Nulcear Reactors 166 - Nuclear Insurance - Part 1

         I have mentioned insurance for nuclear power plants in previous blog posts but have never really gone into nuclear insurance in detail. At the World Nuclear Association's 2014 Symposium in London, Mark Tetley, the managing director of the power, nuclear and construction division at Lloyd's broker Price Forbes discussed nuclear insurance. "It is my belief that insurers could do more. We could provide cost effective, materially higher financial support for the nuclear industry, reducing the burden of accident costs that currently falls to governments and taxpayers, and thus improving the industry's image," he said.

        There are two types of nuclear insurance for operating nuclear power plants. The first type of insurance covers the plant, building and income stream of the owners. The second kind of nuclear insurance covers payments to victims of nuclear accidents at a plant. This type of nuclear insurance is based on international treaties drawn up when nuclear power was young. An important feature of the treaties is a cap on the liability of a nuclear plant operator for damage caused and harm inflicted by a nuclear accident. Tetley says that the national and local laws  based on these treaties are out of date. Both the nuclear industry and the insurance business have grown enormously since the treaties were implemented.

       In the United States, the Price Anderson Act limits the liability of nuclear plant operators in case of accidents. Once the cost of an accident has passed a half a billion dollars, then additional costs are supposed to be covered by the assets of the owners of the nuclear power plant where the accident occured. Unfortunately, it is not improbable that a company might not be able to pay all the additional costs and would have to declare bankruptcy. In this situation, the additional costs would have to be borne by the U.S. taxpayers.

     Only the first three hundred and seventy five billion dollars of an accident are covered by insurance in the U.S. There is a fund that all U.S. nuclear power plant operators would pay into in the event of a major nuclear accident. Currently, that fund would collect about thirteen billion dollars. Estimates of the cost of the Fukushima accident are currently at forty billion dollars and the estimated cost of the Chernobyl accident in Ukraine is over eighty billion dollars. In light of previous major accidents, the thirteen billion dollar fund of the U.S. is not even nearly enough.

       International treaties on nuclear liability are currently in the process of implements a broader definition of nuclear damage which must be compensated. This includes considering compensation claims for up to thirty years after an accident. Insurers say that they simply cannot afford to offer insurance that would satisfy the new requirements. In addition, different countries have chose different limits on nuclear liability. Belgium caps liability at about a billion and a half dollars while China caps liability at forty five million. This is a huge different. Trying to comply with all the different caps and regulations across the globe is very difficult for international insurance companies.

(See Part 2)    

Geiger Readings for September 19, 2014

Latitude 47.704656 Longitude -122.318745
Ambient office = 78 nanosieverts per hour
Ambient outside = 71 nanosieverts per hour
Soil exposed to rain water = 72 nanosieverts per hour
Lemon from Top Foods = 109 nanosieverts per hour
Tap water = 70 nanosieverts per hour
Filtered water = 60 nanosieverts per hour

Nuclear Reactors 165 - Problems and Trendes in Nuclear Licensing and Permitting in the United Kingdom

         In my last blog post, I talked about the U.S. NRC approving the GE-Hitachi Economic Simplified Boiling Water Reactor design. The whole issue of licensing is complicated with different countries applying different criterion for granting licenses. And inside a particular country, the rules may not be applied consistently. The nuclear industry would prefer to have a more consistent and faster licensing process. This would certainly be more attractive to investors.

        Some licensing and permitting goals are obvious. One of the most important is insuring safety and security. Regulatory agencies want to decrease threats to the environment and other negative possible impacts. There should be transparency and acceptance by all the stakeholders, not just the shareholders. The industry and the regulatory agencies should be efficient. In addition, the nuclear industry would like to facilitate investment.

