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ASSISTANCE TO ENERGY SECTOR TO STRENGTHEN ENERGY SECURITY AND REGIONAL INTEGRATION This publication was produced for review by the United States Agency for International Development. It was prepared by Tetra Tech ES, Inc. ASSISTANCE TO ENERGY SECTOR TO STRENGTHEN ENERGY SECURITY AND REGIONAL INTEGRATION The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. ASSISTANCE TO ENERGY SECTOR TO STRENGTHEN ENERGY SECURITY AND REGIONAL INTEGRATION TABLE OF CONTENTS
Foreword
New Nuclear Generation
1.1.1 Transmission Capacity and Stability 1.1.5 Radioactive Waste Storage and Disposal 1.2 Candidate Nuclear Generation Technologies Life Extension of the Armenia Nuclear Power Plant
2.1 International Experience in Life Extension of VVER 440 FOREWORD
This document discusses nuclear generation options which can be used for the new Least Cost Generation Plan. 1.
NEW NUCLEAR GENERATION
This chapter describes the technical, economic and logistical issues associated with constructing a new nuclear plant to replace the generation capacity of ANPP when it is retired at the end of its period of extended operation, which is assumed to be September 2026. The chapter also describes several nuclear generation alternatives and describes the cost assumptions used in the LCGP model. NUCLEAR PLANT PLANNING ISSUES
Transmission Capacity and Stability
The Armenian electrical grid is a relatively small system, relying primarily on load shedding to maintain system stability during transient situations. The transmission network is being rehabilitated as funding becomes available. Connections with neighboring countries also are being upgraded to provide greater capacity for power interchange. However, in order to handle the capacity of a new 1,000 MW nuclear plant at the ANPP site, additional transmission lines from the site to Hrazdan and from Hrazdan to Georgia will be needed. Previous planning for the new nuclear unit included discussion of a new transmission line from the site to Horasan in Turkey; however relationships between Armenia and Turkey may prevent cooperation on construction of a line directly to Turkey. This line may not be required to support operation of a new 1,000 MW plant, but reliability of offsite power supplies to the site may require additional high voltage transmission lines to elsewhere in Armenia, especially in light of the role that lack of offsite power supplies played in the Fukushima Daiichi nuclear accidents. Transportation Infrastructure
New generation resources will require the ability to bring in large pieces of equipment via railroad or roads. Several of the major components of a 1,000 MW NPP are over six meters in diameter and weigh over 600 tons. Because of the tunnels and bridges on alternate routes, the only suitable route to the ANPP site for large and heavy equipment is a roadway from the port of Batumi through western Georgia to Gumri and then south to the ANPP site. This roadway is about 450 km and is without the narrow tunnels and major bridges that make other routes unusable for such large and heavy loads. However, the condition of the roadway in several sections is not very good and the road goes through mountain passes with narrow lacets. There are several sections where the road is very steep. It probably will be necessary to widen the road in several places in order to move large and heavy loads. On the Armenian part of the road there are several small bridges that may have to be strengthened. The port facilities at Batumi also will need to be upgraded to provide the capability to offload the large and heavy components and load them on to transport vehicles. To prepare for construction of the new 1,000 MW unit, the following activities will need to be accomplished to develop the transportation infrastructure:  Perform a comprehensive survey of the roadway from Batumi to the ANPP site to determine the technical characteristics and to define the improvements that will be needed.  Perform a survey of the port facilities at Batumi to determine the existing capabilities and identify needed improvements. New Nuclear Generation. continued.  Develop an environmental impact assessment for the transportation upgrades,  Establish an agreement with the Government of Georgia for use of the roadway for NPP shipments, including provisions for road improvements and repairs as well as road closures during shipments.  Complete the upgrades to the Batumi port facilities and Georgia/Armenia roadways to accommodate transport of large and heavy loads. Water Resources
