Boom or Bust?

By Darlene Bremer | Jun 15, 2004




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Are there jobs for you in the nuclear power market?

According to the World Nuclear Association, a recent study determined that nuclear energy incurs about one-tenth of the financial cost of coal to produce electricity. And if the social and environmental costs of using fossil fuels to generate electricity are considered, then nuclear energy is an even more attractive option. But since no new nuclear power plants have been ordered in the United States for the past 25 years, what opportunities exist for electrical contractors in the market?

Bill Matthews, vice president of nuclear operations for Dominion Power, Richmond, Va., believes that the market is growing. “In the last decade, through improving and upgrading existing facilities, the entire nuclear industry has increased output, equaling the production of 10 1,000MW plants,” he observed. For example, the capacity factor in U.S. nuclear power plants has risen from 58 percent in 1980 to 92 percent in 2002. “Although a few plants have shut down, nuclear power plants are, overall, producing more electricity,” he added.

Others, however, take a more “stable” view of the market. “The emphasis today is on the renewal of licenses for longer periods. The market will remain viable for a long period as these plants are relicensed and they make investments in system upgrades and equipment modernization to improve performance and reliability,” said Steve Hogan, superintendent of work control support for the Callaway nuclear plant in Missouri, which is owned and operated by AmerenUE, St. Louis, Mo.

The main reasons no new construction of nuclear power plants is planned? Public perception of the dangers of nuclear reactors and cost. “Since deregulation, the production costs of nuclear power have grown and the profit motive has forced utility companies to be more competitive,” explained Wayne Flippin, vice president of Dillard Smith Construction Co., Charlotte, N.C. In the past seven years or so, the industry has been trending toward the use of turbines to produce electricity in peaker power plants to fill peak demands. “Turbine power generation is a very cost-effective technology,” Flippin added.

However, all is not as bleak as it might seem. Potential legislative changes, such as the federal Energy Bill, may offer new opportunities on the horizon, including future new plant construction. “Several utilities in the U.S. are in the process of submitting licenses for new plant construction on existing operating sites. We are also seeing a resurgence of restarting plants that were never initially completed or that were shut down after just a few years of operation for various reasons,” said Aric Zurek, manager for control systems for GE Energy’s nuclear operations, Wilmington, N.C.

The real growth, said Zurek, is the international market. “Around the world, 30 new reactors are being built, creating a total of 26GW. In addition, another 50GW of power are already being planned.”

Opportunities await

Even with no new construction of power plants domestically, opportunities for electrical contractors definitely exist in the nuclear market. “Utilities generally have their own staff for day-to-day operations, but when reactors are shut down for scheduled refueling operations, hundreds of contractors from various disciplines can be brought in to perform maintenance and upgrade activities,” Matthews said.

In addition, contractors that focus on digital controls, information technology (IT) systems, or telecommunication and computer network systems, are particularly valuable during these scheduled outages. “Utilities use the opportunity to upgrade old analog systems to make the plant even more operationally efficient. Electrical contractors that have experience with these low-voltage, high-tech systems are in high demand.”

Other niche areas that offer excellent opportunities for electrical contractors include transformer maintenance, HVAC work, motorized operating valve testing, and large battery and elevator maintenance, according to Hogan. “Other opportunities include transmission infrastructure upgrades for line contractors, or for contractors that specialize in inside work, performing upgrade and maintenance projects in the plant’s office and support buildings. No nuclear plant qualifying training is necessary to work in this area and the work is the same as in any other commercial project,” he added.

Finally, since most of the electrical contractors and electricians that worked on the original construction of nuclear power plants have retired, there is an increasing lack of expertise. Tom Tatro, vice president of operations at Contra Costa Electric Inc., Martinez, Calif., an EMCOR Group company, maintains that “This gap provides an opportunity for those electrical contractors that want to enter the market to train their work force and capture whatever market share exists.”

