New Nuclear Plants
Technology Investment Series – Chapter 2
Click here for: Chapter 1
Explosive Growth Potential in Nuclear
New Nuclear Plants are being proposed and applied for by a number of Electric Utilities (over 17 total today) both with and without nuclear experience. Through January 24, 2008, twenty-one new unit applications have been applied for or are anticipated being applied for by the end of 2008, with at least another two unit applications expected in 2009.
Moreover, the U.S. Department of Energy expects electric power demand to increase by 50% by 2030. To maintain its current 20% share of the U.S. electricity supply, nuclear energy output would need to increase by 500,000 megawatts (that’s 50 new 1,000 megawatt units in the U.S. alone!).
Technology Overview and Advancement
Currently there are five new nuclear designs that are certified or undergoing the certification process and another six designs that potentially could be added. These new designs are anticipated to be much more modular and standardized than the existing nuclear fleet (of which there is little standardization between plants). These new designs are based on advanced technologies considered Generation III or Generation III+ designs. The next generation of nuclear plants (expected after 2030) are Generation IV designs which are theoretical nuclear reactor designs currently being researched.
Research & Development Implications
Companies investing in New Nuclear Plants should be looking hard at the development activities taking place for potential R&D deductions and credits. With the current activities supporting the new crop of nuclear plants, potential sources for R&D activities include site specific research to support Combined Operating License (COL) design and application as well as new nuclear plant group consortiums formed to develop specific nuclear design research.
Looking ahead, because of the critical nature nuclear plays in the country’s energy supply, research is and will be ongoing in a number of technical and conceptual design studies in areas such as: nuclear fuel recycling and reprocessing; advanced recycling reactors; spent fuel forms and container advancement; plant safety optimization; new technologies such as sodium-cooled fast reactors, gas-cooled and lead-cooled fast reactors; new fuels such as thorium as potential replacement to uranium; site security for beyond design-basis threats and cyber security. In addition, to being potentially involved in the development of R&D knowledge, we expect a number of utilities will also be highly involved in transforming this knowledge into useful and beneficial technology.
So What Does All This Mean?
With the acceleration of research activities associated with COL design and applications, utility tax departments should focus on implementing now the processes necessary to ensure proper documentation and capture of R&D costs in this area as well as developing deeper understanding of nuclear investments within your company. In addition, tax departments should be ensuring that nuclear group consortiums are providing detailed explanations and background on spending so that R&D can be adequately captured by your organization.
More on BCP
BCP is an engineering services firm with 26 years of engineering experience and know-how. Over the last six years, we have developed a unique approach to R&D and an experienced team of R&D engineers and professionals that work for and with your tax group to provide complete and accurate technical substantiation for your R&D claim.
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