Monthly Archives: October 2010

25th Carnival of Nuclear Energy Blogs

The 25th Carnival of Nuclear Energy Blogs is up at Yes Vermont Yankee.   It features blog posts from the leading U.S. nuclear bloggers.  It is a roundup of featured content from the nation’s leading pro-nuclear blogs. If you want to hear the voice of the nuclear renaissance, this is where you will find it.

Past editions have been hosted at NEI Nuclear Notes, Atomic Insights, Idaho Samizdat, Next Big Future, and several other popular nuclear energy blogs.

If you have a pro-nuclear energy blog, and would like to host an edition of the Carnival, please contact Brian Wang at Next Big Future to get on the rotation.

This is a great collaborative effort which deserves your support. Please post a Tweet, a Facebook entry, or a link on your website or blog to support the carnival.

Thank You.

The 21st Green Business Blog Carnival

The 21st Carnival of Green Business blogs is up at sustainablog!  Since July 2003, sustainablog has been providing information on environmental and economic sustainability, green and sustainable business, and environmental politics.  The Carnival of Green Business Blogs is a roundup of featured content highlighting news, opinions, and insights on issues of interest to the green business community.

If you have a blog that covers issues of interest to green businesses, and would like to submit an article to the Carnival, please visit the Green Business Blog Carnival submission page.  If you are interested in hosting a Green Business Blog Carnival, visit the Green Business Blog Carnival Calendar at sustainablog.

Thank you.

Small Nuclear Dow? Wall Street primer on SMR financing

By Tamar Cerafici

Infocast held a gabfest for small nuclear proponents last week, promising an opportunity for small modular reactor (SMR) vendors and suppliers to understand how the future of their industry would be shaped by banks and venture capital firms. It’s high time that the SMR bandwagon includes the financiers who’ll really drive the business.

I wasn’t at the gabfest, but I really wanted to be. After all, I’m in the same boat as the SMRs: I’m starting my own business and advising other startups, and I wanted to learn what big finance and venture capital had to tell me that the policy wonks and promoters weren’t telling me. Fate intervened, however, and I had to rely on the kindness of colleagues and friends to update me on the conversations there.

Here is the lukewarm glass of water that the financial industry (in the form of a lone Goldman Sachs representative and several venture capital firms) threw in the face of the industry:

  • To paraphrase Ben Franklin, hang together, or most assuredly you will all hang separately.

    Mr. Franklin

Without cooperation between vendors, component manufacturers, and constructors, the Holy Grail of SMR–Nuclear Regulatory Commission licensing–remains a pipe dream. Without licensing, Wall Street’s reception of requests for funding will be cold, if not icy. Without major funding, there is no industry.

STARK ECONOMIC REALITY – Traditional models just don’t’ work
U.S. SMR vendors appear to rely too much on traditional models for selling their nuclear product. For the traditional purchaser–a utility–the fees and insurance costs get passed through to the ratepayer. As long as these types of operating expenses are prudent and shared equitably across rate-paying regions and types of ratepayers, the actual amounts aren’t too important. The drawback is that there are few traditional utilities in the market for nuclear power, especially now, when natural gas is cheap.

In a deregulated marketplace–like Maryland–the last few years have been extraordinarily tough on this model. The situation argues the case for a consortium to manage the financial and generic issues that will arise to facilitate project financing as the next phase of SMR development. Unless the number of utilities interested in nuclear power dramatically increase, generators/developers will not take all the risk on the project, and state regulators will not approve the “pass-through” of plant costs to the ratepayer. The round of late-term legislation shows that utilities, vendors, and constructors must be in a position to take equity in a project.

USE PROJECT FINANCING
Long- term financial success for the industry depends on project finance, which is the common finance model for the industrial world. In a project financing, the deal is structured so that all the main players take profit from the revenue of the project. Unlike the traditional utility that lets the vendor off the hook once the cost-plus contracts are signed, in a project finance model the vendor must be willing to invest in every sale it makes. One option is to be able to invest funds in the project and own equity in every SMR that is built. Wall Street likes this option, because it spreads the risk.

The money tree

The new nuclear economy–fueled by Wall Street–wants the vendor to be a cost partner in the entire project. This kind of enhanced participation will be vital to the success of any SMR technology. It’s not fancy, nor is it hard. Participants in this new economy must follow a financing and production model that’s as old as the Model T.

WHAT WOULD HENRY FORD DO?
At the end of the day, the success of the SMR industry must hinge on its adoption of an organization. It must be a for-profit, industrialized model that Wall Street understands. Say, like Henry Ford’s.

Ford

Ford knew that his car’s success depended on the entire industrial process. He built a consortium that included companies with raw materials, parts and body production, assembly, production, and sales. It’s a model that continues to work today. In investment banking, it’s called a roll-up. Wall Street understands a roll-up. The industry needs a roll-up.