Electrical contractors that perform work in nuclear power plants must understand all of the safety requirements that must be taken to avoid any accidental exposure to radiation, according to Tatro. In addition, quality assurance and quality control procedures in nuclear power plants require 100 times the amount of documentation of other kinds of electrical projects, pre-installation approvals, and post-installation inspections. “To successfully bid this type of work, electrical contractors must understand and deal with the Nuclear Regulatory Commission (NRC) paperwork involved, the safety procedures that must be complied with, and would have to research how to best incorporate those costs in the final bid,” he added.

According to Matthews, only the most highly qualified contractors who are used to following detailed procedures and fulfilling various regulatory requirements will succeed in the market. Unlike in a fossil-fueled station, contractors in the nuclear power market must constantly solicit permission and have clearance to perform various functions. “Working in nuclear power plants means the contractor has to be extremely safety conscious, particularly in terms of being aware of the surroundings and the effect of activities on nuclear reactivity management,” he said.

However, when it comes to market research, technical training, and the ability to demonstrate to the customer that the contractor has the expertise required to perform the work, there is no difference between the nuclear market and other utility work. “You can’t really separate nuclear power from other types of facilities,” said Flippin. “The difference is primarily in the type of fuel that is used to generate the electricity.”

Pros and cons

As with any other market, there are advantages and disadvantages to working in nuclear power plants. With deregulation, the energy production market has become more competitive and utilities need contractors to provide solutions that improve the profitability and performance of their plants, according to Zurek. On the downside, the number of available customers is relatively few, making the nuclear power market an extremely competitive and visible one. “The margin of error for the contractor is very small, exerting a lot of pressure to remain on schedule. And although this can be said in most every market, poor performance in the nuclear power market can ruin a contractor’s reputation extremely quickly,” he explained.

Other advantages to entering this market include increased sales and profitability, an increased customer base, and the potential to diversify service offerings. However, the contractor also has to invest in additional safety training because nuclear plants have their own set of rules, which, according to Flippin, are often more stringent that OSHA. Then there is the strict security and badging requirements that accompany working in the nuclear arena. “These requirements could impact the contractor’s ability to provide the necessary manpower levels if workers won’t easily pass background checks and random drug and alcohol testing,” explained Hogan. But, he adds, most utilities that operate nuclear plants have other types of generating facilities as well, so the contractor that performs well at the nuclear plant may very well find additional work with the same customer.

Tatro looks at the nuclear power market as an opportunity for contractors to position themselves for the future. “There will come the day when the price of fossil fuel becomes so prohibitive that the public will again be willing to turn to nuclear energy to provide affordable, clean, and safe power.” The government is putting money toward research, upgrades to existing plants and the re-evaluation of potential new construction. “The Bush administration has pledged over $1 billion to re-examine nuclear power, the advantages it provides, and ways to store spent nuclear waste safely,” Tatro said.

So much of the future of nuclear power is wrapped up in politics and public opinion, making it difficult to accurately predict. “There are, however, new, simplified reactor designs already on the drawing board that focus on increased security and safety. And the NRC’s new, early-site permit process has been designed to simplify the procedure of filing for permits and constructing new power plants, which is a sign that interest in building new plants sometime in the future does exist,” said Hogan.

And don’t forget to look abroad. “The international market continues to look more inviting than here in the U.S., but with new legislation such as the current energy bill and incentives for new construction, that may change in the next few years,” Zurek predicted.

Flippin estimates that, unless there is a technological breakthrough in dealing with waste, existing nuclear power plants will eventually be replaced by other forms of electricity generation. “However, if the public attitude against global warming intensifies, there might very well be a reexamination of the benefits of the clean electricity provided by nuclear power plants,” he said.

If, however, with the new simplified plant design being presently proposed, the right economic conditions, and the resolution of the waste issue, then, concluded Matthews, “Within a decade, the probability is that new nuclear power plants will begin to be constructed.” EC

BREMER, a freelance writer based in Solomons, Md., contributes frequently to ELECTRICAL CONTRACTOR. She can be reached at 410.394.6966 or [email protected].

About The Author

Darlene Bremer, a freelance writer based in Solomons, Md., contributed frequently to ELECTRICAL CONTRACTOR until the end of 2015.





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