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Interview: GE-Hitachi CEO Jay Wileman on New SMR Focus

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Under CEO Jay Wileman, GE-Hitachi Nuclear Energy has seen enormous success marketing its BWRX-300 small modular reactor (SMR) and the Natrium advanced reactor, the latter of which is a sodium fast reactor developed with TerraPower. Last month Energy Intelligence's Phil Chaffee sat down with Wileman on the sidelines of the World Nuclear Association's annual symposium in London to discuss GE-Hitachi's outlook on the nuclear world. Below is an edited and shortened transcript of that interview.

Q: GE-Hitachi strikes me as the one legacy reactor vendor that has almost entirely switched over to the SMR market. Is that fair?

A: I would characterize it a little bit differently. We are still focused on our installed base and our existing market.

Q: But in the newbuild market ...

A: In the recent newbuild market we started with our ESBWR, and had the North Anna-3 project with Dominion. After they suspended it, and we stepped back and looked at what was going on in the world with newbuilds and power, and said: "OK, what do customers really want? What's it going to take for them to rebuild the fleet?" This was just before everybody was talking about Net Zero by 2050.

Our team went out and really listened to the customer, and they want a few things: something that wasn't going to potentially destroy the company's balance sheet, so it couldn't be a multibillion-dollar build.

Q: ... à la Vogtle and VC Summer.

A: You said it. They want certainty on cost and schedule. They want reliability — a lot of technologies back in the 60s and 70s, when they started up if they hit a 60% capacity factor, you were happy. Now you've got to blow past 90%.

So our engineers got together in 2017, we slid pizza and Red Bull under the door, and they came up with some innovations. We took the ESBWR, which is a very elegant type of design, and its passive safety, and we really simplified it down through innovation. That's how BWRX-300 was born. Now the BWRX-300 has that technology base [the ESBWR] that was a licensed design by the NRC [US Nuclear Regulatory Commission] with a couple breakthrough propositions.

One is integral isolation valves; if you're a nuclear engineer, you know that you have the reactor pressure vessel with some pipe — an MSIV (main steam isolation valve), another MSIV — and then you go off to a steam turbine. When you do that, regulators make you assume that the pipe is going to have a double guillotine break, and you're going to release all that coolant into a containment. To mitigate this you need systems to put the water back in, and to deal with temperature, pressure, and all of that. Our patented innovation is an integral isolation valve. So it's now our pressure vessel and the integral isolation valve, which is the same code classification as the pressure vessel, before any piping. Now, if a pipe break occurs, the integral isolation valves close to stop the loss of coolant. This simplifies everything.

The second thing is construction. If you're building a traditional nuclear plant you're going to scoop out about a million cubic meters of dirt, and then you're going to build your building, and then you're going to backfill it with expensive engineered backfill. What we're going to do is build a vertical shaft, and come in with an innovation — in the nuclear industry — called steel bricks, which is a steel-concrete composite. So you bore down and then those can be built modularly, so you save a lot of time and a lot of money.

Q: And that's for the foundation?

A: That's for the reactor building. The containment, and the reactor building.

Critical for me are three pillars: Design to cost — carefully manage the nuclear creep, and have a standard plant. Next, there is certainty on outcome, on schedule and on cost. We've got great experience with our partners in Hitachi-GE Nuclear Energy, building ABWRs in Japan on budget and on time, and they did a great job modularizing. And the last thing is reliability. When you start up you can't afford to be on a learning curve. This is a boiling water reactor; we know how to operate it.

I'm excited about the technology. OPG [Ontario Power Generation] is our launch customer. SaskPower has done their evaluation and selected us a month or two ago. TVA. Synthos Green Energy is in a joint venture in Poland with PKN Orlen. We're excited about this real interest: not just MOUs [memorandums of understanding] to explore.

Q: In terms of creating a product that can be identical and sold anywhere, increased regulatory harmonization can of course enable this. But I was in Paris when you were on the stage with OPG Chief Strategy Officer Dominique Miniere and Rumina Velshi, head of the Canadian Nuclear Safety Commission. But while Velshi talked about harmonizing regulatory approval with other regulators — particularly the NRC — Miniere argued that “if we try” to harmonize regulations “too much,” then “we will slow down the speed of the SMR” deployment in Canada. How do you negotiate this understandable customer desire to just get going on their specific project with the broader but perhaps slower goal of harmonization of approvals across multiple regulators?

A: We've been working on this for quite some time. If you think about WNA's Cordel (a harmonization initiative), which I'm a mentor for as a board member; if you think about what the NEA [the Paris-based Nuclear Energy Agency] is doing; about what NEI [the US Nuclear Energy Institute] is doing; about MDEP [the Multilateral Design Evaluation Programme] and about the fact the IAEA just came out looking for the same kind of harmonization. That's great. We've had people doing this at the lower level, and the IAEA is going to bring a lot of attention and tailwind, and they'll be the harmonizer of the harmonizers.