WHY CAN’T WE ALL JUST GET ALONG?
The industry’s success under this model depends utterly on the willingness of SMR developers to work together to resolve common design, financing, and political issues. SMRs have the relatively short fabrication times and the flexibility to switch between customers that mimic the flexibility of combined cycle natural gas (CCNG) plants.

Ford's Model T

If the SMR industry cooperates in building a financial model that mimics the wrapped-warranty, project-finance package used for CCNGs, SMRs have the potential to capture that market. In a project financing model, total operational fee costs for such things as NRC fees, the Price-Anderson Act, and other insurance type costs are important because all the participates derive their profit from the revenue of the project.

The ultimate success of the industry depends on its willingness to work with other SMR developers to develop a viable project finance vehicle. Discussions with industrial leaders and Wall Street financiers tell us that this cooperation has been essential to the long-term viability of conventional reactor and Gen-III+ technology. A consortium of developers is an ideal mechanism to create the favorable business climate needed for a healthy SMR future.

Cerafici

Tamar Cerafici is the owner of The Cerafici Law Firm, which advises clients who are building the next generation of nuclear plants. Her practice focuses on project finance, environment, and policy matters. She is a contributor to the ANS Nuclear Cafe.

Purdue ANS participates in Lugar Collegiate Energy Summit

On September 17, the Purdue University American Nuclear Society Student Section (Purdue ANS) participated in the 2nd Annual Lugar Collegiate Energy Summit at the Indianapolis Museum of Art. Fifteen Purdue ANS members were among the 200 participants at this informative summit focused on the energy challenges facing the nation and energy security. Students attended workshops to learn how to run successful community programs about energy issues. Sen. Richard Lugar (R.,Ind.) gave a speech on energy options, and Purdue ANS members challenged him with questions about nuclear energy options.

Purdue ANS Exhibit at the Lugar Collegiate Energy Summit

Purdue ANS hosted an exhibit at the summit where members talked to other students and teachers about the benefits of nuclear power. According to participants, the summit was a productive outreach opportunity. The ANS members’ enthusiasm and representation kept nuclear energy on the discussion agenda.

“Attending this event gave us great ideas about how to reach out to our community and campus about energy issues,” said Patrick Wright, Purdue ANS Outreach chair. “Our presence at the Lugar Collegiate Energy Summit also made an important statement about our commitment to clean energy and nuclear power. Without the Purdue ANS presence, nuclear energy would have been barely–or not at all–mentioned during the summit. Our strong participation at this event had a positive impact on Senatar Lugar and his staff, along with all of the students, teachers, and others from the community who attended.”

ANS headquarters has traveling exhibits on various nuclear topics available to ANS local sections and student sections. For more information, please visit the ANS Web site or email ANS Outreach.

Election 2010: Breaking the nuclear deadlock?

By U.S. Representative Judy Biggert (R., Ill.-13)

Over the next 25 years, the demand for electricity in the United States is expected to rise by 30 percent. This is a trend that will almost certainly accelerate as we move increasingly toward an electricity-based transportation infrastructure and plug-in hybrids and we replace fossil fuels.  In fact, as the lead Republican sponsor of the Electric Drive Vehicle Deployment Act of 2010, I’m pushing for exactly that. This bipartisan bill will invest in the development, installation, and deployment of advanced electric vehicle infrastructure, and help put more electric vehicles on the roads.

To meet this rapidly rising demand for power, everyone recognizes that we must expand our domestic electricity production and create affordable, reliable electricity. Nuclear power is the only way to do this.

Yet, Washington is at a standstill. Advocates and opponents of cap-and-trade continue a bitter battle over the best way to curb greenhouse gas emissions without plunging America’s economy into a vicious tailspin. This battle has resulted in a standstill on other energy priorities, including progress on the most reliable, plentiful source of carbon-free energy–nuclear power. No matter how you dice it, the upcoming election promises to be a game changer. Americans are frustrated with Washington and they want a new direction. The make-up of the House and Senate will shift, and leaders in Washington will have no choice but to adapt and respond to the new voices that arrive in Congress. Those voices–whether inspired by calls for energy independence or environmental stewardship–are increasingly pro-nuclear. And with cap-and-trade opponents positioned for gains in November, the proposal may be D.O.A. in the new Congress.

Hyperion nuclear power module

The resulting vacuum in the energy debate should be seen as an opportunity for advocates of nuclear energy. Nuclear power offers something Americans desperately want–concrete progress on a bipartisan priority.  Instead of deadlock, the new Congress should set aside old debates with petrified battle lines, and push forward on bipartisan legislation like H.R. 5164, a bill I cosponsored with Rep. Jason Altmire (D., Pa.-04) that would support the deployment of small modular nuclear reactors. A complement to existing large-scale reactors, small modular reactors require less time to construct and are based on current reactor designs, thereby reducing the burdensome licensing process. This is an ideal solution for growing communities and cash-strapped utilities that need extra generation capacity at a fraction of the cost.

