Delays in the European New Build Renaissance

Ben Williams (ID: 24691925)

SESG6043: Nuclear Energy TechnologyPhysics

University of Southampton

May 9, 2015

Abstract

Since 2001 the term nuclear renaissance has been used to refer to a possible revival in nuclear power. �isrevival has been fuelled by concerns about global climate change, spiralling energy demand and excessiveimport dependency on fossil fuels. However, in 2012 nuclear electricity generation was at its lowest level since1999. �is is due to two main reasons: (i) Many reactors are reaching the end of their operational lifespanand new reactors aren’t being built in time to replace the outgoing ones. (ii) �e 2011 Fukushima disaster hasincreased anti-nuclear opposition and several governments have changed their stance on nuclear power. Inaddition to these delays in the nuclear revival, current ‘new build’ projects all over Europe are severely behindschedule and over budget. �is paper aims to explore, explain and categorise these delays.

Keywords: Nuclear power, New build projects, Fukushima consequences, construction delays

Contents

1 Introduction 2

2 Construction Delays 22.1 EPR delays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.2 VVER delays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

3 Neutral Delays 33.1 Stress tests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.2 Change in public opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.3 E�ect on the European nuclear industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.4 Energy policy changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

4 Conclusion 5

References 6

1

Delays in the European New Build Renaissance 2

1 Introduction

As of February 2015 there are currently 6 nuclear reactors under construction in Europe (excluding Russia),with plans to build a further 29 reactors and proposals for another 36. However, many of the currently operat-ing nuclear reactors (currently there are 152 operating reactors in Europe, excluding Russia) are reaching theend of their operational lifespans. �us for the nuclear renaissance to be successful then a rapid expansion ofnuclear power capacity is required [5, 11]. But a recent worldwide review of all the reactors currently underconstruction has shown that 74% of them are behind schedule and over budget. In addition to constructiondelays, the public and governments have begun to question their nuclear strategies a�er recent events, suchas the Fukushima disaster; ultimately causing further delays to the nuclear renaissance [8, 5].

Within industry, delays are separated into 4 categories: Neutral, Client fault, Contractor fault and Concur-rent delays. �is paper will look at the �rst 3 categories (the fourth does not really apply to the nuclearrenaissance). Client and Contractor fault delays can occur because of several reasons and usually impact thecompletion date and budget of the project. Neutral delays are usually unforeseen delays that occur by outsideforces, in the case of the nuclear renaissance we look at the Fukushima disaster as the primary neutral delay,from which there are several secondary and tertiary e�ects [4].

2 Construction Delays

�is section explores the construction delays in the fourmain reactors currently under construction in Europe.�e EPR, European (Evolutionary) Pressurised Reactor is the �rst 3rd generation reactor to be built in Europeand has faced many problems resulting from being the ‘�rst-of-a-kind’. �e VVER, a Russian designed PWR,has been under construction since the mid-80’s and has been severely delayed due to funding issues.

2.1 EPR delays

�ere are currently 2 EPR’s under construction in Europe, one in Finland and one in France both are severelybehind schedule.

Olkiluoto 3, in Finland, began construction in August 2005 with an aim of being online by 2009, it is nownot expected to start producing grid electricity until 2018 [14]. �e construction is a joint e�ort betweenAreva and Siemens. �ere have been various problems with planning, supervision and workmanship, theseare summarised below [2, 12]:

• Irregularities in the foundation concrete have been found.

• Substandard forgings were delivered to the site, these had to be re-cast.

• Problems constructing the double-containment structure. �is is a feature unique to this type of reac-tor but will probably become a standard design feature on all future reactor builds. It is designed towithstand a terrorist a�ack and can resist a direct hit by an aeroplane.

• Unfamiliar welding instructions. It has been stated that during the construction welding instructionshave not been observed and that the supervision carried out by the subcontractor have not dealt withthese issues.

• Because of safety concerns and poor practices construction has been halted at least a dozen times.

