South Korea to Boost Nuclear Energy Exports

EDF to Release Tender for Two-to-Six 1600 MWe EPRs to Be Built in France

NuScale Inks MOU with CEZ for SMRs in Czech Republic

Westinghouse to Acquire Rolls Royce Civil Nuclear Business Unit

South Korea to Boost Nuclear Energy Exports

(Business Korea) The South Korean government has decided to promote nuclear technology exports to revive the domestic nuclear power industry, which is having difficulty due to the domestic nuclear phase-out policy.

The export strategy represents a shift by the current administration which so far has taken an anti-nuclear stance.

It has tried and failed to stop the completion of plants that were already under construction and has targeted complete phase out of all commercial nuclear reactors by 2050.

Up tp now South Korean nuclear power companies have pitched their tent in the realm of building commercial nuclear power plants. Four South Korean designed PWR type 1400 MWe nuclear reactors are under construction in the United Arab Emirates with the first unit expected to be commissioned in 2020.

A key change in the country’s export strategy is to shift from construction of nuclear power plants overseas to the selling value-added support for the full cycle of nuclear power generation ranging from plant operation to maintenance and decommissioning.

The government will actively help small and medium-sized companies move into the global nuclear power market and export their technologies as part of the global nuclear component supply chain.

This effort wil be in addition to ongoing support for state-run nuclear power companies, such as Korea Electric Power Corp. (KEPCO) and Korea Hydro & Nuclear Power Co., and conglomerates, including Doosan Heavy Industries & Construction Co., which are the main players in the nuclear export industry.

These same South Korean firms are also planning to enter the reactor decommissioning business and are actively exploring opportunities in the U.S. Reactors in the U.S. have been closing, some well before their time, due to the low cost of natural gas. More closures are expected as long the the price of gas stays low.

These firms have not won after market business deals for nuclear fuel supply, operation and maintenance of nuclear power plants, and replacement of components and systems such as generators and steam systems. So far, South Korea has not booked any other new nuclear export deals for either new full size reactors or services since the UAE project.

South Korea has been involved in a joint development project with Saudi Arabia since 2011 to deploy a 100 MW SMR. Last week World Nuclear News reported that South Korea and Saudi Arabia have agreed to collaborate on the commercialization of the Korean-designed SMART small modular reactor. Under the agreement, they will work together to license and construct the first such unit in Saudi Arabia. The agreement also calls for manufacturing the SMRs for export.

Rationale for the Shift in Strategy

The Ministry of Trade, Industry and Energy announced its new export strategy during a meeting held at the head office of Korea Trade Insurance Corp. in Gwanghwamun, Seoul, on 09/19/19.

According to Platts, smaller companies and medium-sized companies account for a large number of the nuclear power companies in South Korea, in terms providing compoents to supply chains, but big corporations have dominated the earnings from exports. Among the 92 major nuclear power equipment producers in the country, only 14 have the experience of exporting their products to global markets. Clearly, the government has it in mind to significantly grow these numbers.

The government has increased next year’s research and development (R&D) budget for smaller nuclear power companies by 33 percent to US$118.59 million and will expand loans with favorable terms to smaller firms.

Despite these increases in funding, the South Korean government faces a fundamental challenge for its new export strategy. Countries that might consider the new 1400 MW PWR design will ask why South Korea’s exports are not supported by continuing investments in the same design at home.

The credibility of the design for export will hinge on whether the current administration’s ill-advised energy policy will yet again try to throttle the commercial domestic market. If it does, it might just as well roll up the sidewalks for the export strategy.

Prospects for Export to the U.S.

To say that KHNP faces an uphill climb to sell their newly certified reactor in the U.S. is probably akin to a diplomatic communique at its finest. More likely, KHNP wanted the NRC design certification because on an international basis it is considered to be the “gold standard” for safety reviews and therefore it is a confidence builder in any potential export deals.

A report in Business Korea earlier this year noted that since the NRC’s design approval is recognized as an indicator of technological reliability by the global nuclear power industry, it will strengthen the overall export base for Korean nuclear power plants.

KHNP is also reported to be on track to obtaining a European design approval on the reactor as a standard design for the EU-APR. A version of the APR1400 tailored to Europe passed the screening of the European certification body in October last year.

