Supply chain

Getting heavy

23 July 2010

The past year has seen several major developments that should help to ensure the necessary heavy engineering capability is in place to support the nuclear renaissance. By Claire Maden

As vendors ready themselves for orders for new reactors from around the world, the supply chain for specialised reactor components has also been gearing up. Today’s reactor vendors are not the integrated reactor suppliers of the 1970s and 1980s. Reactor components for the nuclear renaissance will be sourced from a range of suppliers. Promises from reactor constructors to develop and use local sources of supply wherever possible are becoming a recurring theme: Westinghouse has gone so far as to name it the ‘We Buy Where We Build’ approach. As well as enabling reactor constructors to deliver on such promises, by developing supply chain capabilities within the various countries that are, or are likely to, be building new nuclear plants also means that suppliers are also protecting their international interests, with each press release eagerly suggesting that the components will find an overseas market in addition to the domestic one.

Making key components of nuclear power plants is highly specialised. Suppliers must be able to produce components to the exacting standards required by the industry. The N-stamp nuclear accreditation awarded by the American Society of Mechanical Engineers (ASME) is an internationally recognised standard for nuclear components.

Large forgings like reactor pressure vessels need to be made in equally large forging presses. Indeed, pressure vessels for Generation III+ reactors ideally need to be made in 14-15,000 tonne forging presses able to accept hot steel ingots of 500-600 tonnes, which are currently offered only by three suppliers: Japan Steel Works (JSW), China First Heavy Industries (CFHI), and Russia’s OMZ Izhora. With vendors anticipating new orders – and not forgetting the need for replacement components such as reactor pressure vessel heads and steam generators at existing plants as operating lives increase – the heavy components sector is taking steps to meet the demand. All of the big three existing suppliers of heavy forgings have taken or continued with steps over the past year to increase their capacity, while new capacity is planned at other locations including plants that can finish forgings made elsewhere.

April 2010 saw the completion of a new forging shop including a 14,000 tonne press at JSW’s Muroran plant. The forging shop is the first part of a three-stage expansion project launched in 2008 that should see JSW’s nuclear capability tripled to about 12 reactor pressure vessels per year by 2011. JSW has supplied the heavy forgings for the first two EPR reactors currently under construction in Finland and France. Meanwhile, Mitsubishi Heavy Industries (MHI) is in the midst of work to double the capacity for reactor pressure vessels and internals at its Kobe shipyard.

China currently boasts the world’s most ambitious nuclear reactor construction programme, with 20 reactors under construction and many more planned. It is hardly surprising, then, that its heavy engineering industry is also gearing up for expansion. Ten engineering enterprises were announced as qualified to provide equipment for Generation III nuclear plants by the State Nuclear Power Technology Corporation (SNPTC) in early 2010. Chief amongst them is CFHI, which already has a 15,000 tonne press and is in the process of expanding its capacity from three sets of PWR equipment per year in 2009 to five sets by 2015.

Russia’s heavy engineering sector has also been expanding for more energy sector work. The commissioning of a furnace complex able to produce 600 tonne ingots and 5.5 m-diameter forging shells for reactor components at OMZ’s Izhorskiye Zavody plant at Izhora in mid-2009 is a major step in expansion plans that should see a doubling of large forgings capacity to 3-4 sets of reactor components per year from 2011.

Moving on to new capacity, Sheffield Forgemasters International Ltd (SFIL) is set to install the UK’s first 15,000 tonne forging press after securing a funding package worth £140 million, including £80 million from the UK government. Much of the remainder – up to £50 million according to some reports – is from AP1000 constructor Westinghouse, in the form of forward orders. Construction is likely to begin later in 2010, with the press becoming operational within three years.

However, forgings from the new press would not necessarily find their way into the UK’s potential new reactors. Two reactor designs – the AP1000 and EPR – are being assessed in the UK’s Generic Design Assessment. The SFIL press would be able to produce components for the EPR, but with its substantial Westinghouse backing it seems reasonable to expect it to produce forgings for the AP1000, while the forgings for EPRs would likely originate from one of the Areva’s heavy component projects.

In 2009, SFIL strengthened its position as a supplier of nuclear heavy components by winning contracts with Babcock & Wilcox, to supply 20 tonne steam generator tubesheets for Argentina’s Embalse Candu reactor, and pump maker KSB for reactor coolant pump forgings for South Korea’s Shin Kori NPP.

Another company preparing to join the exclusive club of very heavy forge presses is South Korea’s Doosan Heavy Industries, which operates a 13,000 tonne press and is in the process of building a 17,000 tonne press, with plans to increase capacity from 3.5 units per year in 2010 to 5 units per year by 2012. February 2009 saw Doosan make its first export sale of a reactor pressure vessel, for the Chinese-designed CNP-600 sixth unit at the Qinshan nuclear power plant in China. In addition to other Chinese contracts, Doosan also has contracts with Westinghouse and Shaw to supply similar components for four new AP1000 reactors in USA.

