The Commercial Nuclear Power Industry

Don LincolnPrincipal

nStone Corporation

September 2011

Agenda1. History2. Current Status3. What Went Wrong4. Other Issues – Chernobyl, Fukushima, & High

Level Waste5. Comparison of Current Plants and New6. Potential New Units7. Drivers for the Resurgence8. Small Modular Reactors9. The Future

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1. History

1942 First sustained and controlled fission reaction

1946 Formation of the Atomic Energy Commission (AEC) with a civilian branch

1954 Atomic Energy Act allows private ownership of nuclear reactors

1954 AEC initiates the Power Reactor Demonstration Program

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1. History

CP-1 Critical December 2, 1942University of ChicagoStagg FieldSquash Court Under West Grandstand

Squash Racket

Racquetball Racket 4

1. History

CP-1 Critical December 2, 1942University of Chicago

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1. HistoryAEC - Power Reactor Demonstration Program - 1954

Loc Net Mwe Type Start ClosedBig Rock Point MI 67 BWR 65 97BONUS PR 72 BWR 64 68CVTR SC 17 PHWR 63 67Elk River MN 23 BWR 64 68Fermi 1 MI 61 LMFBR 66 72Hallam NE 75 LMGMR 63 64LaCrosse WI 50 BWR 69 87Peach Bottom-1 PA 40 HTGR 67 74Piqua OH 12 OCR 63 66Pathfinder SD 59 BWR 66 67Shippingport PA 60 PWR 57 82Dresden 1 IL 200 BWR 60 78Yankee MA 175 PWR 61 91

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Hallam1. History

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Piqua Nuclear Power Station

1. History

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1. History - 1978Nuclear Steam Supply (NSS) Vendors

1. Westinghouse – PWR 952. Combustion Engineering – PWR 233. Babcock and Wilcox – PWR

134. General Electric – BWR 605. General Atomic – HTGR 1

Total Units 192

Reactor Licensing Process1. Preliminary Safety Analysis Report, PSAR

(construction license)

2. Final Safety Analysis report, FSAR and Technical Specifications(operating license)

Units On-Order, Under Construction, or Operating

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1. History – March 28, 1979

Three Mile Island – 2, Harrisburg PA

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2. Current Industry Status104 Nuclear Units Operating Today

1. PWR 692. BWR 35

Average Capacity Factor (2010) – 91.1%Average O&M + Fuel Cost (2010) - $17.60 per MWh

Generation by Energy Source – 2006

1. Coal 49.0%2. Natural Gas 20.0%3. Hydro 7.0%4. Petroleum 1.6%5. Nuclear

19.4%6. Other 3.0%

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2. Current Status

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3. What Went Wrong?

Utilities projection of growth – 7 to 10 year doubling

TMI and other regulatory issues drove design changes

Massive construction schedule delays

High interest rates in late 1970s and early 1980s (1981 peak in prime rate of 21.5%)

Total project costs increased significantly

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4. Chernobyl Accident – April 26, 1986

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4. Chernobyl Accident – April 26, 1986

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4. Chernobyl Accident – April 26, 1986

RBMK Currently• Now 12 Operating RBMK Units

Russia/Lithuania• 48% of Russian Nuclear Capacity in

2010• Initial Operation 1973 – 1990• Projected Shutdown 2012 - 2024

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4. Fukushima Accident – March 11, 2011

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4. Fukushima Before March 11, 2011

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4. Fukushima March 15, 2011

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4. Fukushima Accident – March 11, 2011

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4. High Level Waste

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4. High Level Waste

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4. High Level Waste

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4. High Level Waste

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4. High Level WasteBlue Ribbon CommissionRecommendations for the long term solution to managing the nations used nuclear fuel

Yucca Mountain Project

5. Technology Comparison

Current Design New Design 27

5. Technology Comparison

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5. Technology Comparison

**

50% FewerValves

35% FewerSafety Grade

Pumps

80% LessPipe

45% LessSeismic Building

Volume

85% LessCable

Simplification of Design Eliminates Components and Reduces Cost

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6. Potential New Units

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Owner Location COL No Units Type Notes Market CapNRG Energy South Texas 2011 2 ABWR Cancelled $5 BTVA/NuStart Bellefonte, AL 2012 1 AP1000 DelayedDominion North Anna, VA 2013 1 2019 USAPWR $26 BEntergy/NuStart Grand Gulf, MS 1 ESBWR Suspended $13 BEntergy Riverbend, LA 1 ESBWR Suspended $13 BDuke, Lee South Carolina 2012 2 2021 AP1000 $23 BProgress Harris, NC 2011 2 AP1000 ? $13 BProgress, Levy County Florida 2011 2 AP1000 ? $13 BSouthern Vogle, GA 2011 2 2016 AP1000 $32 BConstellation (UniStar) Calvert Cliffs, Maryland 1 EPR Cancelled $6 BConstellation (UniStar) 9 Mile Pt, New York 1 EPR CancelledSCE&G V. C. Summer, SC 2011 2 2016 AP1000 $5 BExelon Victoria County, Texas 2 TBD Suspended $27 BDetroit Edison Fermi, MI 2012 1 2020 ESBWR ? $8 BLuminant Power Commanche Peak, Texas 2012 2 2021 USAPWR ?AmerenUE Callaway, MO 1 EPR Suspended $7 BPPL Corporation Bell Bend, PA 2012 1 2018 EPR $13 BFPL Turkey Point 2013 2 2022 AP1000Alternate Energy Holdings Payette, ID 2014 1 EPRTransition Power Utah, Blue Castel Project 2012 1 TBDUnannounced ? 2012 2 TBD

Total Likely To Be Built 12Total Announced 32

Estimated Cost per Unit - $5.3 B

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2. Current StatusConstruction/Operating License (COL) in ProcessConstruction/Operating License (COL) Suspended/Unscheduled

7. Drivers for the Resurgence

Cost to Generate, O&M plus Fuel (2009) $17.60 per MWh

Average Capacity Factor – 91.1%1100 MW Nuclear PlantAverage Wholesale Price of Electricity (2010 Est) $50.00 per

MWhAverage Delivery Cost (T&D) 20%Hours per year 8760 hrs per

YearAnnual Net Revenue (8760x0.911x1100x($50-$17.60)x0.8 $227,000,000Payback at a cost to construct of $1500/kW 6.6 YearsPayback at a cost to construct of $2500/kW 11.0 YearsPayback at a cost to construct of $5300/kW 23.24YearsPayback at a cost to construct of $6000/kW 26.5 Years(Actual recent costs in Japan and Finland: $2300 - $2800/kW)(Estimated Costs USA: Summer $4800 – Turkey Point $4540/kW) 32

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8. Small Modular Reactors

Hyperion Power – 27 MWSanta Fe, NM

Babcock & Wilcox mPower125 MWLynchburg, VA

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8. Small reactors

GE Hitachi Prism 331 MWUnderground Containment

NuScale Power - 45 MWCorvallis, OR

Toshiba 4S - 10 MWJapan

9. The Future

Pebble Bed Modular Reactor

ITER Experimental Fusion Reactor

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Questions?

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