How two cutting edge U.S. nuclear projects bankrupted Westinghouse

[thackney]

How two cutting edge U.S. nuclear projects bankrupted Westinghouse
http://www.reuters.com/article/us-toshiba-accounting-westinghouse-nucle-idUSKBN17Y0CQ
May 2, 2017

In 2012, construction of a Georgia nuclear power plant stalled for eight months as engineers waited for the right signatures and paperwork needed to ship a section of the plant from a factory hundreds of miles away.

The delay, which a nuclear specialist monitoring the construction said was longer than the time required to make the section, was emblematic of the problems that plagued Westinghouse Electric Co as it tried an ambitious new approach to building nuclear power plants.

The approach - building pre-fabricated sections of the plants before sending them to the construction sites for assembly - was supposed to revolutionize the industry by making it cheaper and safer to build nuclear plants.

But Westinghouse miscalculated the time it would take, and the possible pitfalls involved, in rolling out its innovative AP1000 nuclear plants, according to a close examination by Reuters of the projects.

Those problems have led to an estimated $13 billion in cost overruns and left in doubt the future of the two plants, the one in Georgia and another in South Carolina.

Overwhelmed by the costs of construction, Westinghouse filed for bankruptcy on March 29, while its corporate parent, Japan's Toshiba Corp, is close to financial ruin. It has said that controls at Westinghouse were "insufficient."

The miscalculations underscore the difficulties facing a global industry that aims to build about 160 reactors and is expected to generate around $740 billion in sales of equipment in services in the coming decade, according to nuclear industry trade groups.

The sector's problems extend well beyond Westinghouse. France's Areva is being restructured, in part due to delays and huge cost overruns at a nuclear plant the company is building in Finland.

Even though Westinghouse's approach of pre-fabricated plants was untested, the company offered aggressive estimates of the cost and time it would take to build its AP1000 plants in order to win future business from U.S. utility companies. It also misjudged regulatory hurdles and used a construction company that lacked experience with the rigor and demands of nuclear work, according to state and federal regulators' reports, bankruptcy filings and interviews with current and former employees....

[IsailedawayfromFR]

A $13 billion cost over-run would bankrupt almost any company, save maybe a Solar or Wind plant that uses public money instead of private money.

[Fishrrman]

Start building coal-fired plants again.

Nuclear power (as I mentioned yesterday in another post) is all-but dead.
Nobody wants to get involved any longer.

Coal is cheaper, the plants can go up quickly, better for the economy (mining and transportation), the electricity produced is cheaper.

And the emissions are no longer a problem that they once were, due to cleaner-burning technology.

[Joe Wooten]

I work for Westinghouse. It's both more complex than the article states, but the simple  answer is senior management screw-ups by guys who had a serious lobotomies when they moved up the ranks into those positions from Engineering. They let a con man convince them to use his newly acquired AE (S&W) firm along with his piping manufacturer to build the modules and design the plant. We had very little construction management and manufacturing experience (as did S&W) and tried to do too much without going to one of experienced firms (Fluor or Bechtel) for help.

Site construction productivity is abysmal. I hope Fluor can get it moving again.

[ConstitutionRose]

I work for Westinghouse. It's both more complex than the article states, but the simple  answer is senior management screw-ups by guys who had a serious lobotomies when they moved up the ranks into those positions from Engineering. They let a con man convince them to use his newly acquired AE (S&W) firm along with his piping manufacturer to build the modules and design the plant. We had very little construction management and manufacturing experience (as did S&W) and tried to do too much without going to one of experienced firms (Fluor or Bechtel) for help.

Site construction productivity is abysmal. I hope Fluor can get it moving again.

I was unaware of this situation.  I worked at Sequoyah for a decade.  Westinghouse was considered a reliable partner.

[IsailedawayfromFR]

Start building coal-fired plants again.

Nuclear power (as I mentioned yesterday in another post) is all-but dead.
Nobody wants to get involved any longer.

Coal is cheaper, the plants can go up quickly, better for the economy (mining and transportation), the electricity produced is cheaper.

And the emissions are no longer a problem that they once were, due to cleaner-burning technology.

Nuclear power is in fact perfectly designed to generate electricity.  Its major technical problems involve choosing the correct site away from earthquake-prone areas, near prodigious water sources and handling spent fuel.

