Kettering Executive Network, Energy Day - Special Guest, Jay Hakes of the Carter Library

Last week, the Atlanta Kettering Executive Network (KEN) was pleased to have a day focused on the business of energy.

An overview was presented by KEN Energy Special Interest Group member, Jeff Gross. This energy-focused group was created earlier this year to promote careers and entrepreneurial opportunities for KEN members in the energy sector. I am a part of the leadership team which includes Jeff Gross, Jin Kim and Pierre Beuret.

It was a real treat to have as our main speaker, Jay Hakes, Director of the Carter Library and Museum

and author of the recent book Declaration of Energy Independence.

I had the pleasure of introducing Jay who spoke about topics from his book, his experiences as the leader of the Energy Information Administration in Washington and energy efficiencies incorporated in the latest renovation of the Carter Library and Museum. He discussed trends in energy usage over the past 50 years and his prognosis for renewables, efficiency, nuclear power and price of oil, going forward.

Some of the topics discussed were:

• Jay highlighted the Carter Library and its advanced energy savings design, siting LED lighting and the addition of space without requiring more air conditioning/heating.
• Specific actions taken in legislation to improve energy efficiency, such as those to mandate better auto fuel mileage beginning in the 70s that forced positive change throughout the auto industry. He extrapolated this to say recent new fuel efficiencies should be manageable and necessary. However, these things would not be taking place without government policy driving them.
• Photovoltaic Solar Generation companies claim big cost reductions year-over-year - almost similar pattern as the micro chip cost history. Jay doesn't believe there is so much potential for big improvements.
• He explained how tax credits on renewable generation such as wind, have a short term effect which fizzles when tax credits expire. Jay would prefer to see taxes on fossil fuels which would make renewable a more attractive choice for energy needs.

Jay was kind enough to take questions from the crowd and meet with KEN members before and after the meeting. I always enjoy hearing Jay speak about his vision for energy use both in this country and around the world. Many thanks, Jay.

For more information about Kettering Executive Network see their website at

http://www.ketteringexecutivenetwork.org

A Nuclear Power Generation WorkshopUnveiled in Atlanta

Closing the workforce gap…who is going to work in the nuclear renaissance?

You’ve heard me talk about the coming nuclear renaissance and the need to train more students and more professionals in this industry.

I want to tell you about an exciting workshop I took part in last week at Southern Polytechnic State University (SPSU) in Georgia. I was invited by Tony Sideris, course Program Manager, to join the steering committee for this initiative and participated as an attendee and instructor. A follow-up final session is scheduled for November 9 -11.

To my knowledge this is the first workshop of its kind and we expect to develop similar offerings at other learning institutions in the US and internationally.

There are three segments to the 48-hour, two-week course. The first session (held this past week) covered two modules; a background in nuclear power generation and information about construction. Participants were introduced to the nuclear industry, the different Nuclear Steam System Suppliers (NSSS), the major industry players, general and detailed regulatory guides, codes and standards applicable to nuclear plant construction.

The final module, November 9-11, covers testing and start-up and will focus on pre-operational testing, startup testing and initial power ascension.

The workshop was well attended and included professionals from Institute of Nuclear Power Operations (INPO), Nuclear Regulatory Commission (NRC), Southern Company, Tennessee Valley Authority (TVA), engineering students from SPSU and other local companies interested in becoming suppliers to the nuclear industry.

Financial and technical support was provided by the US NRC, the ASME Board on Nuclear Codes and Standards, ICAPP and other industry participants. Wes Rowley, an ASME codes expert and past vice-chairman of the ASME board of Nuclear Codes and Standards, is one of the key contributors and presenters of the workshop.

Feedback from the participants during this first session was very positive and I am looking forward to the follow-up session in November.

This course answers the big question, how will we support this industry going forward? I think we have at least one answer in this important, timely workshop.

For detailed course content, program information and registration, please visit the SPSU Nuclear Power Generation (NPG) website spsu.edu/nuclear/.

Energy is Everything - Washington Energy Summit proposes immediate action with a balanced approach…

“America’s Future Prosperity Tied to Energy - The future economic prosperity of the United States is inextricably tied to our ability to create a sustainable and balanced energy system. The private sector is the pivotal actor in achieving energy system transformation with speed and at scale.”

