The 26th Annual NUPIC Vendor Meeting was held June 21st and 22nd at the Hilton Riverside New Orleans and hosted by Entergy. This was Alden’s 4th time attending the event (see last year’s blog post for more information about the NUPIC organization). The meeting is an important opportunity for utility auditors and representatives to meet with suppliers outside of a NUPIC audit. As Oscar Limpias, the VP of Nuclear Oversight at Entergy noted in his keynote address, “vendor performance and the partnership between vendors and utilities is critical to the future of nuclear generation”.
A variety of topics were presented, including decommissioning, new plant construction, small modular reactors, equipment reliability, commercial grade dedication (CGD) and the revised CGD guidance, cyber-security considerations for suppliers, counterfeit items and delivering the nuclear promise. Copies of the presentations can be found on the NUPIC site (https://nupic.com/NUPIC/Home/HotTopics.aspx).
A common theme throughout the two days was the current state of nuclear power and its future. While NUPIC, itself, saves each utility an estimated $1 million per year, there are more opportunities to reduce cost in relation to NUPIC and vendor interfacing. The average cost for generating nuclear power in 2016 was $34 per MWh (down from a peak of $40 per MWh in 2012). Of this price, approximately $6 is the cost of fuel and $28 is the people and support systems. In order for nuclear to remain competitive with highly subsidized renewables and low-cost natural gas, the goal is to reduce the cost to $28 per MWh by 2020. This will be accomplished through the Delivering the Nuclear Promise initiative and the issued efficiency bulletins, which are the implementation of the initiative. All of the efficiency bulletins issued to date can be found on the NEI website (https://www.nei.org/Issues-Policy/Delivering-the-Nuclear-Promise/Efficiency-Bulletins). The four bulletins that currently relate to NUPIC and suppliers are EB 16-28a (Minimize NUPIC Vendor Audit Frequencies), EB 16-28b (Establish Common Finding/Deficiency Definitions Used During Vendor Audits), EB 16-29 (Optimize Strategic Sourcing to Deliver Savings), and EB 16-30 (Material Cost Reduction While Maintaining Quality). NUPIC is also considering additional savings possibilities such as graded scope audits, standardized purchase orders, reducing utility intervention in manufacturing and services and enhanced auditor training. (Refer to the presentations presented by Brian Mervak (NUPIC Chair, SCE&G) and David Kimball (Director of Nuclear Oversight at Cooper Nuclear Station) on Day 1 and Mark Mlachak (QA Manager, First Energy Nuclear Operating Company) and John Simmons (Consulting Nuclear Auditor, Luminant Power) on Day 2 for more information.)
The annual vendor dinner and social is always a highlight of the meeting. This year it was a dinner cruise aboard the Creole Queen Riverboat. We were treated to a creole buffet dinner with a lively jazz band and gorgeous views of the city (see photos below). As always, it was a very good meeting with a nice balance between informative presentations and networking between quality assurance professionals from utilities and nuclear suppliers. As Jeff Perry (Senior Project Manager, TVA) stated in his presentation on Small Modular Reactors, “QA in nuclear construction will make the difference between a project that is successful and one that is not.” An efficient and effective quality program including a robust corrective action program is of utmost importance throughout the supply chain.
In June 2016, the Alden Quality Assurance department attended the annual NUPIC (Nuclear Procurement Issues Committee) vendor conference for the third year in a row. NUPIC is an organization that provides a cost effective method for NRC (Nuclear Regulatory Commission) licensee's to maintain their approved suppliers lists by sharing audits of suppliers. The vendor conference is an opportunity for utilities, suppliers and regulators to get together and discuss current issues which impact the processes of purchasing and supply of nuclear components and services. This annual event has been beneficial for Alden QA to stay abreast with current nuclear quality issues and to maintain a high quality product for our clients.
