Future Nuclear Technologies · SMR plant may cost ~$1 billion vs. $5-8 billion for large reactor....

© 2016 Electric Power Research Institute, Inc. All rights reserved.

Tina Taylor

Director, Strategic Programs

[email protected]

October 2016

Future Nuclear Technologies

2


There is a bright future for nuclear energy

Global new build

Realization of small modular reactors

Need for carbon free generation

Need for deep electrification

Progress on advanced reactors

Continued forward movement on fusion

But…

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Can the Future Come Fast Enough for Nuclear?

Current financial challenges – some

shutdowns

Long lead time for licensing and construction

Financing new projects is challenging

Carbon reduction strategies

Continued competition from low cost natural

gas and renewable targets

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Robust International Market for Nuclear

~68 GWe under construction, including non-LWRs

Operation of new plants will span the 21st century

New designs for advanced reactors are progressing

Source: IAEA PRIS Database. Updated 29 Sept 2015

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Continuum of Nuclear Technologies

“Advanced Nuclear” can encompass SMRs, GEN IV and Fusion

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Light Water Small Modular Reactors

At least 9 designs progressing worldwide

Construction underway in Argentina (CAREM-25) and Russia (twin 35MW units on a floating barge)

In the US:

– NuScale, with DOE support is submitting design certification application this year

– TVA has recently submitted an Early Site Permit application

– Plans have been announced to build the first NuScale SMR in Idaho, owned by UAMPs and operated by Energy

Northwest.

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Current Landscape for Advanced Nuclear

Most advanced reactor concepts go back to

the dawn of civilian nuclear power

Convergence of public and private interest

in advanced nuclear over past two years

Bipartisan support

40-50 entrepreneurs with variants and applications

at all scales

>$1.5B private investor interest

NRC engagement and consideration of appropriate

license approach

Emergence of utility champions and industry consensus-

building organizations

International collaboration through OECD/NEA and IAEA

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21st Century Role for Advanced Reactors

No Generation IV without healthy Generation II/III

– operation advanced light water reactors currently under

construction will span the century

– loss of viable nuclear industry infrastructure not easily reversed

Sustained future will require more compelling business

cases derived from advanced reactor attributes:

– high efficiency electricity generation and/or alternate products

via high temperature operation

– enhanced passive safety from inherent physical properties

– natural resource amplification via high conversion or breeding

– waste management

– asset flexibility: operational, deployment, product

Resource

Amp

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TerraPower

Backed by Bill Gates / Nathan Myhrvold

Located near Seattle

Two designs underway:

– Traveling Wave Reactor / partnership with Chinese

– Liquid Chloride Fast Reactor

DOE project award with Southern, EPRI, Oak Ridge

TerraPower aims to develop a sustainable and economic nuclear energy technology

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X-Energy

• Pebble Bed Helium Cooled Reactor

• DOE Awardee

• Based in Maryland

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Transatomic Power

Based in Boston

Started by MIT grads with venture

capital backing

Liquid fueled, molten salt reactor

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Together…Shaping the Future of Electricity

Developments in the

Global Nuclear Supply Chain

CSIS Nuclear Conference

Jonathan Hinze

Executive Vice President, International

[email protected]

October 24, 2016

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5,000

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20,000

25,000

30,000

35,000

40,000

45,000

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10

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1954 1959 1964 1969 1974 1979 1984 1989 1994 1999 2004 2009 2014

Operating Units Shutdown Units Total MWe

Units MWe net

© UxC

Where Have We Been?

► 62-Year Annual Average: 9.5 Units / 7,400 MWe

► Average Since 2000: 4.3 Units / 3,900 MWe

► 73% of All Operating Units Built Before 1990

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Total

New Builds

Since 1954:

597 Units

466 GWe

Where Are We Going?

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Source: ExxonMobil

World Electricity Generation by Source,

2014 vs. 2040 (in TWh)

Source: BP

Nuclear Generation by Region, 1965-2035

(in 1,000 TWh)

Nuclear power remains a critical part of the global energy system,

and all independent forecasts indicate continued expansion.

