- PG&E Files for 20 Year Extensions for Diablo Canyon Licenses
- Westinghouse Acquisition by Brookfield and Cameco Closes
- Centrus Makes First HALEU Delivery to DOE
- Rolls-Royce Lands SMR Collaboration Deal in the Netherlands
PG&E Files for 20 Year Extensions for Diablo Canyon Licenses
- The twin Reactors could potentially operate until 2044 and 2045
(NucNet) PG&E has file an application with the Nuclear Regulatory Commission (NRC) to extend for 20 years licenses of two 1150 MW reactors at the Diablo Canyon nuclear power station. It is the only commercial nuclear power station in the state and has weathered repeated attempts by anti-nuclear groups to shut it down. If the license extensions are not granted, the current operating licenses for Units 1 and 2 would otherwise expire in 2024 and 2025, respectively.
Twin Reactors at Diablo Canyon
The NRC’s review of PG&E’s application for a license extension is expected to take a minimum of two-to-three years but the agency may take longer. During this time, with the extension applications under review, the plants will continue to operate under their current licenses.
Last year, the Biden administration announced the approval of up to $1.1 billion in conditional funding for the facility. The funds will be used, in part, for plant maintenance and upgrades to meet the NRC’s current licensing requirements.
The filing with the NRC follows governor Gavin Newsom’s signing Senate Bill 846 which allows extended operations at the facility. The legislation also allowed PG&E to bypass state water laws related to the plant’s cooling system until October 2030 and provided a $1.4 billion forgivable loan from the state. PG&E, which owns and operates the station, said Newsom and lawmakers took these steps to ensure statewide electrical reliability and combat climate change as California continues towards its clean energy future.
PG&E chief executive officer Patti Poppe said recently that Diablo Canyon can operate beyond the current planned shutdown date of 2030 with PG&E “prepared to run the plant for as long as the people of California desire”
She highlighted the excellent condition of the facility and her hopes that it can operate as long as it remains safe. “Diablo Canyon is a treasure and tremendous resource for the state, as well as one of the safest operated nuclear power plants in the nation.”
Company Cites ‘Lack Of Alternatives’
Maureen Zawalick, PG&E’s vice-president of nuclear business and technical services, emphasized the necessity of Diablo Canyon, citing the lack of alternatives that would compensate for any shutdown.
PG&E said Diablo Canyon is the state’s largest source of clean energy and generates 2,200 MW of baseline electricity, providing approximately 17% of California’s zero-carbon electricity supply and 8.6% of the state’s total electricity supply. The station has two Westinghouse-designed four-loop pressurized water reactors. Unit 1 began commercial operation in May 1985 and Unit 2 in March 1986.
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Westinghouse Acquisition by Brookfield and Cameco Closes
A consortium comprised of Brookfield Asset Management (NYSE: BAM, TSX: BAM), and and its publicly listed affiliate Brookfield Renewable Partners (NYSE: BEP; TSX: BEP.UN) and its institutional partners, and Cameco (NYSE: CCJ; TSX: CCO) completed its acquisition of Westinghouse Electric Company.
The total enterprise value for Westinghouse is $7.875 billion. Westinghouse’s existing debt structure will remain in place, leaving an estimated $4.5 billion equity cost to the consortium.. This equity cost will be shared proportionately between Brookfield and its institutional partners (approximately $2.3 billion) and Cameco (approximately $2.2 billion).
Deal Makes Sense for Cameco
The deal makes sense for Cameco which now will be able to sell its uranium for nuclear fuel manufacturing to Westinghouse which is a major global supplier of nuclear fuel to commercial reactors.
Cameco is one of the largest global suppliers of uranium fuel for nuclear energy, with extensive uranium mining and milling operations, as well as refining and conversion facilities and CANDU fuel fabrication for heavy water reactors.
Brookfield’s Renewable Energy Play
Less apparent is the rationale and role of Brookfield Renewable Partners. The firm’s portfolio consists of hydroelectric, wind, solar and storage facilities in North America, South America, Europe and Asia. One possible strategic benefit is that it would use nuclear reactors to provide grid stability for the intermittent nature of renewable power systems.
Brookfield Renewable is among the world’s largest investors in clean energy and transition assets, with approximately 125,000 MW of operating and development capacity worldwide. The firm’s portfolio consists of 50% hydro, 22% wind, 15% solar, and 13% other.
Westinghouse Sees Benefits for the Deal
Westinghouse services about half the nuclear power generation sector and is the original equipment manufacturer to more than half the global nuclear reactor fleet. Approximately 85% of Westinghouse’s revenue has come from long-term contracted or highly recurring customer service provision with a nearly 100% customer retention rate given its comprehensive services offerings and position as an original equipment manufacturer, providing stability in all macroeconomic environments. Westinghouse is also a major supplier of nuclear fuel to global markets with fuel fabrication facilities in the US, UK, and Sweden.
