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Trends in Nuclear Energy Development

Jan Kocourek

AF-Colenco Ltd., Switzerland

Vilnius, Lithuania, 30. September 2009

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• Introduction

• Energy forecasts

• Challenges in national and international nuclear energy markets

• Experiences and projects

• Future prospects

• AF-Consult

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• Interesting to know!

§ Only 31 countries have nuclear power plants (439) in operation,(+ 284 research reactors in 56 countries; 220 reactors for shipsand submarines)

§ Nuclear energy contributes by approx. 16 % (ca. 375.500 MW) tothe world’s energy production (Stand 01. 01. 2009)

§ The nuclear share in 31 countries corresponds approx. to thesame range as hydropower though hydropower is more widelyspread

§ In the last forty years, 40 countries have applied for support fromthe IAEA for the development of a “nuclear infrastructure”

“Petroleum Man will be virtually extinct this century, and HomoSapiens faces a major challenge in adapting to his los” (Dr. Colin J. Campbell,2008, Preeminent Petroleum Geologist)

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Interesting to know!

§ Significant safety innovations in 3rd generation nuclear reactors(evolutionary designs such as ABWR, EPR, AP1000, APWR,ESBWR)

§ France and Japan – major forces in nuclear energy

§ China to build 200 reactors by 2050

§ 2008 number of starting constructions hit double figure – withChina and Russia leading the race

Electricitygenerated

Reactorsoperating

Reactors inbuildingphase

Reactors inorder orplanned

Proposed

16%

2658 TWh

439

(375 GWe)

33

(27 GWe)

94

(101 GWe)

222

(193 GWe)

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World energy production by fuel type from 1980 till 2005 in EJ (Exajoule = 1018 J) and by portion in %

1980 1985 1990 1995 2000 2005 growthp.q (%)

Solid materials 79 (27,7) 92 (29,8) 96 (27,4) 98 (25,7) 94 (22,7) 122 (25,7) 1,7Liquids 122 (42,8) 114 (36,9) 128 (36,5) 133 (34,9) 144 (34,8) 160 (33,7) 1,1Gases 55 (19,2) 63 (20,2) 75 (21,4) 86 (22,5) 99 (23,9) 110 (23,2) 2,8Fossile Energies (Subtotal) (89,7) (87,0) (85,3) (83,2) (81,4) (82,7)

Biomass 16 (5,5) 18 (5,7) 22 (6,2) 29 (7,7) 39 (9,4) 40 (8,5) 3,8Hydro 6 (2,2) 7 (2,3) 8 (2,3) 9 (2,4) 10 (2,4) 11 (2,3) 2,1Nuclear 7 (2,4) 14 (4,7) 21 (5,9) 24 (6,2) 26 (6,4) 29 (6,1) 5,8Renewables 0,5 (0,2) 0,9 (0,3) 1,4 (0,4) 1,6 (0,4) 1,9 (0,5) 2,2 (0,5) 6,3

Total 286 310 351 380 414 473 2,0

From IAEA-Report:: „Energy, Electricity and Nuclear Power: Developments and Projections“

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• Nuclear power plants in operation and under construction

From IAEA-Report:: „Energy, Electricity and Nuclear Power: Developments and Projections“

In OperationUnder construction

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• NPPs under construction and planned (examples)

§ Finland: Finland 5 in Olkiluoto (EPR), further sites (2-3) in theplanning phase (TVO, Fortum, Fennovoima Oy)

§ France: Flamanville (EPR), further units planned

§ China: 5 units under construction and 30 units planned

§ Russia: 7 units under construction and 9 units planned

§ India: 6 units under construction and 10 units planned

§ Completion K2R4 planned, K2 already financed

§ Completion Atucha II (Argentina), Busher (Iran)

§ USA: NRC received 17 application for 26 new built

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• Energy production by nuclear power in regions

Far East

Middle East

Afrika

East Europe

West Europe

Lateinamerika

North America

From IAEA-Report:: „Energy, Electricity and Nuclear Power: Developments and Projections“

