said. In southwestern Pennsylvania, Westinghouse had about 3,100 employees at the end of last year.

Asked if Westinghouse can stick to the timeline envisioned in the Polish plan, Ms. Mann said that Westinghouse has learned from its experience delivering the first AP1000 plants in China and in Georgia. 

On social media networking site LinkedIn last month, Westinghouse’s CEO Patrick Fragman thanked the governments of Poland and the U.S. for shepherding this agreement and promised full speed ahead.

“We are ready, able and willing to move very fast now.”  https://www.post-gazette.com/business/powersource/2022/11/14/new-nuclear-faces-old-skepticism-can-it-deliver-on-time-and-on-budget/stories/202211130052

November 15, 2022 Posted by Christina Macpherson | business and costs, EUROPE | Leave a comment

EU Needs $460 Billion Investment Just To Maintain Nuclear Power Capacity, let alone build new

Oil Price.com By Tsvetana Paraskova – Nov 11, 2022, 

The European Union will need up to $462 billion (450 billion euros) in investment just to keep the current level of its nuclear power generation capacity, the EU Commissioner for Energy, Kadri Simson, said at a nuclear energy forum this week……..

This year, a year when surging energy prices have highlighted the importance of energy security, the EU is particularly focused on its nuclear power availability.

According to the EU modeling, nuclear power generation will account for around 15%-16% of the EU’s power output in 2030 and 2050, Simson said.

The EU needs a stable generation capacity, at the level of just over 100 GW, in the coming decades. Yet, a lot of investment will be needed to keep that generation capacity in the future.

“Our analysis shows that without immediate investment, around 90% of existing reactors would be shut down around the time when we need them most – in 2030,” Simson noted.

The EU will need between $360 billion (350 billion euros) and $462 billion (450 billion euros) of investment just to maintain the current generation capacity, and another up to $51.3 billion (50 billion euros) in the long-term operation of existing reactors, according to the EU commissioner………   EU Needs $460 Billion Investment To Maintain Nuclear Power Capacity | OilPrice.com
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November 11, 2022 Posted by Christina Macpherson | business and costs, EUROPE | Leave a comment