HomeMy WebLinkAbout15 UAMPS Carbon Fee Power ProjectAgenda Item #15
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Board o f Directors
Stephen Hollabaugh
April 15 , 2015
Discuss ion About UAMPS Carbon Free Powe r Projec t- New
Resource
W ORKS HOP
1. WHY T HIS MAT T ER IS BEFORE T HE BOARD
UAMPS has been investi gating a new genera ti ng resource called Carb on Free Power
Project. This workshop is to discuss and d escribe thi s resource to the Board. No
decisi ons are required at this workshop.
Staff wil l also di scuss an APPA pub l i cati o n "Straight Answers to False Charges
Against Public Power".
2. HIST ORY
Truckee Donner PUD i s in th resource proje ct at UAMPS. The resource project is
used to investigate possible generation reso urces prior to starti ng a study project.
The Carbon Free Power Project will so on mo ve from the resource project to a study
project.
This generation may be a fit for the Di stri ct's power portfolio. The District has a five-
year market purchase from 2017 through 20 22. Al so the Trans Jord an land fill gas
contract ends in 2023. The Carbon Fr ee Po wer Project may replace a smal l part of
the market purchase and landfill gas gene ration wi thin our portfoli o. Resources
(MW h) by year 2014-2025 is incl uded as Attachment 1.
3. NEW INFORMAT ION
UAMPS i s constantly assessi ng and foreca sting future electric en ergy needs of
member utiliti es. To meet those nee ds, U AMPS i n vestigates al l possible energy
sources, includi ng al ternative resources such as wind and solar, al ong wi th i ncreased
conservation and effi ciency.
UAMPS currently owns and operates a di vers e and balanced resource mi x, i ncludi ng
hydro, coal , combi ned cycle natural gas and wi nd. The Distri ct partici pates in many of
these resources (except coal). UAMPS i s als o devel o ping a waste heat project whi ch
the Di str i ct is participati ng in, purchases power in the open market and al ong wi th its
members, i mplements aggressive conservatio n and effi ci ency programs.
Because major baseloa d projects requ i re ye ars to plan, construct and bring online,
decisi ons must be made today to ensure adeq uate sup pl i es a decade from now for an
energy-hungry society with numerous electric vehi cles and myri ad mobile computing
devices. After much sophisticated r esourc e plann i ng and hard-nosed a nalysi s,
UAMPS uti l i ties have concluded i t i s ti me to seriousl y study small modular nuclear
reactors as a future source of basel oad electr ical suppl y.
This workshop will hel p explain why d evelo pment of small modular reactor (SMR)
power pl ant is being full y explored as potent i ally the cleanest, safest and most cost-
effective long-term soluti on to ensure stable, re liabl e,well-priced electri cal power for
UAMPS members over the next several decad es.
THE EVOLUTION AW AY FROM COAL
Coal-fired power plants have been stabl e, rel i able, cost-effective workhorses for
basel oad el ectri cal supply for many decades for utility compani es across the nation.
But most coal pl ants were built 30 or 40 year s ago, and are reaching the end of thei r
l ife cycle. Coal is under severe pressure beca use of carbon emi ssions and pollutants.
Stri ngen t carbon and environmental regulati on wi l l make coal plants impossible to
operate in 10 to 15 year s.
THE UPSIDE AND DOW NSIDE OF NATURAL GAS
Natural gas has become an inexpensi ve , abundant fuel due to new dri l l i ng
technol o gi es and some anal ysts believe i t has the potenti al to become a stable
basel oad el ectri ci ty gen eration. Natural gas i s an i mportant component of a di verse
resource mix. However, natural gas pr i ces h ave hi sto rical l y fluctuated a great deal .
Natural gas is expected to become a gl ob al commo di ty with accompanyi ng pri ce
i nstability.
ROLE OF "CLEAN" ALT ERNATIVES
Advanced technology i ncludi ng conservation and energy efficiency, has enabl ed a
vari ety of clean energy resources, i ncluding wind, solar, micro hydro, waste heat,
bi omass and geothermal . W hi l e these renewable and conservati on pr ojects are very
i mportant, anal ysis indicates that they wo n't be enough to replace base load
resources. Many renewables create si g ni fica nt envi ronmental problems of their own,
and are coming under increased regul ati on to protect bi rds, endangered species,
mi grati ng fish, and stream fl ows.
NUCLEAR RENAISSANCE: PHASE II
Not many years ago, news reports commonl y reported that at "nuclear renai ssance"
was underway. Recog ni zing that enormous amounts of electricity were required to
support the gl obal economy.
Then in March 2011, a major earthquake and tsunami occurred in Fukushima, Japan,
creati ng a catastrophic failure at the Fuku shima nu cl ear plant. T he Fukushi ma
meltdown focused enormous attention on nuclear plant safety and the "nuclear
renaissa nce " clearly stal l ed.
Today, however, with a new generation of smaller, technologically-advanced nuclear
reactors under devel opment, a promising ne w phase of the nuclear renaissance is
occurring. The Obama administrati on and its Department of Energy,for exampl e, are
encoura gi ng the devel opment and depl oy ment of advanced nuclear reactors,
providing major funding grants and faster app roval of appl i cations.
A number of prominent envi ronmental i sts, ver y concern ed about the impact of cli mate
change, are touting nuclear energy as the clean solution to the world's growi ng
energy needs.
