Thursday, October 25, 2012

i-Nuclear update: EDF says strike price won't cover construction risk; finished design proof against overruns

i-NUCLEAR

EDF says strike price won’t cover construction risk; finished design proof against overruns

by I-Nuclear
EDF Energy CEO Vincent de Rivaz denied the company was trying to recoup construction cost risk via the “strike price” for power for its two planned EPR reactors at Hinkley Point C.
But a colleague at a rival nuclear company said construction risk for the reactors it plans to build would have to be accounted for either in the strike price or via some sort of  “adjustment mechanism.”
Speaking before the House of Commons Energy and Climate Change Committee earlier this week de Rivaz said that EDF is not asking for construction cost overrun risks to be included in the “strike price.”
The strike price comes through a long-term contract with a guaranteed price for power from the reactors. EDF is currently negotiating the strike price for the Hinkley Point C reactors in Somerset, England with the Department of Energy and Climate Change.
De Rivaz’ answer contrasted sharply with that from his colleague at the NuGen consortium, which is currently the only other active consortium planning to build new reactors in the UK.
NuGen is owned by GDF Suez and Iberdrola. The latter owns Scottish Power. NuGen is planning to build new reactors at its Moorside site near Sellafield in northwest England.
Rupert Steele, director of regulation, Scottish Power/Iberdrola, told the committee that construction risk would have to be allowed for either in the strike price or through some kind of adjustment mechanism.
“These are large projects working with relatively new designs which Europe has a relatively limited track record in building. To the extent that there is uncertainty, it will either be necessary to allow for that in the strike price or to have some kind of adjustment mechanism,” Steele told the committee October 23.
“Our view at the moment is that it’s too early to tell which of these two routes has the better outcome for consumers and investors,” Steele said.
NuGen isn’t looking to take an investment decision until 2015, whereas EDF plans to take it’s investment decision by the end of this year.
Managing Construction Risk
De Rivaz told the committee that the way to deal with construction risk is to reduce that risk from the start. “The key issue is to have a stabilised design before we start construction,” de Rivaz said, “to make all the engineering studies in detail before starting construction.”
But with a 2013 construction start looming, EDF and Areva still have 22 outstanding generic design assessment (GDA) issues to resolve on the UK EPR before the end of the year.
EDF and Areva are co-applicants for design certification for the UK EPR under the Office for Nuclear Regulation’s (ONR) GDA program.
The GDA issues are generic safety issues that were unresolved when ONR and the Environment Agency issued their interim design acceptance confirmation (I-DAC) and interim statement of design acceptability, respectively, last December.
EDF and Areva have recently revamped their programs in an effort to speed up closure of the outstanding GDA issues and are now planning to finish in a few months what they had been planning to accomplish over the course of this year.
Together, they have so far closed out only nine of the original 31 GDA Issues and are currently at risk of extending the program into 2013.
Even if EDF and Areva are successful in closing out the 22 remaining GDA issues on the UK EPR by the end of the year as planned, one critic fears they will do so only by shifting unanswered safety questions into the licensing phase of the new reactors.
Nuclear engineer and industry critic John Large says this could turn EDF’s planned project for two EPR reactors at Hinkley Point C into an “Olkiluoto-3”-style situation with cost overruns and project delays inevitable as regulators grapple with last minute design changes.
Shifting from GDA to construction
The ONR disputes Large’s criticism.
When the GDA issues are closed, they often include so-called “assessment findings” which are defined by ONR as “important safety items” needing resolved, but which are “not considered critical to the decision to start nuclear island safety-related construction.”
ONR has said that it will not permit nuclear island safety-related construction until all GDA Issues have been resolved. Assessment findings, by definition, are not GDA issues.
There were 484 assessment findings when the ONR issued its I-DAC last December for the UK EPR.
Since then more assessment findings are being generated as part of the close-out process for the remaining GDA Issues.
An ONR spokesman told i-NUCLEAR earlier this month that there is nothing nefarious about the assessment findings. They are issues that are site-specific rather than generic safety issues and by identifying them now, the regulator is giving any future licensee a heads-up on what it will have to deal with during the site licensing stage.
The assessment findings are “part of the process for transferring findings from GDA to the nuclear site licensing phase,” the spokesman said.
“These findings will, rightly, be considered during the site licensing stages as normal regulatory business,” the ONR spokesman said.
But Large is not convinced. He says that of the 41 assessment findings related to structural integrity that were included in the original list of 484, 10 of them on structural integrity “are certainly not site-specific issues.”
Contrary to ONR’s earlier definition, these assessment findings “do relate to a fundamental nuclear safety function,” Large said, because they refer to the reactor pressure vessel, “which is a generic, high-integrity component,” he said.
Resolving some of these assessment findings “could result in not insubstantial design changes being required” to the reactor pressure vessel, Large said. But if the vessel has already been manufactured and installed, there may be no practicable redress other than modifying the safety assessment instead, Large said.
Large says that what is more worrisome is the assessment findings that could be generated as both EDF and Areva, on the one side, and ONR, on the other, rush to finish GDA by the end of the year.
With only about two months to go before planned completion of the GDA program, there are still 22 of the original 31 GDA Issues outstanding, with the potential for even more assessment findings.
By deferring unresolved issues to the construction/commissioning phase, ONR is running the risk of compromising safety, Large says.
“This problem confronted the Finnish nuclear safety regulator, STUK, at Olkiluoto[-3], for example, with the reactor concrete basemat, the primary containment steel liner, and, now very much overdue, the central instrumentation and control system,” Large says.
EDF Energy did not respond by press time to a request for comment regarding the contrast between EDF's comments and those of NuGen on construction cost risks, nor on Large’s criticism and the GDA process.—David Stellfox

No comments:

Post a Comment