France’s EDF Wants to Build Up to Six EPRs

in France Starting in 2020

(French English language wire services) EDF has called for civil engineering bids for a two and as many as six EPR type1600 MW nuclear units in France, according to a note published in the EU’s Official Journal.

The EPR 2 is the successor unit to the 1,650 MW EPR currently being built in Finland, France and now the UK at Hinkley Point C. The contract will be based on yet to be published specifications and digital plans to be provided by the French utility for the new EPR 2. EDF is reported to be developing the EPR 2 pressurized water reactor with Framatome.

The “nuclear plant of tomorrow” is a simplification of the current EPR design which has been criticized as being too complex. Evidence of this is seen in the many costly delays of construction of the first two units – one in Finland and the other in France at at Olikiluoto-3 and Flamanville-3.

“The goal of the EPR 2 project is to have a competitive model on the new production means market by 2030,” EDF has said.

Without naming any of them at this time the most likely locations will be adjacent to existing reactors. The units are to be built “on one of the nuclear sites in operation in France,” EDF said.

The French regional broadcaster France 3 reported EDF has made land purchases next to existing reactor sites at Belleville and Chinon, with an EDF spokesperson quoted as saying the sites could be used for unspecified future low-carbon power generation projects.

EDF tenders will enable it to “make qualified decision”

(Montel) EDF’s “exploratory tenders” to build two new 1.6 GW European pressurized reactors (EPR) will enable it to “make a qualified decision about the feasibility of building new reactors”, the utility told Montel.

“In order to do so, we are looking for partners who will help us do the costing,” the spokesman from the French utility added late on Wednesday, in line with reports in the press earlier this morning.

“Today, no decisions have been made and calls for tenders are only issued to prepare a decision.”

In 2018, a classified report, ordered by former French energy minister Nicolas Hulot, and revealed by French daily Les Echos, suggested the country should build six new EPR reactors from 2025 on to maintain the share of nuclear energy at 50% after 2035.

The call for tenders comes as a surprise as the French government has said that, as part of its energy policy, it would not decide whether to build new EPRs before EDF’s new generation EPR unit, until construction in Flamanville, is operational.

NuScale Partners with CEZ to Explore

SMR Deployment in the Czech Republic

The companies will share technical expertise and explore potential of NuScale’s SMR as a long-term clean energy option for CEZ

NuScale Power announced that it has signed a memorandum of understanding (MOU) with CEZ Group, a state owned Czech utility, to explore applications for NuScale’s small modular reactor (SMR) as a long-term energy solution in the Czech Republic. The agreement marks the latest indication of of international interest in NuScale’s technology.

The agreement calls for a sharing of nuclear and technical expertise between the two companies. Specifically, NuScale and ČEZ will exchange information relating to nuclear supply chain development, construction and operation and maintenance.

The agreement comes as CEZ continues a broad-based evaluation of potential nuclear energy solutions, including the construction of SMRs and refurbishments to existing nuclear facilities. Nuclear power currently generates roughly one-third of all electricity in the Czech Republic. CEZ currently operates two nuclear power plants in the country.

The utility has struggled in recent years to organize new builds of full size reactors at Temelin and Dokavany where is operated Russian built units. Efforts to develop the financing for a new build at either site have hinged on the government’s willingness to offer rate guarantees to CEZ for the electricity that would be generated by the new plants.

NuScale Key Investor Fluor Hits Financial Headwinds

NuScale_Power investor Fluor highlights in a press statement the need for “additional investor interest” in 2020 in NuScale to maintain progress.

The company told Engineering News Record a strategic review evaluated the contractor’s “entire portfolio of businesses,” including its Stork industrial unit acquired in 2015, its COOEC-Fluor Heavy Industries business, and the investment it has made in small nuclear reactor technology firm NuScale.

Fluor said in its news release that commitments from new investors Doosan Heavy Industries & Construction and Sargent & Lundy, subject to regulatory approval, are expected to allow the funding of NuScale activities for the remainder of this year. That’s not much time since it is now October.