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From IAEA-Report:: „Energy, Electricity and Nuclear Power: Developments and Projections“

nowadays installed capacityProjection 1985Projection 1990Projection 1995Projection 2000Projection 2005

GW

(e)

• Projection for the installed capacity of NPPs in the „Low“ - Scenario

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• Projection for the installed capacity of NPPs in the „High“ - Scenario

From IAEA-Report:: „Energy, Electricity and Nuclear Power: Developments and Projections“

nowadays installed capacityProjection 1985Projection 1990Projection 1995Projection 2000Projection 2005

GW

(e)

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• Global nuclear capacity in the NEA high and low scenarios

• Nuclear power could expand by a factor of nearly 4

439 reactorsin 2008

600 to ..

1400 reactorsin 2050

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• Potential benefits of nuclear power

• Virtually CO2-free

Greenhouse gasemissions of selectedenergy chains

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• Potential benefits of nuclear power

• Cost competitive and very insensitive to price of uranium

Range of levelised costsfor nuclear, coal and gaspower plants at 5% and10% discount rates(USD/MWh)

Note: the 5% lowest and highest values of levelised generation costs have been excluded from the ranges shown in figure

Range of levelised costs for coal, gas and nuclear power plants(USD/MWh)

Investment O & M Fuel Total generation0

10

20

30

40

50

60 USD/MWh

5% 10% discount rateCoalGasNuclear

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• Potential benefits of nuclear power

• Cost competitive and very insensitive to price of uranium

Lifetime of energyresources(years of present annualconsumption rates*)

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From IAEA-Report:: „Energy, Electricity and Nuclear Power: Developments and Projections“

2005 2010 2020 2030

Low High Low High Low High

North America 111 114 116 120 131 126 158

Latin America 4 4 4 6 7 6 18

West Europe 124 122 124 91 129 48 149

East Europe 48 48 50 68 76 78 107

Afrika 2 2 2 2 4 2 10

Middle East und South Asia 3 10 11 17 27 23 46

South-East Asia and Pacific 1 1 5

Far East 76 81 83 119 145 130 187

Total World 368 381 390 423 520 414 679

• Installed plant capacities in the „Low“ – and „High“ – scenarios in GWeThe decommissioning of nuclear plants after reaching the end of plant life considered

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• Trends for further development of nuclear energy until 2030

• In Western Europe – depending on the scenario – an increase(~149 GWe) in the High-Scenario or a slight decrease (~48 GWe)in the Low-Scenario forecast

• In the Middle East and the Far East – for both scenarios a largeincrease to 130 GWe, resp. 187 GWe expected (China, Japan,Taiwan, etc.)

• Difficult to forecast the development in Africa (thermal P/S, politicalstability, etc.)

• Conclusion:

Until 2030 the installed capacity in the Far East might be much higherthan in Western Europe

now

aday

s tr

ends

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Challenges due toawaken interest on energy

supply by nuclear

Need forexperts

Newtechnologies

Flexibility„Thinkglobal -

act local“Association

withdifferentcultures

FinancialRisks

Competition situation

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• Challenges regarding personal skills/expertise

§ Securing availability of experts and engineers with nucleartechnology know-how

§ Recruitment of further specialists in the home office

§ Promoting young generation and – education

§ Planning for the next decades (2010-2020)

§ Recruitment of personnel with multi-lingual capabilities

§ Recruitment of personnel in order to keep the nuclear “Know-how”

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• Challenges regarding association with different cultures

§ Language barriers to overcome

§ Difficulties in decision making in several Asian countriesdue to complicated decision-making processes

§ Missing technical Know-how in nuclear “emerging markets”

§ Non-proliferation and lack of global standards

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• Challenges regarding new technologies

§ LWRs of 3rd and 4th Generation

§ “Passive” plants with new safety philosophy (core-catcher, naturalcirculation, ECCS, etc.)

§ Development of High Temperature Reactors in modular designwith small output of approx. 200 MW th (PBMR, GA, etc.)

