The nuclear power industry is economically challenged by an abundance of low cost natural gas from fracking and government subsidies supporting renewables. As a result, innovation has become a business imperative for Exelon in spite of strict industry regulations and low risk tolerance (with a primary goal of safety).
Exelon Nuclear, with approximately 10,700 employees as part of Exelon Generation, headquartered in Kennett Square, PA, operates the largest nuclear fleet in the nation. The fleet includes 23 reactors at 14 facilities located in Illinois, Maryland, New Jersey, New York, and Pennsylvania, and has the capacity to generate more than 22,000 megawatts of electricity. Overall, Exelon Corporation has approximately 34,000 employees. Exelon was formed in 2000 through a merger of Unicom Corporation (the former parent company of ComEd), and PECO, formerly named Philadelphia Electric Company.
The nuclear power industry is economically challenged by an abundance of low cost natural shale gas from fracking and from government subsidies that support renewables (e.g., wind and solar power). As a result, innovation has become a business imperative for Exelon in spite of strict industry regulations and low risk tolerance (with a primary goal of safety). Some states have deregulated electricity markets, which makes the financing of capital-intensive power projects difficult, and coupled with lower gas prices since 2009, have put the economic viability of some existing reactors and proposed projects in doubt.
Nuclear plants in competitive markets face the cumulative impact of several negative forces, including:
▪ Sustained low natural gas prices, which are suppressing prices in wholesale power markets.
▪ Relatively low growth in electricity demand – and in some markets, no growth.
▪ Federal and state mandates for renewable generation, which suppress prices, particularly during off-peak hours when electricity demand is low.
▪ Transmission constraints, which require power plants to pay a congestion charge to move their power onto the grid.
▪ Market designs that do not compensate the carbon-free baseload nuclear plants for the value they provide to the stability of the electricity power grid and the environment, and market policies and practices that tend to suppress prices.
On May 31, 2017, Exelon announced that it would prematurely retire its Three Mile Island (TMI) nuclear plant in 2019 due to TMI’s severe economic challenges and uncertainty around a path to sustainable profitability. With a high capacity factor (i.e., operating to its full generation capability most of the time) and good safety and regulatory record, TMI is one of Exelon’s fleet’s best-operating plants, making this decision even more difficult. Other nuclear plants in the United States have recently been shuttered or plans have been announced to shut them down near term. Currently there are 99 nuclear plants operating in the United States as shown in Figure 1.
Nuclear energy produces - by a wide margin - the largest portion of America's carbon-free power (more than 60 percent of the nation’s emissions-free energy). It is the nation's safest and most reliable source of electricity. The reality is that every time a nuclear plant shuts down, the power that replaces it is less reliable and produces more emissions. Protecting the U.S. nuclear fleet is in our national interest – it is essential that the plants continue to operate and provide clean, reliable base load electrical power.
Exelon recognizes the importance of safe, economic nuclear power in the energy mix of the United States. As a result of the economic challenges described above, innovation has become a business imperative for Exelon.
When a uranium atom in a nuclear reactor absorbs a neutron, the uranium will fission into two smaller atoms (fission products) as well as release energy and two to three neutrons. At least one of these neutrons is absorbed in another uranium atom, inducing fission which in turn produces more neutrons and energy and the process repeats itself (a self-sustaining series of fissions). This sequence of fission events is known as the fission chain reaction and is of importance in nuclear reactor physics and the production of nuclear energy and subsequently the electricity used in homes and businesses.
The innovation process at Exelon has developed into a similar self-sustaining chain reaction. Exelon has sent individuals to the University of Notre Dame’s Certified Innovation Mentor Program since its inception and continues to send employees each year. A formalized innovation process began recently at Exelon in 2014. Since then, innovation for Exelon has become a Business Imperative – a high level key focus area on the same level as Operational Excellence, Outage Excellence, Equipment Reliability and Talent Management. As a Business Imperative, Exelon seeks to create an innovation culture that will drive safety improvements, reduce costs, improve overall efficiencies and also apply advanced analytics to help optimize predictions. On an individual level, each employee’s performance is measured against a core competency called “Drive Innovation”. The expectation is for individuals to leverage alternative perspectives to deliver creative solutions that are safe, sustainable and proactively impact our industry, our organization and our customers. Innovation is a part of each employee’s performance review at Exelon.
As with all things in nuclear power, we have a procedure called “Innovation in Nuclear” and Nuclear-specific innovation metrics to measure effectiveness in behaviors, investment, and activity. Each one of our nuclear stations and the large corporate organizations have an Innovation Ambassador. There are currently 33 Innovation Ambassadors across Nuclear. I am the Innovation Ambassador for the Nuclear Fuels Department. All of the ideas mentioned below were entered in the Innovation Central portal (software platform by Imaginatik) used to capture all innovative ideas throughout the company.