Delays in the European New Build Renaissance 3

�ese delays are main due to the fact that this is the �rst EPR to be built (‘�rst of a kind’ problems) and thatsubcontractors have not fully understood the very strict requirements for a nuclear build project.

Flamanville 3, in France, began construction in December 2007 with a start-up date of 2012. In November oflast year EDF (the architect engineer of the project) announced that construction was delayed to 2017. �eorigin for this delay seems to lie with Areva, which is providing the nuclear steam supply system. Arevahas had problems delivering the reactor vessel head and many components for the internal structure of thevessel. Again these delays seem to have been caused by substandard welding which has led to defects on thevessel head [12].

Financial implications

�e original �xed price for the construction of Olkiluoto 3 was at ¤3 billion, thus any additional cost dueto construction delays would have to be paid by the main contractor, Areva. As of 2014 the Chief Executiveof Areva (Luc Oursel) has estimated that the overall cost is going to be close to ¤8.5 billion, this wouldmake it the sixth most expensive structure in the world. Because of the delays both Areva and the eventualoperators (and current owners) of Olkiluoto 3, TVO (Teollisuuden Voima, a Finnish nuclear power company)are currently seeking compensation from each other. �is has caused further delays when Areva shut downconstruction in February 2014 due to the escalating dispute over compensations, TVO is demanding ¤1.8billion from Areva, and Areva is demanding ¤2.7 billion from TVO [16].

To put the cost of Olkiluoto 3 into comparison the LHC (the Large Hadron Collider in Geneva) cost ¤7.5billion, and ITER (the forefront in experimental fusion technology) is expected to reach a cost of¤20 billion.�us one could argue that if the money spent building Olkiluoto 3 had been channelled into fusion researchwe would be roughly 0.5 ITER’s closer to replacing nuclear �ssion power plants with clean ‘limitless’ power!

Flamanville 3 has also faced similar cost in�ation, originally EDF had put the cost at ¤3.3 billion but by thebeginning of 2013 this cost had risen to ¤8.5 billion [12].

2.2 VVER delays

�e two state owned, 440MWe Water-Water Energetic Reactors, under construction in Slovakia, hold thetitle for the longest construction of a commercial nuclear reactor in Europe. Construction began in 1985,however due to lack of funds work was halted in 1991. In 2004 the Slovak government privatized 66% of thecompany owning the power plants, an Italian utility company (Enel) won the bid and commi�ed an additional¤1.6 billion to the initial investment of ¤576 million for the completion of the partially built reactors [13].In November 2008, 17 years a�er construction began, construction restarted with the aim of having bothreactors completed by the end of 2013. However, again things have not gone to plan and the completion datehas now slipped back to 2016 and is¤3 billion over budget with no explanation being o�ered as to the reasonbehind the delays and cost overruns [15].

3 Neutral Delays

On the 11th March 2011 the Fukushima nuclear accident occurred, it is the largest nuclear incident of thiscentury and changed not only the public’s perceptions of nuclear power but also governments policy’s onnuclear expansion [7]. Below some of the consequences of the Fukushima disaster are brie�y explored.

Delays in the European New Build Renaissance 4

3.1 Stress tests

Stress tests were one of themain programmes introduced because of the Fukushima disaster. Developed by theEU, their goal is to ensure that all operating nuclear reactors in Europe follow the same safety standards andhave the same safety level. �e safety level covers a wide range of catastrophe events such as: (i) Earthquakes,(ii) Floods, (iii) Terrorist a�acks. �e results from these tests have shown that most of the reactors will have toundergo “a program of safety upgrades”[6]. In 2012 the cost of the upgrades were estimated to be somewherebetween ¤30-200 million for each reactor unit, this gives an overall cost of around ¤10-20 billion. �e timeand money required for these upgrades will mean that any new build projects will inevitably be delayed andpossibly cancelled.

