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Update on New Nuclear Plant Development
for the Kansas Energy CommissionAugust 15, 2007
Mary Quillian
Director, Business and Environmental Policy
Nuclear Energy Institute
202-739-8013, [email protected]
Overview
Factors driving interest in building new nuclear plants:– Performance of existing nuclear fleet– Fuel diversity– Public opinion– Environmental Benefits – no GHG emissions– Need for new capacity – particularly new baseload
The next wave of new plants– Who’s developing them?– New licensing process– Used Fuel– Financing– Energy Policy Act of 2005 support for new nuclear– State initiatives that support new plant construction
50
55
60
65
70
75
80
85
90
95
'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
Sustained Reliability and Productivity
88.1% in 2000
89.4% in 2001
90.3% in 2002
87.9% in 2003
90.1% in 2004
89.3% in 200589.8% in 2006*
Source:Global Energy Decisions / Energy Information Administration
* Preliminary for 2006
Cap
acit
y f
acto
r (%
)
U.S. Nuclear Capacity Factor
200
300
400
500
600
700
800
'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
Source: Global Energy Decisions / Energy Information Administration
* Preliminary for 2006
Output Remains Near Record Levels
Billion
kilow
att
-hou
rs
Billion kilowatt-hours754 in 2000769 in 2001780 in 2002764 in 2003789 in 2004782 in 2005
787 in 2006*
U.S. Nuclear Generation
0.0
0.5
1.0
1.5
2.0
2.5
3.0
'95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06
Source: Global Energy Decisions
2000: 2.03 cents/kWh
2001: 1.89 cents/kWh
2002: 1.90 cents/kWh
2003: 1.86 cents/kWh
2004: 1.84 cents/kWh
2005: 1.76 cents/kWh
2006: 1.72 cents/kWh
Solid Economic Performance Continues
2006 C
en
ts p
er
kilow
att
-hou
r
U.S. Nuclear Production Cost
U.S. Industrial Safety Accident Rate2006
0.12
2.00
3.50
Nuclear Power Plants Electric Utilities Manufacturing
Sources: Nuclear (World Association of Nuclear Operators), Electric Utilities and Manufacturing (2005, U.S. Bureau of Labor Statistics).
Updated: 4/07
ISAR = Number of accidents resulting in lost work, restricted work, or fatalities per 200,000 worker hours. Electric utilities and manufacturing do not include fatality data.
O&M22%
O&M74%
Fuel78% Fuel
94%
Fuel26%
6%
Coal Gas Nuclear Nuclear Fuel CostComponents
Fuel as a Percentage of Electric Power Production Costs
2005
Source: Global Energy Decisions
ConversionFabrication
Waste Fund
Enrichment
Uranium
63% Favor Use of Nuclear Energy
(Annual Averages)
49
46
31
63
Apr-2007
Oppose
Favor
20
40
60
80
1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 20061983Source: Bisconti Research, Inc., poll conducted March 30 and April 1, 2007
Five Steps of Support for New Plants
Important
for our energy
future
80%
Prepare to build
71%
Definitely build
56%
Accept new
reactors at nearest
plant
66%
Renew licenses
81%
Source: Bisconti Research, Inc., poll conducted March 30 and April 1, 2007
681.2
241.9
22.2 12.8 0.4
Nuclear Hydro Geothermal Wind Solar
U.S. Electric Power Industry CO2 AvoidedMillion Metric Tons
2006
Source: Emissions avoided are calculated using regional and national fossil fuel emissions rates from the Environmental Protection Agency and plant generation data from the Energy Information Administration.
Updated: 4/07
Nuclear Energy Has an Environmental Impact Comparable to Renewables
gram equiv CO2/ kWhLow
High
Coal - Modern Plant
Solar Photovoltaic
Natural Gas (Combined Cycle)
Wind
Biomass/ forestry/ waste combustion
Nuclear
Hydropower 2 - 48
2 - 59
15 - 101
7 - 124
389 - 511
13 - 731
790 - 1182
Source: “Hydropower-Internalised Costs and Externalised Benefits,” Frans H. Koch. International Energy Agency
Life Cycle Emissions for Various Electricity Sources
Emissions Reductions in Perspective
The UNFCCC estimates that the Kyoto Protocol’s Clean Development Mechanism (CDM) will generate 1.2 billion tonnes of emission reductions by the end of 2012
Worldwide, nuclear power avoids the emissions of around 2 billion tonnes of CO2
annually
Source: UNFCCC CDM Statistics (http://cdm.unfccc.int/statistics) and International Energy Agency. Emissions avoided by nuclear power are calculated using an average fossil fuel emissions rate that is weighted by the ratio of projected coal and gas generation.
