GE Hitachi targets new decommissioning markets after REI Nuclear buyout

GE Hitachi’s takeover of decommissioning technology group REI Nuclear deepens its PWR and small reactor expertise and the company is seeking new opportunities in fast-growing U.S. and European markets, company executives told Nuclear Energy Insider.

In December, GE Hitachi Nuclear Energy (GEH) acquired REI Nuclear (REIN), a decommissioning technology and tooling design company based in South Carolina.

REIN specializes in the design, tooling and project management of decommissioning and dismantlement (D&D) projects. GEH has already partnered with REIN on projects in Europe and the acquisition strengthens GEH's decommissioning supply chain and widens its base for growth.

The move comes amid a flurry of acquisitions and collaborations in the U.S. and Europe decommissioning markets. Decommissioning activity is set to hike in the coming years as reactors age and low power prices dent margins. Operators are increasingly seeking accelerated decommissioning processes to minimize costs and long-term risks.

GEH will combine REIN’s design strengths with GEH’s original equipment manufacturer (OEM) capabilities to optimize tool development and deployment for reactor segmentation projects, Gregg Schneider, General Manager, Decommissioning and Dismantlement Services at GEH, said.

This will “improve the efficiency and predictability” of reactor segmentation projects, he said.

GEH has already deployed REIN technology to dismantle two boiling water reactors (BWRs) at the Oskarshamn Nuclear Power Plant in Sweden. Earlier this month, GEH completed the segmentation of reactor internals at the 490 MW Oskarshamn-2 reactor on schedule and on budget, the company said. The segmentation of Oskarshamn-1, shut down in 2017, is ongoing, it said.

REIN's U.S. presence and expertise on multiple reactor types will also help GEH seek business in new decommissioning markets. REIN's previous U.S. contracts include tooling and execution of reactor segmentation at the 2.7 GW Rancho Seco plant in California, major component removal for the Big Rock Point nuclear plant in Michigan and numerous research reactor projects.

GEH is exploring supplying decommissioning services beyond reactor segmentation, Schneider told New Energy Update.

These decommissioning services may include planning, staffing, licensing and tooling as well as projects outside the reactor pressure vessel, he said.

“The acquisition [of REIN] strengthens our supply chain in the rapidly emerging global D&D segment and positions us to be a leader in decommissioning projects worldwide," Schneider said.

New openings

GEH has built on its decades of experience in BWR supply and services to push into the decommissioning market.

In March 2017, GEH formed an alliance with engineering group Bechtel to offer decommissioning and dismantlement services for nuclear power plants in Europe.

GEH has gained experience on seven reactor internals replacement projects in Japan and REIN's experience on serving PWR and BWR reactors in the U.S. aligns with GEH's wider growth objectives.

In Europe, GEH is pursuing dismantling and decontamination (D&D) opportunities for BWRs and PWRs in Sweden, Spain and Italy, Schneider said.

The company is also pursuing contracts on recently-announced U.S. plant closures.

Some 12 U.S. reactors are scheduled to close in 2019-2025. Holtec estimates the value of the U.S. decommissioning market at around $14 billion in 2018-2028.

The U.S. market will "continue to provide growth opportunities as more plants are considering immediate decommissioning [DECON] versus long term SAFSTOR”, Schneider said.

                  Announced US nuclear plant closures (2018-2025)

Source: US Energy Information Administration (EIA), September 2018.

REIN's project experience will also help GEH pursue small reactor and non-reactor contracts "which may have been overlooked by a global focus,” Michael Anderson, Vice president of operations at REI Nuclear and now Senior project engineer at GE Power, told Nuclear Energy Insider.

Bigger players

Growing demand has spawned new decommissioning joint ventures and business models involving the transfer of plant ownership to specialist decommissioning groups.

In the U.S., Holtec and SNC-Lavalin created a joint company, Comprehensive Decommissioning International (CDI) while Orano (formerly Areva) and U.S. demolition specialist Northstar created Accelerated Decommissioning Partners (ADP). The newly-combined groups will offer full ownership transfer and decommissioning services.

In Europe, EDF subsidiary Cyclife Sweden and Fortum agreed to jointly develop services in nuclear decommissioning and waste management, aiming to become a leader in the European nuclear decommissioning space.

These decommissioning groups are using economies of scale and the latest technology advancements to shorten decommissioning procedures and cut costs.

U.S. decommissioning cost estimates fell in 2017, indicating growing industry expertise is improving efficiency.

Total U.S. decommissioning cost estimates fell by 2.5% in 2017 to $88.8 billion, ending a decade of year-on-year increases, according to a new report from the Callan Institute.

                                   US decommissioning cost estimates

                                                               (Click image to enlarge)

Source: Callan Institute's 2018 Nuclear Decommissioning Funding Study

Close cooperation

GEH's acquisition of REIN follows several years of collaboration on decommissioning projects.

For the Oskarshamn reactor segmentation, the partners worked together throughout the pre-award and post-award phases of the contract, to reduce risks and unforeseen costs.

Segmentation of reactor internals in Oskarshamn-2 was completed in around seven months.

"Execution has exceeded all project goals, saving all parties the costs of unplanned discoveries and outcomes," Schneider said.

Tooling solutions designed by REIN helped accelerate the segmentation process, Anderson said.

REIN's tooling system is based on mechanical cutting technologies and the system has been adapted following lessons learned at earlier deployments. A similar design is being used for the dismantling of Oskarshamn-1, despite differing reactor geometries, Anderson noted.

Advanced tools

Operators have traditionally used mechanical cutting techniques for reactor dismantling projects, but alternative cutting methods could help reduce costs in the coming years.

A recent study by the U.S. Electric Power Research Institute (EPRI) found that deployment of thermal arc saw cutting, underwater lasers and self-operating systems could shorten reactor segmentation projects and cut costs.

GEH will continue to develop a range of mechanical and thermal segmentation tools for use on BWR and PWRs.

During the tooling for Oskarshamn, for example, REIN developed a system to deploy plasma-arc torches underwater from the same structure that supported mechanical solutions, Anderson said.

“Effectively, our suite of tools can deploy a plasma-cutting torch at any position a saw blade can be delivered”, he said.

By Neil Ford