        According to the nuclear industry, the licensing and permitting of nuclear reactor construction is too long and costly. There are many issues that must be resolved. A site must be selected and its suitability documented. A "licensable entity" must be created. A reactor design must be selected and certified. A supply chain must be created that supports the reactor and satisfies the regulators. Long term commitments must be made with respect to fuel, etc. The community of stakeholders must be involved early in the process and continue to be engaged. And, finally, all the paper work involved with licensing and permitting must be completed, submitted, approved and defended against law suits. The big problem with finding investment lies in the fact that investors must be secured before the licensing and permitting process begins with no guarantee that it will be successful.

        In the United Kingdom, there are many approvals that must be obtained during the process of licensing and constructing a nuclear power reactor. "The first phase includes justification of a reactor design; a Generic Design Assessment; a nuclear site licence application; a funded decommissioning plan; a strategic siting assessment; an environmental impact assessment; a Development Consent Order (DCO) application; consultation with the local community; a generation licence; preliminary site work permission, nuclear insurance; and an environmental permit. The second phase requires satisfying ongoing licence and DCO pre-operation conditions, as well as other consents for materials handling and grid connection."

        There are three new trends with respect to nuclear power reactor licensing and construction. There are vendor-initiated ventures where private companies and consortiums dominate and utilities no longer play a prominent role. Vendors prefer to have a customer lined up before investing in preliminaries. Key milestones need to be coordinated to attract investors. Unlike utilities, some consortium members may want to pull out of the arrangement and there must be an exit strategy for them. A consortium of different entities may have a diversity of goals and internal processes that must be taken into account.

        A second trend is toward setting up new build sites near existing legacy sites. Factors taken into account for the original sites such as seismic stability, water availability and transportation usually remain the same which benefits siting new reactors in the same area. On the other hand, there might be conflict between the safety of the legacy power plant and the new power plant or left over contamination from a previous power plant. The new and old power plants might compete for labor, transportation, grid capacity, etc.

       The third trend has to do with gain the cooperation of the regulatory agencies by engaging the regulators in the commercial licensing and permitting timelines. Changes to governmental planning can serve to improve the predictability of projects. Political goodwill through community engagement can lower the risk of engaging in the licensing and permitting process.

UK nuclear regulatory agency logo:

Geiger Readings for September 18, 2014

Latitude 47.704656 Longitude -122.318745
Ambient office = 52 nanosieverts per hour
Ambient outside = 46 nanosieverts per hour
Soil exposed to rain water = 70 nanosieverts per hour
Carrot from Top Foods = 80 nanosieverts per hour
Tap water = 103 nanosieverts per hour
Filtered water = 91 nanosieverts per hour

Nuclear Reactors 164 - The NRC Certifies the New GE-HItachi Economical Boiling Water Reactor Design

          New nuclear reactor designs are constantly being developed. Any design that will be built in the United States has to get approval from the NRC. That approval is a critical step in the construction of any new reactor. The NRC has just approved the design of the GE-Hitachi Nuclear Energy's Economic Simplified Boiling-water Reactor (ESBWR) for use in the U.S. Once the new certification rule is published in the U.S. Federal Register, thirty days later the rule goes into effect.

         The ESBWR is designed to generate about one and one half gigawatts of electricity. The design includes what is called natural circulating coolant. There are passive safety features involved which would be able to cool down the reactor automatically without human involvement in case of a malfunction or a serious accident. The design includes a taller reactor vessel, a shorter core and improved water flow through the vessel all of which serve to enhance natural circulation of water. It also includes an isolated condenser system that can control the level of the water and also dissipate heat from radioactive decay while the reactor vessel is pressurized. And, finally, if the reactor pressure falls, there is a gravity driven cooling system that will maintain water levels. GE-Hitachi first submitted the ESBWR design to the NRC in 2005.

         The NRC carried out a thorough engineering evaluation on the design and issued a safety evaluation report in early 2011. There was a draft certification rule notice that was published following the report. Included in the notice were public comments and petitions being circulated by activists. Following the draft certification notice, the NRC requested additional information about the steam dryer in the design. The steam dryer prevents excess moisture from causing damage to the turbine that generates the electricity in a nuclear power plant. In May of 2014, the NRC issued a supplement to the original draft certification notice to take into account changes in the analysis of the steam dryer in the design. There were no public comments about the supplemental material added to the original draft certification notice.

         The NRC is considering two combined construction and operating applications that include the new GE-Hitachi reactor design. Detroit Edison wants to add a third reactor to the Fermi plant in Monroe County, Michigan. Dominion Virginia Power is asking for a license to add a third reactor to the North Anna power plant in Louisa County, Virginia. It is expected that the NRC will issue a license for the new Fermi reactor in 2015 and a license for the new North Anna reactor in 2016.

        In addition to the certification of the new ESBWR design, the NRC has certified four other new reactor designs. These include the Advanced Boiling Water Reactor, the System 80+, the AP600 and the AP1000. The Chinese are developing their own reactor design based on the AP1000. There are several reactor construction projects around the globe which involve the AP1000 design.

GE-Hitachi Nuclear Energy's Economic Simplified Boiling-water Reactor design:

Geiger Readings for September 17, 2014

Latitude 47.704656 Longitude -122.318745
Ambient office = 102 nanosieverts per hour
Ambient outside = 128 nanosieverts per hour
Soil exposed to rain water = 129 nanosieverts per hour
Peach from Top Foods = 77 nanosieverts per hour
Tap water = 143 nanosieverts per hour
Filtered water = 126 nanosieverts per hour

Nuclear Reactors 163 - U.S. Taxpayer Will Pay Dearly for Our Use of Nuclear Power

         I have stated in previous blogs that when you consider all the different factors such as economic, political, social, technological, public health and environmental, it is obvious that nuclear energy is not a good way to produce electricity.  I have often said that the only reason nuclear power is still being discussed as a viable power source is because there is so much money involved in their construction and operation. The nuclear industry has been very successful at offloading liabilities and pocketing profits with the help of a bought and paid for Congress and an industry friendly Nuclear Regulatory Agency.

       In South Carolina, the state regulatory agency has allowed the company constructing two new nuclear reactors to pass the cost overruns along to the utility customers even though the unfinished plants have generated no electricity. Some states such as Florida have or had laws on the books that would allow nuclear power companies to charge their customers for the construction costs of nuclear power plants that were never completed and never generated electricity.

       If the company building new reactors in Georgia happens to go bankrupt, Congress has given them generous loan guarantees which means that the construction costs of the abandon reactor projects will be passed along to the U.S. taxpayers.

       If there should happen to be a major nuclear accident in the U.S. as serious as the March 11, 2013 disaster at Fukushima, the companies responsible are insulated from responsibility for the billions of dollars that the accident will ultimately cost. The Price-Anderson Act requires that each operating nuclear power plant purchase the maximum insurance that is available which is three hundred and seventy five million dollars. Beyond that, if an accident occurs at nuclear plant and the costs exceed the insurance, power plant owners  are obligated to pay one hundred and twenty one million dollars into a national fund that will be used to pay for additional costs of the accident. If the cost of an accident exceeds the four hundred and ninety million dollars from the insurance coverage and the extra money from the nuclear power operator, then the Congress can require additional money from the nuclear power operator. If the cost of an accident exceeds the ability of a company to pay, then the U.S. taxpayer will pay the additional cost.

       In 2013, four out of the one hundred and four U.S. power reactors were shut down for a variety of reasons including being too expensive to repair or being uncompetitive in the energy market. Activists are calling for the last nuclear power plant in California to be shut down. Most of the remaining nuclear power reactors in the U.S. are reaching the end of their licensed life spans. More will be shut down because they will be too expensive to repair or uncompetitive.

        Russia, China, France and Japan are moving aggressively to make nuclear technology exports a major component of their international trade. Russia and China are committed to building dozens of new reactors in the near future. Fortunately, for all the problems that the U.S. has with nuclear power, embarking on a major building and exporting program for nuclear reactors is not one of them. The electricity supplied by nuclear reactors in the U.S. can and should be replaced by renewables and conservation as soon as possible. In any case, I am sure that the U.S. taxpayer will still wind up paying dearly for our use of nuclear power.

Geiger Readings for September 16, 2014

Latitude 47.704656 Longitude -122.318745
Ambient office = 95 nanosieverts per hour
Ambient outside = 83 nanosieverts per hour
Soil exposed to rain water = 60 nanosieverts per hour
Mango from Top Foods = 64 nanosieverts per hour
Tap water = 112 nanosieverts per hour
Filtered water = 97 nanosieverts per hour

Nuclear Weapons 92 - Los Almos National Laboratory Fires an Employee for Publication of an Article of Nuclear Disarmament

         James Doyle spent seventeen years as a nuclear policy specialist at the U.S. Los Alamos National Laboratory (LANL). The LANL receives about two billion dollars each year for work that includes nuclear weapons development. Last year Doyle published an article titled "Why Eliminate Nuclear Weapons?" in the journal Survival: Global Politics and Strategy. This journal is published by the International Institute for Strategic Studies in the U.K. Following the publication of this article, Doyle lost his job at LANL.

         Doyle's article pointed out that nuclear weapons no longer provided strategic utility or value as a deterrent for war. He said that eliminating nuclear weapons would strongly increase international security. He also said that he thought that now was a good time to hold serious discussions about global nuclear disarmament. Although President Obama supports nuclear disarmament, he did not think that it would happen in his lifetime. Doyle suggested that it should be possible to achieve total nuclear armament in thirty four years which would mean that the world would have eliminated nuclear weapons before the one hundredth anniversary of the dropping of atomic bombs on Hiroshima and Nagasaki at the end of the Second World War. There are still advocate for nuclear weapons but many respected voices in the world of global security agree publicly with the ideas expressed in Doyle's article.

         Doyle's dismissal from LANL is detailed in a report by the Center for Public Integrity. Because Doyle wrote his article at home outside of working hours, he was not obligated to show the article to LANL for what is called a "classification" review. However, Doyle did submit the article to LANL for review. One of Doyle's coworkers said that while the scientists at LANL had no problem with the article, LANL management was upset. Doyle published his article on  February 1st of 2013, having been told by the staff who handled classification reviews that there was no classified information in his article.

         Around the time of the publication of the article, the LANL and their Republican allies on the House Armed Services Committee were trying to get funding for a new multibillion dollar facility at LANL. This new facility would manufacture the small plutonium spheres that form the heart of nuclear warheads. Despite resistance against the new facility from the Obama administration, a Republican Congressman managed to get an amendment attached to the bill for the project. According to the amendment, the facility had to be completed by 2024. Obama did sign the bill including the amendment. Appropriation of funds for the facility is still being debated. Obviously, a call for total nuclear disarmament could have a negative effect on support for the planned facility.

         Five days after the article was published, Doyle was told that senior LANL managers wanted copies of all of the more than one hundred articles that he had written during his time at the LANL. On that same day, Doyle was told that his article did contain classified information. Seven days after the publication of the article, the head of the classification review department told Doyle that his article needed to be withdrawn from publication because it contained classified information. Doyle was forced to give up his home computer so that all copies of his article could be erased. In addition, he lost his high-level security clearance. Doyle fought back for several months, protesting his treatment and the reclassification of his article by the LANL.

        Doyle was ultimate fired from his position at LANL on July 8th, 2014. LANL representatives claim that it all just part of a regular planned program of layoffs at the lab. Doyle and his supporters are skeptical of the LANL excuse and say that Doyle was fired improperly for political reasons. After all, his article was supporting the publicly expressed policy position of the U.S. President with respect to nuclear disarmament.

Los Alamos Nuclear Laboratory:

Geiger Readings for September 15, 2014

Latitude 47.704656 Longitude -122.318745
Ambient office = 88 nanosieverts per hour
Ambient outside = 119 nanosieverts per hour
Soil exposed to rain water = 125 nanosieverts per hour
Bartlett pear from Top Foods = 51 nanosieverts per hour
Tap water = 104 nanosieverts per hour
Filtered water = 92 nanosieverts per hour