The NUPIC vendor conference is hosted each year by a different utility and in addition, the NRC sends representatives and holds a workshop on vendor oversight at the conference every two years. The 2016 event was hosted by Ameren in St. Louis, Missouri at a hotel adjacent to the Jefferson National Expansion Memorial (U.S. National Park featuring the Gateway Arch and Old Courthouse, see photos). Conference topics included an update on new nuclear plant construction, updates on NUPIC initiatives and activities, maintaining independence during internal audits, common audit findings, and nuclear safety culture. One particularly interesting presentation last year was given by Kenneth Koves of INPO (Instutite of Nuclear Power Operations). Mr. Koves talked about ways to improve nuclear safety culture including; making sure to step back and look at the big picture, the importance of human factors and remembering that you don't "fix" people, the importance of communication including communicating the "why" of a particular situation, listening is often more important than telling, and planning (you have to go slow to go fast). He also made sure to point out that completing a checklist does not mean you have accomplished anything other than completing the checklist! Copies of the presentations from the conference can be found on the NUPIC site (https://nupic.com/NUPIC/Home/HotTopics.aspx). The NRC workshop topics included commercial grade dedication, the development of guidelines for the implementation of 10 CFR Part 21, dedication of design and analysis software, and the expanded recognition of the ILAC accreditation process. Copies of the presentations from the workshop can be found on the NRC site (https://www.nrc.gov/reactors/new-reactors/oversight/quality-assurance/vendor-oversight/past/2016/).
Gateway Arch & Old Courthouse in St. Louis, Missouri
In November 2016, the Alden Quality Assurance department attended the NIAC (Nuclear Industry Assessment Committee) annual meeting. NIAC is the supplier equivalent to NUPIC (https://www.aldenlab.com/News/Blog/PostId/9/nuclear-procurement-issues-committee-annual-meeting) and the main benefit of membership is for suppliers to share audits of their sub-suppliers. NIAC membership is open to suppliers with a 10CFR50 Appendix B or equivalent DOE quality program, and who demonstrate and agree to compliance with the NIAC Charter. Alden joined NIAC in the fall of 2014 and the membership has helped reduce quality assurance costs while also staying in touch with current industry issues and maintaining a high quality product for our clients.
The meeting was held in Jacksonville, Florida and featured the necessary business of setting the audit schedule for the upcoming year and providing auditor training. The auditor training is important to ensure consistent and accurate audits that all members can share and rely on. Additionally, there was a keynote address by Ben Marguglio of High Technology Seminars (http://hightechnologyseminars.com/). Mr. Marguglio is a leading authority on human performance factors and human errors, including error prevention and reduction. He was an informative and engaging speaker who spoke about Root Cause Analysis. One of the most interesting parts of his talk was about the seven human error causal factors. The seven factors are: knowledge, cognition, value/belief, error-inducing condition, reflexive/reactive, skill and lapse, and he talked at length about them and gave an example of each. If a human error was the cause of a problem, identifying the causal factor will allow you to appropriately correct and prevent that condition in the future.
In addition to the NIAC programming and networking, members were treated to an array of aerial tricks as the Blue Angels practiced over the beach for the Jacksonville Sea & Sky Air Show which was held on the weekend following the meeting. This was not part of the NIAC meeting itself but was an unexpected surprise during lunch break Thursday and after the meeting on Friday.
Attendees at the 2017 Alden Forum on Hydropower and Fish Passage
Based on presentations given by the various speakers, the primary takeaways from the forum include the following:
Cake consumed during a break at the 2017 Alden Forum, showing companies and agencies in attendance
The format and content of the forum was highly rated by the attendees and led to many in-depth and productive discussions. The setting appeared to be more conducive to open dialogue among all of the participants compared to typical relicensing meetings and agency consultations.
Planning for additional forums addressing other relevant topic areas related to fish passage and other environmental issues is underway by Alden staff, and may include hosting events in other regions of the U.S.
HydroVision International is the largest gathering of hydro professionals worldwide. Over 3,000 hydro professionals and over 300 hydro related product and service providers were on the exhibit floor. The participants are from 51 countries. The event highlights perspectives on the role of hydropower, explores issues affecting the hydropower industry, covers issues and concerns affecting hydro resources, publicizes current market opportunities and challenges, and facilitates development of a vision to meet challenges and to ensure sustainable development.
Alden is active in supporting the hydro industry, with physical hydraulic modeling, 3D and 2D numeric modeling, fish passage design and testing. We attend Hydrovision every year, and participate in the exhibit, as well as technical conference and training sessions.