And so began the National Energy Summit and International Dialogue held last week in Washington. This gathering of a broad coalition of CEOs, presidents of major research universities, labor union leaders, and top government officials both from the U.S. and abroad was brought together to discuss creating a single voice for moving forward with energy transformation. The summit was a part of the Council on Competitiveness’ Energy Security, Innovation & Sustainability (ESIS) Initiative, founded in 2007. The goal of the Initiative is to enhance U.S. competitiveness and energy security by developing a public-private action agenda to drive private sector demand for sustainable energy solutions and create new markets, industries and jobs.

I was surprised this event did not get more media coverage. But I was very encouraged by the discussions and recommendations, presented under the slogan, “Energy is Everything,” to U.S. Secretary of Energy, Steven Chu. The council proposed specific actions under the six pillars for competitiveness - 1) Efficiency, 2) Clean Energy production, 3) Infrastructure & Manufacturing, 4) Smart grid, 5) Technology & Entrepreneurship and 6) finally World-Class Workforce.

The key messages from the recommendations are:

• Balanced Portfolio of Solutions – starting with efficiency on the demand side to renewable, gas, clean coal and nuclear on the supply side along with adding intelligence to the grid and training the workforce
• Strong support for nuclear and clean coal – expedite nuclear power plant approvals, re-commissioning and eliminate regulatory uncertainty for nuclear waste. Expedite construction of carbon capture and storage facilities
• Carbon tax for funding investments – Congress should enact legislation that will result in the establishment of a consistent, predictable and transparent price on carbon emissions to fund technology R&D, workforce training and efficient manufacturing
• Create a local Energy manufacturing infrastructure – provide tax incentives and financing to develop the infrastructure required to research, manufacture and service the proposed energy solutions

The Competitiveness Council has been working for almost two years on these recommendations which provide an excellent roadmap for industry and government to take immediate action. It’s my opinion that these recommendations should be acted upon by the current administration; they should be the foundation for the U.S. position at the United Nations Climate Change Conference 2009 in Copenhagen later this year.

For more details on this event check out the link to the Energy Summit & Competitiveness council. http://www.compete.org/nes

THE NEW NUKES...are we close to breaking ground?

It was great to see the following headline recently, “The New Nukes,” in the Wall Street Journal. The article began with this statement…

“For the first time in decades, popular opinion is on the (nuclear) industry's side. A majority of Americans think nuclear power, which emits virtually no carbon dioxide, is a safe and effective way to battle climate change, according to recent polls. At the same time, legislators are showing renewed interest in nuclear as they hunt for ways to slash greenhouse-gas emissions.”

Having a balanced article of this quality in a first class newspaper shows that public opinion is changing and we here in the U.S. are close to actually having new nuclear plants.

Just yesterday, I had the pleasure of hearing a presentation by Steve Ewald of Georgia Power on one of the four projects selected for DOE loan guarantees -- Vogtle 3 and 4, located in Augusta, Georgia. This project will be an AP1000 pressurized water reactor from Westinghouse with the Shaw Group as the main contractor.

From Ewald’s discussions, it was clear that there are two main reasons Georgia Power selected nuclear:

1) Baseload generation requirements have increased – clean coal is not available in the short term, so the lowest cost option is nuclear.

2) Reduction of carbon emissions – without clean coal, nuclear is the best choice for baseload generation.

Georgia Power is taking advantage of renewable power, for example switching the Mitchell Plant from coal to wood resulting in a 95MW plant. With the limited potential for wind and solar in Georgia, nuclear is the best option for meeting the increase in baseload demand up to 2025.

What we need now is action. The DOE should come out with its final selection of projects for loan guarantees. I recommend proceeding with two projects with competing technologies -- for example, one pressurized water reactor and one boiling water reactor.

Once a project actually breaks ground and an order is placed for an NSSS system, we can really start talking about THE NEW NUKES.

Here’s a link to the article -- http://online.wsj.com/article/SB10001424052970204409904574350342705855178.html#articleTabs%3Dcomments

Not in my backyard. Hosting renewable energy no picnic for some...

A recent article in the September 4 Wall Street Journal, “Renewable Energy, Meet The New Nimbys,” provides further confirmation that there is no “silver bullet” for our energy problems. When it comes to finding space for renewable projects, we are hearing a lot of people saying, “not in my backyard," also known as “nimbys.”