Innovation Culture Surveys were held in Nuclear in 2016 and 2017 to assess our strengths and weaknesses in truly embedding innovation into the culture of the organization. Actions are created to address gaps so that Exelon can leverage innovation to its fullest extent.
As a result of the economic challenges facing nuclear power and with my innovation training at Notre Dame’s CIMp and the existing Exelon innovation processes in place, I want to walk you through three specific nuclear innovations which I have a passion for and with which I was personally involved. All three of these innovations address the economic challenges facing Exelon’s nuclear plants be reducing fuel costs.
INNOVATION 1: The first innovation resulted from a core design challenge for Nine Mile Point Unit 1 (New York) and Oyster Creek (New Jersey) nuclear reactors. Restrictive thermal limits from conservative, legacy LOCA (Loss-of-Coolant Accident) methodologies had significantly limited the efficiency of core designs and therefore increased ongoing fuel costs and resultant spent fuel waste. A LOCA is a design basis accident scenario for a Boiling Water Reactor that begins with the postulated rupture of one of the pipes connecting the (external) circulating pump with the reactor vessel resulting in the loss of coolant water from the reactor core. A methodology is a Nuclear Regulatory Commission (NRC) approved technical approach and the associated software that is used to analyze hypothetical accident scenarios. The NRC-approved methodology sets the safety analysis limits which must be met when a core design is being developed. Restrictive limits, which limit the power in the fuel, result is a less efficient core design for each new fuel cycle. A less efficient core design means that the number of new fuel bundles and/or the uranium-235 enrichment needs to be increased to meet the energy requirement of the fuel cycle.
CIMp’s The Way of InnovationTM teaches us to ‘ask new questions to get new answers’. So, we at Exelon asked ourselves: ‘What if we could work with the fuel vendor (Global Nuclear Fuel) to develop a new methodology for a best-estimate understanding of the design basis loss-of-coolant accident?’ The answer turned out to be ‘yes, and’ we could achieve better thermal limits. And we could also reduce fuel costs. This innovation was implemented in March 2017. My innovation team analyzed the benefits of such a new methodology. After showing the value of this innovation, explaining the trade-offs and preparing contingency plans, Exelon management accepted a proactive level of financial and technical risk on the idea and we designed the new fuel cycle for this innovation, even though we had not yet received NRC approval. The design work started in May 2016 and we did not receive approval from the NRC until February 2017. The new methodology had been initially submitted to the NRC for review and approval in 2011. It should be noted that getting a new methodology approved by the NRC is a long process – typically one to two years, but sometimes more. With proactive resolution of questions by Exelon, GNF and the NRC, 104 RAIs (Requests for Additional Information) later, the NRC approved the new methodology called TRACG LOCA. The TRACG LOCA methodology supports higher operating limits (called MAPLHGR limits – Maximum Average Planar Linear Heat Generation Rates) which allow the core designer to make the reactor core design more efficient (thus ordering less new fuel while achieving the same energy capability). There was true collaboration throughout the process as numerous groups within Exelon worked with GNF and the NRC. The benefit? Large, sustained fuel cost savings. Fuel costs were decreased by $2.3M in 2017 for Nine Mile Point Unit 1 and will be decreased by $2.5M for Oyster Creek in 2018. Recurring savings will be approximately $2M per fuel cycle (every two years) going forward for Nine Mile Point Unit 1. Also, using less fuel creates less fuel waste at the end of the life cycle. This innovation won an industry award – a 2017 NEI (Nuclear Energy Institute) TIP (Top Innovative Practice) award – in May 2017. The team is shown in Figure 2. (Note: Unfortunately, Oyster Creek will be prematurely retired at the end of 2019 – a decision that was made about 4 years ago).
INNOVATION 2: The second innovation is called “Mining the Spent Fuel Pool”. With the target customer being Oyster Creek Nuclear Generating Station in New Jersey, we asked “How might we minimize fuel costs for Oyster Creek Cycle 27 while meeting all design goals and regulatory requirements?” As mentioned, Oyster Creek will be prematurely retired and its last fuel cycle will be Cycle 27. It will be a short cycle (14 months relative to the normal 24-month cycle). Being the last fuel cycle and a short one at that presented some unique challenges to the core design team. One of the challenges was dealing with a population of fuel bundles that would exceed their design basis lifetime of 8 years. Based on preliminary design work, there will be between 12 and 28 bundles that would need to remain in the core for the final cycle that would exceed their 8-year residence time limit. We could have just purchased new fuel that would allow us to discharge those 12 to 28 high residence time bundles. But rather, my Exelon team developed an innovative solution.
