Hopes for US nuclear sector renaissance fade after Westinghouse's $6 billion black eye

Hopes for US nuclear sector renaissance fade after Westinghouse's $6 billion black eye
Hopes for US nuclear sector renaissance fade after Westinghouse's $6 billion black eye

The company has said that Westinghouse will complete the reactors for the projects it already has underway, including two in China. But the fate of other projects in the United States and abroad that plan to use the Westinghouse reactor, known as the AP1000, are in doubt, along with the role of the United States in the future of nuclear energy. It is also unclear how President Trump will approach nuclear energy development, which has broad and overlapping implications for tax and trade policies, economic development and national security.

The AP1000 is considered one of the world's most advanced reactors, with simplified structures and safety equipment which were intended to make it easier and less expensive to install, operate and maintain. It has been designed with an improved ability to withstand earthquakes and plane crashes and is less vulnerable to a cutoff of electricity, which is what set off the triple meltdown at Fukushima.

The industry has lurched through boom and bust cycles before.

Nuclear construction had all but disappeared in the United States, particularly after the partial meltdown at Three Mile Island in Pennsylvania in 1979. Concerns over climate change led to renewed interest in building new plants under the administration of George W. Bush, however. The Bush-era energy policy acts authorized $18.5 billion in loan guarantees, plus tax credits like those available for wind and solar.

Determined to avoid the delays and ballooning costs that were common as plants were built in the 1970s and '80s, federal regulators had devised a new licensing process.

Under the old system, companies received construction permits based on incomplete plans and then applied for an operating license, often leading to rebuilding and lengthy delays. The idea for the new system was that companies would submit much more complete design plans for approval, and then receive their operating licenses as construction started. That way, as long as they built exactly what they said they would, the process could move more quickly.

In the meantime, companies like Westinghouse and General Electric were developing a new generation of reactors intended to operate more safely. With the AP1000, for instance, emergency cooling for the reactor mainly relies on natural forces, like gravity, to propel the coolant, rather than relying on mechanical pumps powered by electricity. The problem is that electricity can fail, as it did at Fukushima, which can lead to disastrous overheating in a damaged reactor of an older design.

In addition, Westinghouse was engineering its equipment so that large components of the plants could be made in sections at factories, then welded together and lifted into place with cranes at the construction site. In theory, this approach would save money and time, requiring far less skilled labor than the old, bespoke approach, in which workers assembled more parts onsite.

By 2008, Westinghouse had deals to expand two existing plants with the electric utilities Georgia Power and South Carolina Electric & Gas. Little went as hoped.

CNBC

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