Complaints from environmentalists include concerns that wind turbines will cause damage to local flora and fauna -- killing sage grouse in Wyoming or the endangered kit fox and antelope-like pronghorn in California.

And, several new wind and solar projects will require transmission lines over previously clear-skied neighborhoods and green spaces.

While we iron out these issues, there is a “silver buckshot” solution. We should choose to hold a variety of energy solutions in our power portfolio -- ranging from renewable to coal, to nuclear. Acceptable solutions will be driven by technology, regional fuel/resource availability and yes, environmental concerns -- even for wind and solar.

In addition to keeping these traditional sources alive, in some states it may make more sense to invest in nuclear and clean coal where transmission line infrastructure already exists. Food for thought, here is the WSJ article. Renewable Energy, Meet the New Nimbys http://online.wsj.com/article/SB125201834987684787.html

Knowledge Management Reduces Risk -- Applying knowledge management software to reduce the risk of new nuclear plant construction and operation

Some of the most frequently heard objections to the development of new nuclear plants are the schedule and cost uncertainties. “We do not know how long it will take or how much it will cost,” it's said.

Recent and past history does not provide much comfort either. In the 1970’s and 1980’s, the average time required to bring a plant on line from order date increased from three to 13 years. More recently the Olkiluoto plant, currently under construction in Finland, has a project completion date -- originally planned for 2009 -- delayed to at least 2012.



New developments, such as modularized design processes and more efficient construction and operating license process by the NRC will certainly help to resolve past problems.

But recently software companies catering to the nuclear plant industry are filling a need, and it’s an exciting new area to talk about. Using knowledge management systems, these companies are capturing lessons learned from past construction and plant operation and developing tools which allow plant owners, architect engineers and regulatory organizations to develop a comprehensive knowledge based management system for design, licensing, construction and operation.

Combined data management and expert system tools allow the transparent flow down of design/licensing requirements to the construction and operation phase of power plant build. Of course this approach can also be applied to existing plant licensing for uprates and modifications.



The International Atomic Energy Association (IAEA) and the Nuclear Energy Institute (NEI) have come out with guidelines and standards for developing knowledge management systems. Here is a report from the IAEA -- http://www-pub.iaea.org/MTCD/publications/PDF/Pub1377_web.pdf

While working with new construction in Europe -- as a subcontractor to the main EPC --I saw my share of changing requirements which required re-design of piping supporting structures during construction. I feel that the industry can reduce the risk in cost and schedule for new nuclear plant build and existing plant modifications by taking advantage of the new suite of tools being created by software companies for developing nuclear plant knowledge base systems.



For more details, check out recent announcements from two software providers, Enterprise Informatics and Wiznucleus -- http://nuclearstreet.com/blogs/nuclear_power_news/archive/2009/08/03/enterprise-informatics-and-excel-services-team-on-nuclear-knowledge-management-1804.aspx 
http://nuclearstreet.com/blogs/nuclear_power_news/archive/2009/07/17/wiznucleus-announces-new-it-platform-for-nuclear-plants-785.aspx

Renaissance of the Nuclear Kind In Italy

This week I was very pleased to see the headline “Enel, EDF to build Nuclear Plants in Italy” in the Aug 4, 2009 edition of the Wall Street Journal. What an exciting renaissance of nuclear power in Italy.

Italy was a pioneer of civil nuclear power, establishing the first scientific body to study nuclear in 1946. In 1952, Italy established an agency to develop and promote nuclear power; this agency was reorganized in 1960 to become CNEN (National Committee for Nuclear Energy).

At the time of the shutdown law in 1987 -- after the Chernobyl accident in Russia -- Italy had four operating nuclear plants: Latina, Garigliano, Trino Vercellese and Caorso and two units under construction at Montalto di Castro. Current plans call for building four new reactors at existing licensed sites.

Of course, I have to provide full disclosure here…l was especially pleased to hear this news because I was one of the young field engineers who started up the Caorso Plan for Enel in northern Italy.

