Two industry officials cautious on outlook for US nuclear revival

Two industry officials cautious on outlook for US nuclear revival

london (Platts)--9Jun2006

The US nuclear resurgence that the industry has been touting may be slower or
smaller than some recent projections have suggested, two nuclear utility
executives said in featured speeches at an industry conference this week.

The comments by Dale Atkinson, Energy Northwest's vice president for nuclear
generation, and James Malone, the vice president for nuclear fuels at Exelon
Generation, were echoed, to varying degrees, by some of the other participants
at the World Nuclear Fuel Market's June 5-6 annual meeting in Seattle.

Neither Exelon, which has the largest US nuclear fleet, nor Energy Northwest,
which has one reactor, has announced plans for building potential new
reactors.

In his opening address, Atkinson said he thought that new plants would be
built, but not on the "aggressive timeline" and in the "massive numbers" that
some officials have suggested. Industry officials have discussed various
number and timeframes. NRC Chairman Nils Diaz said last month that about 16
utilities were considering applying for licenses to build as many as 25 new
units (NW, 25 May, 12). Many of those units would be targeted for operation in
the 2015-2016 timeframe.

The WNFM meeting, which focused on the front end of the nuclear fuel cycle,
was titled, "Fueling a Brighter Future ? Are We Keeping Pace?"

Malone's presentation included a slide with a heading, "Not so fast!" A
possible limiting factor in nuclear construction, he said, is the current lack
of infrastructure in the US for building large components, such as pressure
vessels. Such facilities eventually will be built, but the process will take
time, and the market "needs to understand the timescale before reacting to
presumed increased demand," he said.

Several speakers said another concern ? for both the power-generation and
fuel-cycle parts of the industry ? is ensuring adequate numbers of qualified
personnel. Although, the speakers' comments suggested, the problem may be less
acute in Europe than in the US, panelists from both areas emphasized their
recruitment and training efforts.

Robert Jordan, the director of nuclear fuel supply for Constellation Energy,
highlighted the need to retain young workers. Today, he said, such workers
often have "higher expectations" for the work environment than their
predecessors did. How to make sure such workers don't leave after only a few
years is "a problem we don't have a solution for" at the moment, he said. But
Jordan expressed confidence that in the end, "we'll be fine."

He said questions about the nuclear resurgence were largely about the timing.
After the first "one or two" new reactors, utilities will "start looking to
the future," he said. The process can then move fairly rapidly because designs
will be much more standardized than they have been in the past, he said.

Constellation and Areva last year formed a joint venture to market and deploy
the US EPR.

Another panelist, Remy Autebert, the senior executive vice president of the
Areva sector covering mining, chemistry and enrichment, expressed more
optimism than Energy Northwest's Atkinson, saying there was a "clear need" for
new plants in the US and elsewhere. It is "our role and responsibility" to
"make that possible," he said. Areva is pushing all its segments to make sure
they have the capacity to meet the needs of customers who want to build new
reactors, he said.

In an interview, he added that if the customers' programs gear up more slowly,
then his company could wait because it has a "core of plants" with
"expandability." In his presentation, Autebert described Areva's
uranium-enrichment and -conversion facilities as "modular."

David Culp, the nuclear fuel manager for Duke Power, said in an interview that
the observers who questioned the more optimistic projections for US nuclear
construction "have a basis for being somewhat skeptical," in part because it
has been so long since a new reactor was built. Another issue, he said, is the
untested licensing process now in place. But he said the skeptics may not
fully appreciate the "resolve" of US utilities to move ahead.

While Duke has not made a "firm" decision to build a new plant, the company is
"working aggressively" so that, if it decided to build one, the reactor would
be operating in 2015 or 2016, he said.

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