A new 1,000 MW NPP will require more than twice the flow of cooling water as the existing ANPP. Water usage data indicate that there may be sufficient water in the Sevjur River and collection pond to provide water for new NPP in the same way as is done for the ANPP, although some small reduction for other users may be needed. The approximately 6 % reduction in water available to agriculture users of the Sevjur could be compensated from other sources in the region or by more efficient water use practices. It also would be feasible to use a hybrid wet/dry cooling system, similar to that designed for the North Anna NPP, although the system has significant cost and efficiency penalties. While the payments for water use are very small as compared to other costs and will not impact the results of the LCGP analysis, the costs to mitigate the water use impact on other users should be considered in the investment cost of the new NPP. Capacity Utilization
The full capacity of a new 1,000 MW NPP could not be used in the Armenian system until well beyond 2030. From analysis of the load duration curves, it has been determined that, from plant startup in 2026 until well beyond 2030, a 1000 MW NPP would operate at far less than the expected 90% capacity factor if only Armenia domestic load is served. This is because there are large seasonal and daily variations in the domestic load and rules for dispatch restrict load on the largest generator to 75% of system load. Export of excess capacity to neighboring countries is necessary to achieve the design capacity factor needed for cost effective operation. Radioactive Waste Storage and Disposal
Operation of the new nuclear unit will create low level radioactive waste and spent nuclear fuel that need to be stored safely and ultimately disposed. For low level waste, near surface disposal in a vault constructed at the ANNP site is the recommended alternative. This should be the same disposal facility constructed for disposal of the operational and decommissioning waste from the existing ANPP. For spent nuclear fuel, several programs currently are underway to develop international or regional disposal facilities that should provide a means for disposal of fuel waste in the future. Spent fuel may to be stored in an interim spent fuel storage installation (ISFSI), similar to the one at the existing ANPP, for as long as 60 years until an international repository becomes available. In estimating the impact of radioactive waste storage and disposal on the operational costs for nuclear plants in the LCGP, estimates based on international experience have been used. However, it must be recognized that until the GoA establishes a government policy, safety regulations, and funding regulations for high level and low level radioactive waste disposal, the costs cannot be determined with precision. New Nuclear Generation. continued. International Agreements
Armenia is already participating in most international conventions related to nuclear energy. However, Armenia will need to ratify one or more of the current conventions on nuclear liability and the Joint Convention on Safety of Spent Fuel Management and on the Safety of Radioactive Waste Management in order to have full access to international nuclear commerce. Armenia has acceded to the 1963 Vienna Convention on Civil Liability for Nuclear Damage, which requires the parties to provide a minimum of approximately $5M of 3rd party liability protection. In order to have full access to international nuclear commerce, Armenia may need also to ratify the 1997 Protocol to the Vienna Convention and/or the Convention on Supplementary Compensation for Nuclear Damage (CSC) that were adopted by a conference in 1997. The 1997 Vienna Convention Protocol raises the liability limits approximately tenfold over the limits of the 1963 Vienna Convention (from $5M to approximately $466M). The CSC, once in force, will adopt the same basic limits as those in the 1997 Protocol and further provide for binding together, through a system of contributions (initial and supplementary) from countries with nuclear programs into a pool to share liability and distribute the economic burden among member states in the event of a nuclear accident in one of the member countries. Ratifying the 1997 Protocol or the CSC will mean that Armenia must require nuclear power plant operators to provide insurance or security and/or to make available public funds equivalent to 300 M Special Drawing Rights (SDRs), which is about $458 M at the 2012 exchange rate. Additionally, Armenia will need to amend or enact legislation that implements the terms of the convention(s). Acceding to the CSC would require Armenia to also provide for contributions of approximately 1 M SDR ($1.5 M) to the fund for the supplemental coverage in the event of a nuclear incident in one of the Parties to the CSC The IAEA “Joint Convention on the Safety of Spent Fuel and Radioactive Waste Management” entered into force on 18 June 2001 and currently has over 60 countries participating. This