With power costs in Italy currently one-third higher than in most of Europe and a generation mix of more than 60% natural gas, most imported, Italy sees nuclear as a way to address cost, emissions and import dependence simultaneously. More details can be found at the following link to the WSJ article http://online.wsj.com/article/SB124932829249202353.html

Hidden Gem in Sahara Desert – Solar thermal power for Europe…

During my June trip to Europe, my German friends were talking about a project to create a “huge” solar thermal field in the Sahara to generate electricity for Europe. This sounded unbelievable, and my thoughts went to concerns about reliability and safety of the transmission method.

Well, it is a reality and last week the story was see in several print and web media, including the Economist -- http://www.economist.com/displaystory.cfm?story_id=13982870

Munich Re, the world’s largest reinsurance company, has invited 20 large companies to join it in developing this massive solar thermal field to satisfy 15% of Europe’s needs by 2050. The project is called Desertec and the companies invited to join this venture include Siemens (Germany’s engineering giant) power suppliers RWE and E.ON, and Deutsche Bank, Germany’s biggest bank.

Why would an insurance company promote this project? Munich Re’s goal is to reduce weather-related losses due to global warming.

Even though Desertec is still a vision, and there are risks having 15% of Europe’s energy supply depend on a foreign country in Africa, I still see several benefits. This is a great place to promote research and development in solar thermal power. The size of the investment ($560 billion) will motivate large and small players to improve the technology and obtain economies of scale thus reducing the cost of production. And, as it has to travel over a distance of over 2000 km, it’s a good application for high-voltage direct current which reduces the transmission losses vs. traditional AC lines.

This project will certainly be a good step for solar thermal generation and will add to the objective of making renewable energy competitive vs. coal and other fossil fuels.

Best use of government energy subsidies in this energy market…

An article in the Wall Street Journal last week confirmed what I have been observing over the past couple months as I speak to people in the energy business.

Government subsidies alone may not be enough to overcome generation options which are not commercially viable.

In addition to the recent American Recovery and Reinvestment Act of 2009, production tax credits and investment tax credits for renewable energy have been in place since 1998. These credits have promoted alternative energy generation from wind and solar. Unfortunately this market sector is not showing healthy growth -- wind orders are down 50% from the first quarter last year and solar projects in California are down 60% vs. the first quarter of 2008.

Challenges include financing issues and a lower demand for electricity. But, a larger factor is the competition faced from more cost efficient sources of energy like gas generation.

With gas futures at $3.35 per MBTU alternative sources are becoming less attractive to fund. For example, T. Boone Pickens has just delayed his wind farm project until at least 2013.

Funding exciting new sectors of energy generation should continue, but, we need to make these new technologies commercially viable. Government subsidies need to be used to improve wind farm production costs, reduce photovoltaic costs and show a track record of economic production.

The next generation of these important renewable energy options must be economically solvent without government subsidies.

This brings me back to nuclear generation. The current interest in nuclear power is possible because in the last 20 years that energy sector has shown it can produce electricity safely and at the lowest cost. Yes, challenges exist like long term storage and initial construction costs, but the picture is clear – once these plants are built, not only are they are safe but they are one of the most economically viable energy sources out there.

For more about the challenges that clean energy is facing check out the WSJ article WSJ article and Money/CNN article on Wind Power money cnn.com.

Alstom Power leverages turnkey projects...

My recent visit to Switzerland gave me a chance to meet with representatives from Alstom Power to discuss current topics in power generation.

Switzerland is the one of the key countries for Alstom and the headquarters for its power generation business. Throughout the offices of this multicultural company, one can hear discussions being carried out in several languages including German, English, French and Spanish -- clearly a multinational company.

Alstom recently decided to reorganize the company by merging into a single entity. All activities related to power generation, currently managed by two sectors, Power Systems (plants, equipments and retrofit ) and Power Service (after-sales, from service to renovation and spare parts) is now called Alstom Power.

In addition to providing turbo generators for nuclear plants in France and China, Alstom Power continues to lead in turnkey projects for coal and gas plants.

I was very impressed with the quality of the people I met, and the strategy and direction of Alstom Power and enjoyed our discussions. The company’s focus on clean carbon generation and turnkey projects will yield benefits to Alstom Power in the long term. Turnkey projects managed well can be a competitive advantage over other OEMs.

The future of nuclear power in Switzerland

Last week I visited Switzerland where I lived and worked in the nuclear power industry. Switzerland currently relies on nuclear for about 40% of its electricity production.