For decades, the major two concerns re gardin g nucl ear energy have been safety and
cost, wi th safety concerns intensified by the Fukushima inci dent. In real i ty, even wi th
every nuclear plant acci dent in history acco unted for , nucl ear energy i s by far the
safest major source of energy. Con si deri ng the e ntire suppl y ch ai n of energy
production, i ncludi ng extraction and transpo rtati on, nucl ear energy h as hi storically
been much safer than oi l , gas, or coal.
Detractors of nuclear energy for many years have exp ressed concern about nuclear
waste storage. But after decades of proble m-free, on-si te stor age, such concerns
have diminished considerably. Storage takes up very l ittle space, and spent fuel rods
are being increasingly viewed as val uable pr oducts for re-processi ng and re-use. In
addition, pri vate storage projects are b ei ng proposed that woul d pro vi de long-term
storage solutions.
Nuclear plants are certainl y expensive to bu ild. But when amorti zed over 50 or 60
years of energy production, the pri ce of ele ctricity to consumers i s comparable to
natural gas, and cheaper than many al ternativ e sources.
SMALL MODULAR REACTORS: SAFER, MO RE PRACTICAL, COST-EFFICIENT
Today, small modular nuclear reactors (SMR) are bei ng developed that are
dramatically safer, less expensi ve and more practica l . UAMPS believes that most
promising technol ogy i s bei ng devel o ped b y NuScale Power, located in Oregon.
NuScale is a pri vate commercial enterpri se fo rmed to develop and market i nnovati ve
modul ar nuclear reactor concepts. NuScale is majori ty-owned by Flour, one of the
world's l eadi ng publicl y-traded e ngineeri ng, co nstructi on and project management
compani es. Other companies like Roll s-Royce have i nvested i n NuScal e and are
backi ng its bid to commerci alize its SMR techn ology gl o bally.
UAMPS has entered into a Teaming Ag reement with NuScale and En ergy Northwest
that outl ines the parties' intent to investi gate the viabi l i ty of developi ng a SMR project,
possi bly at the Idaho Na tional Laborato ry (INL ) near Id aho Fal l s. Energy Northwest is
a munici pal corporati on and joi nt operating ag ency.
A NuScale SMR project could consist of up to twelve 50MW reactors (600 MW total).
Each re actor si ts wi thi n a contai nmen t vess el measuring 76 feet ta l l x 15 feet in
di ameter . Each reactor and containment ves sel operates independently of the other
reactors insi de a water-filled 8 million gal l on water pool that is built below grade.
The reactor operates using the princi ples of n atural circul ati on; hence, no pumps are
needed to ci rcul ate water through the reacto r. The system uses a n atural physi cs
convecti on process, providi ng the abi l i ty to sh ut down and self-cool , indefini tel y, with
no operator interaction, AC or DC powe r, and no addi ti onal water. The reactor can't
explode, and is inherently safe. The d esign simpl i city al l ows the NuScale Module to
be factory-built, and transported to the site on tru cks. The desi g n makes the plants
faster to construct, and less expensive to bu i l d and operate. The footprint of a 600
MW pl ant is smal l , onl y 44 acres.
The NuScal e reactor re cently won a $217 mi llion Dep artment of Energ y (DOE) grant
to devel op the reactor and apply for DOE ap proval. SMR's are drama tical l y different
than the enormous large-reactor plants of the 1960's. The tech nologi cal differe nces
are like compari ng a 2015 Tesla to a 1960's-era Cadillac, complete wi th enormous
fins and terri ble gas mi l e age.
A POSSIBLE LOCATION: IDAHO NATIONAL LABORATORY
UAMPS is i nvestigati ng the possibility of l o cating an SMR plant at Idaho National
Laboratory (INL), 60 mil es northwest of Idaho Fal l s. INL is owned by the Department
of Energy Office of Nuclear Energy. Its pr imary mi ssion is the de velopment and
demonstration of advanced nuclear technolo gies. Mo re than 50 rese arch, test and
demonstration nuclear reactors have been constructed and operated on the 890-
square mi l e INL si te over the past 6 0 yea rs to support the U.S. Navy's nuclear
propulsi on program and the U.S. ci vilian nucl e ar power program.
The site has sufficient water resources and excel l ent access to major transmissi on
l ines for electricity distribution. Strong pol i t i cal supp ort exists i n Ida ho for a small
nuclear reactor project at INL. An operatin g SMR plant would employ about 320
peopl e drawing sal ari es averagi ng $86,000.
NEXT STEPS:
UAMPS has discussed the formation of the CFPP pursuant to UAMPS Joint Acti on
agreements and byl aws i ncludi ng the defin i tion of parti cipation sha res as a Site
Percentage Share ("SPS");
converting SPS to a Power Sales Contracts;
selling SPS' to other UAMPS Members through a fi rst right of refusal;
cost recovery of investigation based on SPS; and
ownershi p of the investi gati on work prod uct by SPS pa rti cipants;
UAMPS is working on o btai ning a $1,00 0,000 and possibl y addi tional matching grant
for site development. SPS participants will be abl e to take advantage o f the grant.
UAMPS staff is to provide CFPP draft agre ement of the SPS at the April UAMPS
meeting.
No fi nal decision regarding an SMR plant sh ould be expected before 2017. A plant
woul d likely not be oper ational before 2024, when man y coal pl ants wi l l likely need to
or be retired.
Stephen Hollabaugh Mi chael D. Holley
Assistant General Manager General Manager
4. FISCAL IMPACT
There is no direct fiscal impact associated with this item.
5. RECOMMENDAT ION
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