Magnitude of the Climate ChallengeUnder “business as usual” projections, global CO2 emissions from fossil fuels expected to double by 2050 – from 7 GtC/yr to 14 GtC/yr.
But stabilizing atmosphere at 500 PPM CO2 requires avoiding this growth and then rapidly shrinking CO2 emissions after 2050.
To get to 2050, we would need seven “wedges” of low-carbon energy, each enough to displace 1 GtC/yr.
Source: Keystone-NJFF Report June 2007
What is a “Wedge” of Nuclear Capacity?
One wedge would
require that we
roughly triple the size
of global nuclear
power plant capacity,
from 370 GW to 1070
GW, or about 700 net
GW.
Current
One Wedge
0
200
400
600
800
1000
1200
GW
Ins
talle
d n
uc
lea
r c
ap
ac
ity
Source: Keystone-NJFF Report June 2007
Kansas
Wolf Creek avoided 9.3 million metric
tons of CO2 in 2006
In 2030, a new nuclear plant in SPP could
avoid 9.7 million metric tons of CO2 a
year
All the passenger cars in Kansas emitted
4.5 million metric tons of CO2 in 2005Source: NEI calculations using EPA and EIA data
New nuclear plant size 1,400 MW
Gas17.2%
Oil0.8%
Nuclear3.2%
Renewable and Other
5.5%
Coal73.3%
SPP Electricity Generation Fuel Shares
2006 and 2030
* Forecasted
Source: Energy Information Administration’s Annual Energy Outlook 2007
Updated: 8/07
Coal68.0%
Renewable and Other
6.1%
Nuclear4.4%
Oil0.6%
Gas20.9%
2006* 2030*
Coal49.0%
Renewable and Other
3.1%
Hydro6.9%
Nuclear19.4%
Oil1.6%
Gas19.9%
U.S. Electricity Generation Fuel Shares 2006*
* Preliminary
Source: Global Energy Decisions / Energy Information Administration
Updated: 4/07
3,500
4,500
5,500
2005 2010 2015 2020 2025 2030
U.S. Electricity Generation Forecast
2005 – 2030, Billion kWh
Source: Energy Information Administration
Updated: 4/07
2005: 4,046 Billion kWh
2030: 5,797 Billion kWh
Coal57.4%
Renewable and Other
3.7%
Hydro5.3%
Nuclear15.5%
Oil1.8% Gas
16.2%
U.S. Electricity Generation Fuel Shares 2030
* Preliminary
Source: Global Energy Decisions / Energy Information Administration
Updated: 4/07
Fuel Type Average Capacity Factors (%)
Nuclear 89.8
Coal (Steam Turbine) 71.1
Gas (Combined Cycle) 39.9
Gas (Steam Turbine) 17.2
Oil (Steam Turbine) 14.9
Hydro 31.8
Wind 30.3
Solar 18.8
U.S. Capacity Factors by Fuel Type2006*
*Preliminary
Source: Global Energy Decisions / Energy Information Administration
Growing Need for Additional Capacity (2006)
Electricity demand in 2030 will be 45%
greater
than today
To maintain current electric fuel supply mix
would mean building:Nuclear reactors (1,000 MW)
Renewables (100 MW)
Natural gas plants (400 MW)
Coal-fired plants (600 MW)
50
93
279
261
Source: 2006 Annual Energy Outlook, Energy Information Administration
Nuclear Units Under Construction Worldwide
Country Number of Units Total MWe
Argentina 1 692
Bulgaria 2 1,906
China 4 3,220
China, Taiwan 2 2,600
Finland 1 1,600
India 6 2,910
Iran 1 915
Japan 1 866
Pakistan 1 300
Romania 1 655
Russia 7 4,585
S. Korea 2 1,920
Ukraine 2 1,900
Total 31 24,069
Source: International Atomic Energy Agency PRIS database. Updated: 5/07
New Nuclear Plants Under Consideration
Company Location (Existing Plant) Units
Dominion Louisa County, VA (North Anna) 1
NuStart Energy (TVA) Jackson County, AL (Bellefonte) 2
NuStart Energy (Entergy) Claiborne County, MS (Grand Gulf) 1
Entergy West Felciana Parish, LA (River Bend) 1
Southern Co. Burke County, GA (Vogtle) 1-2
Progress Energy Wake County, NC (Harris) & Levy County, FL 2-4
South Carolina Electric & Gas Fairfield County, SC (V.C. Summer) 1-2
Duke Energy Cherokee County, SC (Lee) 2
UniStar Nuclear Calvert County, MD (Calvert Cliffs) 1-5
Florida Power and Light TBD in FL 1
NRG/STPNOC Matagorda County, TX (South Texas Project) 2
Amarillo Power Carson County, TX 2
TXU TBD in TX 2-5
Exelon TBD in TX 2
Alternate Energy Holdings Owyhee County, ID TBD
DTE Energy Monroe County, MI (Fermi) 1
PPL Corporation Luzerne County, PA (Susquehanna) 1