While there, I had the opportunity to meet with the Resun AG team in charge of developing two new nuclear power plants in Switzerland. Resun AG is a consortium of two main producers in Switzerland -- AXPO and BKW. The Axpo Group companies -- Nordostschweizerische Kraftwerke AG and Centralschweizerische Kraftwerke AG -- have joined forces with BKW FMB Energie AG to set up this company (Resun AG) to plan for the replacement of the Beznau and Mühleberg nuclear power stations.

Aarau, Switzerland-based, Resun AG has produced two framework license applications for identical types of power stations for the Beznau and Mühleberg locations. The Resun team has been diligently working on the licensing documents for these two sites with two key milestones ahead: request for proposals to reactor suppliers in 2010 and a referendum in 2012 by the Swiss people for approval on the planned new units.

It's great to see Switzerland taking the initiative to maintain the nuclear option as a balance to the abundant presence of hydroelectric generation.

Follow this link to get more information on the AXPO press release regarding the creation of Resun AG. AXPO press release

Nuclear Plant Long Term Operation

Excitement is high in the Nuclear industry in response to the growing interest in developing new power plant projects in the US and abroad.

One of the reasons for this renewed interest is the good performance of the existing fleet worldwide. In the US, the capacity factor has consistently increased, reaching 92% last year.

Much progress has also been made in extending the life of the fleet worldwide, from 40 to 60 years, so far only the US there have been 54 license renewals with more applications on the way.

This renewed interest in Nuclear Power should also help power plant owners and government organizations to continue investing in the quality of the supply chain for successfully reaching 60 years and funding the research necessary to keep the current fleet operating up to 80 years.

EPRI estimates that the cost of replacing the fleet in the US will be above $500B. The cost for the initial research required to begin evaluating 80 year operation is estimated to be about $100M. This is certainly a very good payback and should motivate the industry and government regulators to fund the research as well as coordinate efforts to take advantage of research by other countries with nuclear fleets such as France, Japan and Korea.

The International Atomic Energy Agency should play a role coordinating global efforts for achieving long term nuclear power plant operation.

Obama administration's “lack of clarity” for a new nuclear generation...

The sense at the executive opening plenary at the ANS Annual meeting in Atlanta was that the current Obama administration continues to send mixed messages regarding its support for new nuclear plants.

William Burchill, ANS president summarized the current situation as a “lack of clarity” in terms of support for nuclear -- even though the industry has made a lot of progress in the last 5 years with 25 COL applications and 4 EPC contracts signed.

David Ratcliff, CEO of Southern Company clearly stated that we must expand nuclear, saying we need 16 more plants to just keep the current 20% contribution to US generation.

During Obama’s speech February 24, there was no mention of nuclear as part of a portfolio of solutions. In his speech in March from Prague, Obama did mention that we should harness the potential of nuclear power.

Nuclear is an under utilized source for U.S. energy needs. The Obama administration needs to come out strongly in support of a new nuclear generation and long term plan for the operation of existing plants.

Take-aways from the 11th Annual Electric Power Conference 2009

I attended the 11th annual Electric Power Conference in Chicago recently. Days of meetings and seminars left me with the following takeaways...

Renewable portfolio--
CEO's of utilities feel the renewable portfolio standards are okay but more thought needs to be given to the regional nuances before mandating specific percentages of wind solar and biomass.

Transmission lines --
Transmission lines need to be added to take advantage of renewable sources in the country. For example, to get all the wind power from the Midwest, you need to get it from that point to more populated areas that need it.

Nuclear --
There needs to be more government support for nuclear which is a critical base load generation source.

Cap and Trade--
The concern about cap and trade is that this could be opened up to financial instruments that may not be transparent.

What's Happening in Colombia...

I visited Bogota in May. Ecopetrol (national oil company) is becoming the growth driver for Colombia. Why is this? Well, the government's Plan 2015 will include investments of $60 billion over the next seven years.

Ecopetrol is investing $8 billion dollars to upgrade the Cartagena and Barranca refineries.

And, there is good potential for new aeroderivative gas turbines and gas reciprocating engines for distributed generation.

The country continues to thrive; there is healthy growth and a feeling of optimism. Even the real estate market has not suffered like that of the U.S.

I enjoyed visiting friends and colleagues in Colombia -- a country I spent many years in. I'll go back soon.