3.2 Change in public opinion

�e 2012 study by Siegrist et al. [7] stated that following the Fukushima disaster there was “a moderate changetowards less acceptance and more negative a�itudes towards nuclear energy.” Although the study also goes onto say that “it seems that people mainly base their interpretation of a technological accident on their prior beliefsand perceptions of related risks.” �is suggests (and in fact was shown to be true in the study) that people’sprior views on nuclear power had not changed but their beliefs and convictions had become stronger. Beforethe Fukushima disaster Europe was almost equally divided on the issue of nuclear power, with slightly morepeople opposing. A�er Fukushima the proportions largely remained the same, however the faction opposingnuclear power became signi�cantly more vocal [10].

3.3 E�ect on the European nuclear industry

�e economical fallout from Fukishima has had a huge e�ect on the nuclear industry. �e smaller businesseshave been hit the hardest but even the large corporations such as EDF have su�ered losses and negative publicopinion. In March 2012 two of the UK’s ‘big 6’ power companies, RWE npower and E.ON announced theywere pulling out of the nuclear industry; at the time both companies had projects involving new builds in theUK [9]. �e Horizon Nuclear Power project that both energy companies were involved in has subsequentlytransferred ownership to Hitachi and instead of 3/4 EPR’s there will be 2/3 ABWR’s built at the sites inNorth Wales and Gloucestershire. In addition to power companies abandoning the nuclear industry manylarge engineering �rms have followed suit. Engineering ‘giant’ Siemens declared (in September 2011) theirwithdrawal from the nuclear industry stating it was due to “the clear positioning of German society andpolitics for a pullout from nuclear energy”[1] (political changes in Germany will be explored in the nextsection). At the time of withdrawal, Siemens was a major contractor for the construction of many new buildsacross Europe, they have subsequently sold o� that responsibility.

3.4 Energy policy changes

Fukushima has made many governments rethink their Energy policy’s, and in some cases restructure theirentire nuclear strategy.

Germany

In Germany immediately a�er the Fukushima disaster anti-nuclear opposition intensi�ed. In response to thisthe German government announced a radial change to its energy policy in August 2011. �ey immediately

Delays in the European New Build Renaissance 5

and permanently shut down 8 out of 17 of their nuclear reactors and stated that the rest of the reactors wouldbe shut down by 2022, with the aim of making renewable energy the prime source of electricity generationin Germany [11].

UK

�e UK’s two major political parties are both pro-nuclear power. Before Fukushima the British governmentannounced plans to build eight new nuclear power plants. However with the pull out of RWE npower andE.ON there is now some doubt whether all these reactors will be built, although EDF still has plans to build4 new reactors in the UK. For new reactors to be built in the UK the reactor design must �rst pass the UK’sGDA (Generic Design Assessment) which usually takes around 5 years per reactor design. Currently, theonly 3rd generation reactor to have passed the GDA is the Areva EPR, with Hitachi’s ABWR presently underassessment andWestinghouse’s AP1000 failing the GDA (the GDA report highlights 51 issues to be addressedin the AP1000 design) [10, 8].

Other European countries:

• Switzerland had plans (before Fukushima) to replace their ageing nuclear power plants. Howeverthese plans have now been abandoned and the reactors will not be replaced when they complete theiroperating lifespan [8].

• Italy voted in 1987 to shut-down all its nuclear power plants, and following Fukushima they havecontinued to oppose nuclear power [8].

• Spain has 7 nuclear reactors producing approximately a quarter of the country’s electricity. Pre-2011the government had a 40 year limit on reactors, this has since been li�ed (owners can apply for exten-sions in increments of 10 years). �e country has no new build plans [5].

• Belgium also has 7 nuclear reactors, however they provide over 50% of the country’s electricity. In2009 the Belgium government extended the operating lifespan of all their reactors in order to meetCO2 reduction commitments. However, with the reactors reaching the end of their operating lifespanand because of Belgium’s 2001 federal act (which prohibits the building of any new nuclear plants), aphase out of their nuclear reactors is currently in operation with all their reactors to be shut-down by2025 [10].