Challenges to Global Nuclear Growth

► In order to reach ~600 GWe by 2040 target, world needs to build

roughly 300 additional large reactors over the next 25 years.

● At least 100 GWe will be lost through reactor retirements by 2040

► Numerous challenges exist for large-scale new build:

● Raising necessary capital funds: 300 new units = ~$1.5 trillion in 2016 USD

● Structuring projects for success – must manage risks properly

● Moving up the learning curve to avoid repeating recent project mistakes

● Choosing the “right technologies” – large LWRs vs SMRs?

● Identifying conducive sites in terms of geology, seismology, population, etc.

● Overcoming public and policymaker apprehensions

● Capacity building in newcomer nations (e.g., human resources, regulatory)

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Current & Potential Nuclear Countries

17Source: UxC Nuclear Power Outlook

Ranking Status Color Number

Existing One or more operating nuclear power plants Grey 31

High Potential Active construction or significant preparatory activities Red 14

Medium Potential Some preparatory activities, but more long-term prospects Orange 13

Low Potential Interest, but no serious preparations or competencies Yellow 12

~10 Fast

Growth

Countries

UxC Nuclear Power Forecast

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Base Case:

~50% net

growth by 2040

Source: UxC Nuclear Power Outlook

China, Russia, India & South Korea (CRIS) represent >50% of all new

construction through 2040. Meanwhile, North America & Western Europe

will drop from 60% of current world total to 27% by 2040.

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2008 2012 2016 2020 2024 2028 2032 2036 2040

South America

Africa & Middle East

Asia & Oceania

Eastern Europe

Western Europe

North America

GWe

© UxC

PWR79%

PHWR9%

BWR1%

FBR/HTR2%

Undecided9%

China33%

Russia17%KEPCO

12%

Westinghouse7%

India8%

AREVA4%

GE-Hitachi2%

CANDU Energy3%

Undecided/ Other15%

UxC Reactor ForecastsFuture Technologies & Vendors

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Source: UxC Nuclear Power Outlook

New Reactor Types, 2010-2025 New Reactor Vendors, 2010-2025

138 total units

► Rosatom (Russia): ● Current projects in Russia, India, China, Belarus, Slovakia, Finland● Agreements with Armenia, India, Vietnam, Bangladesh, Turkey, Egypt, Jordan & Iran● Potential for projects in South Africa, Nigeria, etc.

► CNNC/CGN/SNPTC (China): ● Ongoing projects in China & Pakistan / Contracts in Argentina & Romania● Potential in UK, Turkey, South Africa, Saudi Arabia, Thailand, etc.

► AREVA (France): ● Current projects in China, Finland, France & UK / Potential in India & Turkey (with MHI)● Targeting South Africa, Saudi Arabia, etc.

► Toshiba-Westinghouse (Japan/U.S.): ● Current projects in China & U.S. / More potential in China, UK, U.S., India, Turkey● Targeting South Africa, Brazil, Bulgaria, Saudi Arabia, Poland, Vietnam, etc.

► GE-Hitachi (U.S./Japan): ● Focusing on select markets (e.g., UK, U.S., Poland, Mexico, Japan)

► KEPCO (South Korea): ● Korean and UAE projects ongoing; Focusing on Middle East & Southeast Asia

► CANDU Energy (Canada): ● Large refurbishments in Canada; New projects in Argentina, Romania & China

Competitive Positions of Vendors

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New Reactor Economics

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► Wide Range of Costs

● China PWR: ~$3,500/kWe

● Turkey VVER: ~$5,000/kWe

● U.S. AP1000: ~$6,200/kWe

● UK EPR: ~$8,000/kWe

► Schedule delays have added costs to various projects. Causes include:

● Regulatory issues

● Component manufacturing issues

● Fabricated module issues

● Project management issues

► Largest influence on LCOE for nuclear is upfront capital cost

NPP Cost Breakdown

Site Preparation 5%

Nuclear Island 55%

Turbine Island 14%

Balance of Plant 14%

Switchyard 5%

Strategic Spares 2%

Finance/Contingency 5%

Prospects for SMRs

► Attractive due to lower capital costs and enhanced safety potential. SMR plant may cost ~$1 billion vs. $5-8 billion for large reactor.

