The Current Role of Financing for Nuclear Energy Projects ...€¦ · IEA, World Energy Outlook 2011 and 2014: pp. 444 Total population Without electricity (projected) 0.5 1.0 1.5

The Current Role of Financing for Nuclear

Energy Projects – A Global View

Agneta Rising

Director General

IFNEC-NEA Nuclear Finance Conference,

Paris, 11-12 May 2016

IFNEC-NEA Nuclear Finance Conference 11-12 May 2016

Agneta Rising, Director General

Our members

2



Worldwide presence

3



Decarbonising electricity generation –

need for low life cycle emissions:

Nuclear energy is among the best

4

Source: World Nuclear Association meta study, incl. IPCC 2014



Nuclear meets the World Bank’s

Environmental & Social Framework • Management of Environmental & Social Risks & Impacts

• Comprehensive regulatory oversight

• Labour & Working Conditions • Strong commitment to safety culture at uranium mines and

nuclear installations

• High quality employment

• Resource Efficiency & Pollution Prevention • Small volume of waste materials

• Radioactivity decays (many toxins last forever)

• Controls on water intake and outflow

• Community Health & Safety • International limits to radiological exposure

• Land Acquisition, Use & Involuntary Resettlement • Surface area of installations is small compared to other energy

sources and sites are generally more remote

• Information Disclosure and Stakeholder Engagement • Strong industry commitment to openness and dialogue

5



Africa: Access to Electricity

6

0

500

1000

1500

2000

2500

3000

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Billions

Year Sources: UN, World Population Prospects 2012 Revision;

IEA, World Energy Outlook 2011 and 2014: pp. 444

Total population

Without electricity

(projected)

0.5

1.0

1.5

2.0

2.5

3.0 620 M with no access



0

5 000

10 000

15 000

20 000

25 000

'80 '81 '82 '83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13

Rising electricity consumption

worldwide

7

TWh

Source: International Energy Agency, 2014, World Energy Outlook 2014

Hydro Renewable Combustible Nuclear

25 000

20 000

15 000

10 000

5 000



Share of nuclear energy has

started to rise once again

8

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

'80 '81 '82 '83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14

World Nuclear Share Nuclear Countries Total Nuclear Share

14.6%

11.5%

Source: International Energy Agency, 2014, World Energy Outlook 2014; International Atomic Energy

Agency PRIS database

25%

20%

15%

10%

5%

14.6%

11.5%

Share of electricity in countries

with nuclear power plants

Share of electricity in all countries



0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

80,0%

90,0%

Average availability of power

sources – nuclear provides reliability

9

Source: US Energy Information Agency

90%

70%

50%

30%

10%

Nuclear

Combustible

Other Renewable

1980 2010 1990 2000

Hydro



0,0 10,0 20,0 30,0 40,0 50,0 60,0 70,0 80,0 90,0

100%

90%

50%

10

Average construction times

600 civil nuclear reactors built over last 60 years

• 50% with average 4½ years

• 90% with average 6 years

82.5 Months

55.0 Months

Construction time (Months)

600 Units

300 Units

71.8 Months 540 Units

Best 50%

Best 90%

All 100%



South Korea: OPR 1000

11

57



China: CPR 1000

12

65



Nuclear makes quick, lasting

decarbonisation possible

13

Source: Geoff Russell – Nuclear has scaled far more rapidly than renewables Data source: IEA



Financing energy infrastructure

Financing needs for

infrastructure are

considerable.

• $2.7 trillion a year

needed for energy

infrastructure to 2030;

• Current level of

investment is $1.6 trillion

(2013).

• Private equity is looking

for returns higher than

those offered by energy

utilities.