convention commits participating countries to conform to various standards, guidelines, and good practices related to spent fuel and radioactive waste resulting from civilian nuclear reactors. In Armenia, a resolution to adopt the Joint Convention on Safety of Spent Fuel Management and Safety of Radioactive Waste Management has been drafted but not yet been acted on by the Parliament. Armenia has a bilateral co-operation agreement with the Government of Russia on cooperation in the area of peaceful use of nuclear energy. Similar bilateral cooperation agreements with other nations of other suppliers, such as the US and Canada, would have to be established if reactor technology from these countries were to be used in Armenia. Legislative Requirements
With the new law on use of atomic energy, Armenia has most of the legal hierarchy commonly in force for nuclear nations. However, additional legislation to implement the indemnity and insurance provisions of the 1997 Protocol or the CSC convention will need to be enacted if those conventions are signed. A government policy and new legislation also are needed to identify responsibilities and funding mechanisms for management of spent fuel and other radioactive wastes resulting from NPP operation and decommissioning. New Nuclear Generation. continued. CANDIDATE NUCLEAR GENERATION TECHNOLOGIES
There are a number of NPP designs currently offered from suppliers around the world. These offerings range from existing plants for which there is operating experience to preliminary designs which will not be ready for construction for many years. In order to select NPP designs for consideration in the LCGP, a screening evaluation was performed. The criteria for the screening evaluation were the generation capacity and design maturity. Because of the relatively small electrical grid in Armenia, the LCGP should consider available technologies with a range of net generation capacity below1,200 MWe. This capacity is about three times higher than the existing ANPP and is considered the maximum that could be run efficiently within the Armenia electrical system. The second screening criterion is the current state of completion of the NPP design. The new nuclear unit should be completed by the end of 2026 in order to replace the existing ANPP at the end of its extended design life. Given the importance of the NPP project to the country and challenges of financing the project, it is considered essential that the new nuclear unit be a complete design that is already operating or under construction elsewhere within the next ten years. The screening evaluation identified three NPP technologies to be considered in the LCGP. The VVER-1000 design known as AES-92 has been selected by MoENR after careful comparison with other large, pressurized water reactor (PWR) designs. The Enhanced CANDU 6 (EC 6) represents a mature, proven design with a somewhat smaller generation capacity than the VVER. There are several Small Modular Reactor (SMR) designs under development which offer the capability to add nuclear generation capacity in smaller increments. These three NPP technologies are described in the following sections. VVER 1000 AES-92
The Russian Joint Stock Company, ATOMSTROYEXPORT, is currently offering the AES-92 design for deployment outside of Russia. This design has been selected by the GoA for the Armenia New Nuclear Unit has a generating capacity of approximately 950MW. The AES-92 design was the subject of the bankable feasibility study conducted for the MoENR. In addition to digital controls, the AES-92 has a number of active safety systems similar to those found on a traditional Western PWR. The AES-92 is designed for a 60 year life and an 18 month refueling cycle. It is intended for power generation in Load Follow and Frequency Control operation mode in the range of 100-75-100% with 1% power/min. The design of the reactor facility main equipment (reactor vessel and internals, steam generators, main coolant pumps, and pressurizer) is an improved version of the Russian VVER-1000s currently in operation - an increased reactor vessel diameter, upgraded steam generator design, and modernized reactor coolant pump set. The AES-92 has been certified to meet the European Utility Requirements (EUR) and is acceptable to be constructed in the EU. The safety of the AES-92 has been certified by regulatory authorities in Russia and India. The principal advantage of the AES-92 design is the existing relationship with ASE, which should contribute to the availability of support services and technology transfer provisions. Also, developing the regulatory program for the new plant should be simpler. One disadvantage of the AES-92 is that the standard design has a lower seismic design basis, which will require more enhancements to