Argonne National Laboratory

This is just one idea. We should work with renewed vigor on advancing research to close the nuclear fuel cycle and recycle spent nuclear fuel. In my home district in Illinois, scientists and engineers at Argonne National Laboratory lead the nation in research and development for nuclear fuel recycling. Recycling is not just important for the reduction of waste created, but also for the conservation of worldwide uranium resources. And reducing the volume and toxicity of waste is a priority that appeals to all sides of the debate.

Regardless of which party controls the House and Senate after November 2nd, the dynamics of Washington’s energy debate will change. The stage has been set for a nuclear renaissance that can lead America to greater energy independence while reducing greenhouse gas emissions and our reliance on foreign oil. But Congress needs to hear the vocal support and encouragement of America’s scientists, engineers, and energy experts. So make sure those freshmen Congressmen and Senators arrive in Washington ready to take advantage of an atomic opportunity–not contribute to a stalemate that has lasted far too long.

Biggert

U.S. Rep. Biggert (R-IL-13) is a senior member of the House Science and Technology Committee and co-chair of the House Research and Development Caucus. She is a contributor to the ANS Nuclear Cafe.

The View from Vermont

The View _OF_ Vermont

By Meredith Angwin

Instead of the View From Vermont, today’s post might be called the View Of Vermont. I’ve been putting a lot of mileage on my car. I live near White River Junction, and during the course of this week, I have visited Brattleboro, St. Johnsbury, Barre, Norwich, and Hartland. (At least Norwich and Hartland are neighboring townships.) My friend Howard Shaffer was in a debate at Castleton College, near Rutland.

No, I am not a leaf-peeper, though the leaves are truly beautiful and the leaf-peepers are still all over the roads. In many ways, I’m lucky to be driving so much at this season. People have asked me to talk about Vermont Yankee, and I am willing. The red-gold trees are a bonus!

Preaching to the Choir?

As Howard and I have noted in previous posts, the Vermont Yankee nuclear power plant is a huge issue in the Vermont elections. The good news is that people in Vermont are more aware of the plant and want to learn about it. Many people are Vermont Yankee supporters. They need to know how to answer the allegations of the opponents. I have spoken mostly to Rotary Clubs and business associations. Our supporters are full of questions:

  • “People say the plant was only designed to run for 40 years. I don’t know how to answer that one.”
  • “How dangerous is tritium?”
  • “What do I say when they bring up Chernobyl?”

Vermont Yankee

This has led me to realize what a truly terrible job of education the nuclear industry has done. Even our supporters, people who want to keep Vermont  Yankee running, people who want to build a new nuclear plant to take its place in 20 years…. even these people know very little about nuclear power. In answering their questions, I explained the following:

  • Plants are licensed for 40 years as a matter of prudence, it’s not a “sell-by” date. Many power plants (coal plants) have been running more than 40 years. Nuclear plant equipment safety and conditions are under constant review.
  • The exit sign overhead contains several curies of tritium, far more than was spilled at Vermont Yankee. Tritium is a very weak source of radiation, and drinking tritium-containing well water at the plant is far less dangerous than eating a banana.
  • Chernobyl can’t happen here. Graphite moderators can burn, and our LWRs can’t burn.

In other words, “Nuclear power 101” was all that was needed to answer their questions. The people in these audiences were civic-minded, college-educated, and successful in their careers. Nobody had ever educated them about nuclear power, however. I chose the word “education” carefully. The lack of knowledge among our supporters goes beyond whether or not the nuclear industry’s PR outreach is good enough.

It is important to do outreach to those who are undecided or even against nuclear. But most importantly, we need to help our own supporters. People learn from their neighbors and friends. We need to help our supporters be well-educated advocates.

In my opinion, when you talk to supporters, you are not preaching to the choir. You encourage everybody when you help current supporters gain knowledge. Then these supporters can make an effective case to their friends. Their friends are the future supporters.

Start Young

I also believe we need strong outreach and education for younger people. Students today are concerned with global warming the way that students in my day were concerned with civil rights or air pollution.  The students today, therefore, are a receptive audience for our message. We need to go into high schools with a science talk or a debate. We need to go on college campuses and debate with the PIRG groups and so forth.

In that sense, my friend Howard Shaffer’s recent debate was more important than anything I did with business groups. On  October 20,  Shaffer debated Tyson Slocum of Public Citizen at Castleton State College, near Rutland. Hurray for Howard!

Angwin

Meredith Angwin is the founder of Carnot Communications, which helps firms to communicate technical matters. She specialized in mineral chemistry as a graduate student at the University of Chicago. Later, she led geothermal research projects and was a project manager in the geothermal group at the Electric Power Research Institute (EPRI).  She is an inventor on several patents.  Angwin serves as a commissioner in the Hartford Energy Commission, Hartford, Vt.

Angwin is a long-time member of the American Nuclear Society and coordinator of the Energy Education Project. She is a frequent contributor to the ANS Nuclear Cafe.

President Obama Invites the Nation to the USA Science & Engineering Festival