14

Source: McKinsey report (2016) on financing infrastructure



Profiles of investors

15

Developers &

operators

Investment

banks Insurance

funds, etc. Institution

Aim for:

Source of

funds:

Averse to:

Strengths:

Big capital-

intensive

projects on

balance sheet

Market

knowledge

Issue of

corporate bonds

Long-term

revenue stream

Return on

loans

Money markets

Long-term debt

Risk assessment

Liquid equity

stake with steady

returns

Clients

Project risk

Willing to take

a minority

stake

Source: McKinsey & Co



Nuclear finance has similar features as

other large infrastructure projects

There is no single solution for nuclear finance – we have to work together

• Nuclear project risks to be managed:

• Industry must deliver predictable, shorter, less complex projects

• Regulators should come ‘on board’

• Base load electricity wholesale market is more volatile:

• Market authority must provide sufficient certainty to facilitate investment

• Little value given to reliability of supply or to low-carbon footprint

16



© 2015 Organisation for Economic Co-operation and Development 17

Source: International Energy Agency

IEA 2degree scenario: Nuclear is required to

provide the largest contribution to global

electricity in 2050



© 2015 Organisation for Economic Co-operation and Development 18

Source: International Energy Agency

IEA 2degree scenario: Nuclear is required to

provide the largest contribution to global

electricity in 2050



Harmony goal

25% of electricity

supply 2050

Nuclear energy to deliver

reliable, affordable and

clean electricity

19

1000 gigawatt new

nuclear capacity by 2050



Nuclear: Substantial growth required to

meet demand in IEA 2degree scenario

20

GW

2014 2050

0 0

200

400

600

17% of

generation

11% of

generation

396

GW

930

GW

6800

TWh

Additions

680

GW

5300

TWh

Retirements

150

GW

2411

TWh

1000

3000

5000

7000

9000

1000

800

TWh

Source : World Nuclear Association analysis. Data source: IEA-NEA, 2015, Technology Roadmap: Nuclear Energy, Paris: OECD-IEA: p. 22; IEA, 2015, Energy Technology Perspectives 2015, Paris: OECD-IEA


Agneta Rising, Director General 21 21

Harmony goal is 1000 GW GW

TWh

2014 2050

0 0

200

400

600

800

25% of

generation

11% of

generation

396

GW

1250

GW

10000

TWh

Additions

1000

GW

8500

TWh

Retirements

150

GW

2411

TWh

1200

1000

11000

7000

5000

3000

9000

1000

Source : World Nuclear Association analysis. Data source: IEA-NEA, 2015, Technology Roadmap: Nuclear Energy, Paris: OECD-IEA: p. 22; IEA, 2015, Energy Technology Perspectives 2015, Paris: OECD-IEA


Agneta Rising, Director General 22 22

Harmony objectives

• Ensure nuclear safety

• Increase genuine public

wellbeing

• Value environmental

qualities & reliability

• Internalize system costs

• Enhance standardization

• Harmonise global codes

and standards

• Timely licensing

• Enable financing solutions

• Facilitate international trade

• Support development and

licensing of new

technologies



To deliver 1000 GW new nuclear

capacity to 2050

23

Period Connection rate Added capacity

GW per year GW

2016-2020 10 50

2021-2025 25 125

2026-2050 33 825

_________________________________

Total new nuclear capacity 1000 GW




capacity to 2050

24


GW per year GW

2016-2020 10 50

2021-2025 25 125

2026-2050 33 825

_________________________________


Yearly connection of new nuclear:

Below 5 GW the last 15 years

Doubled to 10 GW in 2015

Historically 31 GW in mid 1980s




capacity to 2050

25


GW per year GW

2016-2020 10 50

2021-2025 25 125

2026-2050 33 825

_________________________________






Connection rate




capacity to 2050

26


GW per year GW

2016-2020 10 50

2021-2025 25 125

2026-2050 33 825

_________________________________






Connection rate

Source: World Nuclear Association, Nuclear Fuel report 2015



The global nuclear industry: identify barriers,

engage in dialog, develop key actions

Level playing field: Establish a level playing field for all low-carbon technologies,

valuing not only environmental qualities, but also reliability and

grid system costs.

Harmonised regulatory processes: Enhance standardisation, harmonise and

update global codes and standards.

Timely licensing of new technologies.

Effective safety paradigm:

Increase genuine public wellbeing from a

society perspective. Ensure global nuclear safety. Confidence

in management of nuclear technology and operations.

27


Agneta Rising, Director General 28

Thank you: Agneta RISING

London [email protected]

Documents

The Current Role of Financing for Nuclear Energy Projects ...€¦ · IEA, World Energy Outlook 2011 and 2014: pp. 444 Total population Without electricity (projected) 0.5 1.0 1.5