But one of the tenets that we've built in is that we can't slow down the existing project. The first project will be under Canadian [regulation], and nobody will lose their sovereignty of licensing. The trick is going to be for us, as the design owner, to think about "I've got all these different regulatory areas in a Venn diagram. How do I find that regulatory sweet spot? And can some of those Venn diagrams move a little bit? Can we squish them together to get more overlap?" So this will be easier the further we go, but we have to be mindful of the right here, right now. We are looking for a license to construct [at Darlington] to be submitted by OPG later this year.

We're working to develop a CPA [a construction permit application to the NRC], and our approach is not Part 52 [of the Code of Federal Regulations] but Part 50. We're going to take the foundation of the ESBWR, which the NRC knows well and approved in November 2015. And where things are different, like this integral isolation valve, we're going to do a licensing topical report. We've already submitted five, and they've been approved.

So the NRC side, we're going in the direction they need, so we can have a good regulatory process. CNSC, same thing. In the UK, we will put in our application for a generic design decision in the next few months. I love this collaboration because the BWRX-300 is playing in all three of these markets. So we're the perfect test case.

Q: What sort of schedule do you envision for the CNSC?

A: I don't want to speak on OPG's behalf, or on the CNSC's behalf.

Q: Zooming in on the Darlington SMR, when I interviewed OPG's Miniere in November, he talked about a model for the SMR project that sounds a lot like the one they developed for the ongoing refurbishment of the existing Darlington Candu reactors. A model that isn't customer-client but much more collaborative. This is something new for GE-Hitachi. How do you envision that model working, particularly with your owner? Is GE comfortable with this collaborative model?

A: It's a great model. It's been demonstrated to be successful for the refurb project. The typical OEM-EPC-AE [original equipment manufacturer-engineering procurement construction-architect/engineer] model has everyone doing their scope, assuming their risk, and the owner has some risk as well.

[This involves] a traditional EPC contract, where when you have an issue you stop, you figure out whose problem it is, who's going to pay for it, and who will be responsible for the stop — which is an important point because the costs are going up all the time — and then you fight about it and you're in commercial negotiations for almost a year.

This [Darlington] model, everybody recognizes there's risk out there: the structure is an integrated project delivery model where we all share the risk. And you keep going, and you don't have to fight about where issues are coming from. It's a lot more complicated than that. Conceptually you've got a risk pool and you've got a benefit pool. Everybody's motivated; you're not set up for commercial arguments. That's the worst thing that can happen: stopping work just to argue.

Q: One of the reasons the ESBWR was so hard to sell, as far as I understand, was that GE and potentially Hitachi as well did not want to take on the construction risk that would have been necessary to sell these things. It does sound like you will take on some construction risk at the Darlington SMR. Are your owners OK with this?

A: What I would say at a high level is that for North Anna-3 we were going to take on risk that we could best control, where it was us controlling it. And others would manage their risk. So we were willing to do that.

Now, with this shared risk, it still gets us to the same general concept, but it is more collaborative. We are being supported by both of our parents. Both GE and Hitachi are excited about this project. We fit well within the energy transition —helping to solve the energy trilemma — within GE Vernova [the GE renewables and power company spinoff that is the GE-Hitachi parent company]. Scott Strazik, the CEO of GE Vernova, is excited about the BWRX-300, and about the excitement he's hearing in the industry. So there's a lot of internal support.

Q: GE's nuclear joint ventures with Hitachi have occasionally over the years been floated on the market. Prospective buyers have looked at them. Is it safe to say they're off the market now?

A: There have always been rumors that there are discussions going on. Of course, we don't comment on rumors. However, Scott [Strazik] has made it very clear to the industry that nuclear has a spot within GE's overall portfolio.

Q: Returning to the BWRX-300, we have this first-of-a-kind. To what extent will these other prospective builds — in Estonia, Poland, Saskatchewan and TVA in Tennessee — wait for your Darlington first-of-a-kind to be operational? Will some move faster than that, and just wait till construction starts at Darlington?

A: First let me push back on that "first-of-a-kind." If you look at the BWRX-300 design, everything has been proven by either extensive tests or operations, except for the integral isolation valves, which by the way have been proven in the oil and gas industry at much higher pressures and temperatures. It's a very low technical risk, and we've cleared the major licensing risks. So I would say, and one of my innovation engineers has said, that this is really no different than taking Lego blocks and putting them together in a much simpler way. That's just a little pushback, but it is the first BWRX-300 specific design. I will give you that. But it's not like everything is new.

You'll have to go to them, but it's been stated in the press that they have a timeline to hit the early 2030s ...

Q: They being ...

A: They being all the customers you just mentioned. And if you do the math on that — the timing on that — I believe they will do their own early works. TVA has said publicly they're starting with us to do their construction permit. So people are doing things.