The only other reasons of concern are contamination, which historically has been controlled save in a very few cases such as Three Mile Island and Chernobyl.

If you statement that coal power generation is cheaper, then why are the Chinese replacing its coal power generation with nuclear with 37 nuclear plants operating and another 20 being built?

[Oceander]

Start building coal-fired plants again.

Nuclear power (as I mentioned yesterday in another post) is all-but dead.
Nobody wants to get involved any longer.

Coal is cheaper, the plants can go up quickly, better for the economy (mining and transportation), the electricity produced is cheaper.

And the emissions are no longer a problem that they once were, due to cleaner-burning technology.

[geronl]

The eco-nuts in court and all the regulations probably helped too

[mountaineer]

I live in the Marcellus/Utica gas producing area. A new gas-fired power plant is in the works (permits pending, of course) to be constructed not too far away. It will be a lot cleaner than the coal-fired one across the river.

[IsailedawayfromFR]

I live in the Marcellus/Utica gas producing area. A new gas-fired power plant is in the works (permits pending, of course) to be constructed not too far away. It will be a lot cleaner than the coal-fired one across the river.

Undoubtedly.  And it also undoubtedly is caused by the technological advances of the last several years in the oil and gas industry.

Just think - another few years of Obama in the form of Hillary would have most certainly squashed this new energy source.

[Joe Wooten]

Undoubtedly.  And it also undoubtedly is caused by the technological advances of the last several years in the oil and gas industry.

Just think - another few years of Obama in the form of Hillary would have most certainly squashed this new energy source.

Maybe, but GE has a LOT of political pull and they kind of forced the 0bama admin to back off the shale gas drillers. They are also the premier builder of combined cycle plants and equipment in the world and are making a lot of money building these plants. If gas gets too expensive, then utilities will stop building them and then GE will not make as much money. I bet they would have gotten Shrilliary to just make noise about shale gas, but little action, just like 0bama.

[IsailedawayfromFR]

If gas gets too expensive, then utilities will stop building them and then GE will not make as much money.

While I believe natural gas will not be getting 'expensive' for many years to come (just way too much resources available to Americans to keep it cheap and plentiful for generations), let's assume it will.

People need electricity in increasing demand.  What alternative do you believe will step to supply that power if natural gas power generation slows down?

[Joe Wooten]

While I believe natural gas will not be getting 'expensive' for many years to come (just way too much resources available to Americans to keep it cheap and plentiful for generations), let's assume it will.

People need electricity in increasing demand.  What alternative do you believe will step to supply that power if natural gas power generation slows down?

If we don't get a few nuke projects building, then it will have to be coal fired units. "Renewables" without nuclear just don't work. Germany had to re-start a lot of mothballed coal units when they began shutting down the nukes.

[driftdiver]

Start building coal-fired plants again.

Nuclear power (as I mentioned yesterday in another post) is all-but dead.
Nobody wants to get involved any longer.

Coal is cheaper, the plants can go up quickly, better for the economy (mining and transportation), the electricity produced is cheaper.

And the emissions are no longer a problem that they once were, due to cleaner-burning technology.

Nuclear is far cheaper than coal.  Govt regulations are what kills nuclear.   Seems coal can't survive with just a fraction of the regulations Nuclear has to contend with.

[thackney]

Nuclear is far cheaper than coal.  Govt regulations are what kills nuclear.   Seems coal can't survive with just a fraction of the regulations Nuclear has to contend with.

No.  Not even in Russia or China where government regulations are not overrun with enviroMENTALists.

[driftdiver]

No.  Not even in Russia or China where government regulations are not overrun with enviroMENTALists.

Sure it is, over the life of a nuclear power plan the cost of electricity is cheaper than coal.   In the early 1970s nuclear plants cost $170 million to build.   Just 10 years later the cost was $1.7billion.   http://www.phyast.pitt.edu/~blc/book/chapter9.html



But take this very story as an example.   8 months to get permission to transport parts of the plant??   How do you plan around that?

[thackney]

Nuclear is far cheaper than coal.  Govt regulations are what kills nuclear.   Seems coal can't survive with just a fraction of the regulations Nuclear has to contend with.

What is "far" cheaper?  20% cheaper? 

[driftdiver]

What is "far" cheaper?  20% cheaper?

I dont think you can really say except on a macro scale.    There are way too many variables.   The point is nuclear is a good option.  Managed properly it is clean and reliable.   