New NRC Licensing Process(1992 Energy Policy Act)
* Public Comment Opportunity
Early Site Permit *
Early Site Permit *
ConstructionConstructionConstruction Acceptance
Criteria *
Construction Acceptance
Criteria *
OperationOperationCombined License *
Combined License *
Design Certification *
Design Certification *
Standardized Plants Benefits Design -- designed once with one NRC approval documented in a NRC rule Construction practices
– Increased construction efficiencies & schedules with experience
Parts and components– Procurement efficiencies and shared “spare part” inventories
Regulatory interface– More efficient & effective licensing– More efficient use of regulatory resources
Design improvements– One modification package Standardizes modifications (like uprates, physical and
procedural improvements)
Operating and maintenance– Procedures– Good practices & training– More efficient outages– Improved equipment reliability
Standardization will reduce the cost of building subsequent plants
and operating all plants
The “Once Through” Fuel Cycle:The Old View of Used Fuel
Management
Yucca Mountain
Used Fuel
Nuclear Plant
Used Fuel Management: An Integrated, Phased Program
Developing advanced technologies to recycle nuclear fuel provides needed flexibility
Sites for recycling logical candidates for interim storage
– Allows DOE to meet statutory obligation to remove used fuel from operating plants
– Sustains public, political, industry confidence in used fuel management program
– DOE grants to 11 volunteer sites for siting studies
Yucca Mountain still needed long term
Used Fuel Management:New Strategic Direction
Yucca Mountain
Used Fuel
Used Fuel Recycling,
Interim Storage
Nuclear Waste
Recycled Nuclear
FuelAdvanced Recycling Reactors
Capital Intensive Industries
1. Capital Intensity = total assets divided by total revenues, 2004 – 2006..
2. Market capitalization = number of shares outstanding times share price on 7.3.07..
3. Capital Intensity for Duke is for 2006 only.
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
$0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500
Cap
ital In
ten
sit
y1 (
thre
e-y
ear
avera
ge)
Market Capitalization2 (billion dollars)
NRG
DominionSouthern Co.
Exelon Corp.
TXU
SCANA
Constellation
BP
Chevron
ExxonMobil
Progress
FP&L
Entergy
DTE Energy
Duke3
AmerenUEPPL Corp.
Energy Policy Act of 2005:Production Tax Credit
$18/MWh for first 6,000 MW of new nuclear capacity
Distributed on a pro rata basis to all plants that:
– Submit a COL application to the NRC by Dec. 31, 2008
– Begin construction by Jan. 1, 2014
– Start commercial operation by Jan. 1, 2021
Production tax credit
– Enhances financial attractiveness of project after it is
built and in commercial operation
– Does not address financing challenges before and during construction
Energy Policy Act of 2005:Standby Support
Federal insurance coverage for delays caused by licensing or litigation
Covers debt service only Limitations on coverage reduce value
– First two $500-million policies: 100% of delay costs, no waiting period for claims
– Second four $250-million policies: only 50% of delay costs after 6-month delay
Energy Policy Act of 2005: Loan Guarantee Program
2005 Energy Policy Act authorizes loan
guarantees
up to 80 percent of project cost
Should allow nuclear plant developers to
– Increase leverage
– Reduce financing costs
– Reduce cost of electricity from project
– Non-recourse to project sponsor’s balance sheet
Final regulations late 2007
State Policies Supporting New Nuclear Construction
Utilities and policymakers in regulated states
realize need for fuel and technology diversity
Policies being implemented that:
– Value diverse generation portfolio
– Limit retroactive reviews of prudence
– Allow PUCs to approve new plant costs, set future
rate increases before construction
– Allow investment recovery during construction
