As power industry veterans, Gabriel Chavez and Stephen Henson have an insider’s perspective on asset management and life extension issues facing the nuclear power industry. With most nuclear power units approaching the end of their first license renewals, the feasibility of extending service lives with another 20-year operating license is a topic of consideration by many nuclear plant operators.
Gabe is a nuclear engineer with nearly 20 years of experience in engineering, operations and project management for one of the largest nuclear fleet operators in North America. He now serves as a project manager and nuclear strategy leader for Burns & McDonnell.
Stephen is a project manager and generation asset adviser at 1898 & Co., part of Burns & McDonnell. He has held leadership roles with major utilities and now consults with power generators on strategies to implement industry best practices, and designs programs to help reduce operations and maintenance costs.
Q: What are the major themes you are seeing from nuclear operators as they position their fleets for another round of license renewals?
Gabe (Burns & McDonnell): Quite a few units are approaching the 60-year mark for continuous operations, which means operators are facing some serious decisions on what it will take to extend their plants out to 80 years.
After original design and construction, the NRC (Nuclear Regulatory Commission) granted initial licenses to operate for 40 years. Following that, it has been pretty routine for operators to seek an extension for another 20 years. That’s been a straightforward process with the NRC mostly reviewing documentation covering all aspects of the licensee’s original application to build, including the environmental impact, safety analyses review and aging management plans.
Now, going from 60 years to 80 is a bit more rigorous. This is where the concepts of life extension and asset management start to get intermingled. With this subsequent license renewal (SLR), the plant — at least on paper — should run for another 20, but we recognize that the plant is getting old and equipment is getting worn out and obsolete. What do we need to do to keep this power plant running safely and reliably? Owners must get ahead of aging and degradation of components — pumps, valves, transformers and piping among others — that can compromise operations. They have to look at outage schedules and maintenance plans to begin planning significant capital expenditures ahead of time and lay out the asset management strategy.
Stephen (1898 & Co.): That’s right. Getting to 80 years is a bigger lift. This is the point where we add value by coming in to perform the due diligence on the plant’s physical condition and components.
We find that asset management becomes a little blurred with life extension. We may be asked to perform a useful life analysis. That will give us an approximate date and what kind of investment it will take to get to that date.
We sometimes hear operators ask about benchmarking the relative states of asset aging and useful life curves in comparison with other facilities with similar technologies and operating profiles. Giving an owner/operator the insight on where they stack up against the industry is a really important level-setting exercise that has proven quite valuable.
Q: So what, exactly, is involved with that due diligence and what is our role in that process?
Gabe: It starts by asking some basic questions: Are there certain performance metrics the plant needs to meet to consider another license renewal? How much capital investment will be needed to give you the returns you need? Given today’s environment of projected load growth, can we compete in the capacity markets and make money? The decision on whether to seek relicensing versus decommissioning comes down to economics. It’s not always about whether the plant or equipment is old and obsolete. It’s driven by economics. Where there is a will there is a way, particularly in an environment of predicted load growth.
Stephen: Our role is to review existing capital plans and match that against our understanding of where the nuclear plant performance should be. Understanding where the pitfalls may be provides the basis of understanding whether it is reasonable economically to get from 60 to 80. Nuclear plants can be very different based on a number of factors. Getting to 80 years might mean you have to open up the window a little wider to make sure you have a good plan.
Gabe: For plants in regulated markets or in long-term power purchase agreements, we usually find it will pay back to keep that plant running, barring a major failure or catastrophic event. You will have to look at major equipment on-site and single-point vulnerabilities. Even if a component is obsolete, we can check to see if there is an equivalent item we can go after. If it can be dedicated for the application — in other words be within the plant’s licensing basis or seek NRC approval — we can generally make something happen.
Q: Beyond regular maintenance, what role do inspections play in getting relicensed?
Gabe: Inspections are really the core of an effective asset management plan and the recognized standard driving that is NEI 03-08. This is a guideline for best practices in management of materials created by the Nuclear Energy Institute in the early 2000s. It was the result of a collaboration among a lot of industry players to address materials issues that were creating challenges for nuclear reliability.
NEI 03-08 looks at asset management and asset protection for nuclear plants, and part of that program is to establish a methodology that identifies degradation mechanisms. Whether it’s the reactor vessel or internal safety-related piping or any other critical piece of equipment, it gives the licensee standards to follow and gives inspectors specific knowledge of what to monitor and inspect. This works hand in hand with in-service inspection and testing programs at nuclear facilities.
It’s a very comprehensive program that illustrates the safety standards the industry is committed to so that plants are performing and behaving like we expect. Yes, the industry is heavily regulated by the NRC, but NEI 03-08 gives a flavor of how the industry is fully committed to being proactive and heading off any issues that could lead to failures that no one wants to see. No matter how detailed the regulations may be, an industry-led program that is dedicated to understanding mechanisms and root causes and aims to mitigate potential failures is really essential to prudent asset management.
Q: What is our role in supporting these efforts?
Gabe: There are mounds of data that come out of inspections and other reports, so sifting through all that and finding the insights needed to make decisions is where we fit in. We’re seeing that many operators, particularly those with just one or two plants, may not have the resources they need to do this. There is a lot of data wrapped up at a plant after 1,000+ people complete their work during a refueling outage, so we can come in and identify any key risks and issues that need to be addressed for future relicensing efforts.
Stephen: As consultants, we provide a forward-looking analysis on what cash flow will be in the future, making sure the operator identifies major projects that will need to be taken on. We make sure those are accounted for and feed into the economic analysis. We can also come in and provide some interpretation of inspection reports, including pointing out any required inspections they may not be doing. We bring in people with experience and knowledge of power plant design, along with operations and insight into the upgrades that will be necessary in a strategic capital plan. All this funnels to the maintenance program required to extend the life of the asset.
We can tell the operator what good looks like, and because we have a broad view across the industry we can also share what bad looks like. The other valuable thing is that we can help operators benchmark their plant against other similar plants across the country. This can be for both capital and staffing. It’s often the case that some facilities are overstaffed in some areas while also not having enough of the right skills in some critical areas.
Q: Will the recent announcements of retired nuclear plants being restarted help the industry overall?
Gabe: Of course, it’s a net positive: more megawatts without having to build new plants. However, there will be a rigorous process that they will have to follow before they can get relicensed. Those efforts are well underway at plants like Palisades Nuclear Plant and the Crane Clean Energy Center. Both those plants were driven to early retirement because of economics, and their turnarounds will require extensive effort to demonstrate to the NRC that they can operate safely and reliably. After their restart, both of those plants will seek to extend their operating licenses to 80 years through an SLR application. That is being driven by demand for clean, carbon-free power by large offtakers like hyperscale data centers. To meet that demand and provide safe, reliable operations, owners will need to make that forward-looking, long-term investment.
Nuclear power projects require a deep pool of specialized experience among engineering and construction teams in order to meet exacting safety and operational standards.