I was able to meet with most of our dams and hydro clients and teaming partners. The attendance from the private power producers, utilities, consulting companies and equipment manufacturers were adequate but there was clearly less participation from the federal government, especially from the U.S. Army Corps of Engineers (USACE). I observed increased energy and optimism in developing renewable and small hydro with a hope of relaxed regulation and a faster FERC approval process. That being said, folks seemed to think the price of natural gas will remain low in the foreseeable future and the development of hydro assets may remain relatively less competitive in general. Overall, the need for hydraulic, environmental, and fisheries work appears steady, nonetheless.
The spillway failure at the Oroville Dam impacted the dam owners and hydro industry, overall. Most dam owners are concerned and are taking steps to ensure their dams are safe, irrespective of regulatory requirements. Clearly, the need for support in the area of dam safety will remain strong.
Here a few highlights of the conference I can share:
Testing of Flood Control America’s One World Trade Center flood protection barrier at Alden
During the first week in May, I attended the Association of State Floodplain Managers (ASFPM) Conference in Kansas City. This conference is generally recognized as the key floodplain conference in the U.S. In addition to floodplain managers, associated consulting firms and product vendors regularly attend.
We thought it would be a good idea to go, given Alden’s recent activity in flooding related testing and modeling. Given the nature of my interest, I primarily attended sessions on floodproofing and modeling, and also spent time in the exhibit. The sessions were well attended and had good quality presentations.
For me, the key takeaways from the conference were:
We welcome your comments on flood proofing, flood protection, and modeling.
In the last installment of this series, we discussed energy demand, energy supply, and the impact of the rapid growth of solar power on changing energy sources. Today, we continue with the effects of power prices, the importance of power storage, and offer some conclusions.
Price of Power
A significant portion of the United States electricity markets is split into hubs. Each hub is an independent energy market in which supply and demand set the price of electricity on a real time basis. A map of United States hub zones is shown in the following figure.
Daily electricity demand is primarily based upon the time of day and climate. As shown in Part I, more electricity is used during daylight and evening hours than night time. Very cold or very warm weather can add demand due to heating and cooling. Additional constraints on fuel costs and available supply add an extra layer of complexity. The cost of environmental mitigations for coal fired power plants, the lack of sufficient natural gas supply in certain markets like New England, and the recent addition of large amounts of intermittent renewables adds significant uncertainty and instability to real time power pricing. If supply exceeds demand in certain electricity hubs, negative power pricing can even occur.
These factors combine to create wide price swings in the cost of real time open market electricity pricing, as shown in the following plot from ISO New England. The figure shows the five minute open market pricing for the New England Hub for 03/02/2017. Prices for this day varied between -$150.13/MWh and $71.93/MWh.
For energy sources that have a high capital cost to construct and a marginal ability to throttle energy output in real time, highly volatile real time energy markets with negative pricing periods create a large amount of uncertainty. This uncertainty in the future price of markets makes new and continued investments in large power generating infrastructure unattractive.
In order to limit the impact of our changing energy demand and production, energy storage will need to be a major priority going forward. One major type of energy storage is hydroelectric pumped storage. This is a process by which water is pumped to a higher elevation during periods of high output and low demand, to be later sent through hydropower turbines to produce energy during peak demand periods. Alden has previously covered pumped storage on the blog so check that out for more information.
Massachusetts has an Energy Storage Initiative which intends to promote and support energy storage within the state. Late last year the state released the State of Charge, a Massachusetts Energy Storage Initiative Study. If the full length report seems daunting, there is an Executive Summary available which gives a good overview of the problem and some of the policy goals to help foster power storage in Massachusetts.
We have provided an introductory look into some of the factors that affect the changing energy climate in the United States. As we discussed in our first blog post, nuclear plants are facing major challenges with many shutdowns on the horizon. These closures will continue to change the landscape of how power is produced in the United States. Optimal solutions to this problem will need to include the growth of renewables and the next generation of nuclear, coupled with significant amounts of power storage if we are going to avoid the continued dependence on carbon emitting power options. Let us know in the comments below if there are any particular items you would like us to expand upon in future posts!
Recognition and Sources
All of our plots above came from either the US Energy Information Administration or ISO New England. They both have a wealth of information and we highly recommend you check them out if you are interested more information on these topics.
Special thanks to Will Fay for his assistance in the development of this post. He works in our Hydraulic Modeling and Consulting Group and is directly involved in Massachusetts power generation as an owner and operator of three hydropower plants.