Now when will the FIDs [final investment decisions] line up? We'll see. But to be there by 2032 ...

Q: ... the FIDs may have to come before Darlington starts operation.

A: Yeah, or just after.

Q: And which of those prospective customers might be the next one after Darlington? Do you have any sense?

A: Good question. I think TVA has laid out their timeline to some degree, submitting their CPA, then it's going to be the standard time for NRC review. SaskPower has come out. There seems to be a big target between 2030 and 2032. Synthos Green Energy and PKN Orlen say they want to be next. Right after that is OPG themselves.

Q: Outside TVA and OPG, none of these are legacy nuclear operators.

A: Cez [the state-owned Czech utility] is.

Q: And we haven't talked about them. But they haven't narrowed their SMR plans down to you yet. And I supposed Estonia hasn't either.

A: That's correct.

Q: But certainly SaskPower, TVA and Synthos have narrowed it down to you.

A: That's correct. But think about the synergies of a North American play, and then a Canadian play with OPG and SaskPower. There's a synergy that you've got in that region. We're looking to recreate that [the Darlington model] with partners, and bring the whole solution. Instead of saying "Nope, I'm the NSSS [nuclear steam supply system] supplier, and here it is," we're trying to build this coalition to really be able to make it easier.

Because if you think about it these are not traditional nuclear companies anymore. I've got a whole new market segment. SaskPower, PKN Orlen and Synthos Green Energy — they understand the challenges of getting to net zero, and yet they're not historically a nuclear operator. We've got to help them along the way.

Q: Are you talking with TVA and OPG about going with them to third countries and customers?

A: Certainly there will be synergies between SaskPower and OPG.

Q: But for Estonia, there's nothing there.

A: What I can say right now is that TVA doesn't have that model. Nor does OPG — yet. They may choose to do that, but I'll leave that to them.

Q: For all of these foreign export projects — excluding TVA — how much firepower are you getting from Washington, in terms of Ex-Im Bank or the Development Finance Corp. (DFC) support?

A: We're getting support from the US government. There's a lot going on. I have always said, when people would say "We're in danger of losing our nuclear leadership," I'd say "No, we have lost our nuclear leadership." I think the US government understands that. Both sides of the aisle are very supportive of nuclear, which is fantastic. We are getting great support from the DOE [Department of Energy] as we go to different places. So the model now with DFC can come in and play. Everything's starting to synchronize now and come together. I haven't seen that before in my career.

Q: Will this newly passed "Inflation Reduction Act" for climate and infrastructure have an impact on the nuclear industry?

A: I believe so. Both for the operating fleet, and now for any kind of a newbuild that we're going to need for net-zero carbon. It certainly will help with investments.

Q: In Wyoming, you're involved with TerraPower on Natrium. Could you explain GE-Hitachi's role there?

A: Sure. I'm very excited to be in partnership with TerraPower. It was an interesting marriage. We have had the Prism [fast reactor] technology in our portfolio since the 80s, post-EBR-II [the sodium-cooled experimental breeder reactor in Idaho].

We were looking at ways to commercialize it. We talked about a stand-alone plant. Even yesterday I had to correct someone when they used the word waste. It's not waste, it's slightly used fuel. But we came here to the UK and talked about plutonium disposition with the NDA [the UK Nuclear Decommissioning Authority], and we never really got traction.

Looking at what TerraPower was going through with their traveling wave reactor, we thought "What might we be able to do together?" Then ARDP [the US Advanced Reactor Demonstration Program], and we thought this is a good opportunity to do something. I talked with Chris Levesque and I said "How can we do something that takes the best from both companies?"

We are jointly developing the Natrium technology. The ARDP project in Wyoming is TerraPower.

Q: So you have no formal role in that demonstration project?

A: Just supporting the technology development under that. They are the project leader, and we are working with them at a technical level.

The important thing here [with the Natrium design] is this ability to go up to 500 megawatts in 5.5 hours to help with some grids that will be heavily into intermittent [generation]. That's a big deal.

Q: So is the Prism off the table? On your website you mention the NDA. I follow UK nuclear policymaking very carefully, and they're not close to a decision on plutonium disposition. Are there any other opportunities for Prism, or should we basically just think about Natrium when thinking about your fast reactor offerings?

A: Prism is not out of the portfolio. It's still there. However, I'm excited about the Natrium and this effort with TerraPower, for what seems to be where this industry is going.

Q: There's obviously a lot of attention — particularly in the US — in new types of nuclear fuel, including high-assay low-enriched uranium, but also on recycled fuels. You were just talking about reprocessing and recycling. Do you foresee the US or Canada building reprocessing facilities?

A: Well the technology is certainly there. Whether the policy and political will are [there] remains to be seen. There's a lot of discussion around this whole area that is not a technical discussion. Could it happen? I don't see any movement in that direction at this point.

Topics:
Nuclear Newbuilds, Leadership Interviews, Corporate Strategy
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