meet Armenia conditions. Other disadvantages are the large size of the major components (reactor vessel and steam generators are 7m diameter) and the 950 MW net capacity, which can not be fully utilized in the Armenia system. New Nuclear Generation. continued. The CANDU 6 was designed by Atomic Energy of Canada Limited (AECL) and is currently offered by Candu Energy Inc., which is a wholly owned subsidiary of SNC-Lavalin Inc. CANDU stands for "CANada Deuterium Uranium". CANDU is a Pressurized Heavy Water Reactor (PHWR) that uses heavy water (deuterium oxide) for moderator and coolant, and natural uranium for fuel. The CANDU 6 is designed with a net generation capacity of 674 MW. CANDU 6 units are typically built in sets of two to provide a plant with generating capacity of 1348 MW. Eleven CANDU 6 reactors are currently in operation in Canada, Korea, Argentina, China, and Romania. An additional unit is under construction in Romania. The CANDU 6 design has been licensed by the Canadian regulatory authority as well as the regulators in the other countries where they are operating. Some CANDU projects have been completed in about 69 months, from the contract effective date to commercial operation including a 46-month construction period from the time of issuance of the construction permit to fuel loading. The CANDU-6 design has a number of unique features that would be beneficial in a situation like Armenia:  Use of natural uranium widens the source of supply and makes fuel fabrication easier. There is no need for a uranium enrichment facility. There is also the potential to use recovered uranium from the spent fuel of the ANPP for the CANDU 6.  The 674 MW capacity could be utilized a higher portion of the time in the Armenia  If a second unit were built, a two unit plant provides more flexibility and reliability for a small grid such as in Armenia. If one unit goes offline, the other unit could supply most of the domestic energy demand.  The CANDU design uses pressure tubes rather than a large pressure vessel to hold the fuel, which allows on-power refueling, resulting in potentially higher capacity factors. The top performing CANDU 6 units have achieved capacity factors in excess of 96 percent.  The use of a pressure tube reactor eliminates the need for a large reactor vessel, which will be difficult to transport into Armenia.  The CANDU 6 is a proven design with successful track record of on-time, on- budget construction and reliable operation in several countries. It has a well established supply chain. This is a substantial advantage in reducing the risk of construction delays due to problems with equipment suppliers, such as those currently being experienced by the Olkiluoto NPP project in Finland. There are two disadvantages to the CANDU 6 design. Following a plant trip (scram), there is a delay of about 36 hours before the plant can be restarted. This situation will not be experienced very often because the CANDU 6 design can accept a 100% load reduction without tripping. The other disadvantage is the need for a one year outage to replace the pressure tubes of the reactor after about 30 years of operation. New Nuclear Generation. continued. Small Modular Reactors
There are a number of Small Modular Reactor (SMR) designs currently being developed with licensing and operation expected within the next ten years. Four SMRs currently being considered for licensing by the US NRC are described in the following sections. In 2012, the US Department of Energy (DOE) announced a program to provide $450 million to support first-of-its-kind engineering, design certification and licensing for SMR projects that have the potential to be licensed by the Nuclear Regulatory Commission and achieve commercial operation by 2022. The funds will be provided as equal cost-share agreements over a five-year period. All four of the SMR developers discussed below have submitted applications for the DOE cost sharing. NuScale is an integral pressurized water reactor (PWR), designed by NuScale Power, LLC in Corvallis Oregon, USA. The NuScale SMR is a natural circulation, light water reactor with the reactor core and a helical coil steam generator located in a common reactor vessel in a cylindrical steel containment. The reactor vessel/containment module is submerged in water in the reactor building safety related pool. The reactor building is located below grade. The reactor building is designed to hold 12 SMRs. Each NuScale SMR has a rated net electrical output of 45 MWe, yielding a total capacity of 540 MWe for 12 SMRs. The SMRs use low enriched uranium fuel similar to conventional PWRs. Two NuScale design features that are important for consideration in Armenia are the modular installation and the size of the major components. While a complete NuScale plant would have 