As noted in the project’s Innovation Opportunity Brief (first utilized in the CIMp training), I used two primary discovery lenses to gather insights. First, an analog – a similarity between two things that enables a comparison – was used. Similar to recycling plastic bottles, we asked ourselves, ‘how might we’ recycle or reinsert fuel that had been previously discharged and classified as spent fuel? Second, an orthodoxy – a practice or policy that is accepted widely by a group – needed to be overturned. The orthodoxy is: “Any discharged fuel in the spent fuel pool is considered spent and no longer usable”. Working in collaboration with the fuel vendor and being technically rigorous, analyses were performed to quantify the effects of reinserting the fuel after sitting in the spent fuel pool for 6 years. Isotopic decay of the spent fuel while in the pool changes the reactivity (power capability) of the fuel and the change in isotopics needed to be accounted for. This stage of the innovation challenge was essentially prototyping -- to ensure that we could create a viable offering for Oyster Creek. This was the first time that GNF performed this type of analysis for any utility.
As part of the Innovation Process at Exelon, we have an Innovation Review Board (IRB) where funding can be requested from a senior management board following a presentation to justify the request. I received approval from the IRB to fund the analysis for reinsertion of up to 28 spent fuel bundles. The analysis was successful and supported the planned strategy. Figure 3 shows that the fuel bundle powers were decreased at the beginning of the fuel cycle by a maximum of 7% due to the isotopic decay over 6 years but this magnitude of power change decreases throughout the fuel cycle (after the fuel is reinserted and operated). The reinserted fuel will be strategically located around the periphery of the core which is why there is no power change in the core interior (as shown in the figure). The fuel has been inspected by the station to ensure there is no debris present on the fuel (which may have impacted the fuel’s reliability). This innovation can be used in the future at other nuclear stations in the fleet. The innovative solution will be launched at Oyster Creek in 2018. Using the minimum expected savings, the fuel cost reduction will be at least $4M.
INNOVATION 3: Finally, a third innovation was inspired by a continued challenge encountered at Peach Bottom, Quad Cities and Dresden power stations. The solution is derived from advanced data analytics. The problem in this situation was that the 3D (3-dimensional) core simulator was not accurately predicting what actual thermal limits would be at the plant. To understand this, it must be explained that the core design is performed using what is called an “off-line” 3D core simulator. At the station, the “on-line” 3D core simulator is used which has feedback from actual in-core nuclear instrumentation indicating actual neutron flux and local power. Therefore, there are inherent differences between the off-line and on-line thermal limits. Nuclear Fuels tracks these thermal limit “biases” and takes them into account during core design - adding additional margin into the design. At the noted stations, Exelon experienced continued surprises in that the thermal limit biases were larger than anticipated (actual thermal limits were much larger than the projected values). This resulted in a minor power de-rate of the reactor at Peach Bottom and de-optimized operation of the cores at Dresden and Quad Cities. This problem has impacted the stations in meeting certain goals such as capacity factor and has challenged the Operators in the main control room. Demonstrating empathy for our customers (station management and the Operators), an innovative idea was developed to use data analytics to increase the accuracy of our off-line predictions.
Exelon had entered into a 5-year agreement with GE for use of their Predix industrial internet platform. Teaming up with Mu Sigma, the world’s largest pure-play decision sciences company, data analytics is being used to develop an accurate model, called Unbiased, which can be used by the core designers to empirically improve the accuracy of the thermal limit predictions. This will significantly mitigate surprises that impact generation (power production) of the reactors. It can also be leveraged to reduce fuel costs by reducing unnecessary design margin. The predicted fuel cost reduction with this innovation fully implemented fleet-wide is $4M fleet-wide every two years. This innovation is at the Elaborate/Prototype stage. This model is also scalable to our Boiling Water Reactor fleet and can be packaged as a service and scaled to external utilities.
As a result of this successful effort, I coordinated an innovation lab (iLab) in May 2017 with Mu Sigma to identify and frame the entire problem landscape in Nuclear Fuels. A representative from all of the groups within Nuclear Fuels was invited to ensure a diverse team. The iLab was held at the new Innovation Workshop in the Warrenville (Illinois) office. An iLab is a way to cultivate and test new ideas, separate from the demands and pressures of the normal job. Being in the Innovation Workshop, the iLab intentionally looks and feels different from the rest of the company, serving as a place to expose employees to new tools, approaches and technologies. Figure 4 shows the Nuclear Fuels team with over 90 colorful Post-It notes placed on the business process map on the wall in the Innovation Workshop.