Background on Westinghouse History
Westinghouse filed for Chapter 11 bankruptcy protection with US courts in March 2017 in the face of extensive financial difficulties. The filing affected only its US operations, which included projects to build four AP1000 reactors – two each at Vogtle in Georgia, and the VC Summer site in South Carolina. The collapse of the V C Summer project left South Carolina ratepayers with billions in unrecoverable costs.
In 2018, Brookfield Business Partners (together with institutional partners collectively known as Brookfield) announced that it had agreed to acquire 100% of Westinghouse from Toshiba for about $4.6 billion. Brookfield completed the purchase in August 2018, marking Westinghouse’s exit from Chapter 11 bankruptcy protection as a restructured company.
Brookfield owns a 51 percent interest in Westinghouse and Cameco owns a 49 percent interest. Brookfield is pursuing this opportunity through the Brookfield Global Transition Fund I (BGTF I), which is the largest fund in the world focused on the clean energy transition.
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Centrus Makes First HALEU Delivery to DOE
Centrus Energy Corp. announced this week that it has made its first delivery of High-Assay, Low-Enriched Uranium (HALEU) to the U.S. Department of Energy, completing Phase One of its contract with the Department by successfully demonstrating its HALEU production process. Centrus will now move on to Phase Two of the contract – requiring a full year of HALEU production at the rate of 900 kilograms per year at its American Centrifuge Plant in Piketon, Ohio.
Under a competitively awarded, cost-share contract signed with the U.S. Department of Energy in 2022, Centrus was required to begin production of HALEU by the end of this year. Centrus began enrichment operations in October which is two months ahead of schedule.
By completing delivery of more than 20 kilograms of HALEU to the Department, Centrus has finished Phase One of the contract. The Department takes delivery of the HALEU on site in Piketon and is obligated to provide the HALEU storage cylinders to collect the HALEU from the cascade. Centrus has constructed a storage facility where the HALEU will be kept until it is needed.
Phase One included a 50 percent cost share requirement for Centrus, with the company and the Department each contributing about $30 million of the $60 million overall cost. In Phase Two of the contract, the Department will pay Centrus on a cost-plus incentive fee basis for the HALEU the company produces.
About HALEU
The HALEU produced by Centrus is in the form of gaseous uranium hexafluoride. In order for it to be used in reactors, it must be sent through a a fuel conversion facility to turn it into a form usable by specialized fuel fabrication plants to make various types of fuels for specific reactors.
HALEU is an advanced nuclear fuel required for most of the next-generation reactor designs currently under development. The capacity of the 16-centrifuge cascade is modest – about 900 kilograms of HALEU per year – but with sufficient funding and offtake commitments, Centrus could significantly expand production.
A full-scale HALEU cascade, consisting of 120 centrifuge machines, with a combined capacity to produce approximately 6,000 kilograms of HALEU per year (6 MTU/year), could be producing HALEU within 42 months after securing the necessary funding.
With appropriate support, Centrus could add a second HALEU cascade six months later and subsequent cascades every two months after that. Centrus said in its press statement that the Piketon facility has ample space for the thousands of machines that will be needed to meet the growing demand for enriched uranium in the decades to come.
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Rolls-Royce Lands SMR Collaboration Deal in the Netherlands
(WNN) Dutch construction firm BAM Infra Nederland has agreed to collaborate with ULC-Energy and Rolls-Royce SMR on the deployment of a fleet of Rolls-Royce SMRs in the Netherlands.
The Rolls-Royce SMR is a 470 MWe design based on a small pressurised water reactor. It will provide consistent baseload generation for at least 60 years. 90% of the SMR – about 16 metres by 4 metres – will be built in factory conditions, limiting on-site activity primarily to assembly of pre-fabricated, pre-tested, modules which significantly reduces project risk and has the potential to drastically shorten build schedules.
Earlier this month, ULC-Energy and Rolls-Royce SMR signed an agreement with Denmark’s Topsoe to jointly investigate the production of hydrogen using Topsoe’s Solid Oxide Electrolysis Cell technology with both electricity and heat produced by a Rolls-Royce SMR nuclear power plant. This deal was preceded by several prior agreements.
In August 2022, Rolls-Royce SMR of the UK signed an exclusive agreement with ULC-Energy to collaborate on the deployment of Rolls-Royce SMR power plants in the Netherlands. ULC-Energy – established in 2021 and based in Amsterdam – aims to accelerate decarbonisation in the Netherlands by developing nuclear energy projects that efficiently integrate with residential and industrial energy networks in the country.
In September 2022, ULC-Energy signed a memorandum of understanding with US utility Constellation – a minority shareholder in Rolls-Royce SMR Limited – to support the deployment of a fleet of Rolls-Royce SMRs in the Netherlands.
Rolls-Royce SMR said it has now signed a memorandum of understanding with construction company BAM Infra Nederland to explore the opportunities for collaboration to support deployment of its SMRs in the Netherlands.
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