• France receives about 75% of its electricity from nuclear power. However, owing to technologicalconstraints they are at their maximum nuclear capacity and are therefore experiencing a ‘lull’ in newbuild projects [8].

4 Conclusion

Construction delays and the impacts of the Fukushima disaster have caused signi�cant delays in the Europeannuclear renaissance. �e e�ects (political) of Fukushima will have long term e�ects that we are only startingto see now, and it is now unclear whether nuclear power will hold a signi�cant place in our energy future.Despite this and the �nancial problems experienced by the current new build projects in Europe, Areva (withthe general contractor being ‘China Guangdong Nuclear Power Company’) is also building two EPR’s inChina, these started construction in 2009 and 2010 and are expected to be completed on budget by 2016/2017which wouldmake them the �rst operational EPR’s in the world [3]. �erefore, this suggests that themistakes

Delays in the European New Build Renaissance 6

and delays from the �rst two a�empts have been recti�ed and future EPR’s are more likely to be on budgetand on-time, which is good news for EDF’s Hinkley Point C’s EPR, currently about to begin construction inSomerset.

References

[1] BBC. Siemens to quit nuclear industry, September 2011. URL http://goo.gl/4HdswF. Accessed:31 March 2015.

[2] BBC. Finland’s olkiluoto 3 nuclear plant delayed again, July 2012. URL http://goo.gl/zGWmYM.Accessed: 30 March 2015.

[3] Bloomberg Business. China builds french reactor for 40% less, areva says, November 2010. URL http://goo.gl/0AvX8X. Accessed: 30 March 2015.

[4] CIOB. Delays on construction projects, Feburary 2014. URL http://goo.gl/mQuPfx. Accessed:1 April 2015.

[5] Ecologist. �ree in every four nuclear power builds worldwide are running late, September 2014. URLhttp://goo.gl/TEF8z7. Accessed: 30 March 2015.

[6] P. P. Povinec, K. Hirose, and M. Aoyama. Fukushima Accident. 2013. ISBN 9780124081321. doi: 10.1016/B978-0-12-408132-1.00005-X.

[7] M. Siegrist, Visschers, and H. M. Vivianne. Acceptance of nuclear power: �e fukushima e�ect. EnergyPolicy, 59:112–119, 2013. ISSN 03014215. doi: 10.1016/j.enpol.2012.07.051.

[8] A. N. Stulberg and M. Fuhrmann, editors. �e Nuclear Renaissance and International Security. StanfordUniversity Press, 2013.

[9] �e Scotsman. Nuclear disaster casts shadow over future of uk�s energy plans, March 2012. URLhttp://goo.gl/OgLX9D. Assessed: 31 March 2015.

[10] Visschers, H. M. Vivianne, and L. Wallquist. Nuclear power before and a�er fukushima: �e relationsbetween acceptance, ambivalence and knowledge. Journal of Environmental Psychology, 36:77–86, 2013.ISSN 02724944. doi: 10.1016/j.jenvp.2013.07.007.

[11] World Nuclear Association. �e nuclear renaissance, January 2014. URLhttp://goo.gl/ZTGhZ1.Accessed: 1 April 2015.

[12] World Nuclear News. Olkiluoto pipe welding ‘de�cient’, says regulator, October 2009. URL http://goo.gl/Ip8yCm. Accessed: 30 March 2015.

[13] World Nuclear News. Contracts signed for completion of mochovce, June 2009. URL http://goo.gl/jJURk5. Accessed: 31 March 2015.

[14] World Nuclear News. Olkiluoto 3 delayed beyond 2014, July 2012. URL http://goo.gl/hqYW8a.Accessed: 30 March 2015.

[15] World Nuclear News. Slovensk elektrrne expects mochovce 3 to start up in 2016, January 2015. URLhttp://goo.gl/J30YmD. Accessed: 31 March 2015.

[16] yle. Claim for olkiluoto 3 delays explodes to 2.7 billion, December 2013. URL http://goo.gl/EuxYm7. Accessed: 30 March 2015.