I was happy to receive positive feedback from participants in the iLab. One person said that he was with the company over 20 years and had never been previously asked to provide so many ideas.
In summary, these are 3 recent examples of many innovative ideas entered by the Nuclear Fuels group into Innovation Central. The number of fissions that occur per second in an Exelon nuclear reactor is on the order of 1x1020. Although the number of innovative ideas being generated is not at that level, the chain reaction has been initiated for nuclear innovation at Exelon. Figure 5 shows ideas generated per month by Exelon Nuclear with the rolling average. The rolling average has increased in each of the last 6 months. This is a positive sign that innovation in Exelon Nuclear is achieving, and will continue to achieve, a self-sustaining innovation chain reaction.
The specific benefits associated with these innovation projects are: reduced fuel costs, reduced spent fuel generated, improved operating margin, and improved predictive capability accuracy associated with reactor analysis. The fuel cost reduction benefit is realized by meeting the energy requirements for the fuel cycle, as well as all other design goals, by loading less new fuel. Each new Boiling Water Reactor fuel bundle costs approximately $400K so a reduction in the new fuel load makes a large economic impact. Another way that fuel costs can be reduced is by meeting all requirements for the new fuel cycle but decreasing the uranium-235 enrichment of the new fuel. These innovations allow the core design engineers to improve the core design such that the reactor cores are more efficient – they can meet all design goals with fewer new bundles and/or lower enrichment.
As mentioned above, the “TRACG LOCA methodology” innovation improved the MAPLHGR limits which allow the reactor core to be designed in a more efficient manner with fewer new fuel assemblies and/or lower enrichment. Fuel costs were decreased by $2.3M in 2017 for Nine Mile Point Unit 1 and will be decreased by $2.5M for Oyster Creek in 2018. Recurring savings will be approximately $2M per fuel cycle every two years going forward for Nine Mile Point Unit 1. The improved limits also make operation of the reactors less challenging so there is a benefit to Operations as well.
The “mining the spent fuel pool” innovation will result in an expected fuel cost reduction of at least $4M in 2018 based on detailed technical studies with the exact value to be determined in late 2017 as the design work is completed.
The “Unbiased model” innovation is still in the elaborate/prototype stage. Significant progress has been made such that fuel cost reductions have been estimated to be $4M fleet-wide every two years when fully implemented. Note that most of Exelon’s Boiling Water Reactors operate on two-year fuel cycles. The Unbiased model also improves the predictive capability of the software, thus minimizing surprises to Operations.
Other company metrics affected by these innovations (and part of the Exelon innovation chain reaction) are: 1) number of ideas entered into the Innovation Central, 2) Effective Full Time Equivalents dedicated to innovation (i.e., people working directly on an innovation project), and 3) Funding dedicated to innovation projects. Exelon has a metric for results achieved implementing an innovation. If the result is significant enough in various categories, the result will be classified as a Single, Double, Triple or Homerun. The magnitude of the fuel cost savings associated with these innovations, when realized, will fall into the “Homerun” category for Exelon and help to meet the economic challenges of our nuclear plants.
The most important lessons that other organizations might learn from these innovations are:
1) Even historically stable, highly regulated, risk-averse organizations can and should innovate,
2) Risk can be managed without adversely impacting innovation through prudent cost/benefit analysis and contingency planning,
3) Economic survival is an impetus for innovation but one must proactively look ahead and not wait until problems have already occurred (as with the premature retirement of a nuclear power plant),
4) Partnering with vendors with specific skill sets that compliment your company’s skill sets is an effective way to accelerate innovation,
5) Break orthodoxies - just because “it has always been done that way” does not mean that is the best way for it to be done, and
6) A sustained chain reaction of innovation will occur as one innovation is absorbed into the company and more innovations are launched as in a fission chain reaction with individuals inspired through customer empathy, problem resolution, iLabs and a culture of innovation.
This story was written by Jim Tusar, Senior Manager, Nuclear Fuels, Exelon Generation. I would like to acknowledge Matt Krathwohl and The Certified Innovation Mentorship Program (CIMp) at the University of Notre Dame for teaching me the Unified Innovation Methodology. One of my classmates at the CIMp, Earl Miller, has provided continued innovation support and, along with Matt, reviewed and provided constructive feedback on my story.
This article was written as one of the requirements to obtain the Innovation Mentor Certification at CIMp. The Certified Innovation Mentor Program (CIMp) is part of iVia, The Way of InnovationTM, founded by The University of Notre Dame, Whirlpool Corporation, and Beacon Health System. Learn more at http://innovationcertification.nd.edu/.