12 SMRs, it can be constructed sequentially so that capacity is added when needed. For example, the plant could be initially constructed with four SMRs to produce 180 MWe. Additional pairs of SMRs would be installed as the capacity is needed. The SMR modules are assembled in a factory and shipped to the site, so there is no need for elaborate fabrication on site. The SMR modules and turbine are sized to fit on a normal railcar, so they can be readily transported from factory to plant site. The staff of the U.S. NRC is currently engaged in pre-application activities on the NuScale SMR design. NRC design certification should be completed by 2016. NuScale is in negotiations with several utilities in the US for construction of the first plants. The mPower™ is an integral PWR, designed by B&W mPower, Inc. in Virginia USA. The mPower is a light water, low enriched fuel reactor with the reactor and steam generator located in a single reactor vessel located in an underground containment. The mPower™ reactor has a rated net electrical output of 180 MWe. The reactor features a four-year refueling cycle. Like NuScale, mPower is designed for modular capacity addition in increments of 180 MWe to match customers' load growth projections. The staff of the U.S. NRC is currently engaged in pre-application activities on the mPower™ reactor design, with design certification expected in 2016. In a parallel activity, the Tennessee Valley Authority (TVA) has submitted pre-application documents to the NRC for the possible licensing and construction of up to six mPower modules at its Clinch River site in Roane County, Tennessee. In November 2012, mPower was selected for one of the DOE cost sharing grants to help to achieve commercial operation by 2022. New Nuclear Generation. continued. The Westinghouse SMR is a 225 MWe class integral PWR with passive safety systems and reactor internals including fuel assemblies based closely on those in the AP1000. The steam generator is above the core, fed by 8 horizontally-mounted axial-flow coolant pumps. The reactor vessel will be factory-made and shipped to site by rail, then installed below ground level in a containment vessel 9.8 m diameter and 27 m high. The reactor vessel module is 25 meters high and 3.5 meters diameter. It has a 24-month refueling cycle and 60-year service life. Passive safety means no operator intervention is required for 7 days in the event of an accident. In May 2012 Westinghouse teamed up with General Dynamics Electric Boat to assist in the design and Burns & McDonnell to provide architectural and engineering support. A design certification application is expected by NRC in 2013. In April 2012, Westinghouse set up a project with Ameren Missouri to seek DOE funds for developing the design, with a view to obtaining design certification and a combined construction and operation license (COL) from the NRC for up to five SMRs at Ameren's Callaway site, instead of an earlier proposed large PWR there. The initiative - NexStart SMR Alliance - has the support of other state utilities and the state governor, as well as Savannah River, Exelon and Dominion. Holtec International is developing a 160 MWe factory-built reactor concept called Holtec Inherently Safe Modular Underground Reactor (HI-SMUR). The SMR-160 has two external horizontal steam generators using fuel similar to that in larger PWRs. The 32 full-length fuel assemblies are in a fuel cartridge, which is loaded and unloaded as a single unit from the 31-meter high pressure vessel. Holtec claims a one-week refueling outage every 42 months. It has full passive cooling in operation and after shutdown and a negative temperature coefficient so that it shuts down at high temperatures. The heat sink can be to atmosphere, using dry cooling. The whole reactor system will be installed below ground level, with used fuel storage. A 24-month construction period is envisaged for each unit. Operational life claimed is 80 years. In March 2012 the US DOE signed an agreement with Holtec regarding constructing a demonstration SMR-160 unit at its Savannah River site in South Carolina. Holtec expects to submit an application for design certification to NRC by the end of 2013 and hopes to have the first unit operating in 2018. The Construction Permit Application and Preliminary Safety Analysis Report are due in June 2014. 1.2.3.5 GENERIC SMALL MODULAR REACTOR For the purpose of the LCGP, it was decided to model a generic SMR as a nuclear generation option, rather than select one or more specific designs. There are several reasons for this decision:  No one SMR design has significant advantages over the others.  Because several SMR designs are in similar stage of development and licensing, it can not be determined at this time which will be the most successful.  