NGNP an essential option for the global energy future

It will supply high temperature process heat with a low carbon footprint

Oil RefineryWhy would a petrochemical firm want to use nuclear process heat and power? DOW Chemical is working toward that objective.

We talked with Fred Moore, a senior consultant in Energy & Climate at Dow, about this industry leading program. Fred is right in the middle of it having just completed a term as chairman of the NGNP Industry Alliance Limited which is developing a high temperature gas reactor (HTGR) for process heat applications.

Moore said there are two things that should get people excited about the work being done by the NGNP Industry Alliance. The first is that last April it chose to develop a modular HTGR reactor technology being developed by AREVA, which is one of the members of the Alliance. The second is that the Alliance’s business plan is coming into focus and will be completed in a month or two.

Intrinsically safe

Fred’s enthusiasm for the HTGR design comes through in his description of its features. First, he notes, it was intrinsically safe. There would be no risk for petrochemical plants such as oil refineries because it was “walk away safe.” This means it can be safely co-located at major industrial sites that need process heat steam.

“The Chinese pebble bed project had already demonstrated there is no potential for meltdown,” Moore said.

Significantly, there are no water cooling system pumps or pipes in the reactor. In the event of a sudden shut down, the reactor can never reach a temperature where the fuel can fail. Even the spent fuel is simply air cooled and only requires natural convection.

Advantages for process heat

Second, the HTGR has terrific capabilities to produce process heat. It’s design outlet temperature of 750C is more than enough to supply high temperature steam. In fact, Moore points out money can be saved for customers by using off the shelf materials in a design of a commercial version that will produce an outlet temperature of about 500C. It is 30% more efficient in producing electric power and, unlike a LWR, can produce process heat than would otherwise require some form of supplemental fired heating from a LWR to achieve the same temperatures.

The relatively small size of the HTGR makes it comparable to a combined cycle natural gas plant of the same capability in terms of producing process heat. This is an important characteristic as it allows similar redundancies for critical process heat applications.

“Our intent is to produce the units for cogeneration. That means they will primarily supply process heat, but when the heat isn’t needed, they will be used to generate electricity and put the surplus power not used in the plant on the grid.”

Another way that money can be saved for customers is that instead of burning fuel oil to make steam, it can be used as a feedstock to make valuable products the sale of which support the bottom line. It swaps out a cost for a source of revenue.

Moore envisions a multi-unit set up. It will allow customers to produce process heat, electricity, conduct maintenance, and have capacity on demand when production requires it.

“Every economic analysis we’ve run supports this business model,” he said.

Alliance with coal companies?

Another huge opportunity for HTGR technology and the Alliance is a possible venture and partnering with coal companies. Moore says the Alliance sees that there is potential demand in synthetic fuels derived from coal with virtually no carbon footprint, and he names a price point where that demand will kick in.

“We see nuclear assisted synthetic fuels as being competitive if oil hits and stays at $130/barrel and that is without any price for carbon.”

Even better Moore says is that the HTGR is economically competitive with gas for process heat at $6/MMbtu.

Time to market milestones

The time to market milestones are coming up fast. The NGNP Industry Alliance expects to submit a license application to the NRC in 2017. And Alliance members point out this will be an American nuclear reactor which will create jobs in this country. Pre-licensing work is already underway.

“White papers on technical challenges and regulatory gaps have already been submitted to the NRC through the NGNP Project. Our target is to get the license, break ground, and have the first-of-a-kind unit operational by 2025,” Moore said.

A utility operator comes with the reactor which is why Entergy is part of the Alliance. The assumed business model is that the HTGR modules would be owned by a power company or other owner/operator and that there would be long term power purchase agreements with customers such as Dow. Moore adds that in some cases the owner/operator would enter into a joint venture with a customer, or the customer could also pay cash if they wanted to capitalize it that way.

The business model is that for an “Nth of a kind” $1 billion reactor, there would be an 80/20 debt to equity ratio. A 20-year power purchase agreement would insure the debt would be paid off. That means for an investment of $1 billion you can get $4 billion worth of reactors. And you can take the contract term sheet to the bank and likely avoid any need for loan guarantees. This is a very different model than the typical model for building and financing 1,000 MW LWRs today.

Moore closes by re-emphasizing that, “The HTGR is very promising. It is the only near term technology that can replace fossil fuels for process heat applications and enable lower carbon footprints for the major process heat industries. It will work, and it will be cost competitive with fossil fuels. That should bring customers running,” Moore says.

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