If you really want to know go look it up.

[thackney]

I dont think you can really say except on a macro scale.    There are way too many variables.   The point is nuclear is a good option.  Managed properly it is clean and reliable.   

If you really want to know go look it up.

You chose to use the word.  You don't have any idea what you meant?

I really do know.  I have looked it up.  That is why the claim doesn't make any sense.

In over 3 decades, the world produced greater that 6 GWH of energy growth from coal while producing less than 2 GWH of energy growth from nuclear.  We didn't choose far greater amounts of coal power because nuclear was far cheaper.

https://www.washingtonpost.com/apps/g/page/world/as-appetite-for-electricity-soars-the-world-keeps-turning-to-coal/1842/

[driftdiver]

You chose to use the word.  You don't have any idea what you meant?

I really do know.  I have looked it up.  That is why the claim doesn't make any sense.

In over 3 decades, the world produced greater that 6 GWH of energy growth from coal while producing less than 2 GWH of energy growth from nuclear.  We didn't choose far greater amounts of coal power because nuclear was far cheaper.

https://www.washingtonpost.com/apps/g/page/world/as-appetite-for-electricity-soars-the-world-keeps-turning-to-coal/1842/

Did you read what I wrote?   The cost of regulation drives the cost up.     Without the obstructionism of environmentalists and bureaucrats the actual technology of nuclear is cheaper.

Nuclear more sustainable as well.   Coal is dirty and while with a lot of expensive equipment can minimize the release of bad stuff it is still a fossil fuel.

[thackney]

Did you read what I wrote?   The cost of regulation drives the cost up.     Without the obstructionism of environmentalists and bureaucrats the actual technology of nuclear is cheaper.

Nuclear more sustainable as well.   Coal is dirty and while with a lot of expensive equipment can minimize the release of bad stuff it is still a fossil fuel.

Yes I read it.  I asked you about the words you chose to use and you could not explain them.

I posted statistics for outside the US and the federal regulations.

[driftdiver]

Yes I read it.  I asked you about the words you chose to use and you could not explain them.

I posted statistics for outside the US and the federal regulations.

and i posted stats as well.

you must work in the coal industry

[IsailedawayfromFR]

If we don't get a few nuke projects building, then it will have to be coal fired units. "Renewables" without nuclear just don't work. Germany had to re-start a lot of mothballed coal units when they began shutting down the nukes.

My consideration is that coal and nuclear are on the 'not-to-like list' by power companies to the extent they will take natural gas over even a somewhat lower-cost nuclear or coal option.

The list of nuclear/coal plants being closed is getting longer by the day. Even though right now the hemorrhaging has somewhat stopped with a sympathetic administration present, the long life of a generation plant causes these companies to think they have to plan for the long term, including an environmental-friendly govt which enacts retroactive requirements to nuclear and coal.

I wonder how many natural gas generation plants have been shut down since the coal and nuclear shutdowns began?  I bet very few.

Guess I am saying, that although natural gas has some negative environmental image due to its being a hydrocarbon, it is still a preferred environmental alternative to coal and nuclear, and will cause a company to add a preference to its usage even in the event pricing gets higher.

Bottom line - we are in the time of natural gas growth, and it will be significant.

[thackney]

and i posted stats as well.

Of a US only nuclear price, and with no comparison to coal price.

Do you believe obstructionism of environmentalists and bureaucrats is the reason China produces so much more electrical power by coal over nuclear?

you must work in the coal industry

You must not have much to back up your claim if you have to accuse the messenger rather than address the message.  I'm an electrical engineer, working in oil/gas industry for the last few decades, mostly Natural Gas liquids the last few years.

[driftdiver]

Of a US only nuclear price, and with no comparison to coal price.

Do you believe obstructionism of environmentalists and bureaucrats is the reason China produces so much more electrical power by coal over nuclear?



You must not have much to back up your claim if you have to accuse the messenger rather than address the message.  I'm an electrical engineer, working in oil/gas industry for the last few decades, mostly Natural Gas liquids the last few years.

China uses so much coal because those plants are faster to build and they dont give a crap about the environment.   They'll burn sulphur laden coal all day long.

So yes, you have a bias to fossil fuels since you make your living that way.  Thats a big part of the problem.  The available information for coal or nuclear is so full of special interest agenda its extremely difficult to get real factual data.