Construction and operating cost estimates provided by the vendors have no real To represent the SMR option in the LCGP, a generic SMR design was defined based on the recommendations in reference 3. The generic SMR has a generating capacity of New Nuclear Generation. continued. 360MWe, which is about equivalent to eight NuScale or two mPower or Holtec modules. In the LCGP model, it is assumed that 360MWe of SMR capacity is brought on line in 2026 and that additional 180MWe modules are added as demand grows. The primary advantage of the SMR is that nuclear capacity can be constructed as needed. This approach will substantially reduce the funding requirements and financial risks of the project. Although the overnight construction cost per kW capacity for the SMR may be higher than for a large plant, the cost of capital and interest during construction will be significantly reduced, resulting in a more economical project. Another important advantage of the SMR in the case of Armenia is the much smaller size of the modules as compared to a conventional plant. For most SMRs, an essential design requirement is that all modules can be shipped on a standard railroad car. This means that the modules could be brought through the large port facilities of Poti and transported by rail, eliminating the need for upgrades to roads and port facilities. COST ESTIMATES
The investment and operating costs and operating performance data for the three new nuclear generation technologies are presented in tables 1 through 3. The data for the AES-92 are taken from the Bankable Feasibility Study (1). Data for the CANDU 6 are taken from the Initial Planning Study (2) and escalated five percent to 2011 dollars. Data for the Generic SMR is from the EPIC report (3). REFERENCES
1. “Armenia New Nuclear Unit(s) Project Bankable Feasibility Study Final Report”, 2. “Initial Planning Studies”, PA Consulting, October 2008 3. “Small Modular Reactors – Key to Future Nuclear Power Generation in the U.S.”, published by the Energy Policy Institute at Chicago (EPIC), Harris School of Public Policy Studies, Technical Paper, Revision 1, November 2011, Robert Rosner and Stephen Goldberg New Nuclear Generation. continued. Table 1-1: VVER 1000 AES-92 Cost and Performance Data
Parameter
Reference
transportation and distribution improvements in 2010 dollars New Nuclear Generation. continued. Table 1-2: CANDU 6 Cost and Performance Data
Parameter
Reference
site, transportation and distribution improvements. 2010 dollars O&M plus decommissioning 2010 dollars Includes fresh and spent fuel costs, 2010 New Nuclear Generation. continued. Table 1-3: Generic SMR Cost and Performance Data
Parameter
$4,778/kw plus 10% premium for Armenia plus 2,092,088,000 EPIC Technical Paper Table 2 $200M for site and transmission improvements O&M plus decommissioning 2011 dollars Includes fresh and spent fuel costs, 2011 Capacity factor is not restricted by load 2.
LIFE EXTENSION OF THE ARMENIA NUCLEAR POWER PLANT
The VVER 440 design life is 30 years. With a startup date of 1980 and six years of shutdown from 1989 to 1995, the ANPP unit 2 will reach the end of design life by September 2016. However, the ANPP staff is preparing a program to extend the operating life of the plant by at least 10 years through 2026. This section discusses the technical and economic issues of NPP life extension and presents estimates for investment and operating costs for ANPP during the period of extended operation. INTERNATIONAL EXPERIENCE IN LIFE EXTENSION OF VVER 440
Russia's nuclear reactors were generally licensed for thirty years of operation. Since 2000, work has been under way to refurbish older reactors in Russia in order to extend their operating lives and the lifetime has been extended for 16 nuclear reactor units. Four of the VVER-440 design units (Novovoronezh 3 and 4, Kola 1 and 2) have been granted 15-year extensions. Cost estimates for the Russian VVER life extension have been reported in the press and literature ranging from $50M to $300M per unit. The ANPP staff were recently told by representatives of Atomstroyexport that a rule of thumb for VVER life extension is $400 per Kw of capacity, which would be $176M for the 440 MWe ANPP. For VVER 440 type reactors, experiences at other plants indicate that annealing of the reactor vessel to reduce radiation damage to the steel may be required. The PAKS NPP in Hungary has been performing a service life extension program for its four VVER440 units since 2006. The PAKS program is based on US practice, which requires consideration of a broader scope of equipment than required by Russian regulations. Plant life extension requires a systematic and comprehensive assessment of age related degradation mechanisms for all systems, structures, and components at the NPP. In the US, where these assessments are now fairly routine and are supported by a large industry database, the average cost of a license renewal application is about $12-15 M. The assessment often identifies many components that must be repaired or replaced to ensure safe operations in the years of extended life. Examples of high cost replacements are steam generators, pressurizer, reactor vessel head, and plant cabling. Beyond the cost of the license renewal application, US plants implement Life Cycle Management programs to replace equipment that wears out during the period of extended life. These LCM programs have ranged from $180M to $800M for a single 1,000 MWe unit. REGULATORY REQUIREMENTS