South Korea’s ambitions to become a major exporter of nuclear power plants, and to be entirely self-sufficient in nuclear power technology by 2012 was further strengthened by Doosan Heavy Industries’ 2009 acquisition of Czech turbine maker Skoda Power.

Vendors expand

Areva’s commitment to secure heavy component capacity for new build in the USA was firmly underlined by the start of construction of the Areva Newport News plant to manufacture heavy components for US EPR reactors, which began in earnest in July 2009. The 300,000 m2 plant, a 76:33 joint venture of Areva and Northrop Grumman, represents an investment of more than $360 million. It will be able to finish large nuclear grade components such as reactor pressure vessels, steam generators and pressurizers, forged elsewhere. CH2M Hill is providing engineering, procurement and construction management services for the facility, which is due to start operations in 2012. The project marks Northrop Grumman’s return to the commercial nuclear power business after four years in which its nuclear activities have been related to naval propulsion systems.

Areva is not putting all its engineering eggs in the Newport News basket. In addition to the US plant, it annnounced plans in 2009 to double capacity at its Chalon/St Marcel heavy components facility in France, including steam generators, reactor vessels and heads, pressurizers and internal equipment. The upgrade, which is being carried out as a gradual ramp-up, would enable the plant to increase its production to the equivalent of 2.7 EPRs per year from the current 1.7.

With plans to build EPRs in the UK, Areva stressed its commitment to developing a UK-based supply chain with an initiative announced in partnership with Rolls-Royce and Balfour Beatty in late 2008; first orders for equipment are likely to be placed in 2012.

With four construction and operation licence (COL) applications for US EPRs already submitted to the US Nuclear Regulatory Commission, it is hardly surprising that Areva is looking to secure its heavy component supply chain in the USA. Likewise, Westinghouse has also taken steps to secure the supply of heavy components for the AP1000. Following a joint venture agreement with the Shaw Group in August 2008, the Shaw Modular Solutions facility being built at Lake Charles, Louisiana will produce structural, piping and equipment modules for AP1000s. The plant is due to start up in early fiscal 2010, according to Shaw Group’s October 2009 Form 10K filing with the US Securities and Exchange Commission. In January 2010, Shaw won a $10.8 million federal tax credit for the plant.

2009 also saw GE Hitachi sign a strategic agreement for Equipos Nucleares SA (ENSA) of Spain to manufacture and supply reactor pressure vessels for ESBWR and ABWR units.

India presses on

Until 2008, India had been effectively isolated from international trade in nuclear materials and components because of its status under the Nuclear Non-Proliferation Treaty. Until then, Indian engineering company Larsen & Toubro Ltd (L&T) produced most of the heavy components for the country’s indigenous pressurised heavy water reactors and prototype fast breeder reactor, including pressure vessels and steam generators. L&T achieved ASME N-stamp accreditation in 2007, and since 2008 has been preparing to venture into international markets.

In November 2009, L&T formed a joint venture company with National Power Corporation of India Ltd (NPCIL) to produce special steels and ultra heavy forgings, and the companies began construction of a new plant at Hazira, in Gujarat state. The plant will produce 600-tonne ingots in its steel melt shop and have a press that will be able to supply finished forgings for nuclear reactors, pressurisers and steam generators.

L&T has also signed various agreements with overseas reactor vendors since early 2009, including memoranda of understanding with Westinghouse to produce component modules for the AP1000, AECL of Canada to develop a cost/scope model for the ACR-1000 reactor, Atomstroyexport of Russia for components for VVERs, particularly the next four VVERs to be built at Kudankulam, and with GE-Hitachi for ABWR components.

Other players in India’s heavy engineering sector have also signed international agreements over the past year or so. Bharat Forge and Areva signed a memorandum of understanding in January 2009 on setting up a joint venture to build a manufacturing facility for heavy forgings in India, with a 14,000 tonne press, to be operational by 2012. In 2009, Bharat Heavy Electricals Ltd (BHEL), which had previously been looking into setting up a greenfield manufacturing base for nuclear forgings in India, joined the Areva-Bharat Forge initiative, and signed a ten-year technology transfer agreement with Sheffield Forgemasters.

In summary, industry has spent the last two years preparing for busy times ahead.

Related Articles
L&T and NPCIL lay foundation for forging plant
Forgemasters win Shin Kori order
NPCIL and L&T set up forging venture
Areva expands heavy component manufacturing capacity

Chalon Chalon
JSW press JSW press

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