New decommissioning giant seeks further sites under ‘dominant’ transfer model

Holtec and SNC-Lavalin's new Comprehensive Decommissioning International (CDI) group forecasts significant economies of scale following Holtec's purchase of three closing U.S. reactors, Mark Morant, CEO of CDI, said.

Holtec's planned acquisition of two Entergy reactors and one Exelon plant upon closure underlines how new business models are transforming the decommissioning sector.

Holtec has signed agreements to purchase upon closure Entergy's 688 MW Pilgrim plant in Massachusetts, its 811 MW Palisades plant in Michigan, and Exelon’s 636 MW Oyster Creek plant in New Jersey.

Holtec and Canada's SNC-Lavalin have created Comprehensive Decommissioning International (CDI), a joint decommissioning general contractor business to carry out immediate decommissioning of the reactors under the DECON process.

Until recently, nuclear utilities generally favored the deferred SAFSTOR decommissioning option which allows them to build up funds over decades. As low wholesale prices accelerate reactor closures, operators are increasingly turning to ownership transfers to minimize risks.

Ownership transfer is set to be the “dominant model” for US decommissioning going forward, Morant told the Nuclear Decommissioning and Used Fuel Strategy Summit on October 1.

The purchase model allows utilities to concentrate on their core businesses under what is effectively a fixed price arrangement that incentivizes greater decommissioning efficiency, Morant said.

"It actually encourages you to go down the prompt DECON route. That's a very positive to message to stakeholders," he said.

      US decommissioning market snapshot

                             (Click image to enlarge)

Table focuses on the ongoing DECON projects and the reactors set to come offline in the coming years.

Source: Nuclear Energy Insider. Data source: company announcements.

Following Holtec’s multi-plant acquisition, CDI will immediately assume a fleet decommissioning approach which should generate significant economies of scale and series.

Backed by Holtec and SNC Lavalin, CDI will be looking to enlarge its portfolio of projects further, Morant said.

"We can handle more, and we are going to handle more," he said.

Fleet advantage

Growing demand for decommissioning services has prompted several new joint ventures which have merged expertise from different parts of the nuclear industry.

In 2016, decommissioning specialist EnergySolutions formed a joint company with engineering group AECOM to win the decommissioning contract for Southern California Edison’s (SCE’s) 2.2 GW SONGS nuclear power plant.

Last year, Orano (formerly Areva) and U.S. demolition specialists Northstar created a joint company, Accelerated Decommissioning Partners (ADP), to provide a "one-stop" final decommissioning solution.

CDI can draw from Holtec's significant spent fuel storage and transport expertise and SNC-Lavalin's plant engineering, construction and maintenance experience. The group aims to release plant sites for unrestricted use within eight years of funding availability.

The fleet management approach offers numerous opportunities to optimize labor and equipment and reduce costs, Morant told the conference.

"It becomes a program, not a project...It gives you the opportunity to move resources around, plan better and keep your foot on the pedal," he said.

Large decommissioning portfolios will allow suppliers to submit multi-site offers, incentivising innovations and lower costs, Morant said.

"We're going to encourage the supply chain to think about that and come forward with those ideas," he said.

    Locations of closed or soon-to-close reactors

                                  (Click image to enlarge)

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

In another example of scale, Westinghouse has reactor segmentation contracts in place at 13 power reactors in Europe and is currently performing dismantling activities at four different sites. The U.S. group is manufacturing new mechanical cutting tools and using the latest automation and visualization technologies to boost parallel project efficiency.

UK learnings

Morant has already managed a large fleet decommissioning program in the UK, as Managing Director of Magnox Electric Reactor Sites.

"When that business was set up, we put 70 leaders across 10 sites and it worked really well," Morant said.

Project management strategies included specialist teams for spent fuel and asbestos removal and advanced planning of resources such as labor, Morant said.

"I've seen the power of how putting a fleet together can really work…I've seen how the supply chain can meld into those programs and really add value," he said.

CDI will look to bring experienced operational site staff into the decommissioning business.

"In the UK, one of the big things we did in Magnox was retrain a lot of people from ops into D&D [dismantling and decontamination]," Morant said.

Operations staff have a good understanding of basic nuclear safety and can transition to decommissioning if appropriate project management training is provided, he said.

As decommissioning activity rises, fleet decommissioning programs offer long-term careers for employees, rather than project-based roles, Morant noted.

"We can genuinely point now to decommissioning as a career that is going to extend for many years, in fact many decades," he said.

Nuclear Energy Insider