The RoA has recently issued two resolutions related to ANPP life extension. Resolution 461 describes several planning activities with organizational responsibility and completion dates. The resolution calls for MoENR to organize the life extension program and estimate needed financial resources by August 1, 2013. Resolution 1085 promulgates ANRA requirements for the life extension program. These requirements are mainly based on RF requirements in NP-017-2000. However, the ANRA requirements specify that safety category 1, 2, and 3 equipment must be evaluated for life extension, while NP-017-2000 only applies to safety category 1 and 2. Therefore, the ANPP life extension program will involve evaluations of a much larger scope of equipment than has typically been included in life extension of the Russian VVER 440 type plants. Per the regulations, ANRA must approve the documentation reporting completion of the life extension activities by September 2016. For this reason documentation should be submitted at least six months earlier in order for ANRA to have time to review it. Following Life Extension of the Armenia Nuclear Power Plant. continued. ANRA approval for extended life operation, ANPP would have to submit a safety justification every five years. In accordance with ANRA requirements, ANPP has prepared and submitted to ANRA a conceptual plan on life extension. The report identifies major activities for planning the life extension program with expected completion dates. The conceptual plan involves two phases. Phase 1 includes equipment surveys to identify equipment to be replaced, development of life extension plans and safety assessment, and preparation of cost estimates. Phase 2 includes replacing or refurbishing equipment, performing analyses to justify remaining life of non-replaceable equipment (e.g., reactor vessel), developing aging management programs for systems and structures, performing an in-depth safety assessment, and preparing documentation to submit to the regulator. RELIABILITY AND EFFICIENCY PROJECTS
In addition to life extension activities required by their regulator, ANPP will require other capital projects to ensure reliability, thermal efficiency, and personnel safety. For example, plant management has indicated that renovation of the main condenser would improve plant efficiency and electrical output significantly at a cost of $1.5M. Another project to replace main turbine blades could improve plant output significantly. Based on the age of the plant, it can be expected that other high cost projects such as feed water heater replacement, turbine controls upgrade, switchgear replacement, or plant instrument modernization will be needed over the next several years to ensure reliable performance of the plant. The ANPP staff is in the process of compiling a list of efficiency and reliability improvement projects. ANPP OPERATING AND INVESTMENT COST
The ANPP operating costs, as approved by the PSRC are shown in Table 2-1. The annual tariff includes an allowance for spent fuel storage of $3.75M per year, which is equivalent to about $1.65 per MWh. It should be noted that this funding is only for construction of interim dry storage at the site. There is no provision in the ANPP tariff for spent fuel disposal. The $ 250 M investment cost shown in the table represent the cost for the Life Extension Program as well as equipment replacements needed to achieve safe, reliable, and efficient operation throughout the period of extended life. This figure is only a very rough estimate based on international experience and could be off by a factor of two either way. A more precise estimate should be developed after ANPP has completed the first phase of the Life Extension Program. Investment costs for life extension are assumed to be spent over a period of five years from 2014 through 2018. Life Extension of the Armenia Nuclear Power Plant. continued. Table 2-1: ANPP Cost and Performance Data
Parameter
O&M plus decommissioning 2012 dollars Includes fuel disposal costs, 2012 dollars 440Mw derated 8% for safety margin less

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