§ Adjustment of existing calculation models to the new technologiesin order to verify and validate technical data

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• Challenges due to higher financial risks

§ Projects have a much higher volume as it was in the past(pre-financing of services, bank guarantee) – new business modelswith public-private financing partnerships

§ Insecurity in financing in “emerging markets”

§ Payment behaviour in these countries often does not correspond to“western” standards

§ Irregular or difficult acceptance of contractual agreed services

§ Bank guarantee with long-term times (up to unlimited durations)

§ High risk in projects with financial interest of engineering companies

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• Challenges due to different national nuclear legislation

§ Some countries have not yet a national nuclear regulatorylegislation for licensing and operation of nuclear facilities(especially in emerging market countries)

§ Minimal requirements are the IAEA standards

§ Exact knowledge of national standards, rules and regulations isnecessary (if available)

§ Comparison of national rules with international regulations isnecessary for each project

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• New potential for highly experienced engineering companies

§ Requirements for top scientists and engineers

§ AF-Group offers the complete value added chain of expertise in thenuclear field

• Long-term potential in international projects

§ Strategic alliances established; international projects with internationalpartners

§ Europe (Finland, UK, CZ, etc.), Asia, South America

§ Emerging markets (new markets) - support and assistance in all stepsof the nuclear power plant project

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ÅF GroupA leading name in technical consulting

Headquartered in Stockholm, Sweden

475 M€Sales (2008)

23 countriesRepresented in

101 locationsOffices in

4440Co-workers

Own offices/Subsidiaries/Branch offices

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§ One of the largest independentEuropean energy consultingcompany

§ World leading independentconsultancy in nuclear power

ÅF in Energy and EnvironmentIndustries biggest bank of experience

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ÅF in Energy today

850 ongoing projects850 ongoing projects

in over 40 countriesin over 40 countries

65,000 MW power generation projects65,000 MW power generation projects

from which 30,000 MW under construction!from which 30,000 MW under construction!

Applying the same cost of capital to nuclear as to coal and gas, nuclear came out at 4.4 €c/kWh,coal at 5.6 €c/kWh and gas at 4.9 €c/kWh, assuming a charge of $25/tonne CO2 on the latter.

Regarding bare plant costs, some recent figures apparently for overnight capital cost (orEngineering, Procurement and Construction - EPC - cost) quoted from reputable sources but notnecessarily comparable are:

EdF Flamanville EPR: EUR 4 billion/$5.6 billion, so EUR 2434/kW or $3400/kWBruce Power Alberta 2x1100 MWe ACR, $6.2 billion, so $2800/kWCGNPC Hongyanhe 4x1080 CPR-1000 $6.6 billion, so $1530/kWAEO Novovronezh 6&7 2136 MWe net for $5 billion, so $2340/kWKHNP Shin Kori 3&4 1350 MWe APR-1400 for $5 billion, so $1850/kWFPL Turkey Point 2 x 1100 MWe AP1000 $2444 to $3582/kWProgress Energy Levy county 2 x 1105 MWe AP1000 $3462/kWNEK Belene 2x1000 MWe AES-92 EUR 3.9 billion (no first core), so EUR 1950 or $3050/kWUK composite projection $2400/kWNRG South Texas 2 x 1350 MWe ABWR $8 billion, so $2900/kWCPI Haiyang 2 x 1100 MWe AP1000 $3.25 billion, so $1477/kWCGNPC Ningde 4 x 1000 MWe CPR-1000 $7.145 billion, so $1786/kWCNNC Fuqing 2 x 1000 MWe CPR-1000 (?) $2.8 billion, so $1400/kWCGNPC Bailong/Fangchengang 2 x 1000 MWe CPR-1000 $3.1 bilion, so $1550/kWCNNC Tianwan 3&4, 2 x 1060 MWe AES-91 $3.8 billion, so $1790/kWAEP Volgodonsk 3 & 4, 2 x 1200 MWe VVER $4.8 billion, so $2000/kW

Detailed study in Finland put nuclear costs at EUR 2.37 c/kWh, coal 2.81 c/kWhand natural gas at 3.23 c/kWh (on the basis of 91% capacity factor, 5% interestrate, 40 year plant life). With emission trading @ EUR 20/t CO2, the electricityprices for coal and gas increase to 4.43 and 3.92 c/kWh respectively: