It has been said that one of the most dangerous phrases in the English language is, "This time it’s different." The phrase makes investors, divorcees, and policy-makers nervous, and for good reason: Often, it isn’t true. Version 2.0 of anything—investments, marriages, public policies—rarely turns out better than the first iteration.

What about nuclear power? The so-called "nuclear renaissance" has been discussed and debated at conferences and in industry publications for several years. A lot of important changes have been made in the nuclear project design, procurement, and licensing processes in recent years. These changes should lead to better results as the United States prepares to build its first new nuclear generators in more than 30 years.

"The one-stop licensing process at the U.S. Nuclear Regulatory Commission (NRC) is a big improvement" over the way that nuclear generators were licensed in the 1960s and 1970s, when utilities had to obtain separate construction and operating licenses, according to Joe Williams, construction manager for new plant construction at the Tennessee Valley Authority. That two-stop licensing process gave people who opposed nuclear power multiple opportunities to delay or stop construction or operation of the multibillion-dollar facilities, he said.

"Organized opposition to nuclear power was a significant hurdle" that nuclear power had to overcome during the 1970s, Williams said, but "the one-stop licensing process will be a big step in getting issues heard and resolved early."

Other improvements to the engineering and construction process include advanced certification of standardized reactor designs, innovative approaches to construction and supply-chain management, and a requirement that nuclear generators have at least 90% of their design completed prior to any concrete being poured for the project, said Dennis Demoss, P.E., a senior vice president and project director with Sargent & Lundy LLC of Overland Park, Kan. "We’re trying to learn from the past." When nuclear plants were being built in the U.S. during the 1960s and 1970s, reactor-design changes or safety modifications often were made during the construction process, which meant delays and cost overruns as the changes were incorporated into the construction process.

In addition, nuclear utilities, national craft labor organizations, and engineering, procurement, and construction (EPC) firms have been working for several years to ensure there is an adequate supply of skilled craft labor to build the next generation of nuclear power plants.

So far, two reactor designs—the Westinghouse AP 1000 and the GE-Hitachi-Toshiba Advanced Boiling Water Reactor (ABWR)—have been certified by the NRC, although the NRC is taking another look at the AP1000 after Westinghouse made some design changes. The NRC is reviewing other nuclear reactor designs from Areva, Mitsubishi, and the GE-Hitachi-Toshiba consortium, according to Demoss. The NRC has said it has serious problems with the instrumentation and control design of the Areva machine.

Atlanta’s Southern Company is building a two-unit expansion of the Vogtle Plant using the Westinghouse AP-1000 reactor. Southern has won a conditional $8.3 billion in federal loan guarantee to build Vogtle units 3 and 4, although the details of the financing have not yet been ironed out. One of the key conditions is the final NRC approval of the reactor design, without which the project would be back at the beginning of a multi-year process.

Southern has estimated that the two-unit Vogtle expansion will cost about $14 billion to build. Preliminary site work for the units began last year, but actual construction cannot begin until Southern receives a combined construction and operating license from the NRC. The Vogtle Units 3 and 4 are owned by Southern Company, Oglethorpe Power, MEAG and Dalton Utilities. While Southern owns a minority share, it will be the licensed operator?

If Southern receives its combined construction and operating license for Vogtle 3 and 4 next summer as expected, Unit 3 is scheduled to begin operating in April 2016, and Unit 4 is scheduled to begin operating a year after Unit 3 begins commercial operations.

Before the industry can pronounce the nuclear renaissance a reality, "We’ve got to build at least one of each of the new, standardized design reactors on time and on budget," said Chris Colbert, senior vice president for UniStar Nuclear Energy, a 50:50 joint venture between Constellation Energy Group, of Baltimore, Md., and EDF, the French state-owned nuclear utility.

UniStar wants to build a third unit at the existing two-unit Calvert Cliffs nuclear power station on the Chesapeake Bay in Maryland. The plant is planned to be a merchant power plant: It will sell electricity on the open market and will not be part of the regulated ratebase of Constellation’s Baltimore Gas and Electric utility subsidiary. Calvert Cliffs 3 will use a new 1,600-megawatt reactor design from Areva. Bechtel (San Francisco, California) is the EPC firm for the project. If UniStar receives a combined construction and operating license from the NRC in mid-2012, as it hopes, the unit should be ready to produce electricity by the end of 2017, Colbert said.

"In our analysis, whether carbon is $10 per ton or $30 a ton, Calvert Cliffs 3 is viable," Colbert said. "But because these projects are all larger than the companies that will own them, deciding who bears the risks is our biggest challenge."

"You don’t want to be either late or over-budget when you build these new reactors, but it is worse to be late than it is to be over-budget," continued Colbert. UniStar is one of several other nuclear operators that are on the Department of Energy’s (DOE’s) shortlist for billions of dollars in nuclear loan guarantees. He told Industrial Info Resources that he had no idea when the DOE would announce its decision on the loan guarantees, or whether the DOE’s decision was dependent on the outcome of the agency’s negotiations with Southern Company.

Facing protracted delays in DOE loan guarantees and uncertainty about additional guarantees from Congress, both Unistar and NRG Energy have cut back preparatory spending on their nuclear projects. NRG is in the queue for one of what now appears likely to be two additional nuclear loan guarantees for an expansion of its South Texas project, along with Constellation’s Unistar project at Calvert Cliffs in Maryland.

Constellation CEO Mayo Shattuck said in a conference call late in July, “We can’t keep going at the rate we are going without clarity on the loan guarantee. Time is a little bit of our enemy at this point.” In all, Constellation and EDF have cut back spending by about a third.

In August, NRG announced it was cutting back spending at South Texas by 80% while it awaits either a DOE decision on existing authority or new loan guarantee limits from Congress.

Nuclear utilities, EPC firms, and regulators have other reasons to be nervous about the "nuclear renaissance," given what has transpired at South Texas Project units 3 and 4, planning to use the GE-Hitachi-Toshiba ABWR design. That proposed expansion project was rocked last year when the owners had a very acrimonious and litigious falling out over—what else?—dramatic increases in project costs.

—John Egan is a frequent contributor to
MANAGING POWER. This article is adapted from an article written for Industrial Info Resources (Sugar Land, Texas) and is published by permission.