Recent milestones achieved by NuScale have generated additional investor interest that is expected to offset 2020 funding requirements. The company told the Dallas Monring News the intent of attracting new investors is to reduce expenses. NuScae noted on its website that as of the end of 2017, Fluor had invested $475 million in NuScale. The initial agreement to position Fluor as a key equity investor in the SMR startup was inked in 2011.

Fluor’s Strategic Review

As a result of the strategic review, Fluor concluded that the divestitures of select businesses will simultaneously improve the financial stability of the company and allow the remaining businesses to refocus on engineering, construction and maintenance services in core markets.

The company is initiating plans to sell its construction equipment rental company (AMECO) and its government business, and to monetize surplus real estate and non-core investments. Fluor anticipates these actions to generate in excess of $1 billion in aggregate proceeds.b

Fluor’s stock fell on 9/24/19 from $20.70 to $18.68 mostly on news of a significantly decreased dividend, by -52%, to stockholders. The 52-week high was $60.60 and the 52-week low was $16.25 which means the stock is now trading close to the lower number. Revenue in 2018 was $19.7 billion.

NuScale Has Benefited from Federal Government Funding

In 2013, NuScale Power was selected as the sole winner of the second round of the Department of Energy’s (DOE) competitively-bid, $226 million, five-year, financial assistance award to develop nuclear SMR technology, and subsequently in 2015, the DOE awarded a $16.6 million award to NuScale Power for the preparation of a combined Construction and Operating License Application (COLA) for NuScale’s first customer, the Utah Associated Municipal Power Systems’ (UAMPS) Carbon Free Power Project (CFPP). Work under this award continues.

In 2018, in a sign of continued support, the U.S. Department of Energy’s Office of Nuclear Energy awarded NuScale $40 million in cost-sharing financial assistance under its “U.S. Industry Opportunities for Advanced Nuclear Technology Development” funding opportunity. The federal award supports early-stage research and development and the industry’s acceleration of these technologies to promote U.S. energy independence, energy dominance, electricity grid resiliency, national security, and clean baseload power.

UAMPS is planning to develop a NuScale 12-module reference plant in Idaho with commercial operation of the first module in 2026. UAMPS has selected a preferred site at the Idaho National Laboratory through a site-use agreement with the DOE.

NuScale NRC Review Status

NuScale’s technology is the world’s first and only SMR to undergo design certification review by the U.S. Nuclear Regulatory Commission (NRC). Last month, the NRC completed phases 2 and 3 of its review and is scheduled to complete its review of NuScale’s design in September 2020.

Westinghouse Announces Acquisition

of Rolls Royce Civil Nuclear Business Unit

(NucNet) US-based Westinghouse Electric Company has announced it will take over UK-based Rolls-Royce’s Civil Nuclear Systems and Services business in North America with the aim of expanding its global capabilities in digital, engineering services, plant automation and monitoring systems, field services and manufacturing.

In a separate statement, Rolls-Royce said the sale comprises civil nuclear services businesses in the US and Canada along with sites at Mondragon, France, and Gateshead, UK, which are currently part of our Power Systems business unit.

Rolls-Royce said the deal does not include the instrumentation and controls business based in Grenoble, France, and the UK nuclear new build operations or small modular reactor activities.

Patrick Fragman, president and chief executive officer of Westinghouse, said the acquisition is an important step in the company’s growth strategy.

According to Westinghouse, the acquisition of Rolls-Royce’s businesses is expected to expand Westinghouse’s operating plant services capabilities and boost the company’s digital innovation, among others.

No financial details about the deal have been disclosed by either firm. Civil nuclear formed 5% of Rolls-Royce’s power systems business in 2018 according to the company’s annual report, accounting for just over £174m of power systems’ nearly £3.5bn underlying revenue, helping the sector have an operating profit of £317m.

Westinghouse is owned by a Brookfield, Canadian private equity fund which acquired the firm from Toshiba for $4.6 billion. A key investor in the fund is the sovereign wealth fund of Qatar.

Westinghouse announced in July the acquisition of NA Engineering Associates Inc., a Canadian-based provider of comprehensive engineering solutions including significant nuclear expertise. This acquisition supports Westinghouse’s strategic growth initiatives by expanding the company’s footprint in Canada.

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