► Light water technologies (i.e., integral PWRs) still in front● High Temperature and Liquid Metal designs also viable

● Growing interest for advanced designs, but development timeframe is longer

► SMRs fill many niche market needs:● Modular nuclear capacity expansion (small bites off the apple)

● New countries/utilities with smaller grids/power needs

● Replacement of aging coal/oil-fired plants

● Back-up power integrated with renewables

● Remote sites / Military installations

● Process heat applications / Desalination

► SMRs may compete more directly with diesel, natural gas, hydro, or renewables rather than with large NPPs

► Growing interest in Micro-Modular Reactors (MMR) i.e., <10 MWe

► Global nuclear power market is not a zero-sum game. There is ample room for SMRs & MMRs as well as large reactors.

► SMR market could reach 10 GWe by 2030 and 25 GWe by 2040

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Global Nuclear Industry Value Chain

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$17.0

$134.2

$9.8

Front-End

Reactors

Back-End

Billions US$

© UxC

► Current global market size is

roughly $160 billion

► Could more than double by 2030

► Reactor market (including new

construction and operations/

services) is over 80% of total

► Front-end fuel markets have

recently shrunk due to lower

market prices

► Almost all sectors have very

global supply chains

Global Nuclear Market in 2015

► With 99 operating reactors and 4 under construction, U.S. is still

the largest single market (nearly 25% of total)

► Major reactor vendors are either partially or fully owned by foreign

companies

► EPC industry remains U.S.-owned and operated as are many small

& medium sized component vendors & service suppliers

► U.S. NRC licenses, ASME N-Stamps, and other certifications

continue to set the world standards

► Bilateral trade agreements (e.g., 123 Agreements) and other

mechanisms give U.S. government key role in influencing export

markets and global opportunities for U.S. suppliers

► However, U.S. is no longer the dominant player it once was

U.S. Nuclear Industry Position

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► Global nuclear energy remains on a growth path, and Asia plus

Middle East will likely lead the way in rapid expansion

► Post-2030, numerous reactors will be retired – in order to reach

600 GWe by 2040, even faster growth will be needed

► Russia and China have key advantages as vendors due to lower

costs and ability to offer financing w/ state support

► New reactor costs vary be region/country, and many factors

influence potential cost increases

► Nuclear plant is a 100+ year commitment – newcomers are

proceeding slower than previously expected

► SMR market is promising, but forecast is more long-term

► Post-Fukushima nuclear power market is undergoing a

transformation that will create new winners and losers. We are

just beginning to see what the future will look like!

Final Thoughts

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Shoichi ITOH

Senior Analyst

Strategy Research Unit

Institute of Energy Economics, Japan (IEEJ)

Nuclear at a CrossroadsSession 2: Key Developments in the Global Nuclear Industry

Changing Dynamics in the Global Nuclear

Industry and Geopolitical Implications

October 24, 20162nd Floor Conference Room

Center for Strategic and International Studies (CSIS)

© All Rights Reserved

© All Rights Reserved27

Contents

Why “Atoms for Peace” once again?

The global nuclear market

New challenges

- Russia as a frenzy exporter

- China as an emerging exporter

Looming uncertainties

Key takeaways

Why “Atoms for Peace” Once Again

Projected growth of nuclear demand:

To satisfy increasing energy need.

To tackle climate change.

Globally mushrooming aspirants to acquire nuclear facilities:

The Middle East, South Asia, Southeast Asia, Africa, etc.

Widespread proliferation risks amidst new market opportunities.

Intensifying competition between market-drivensuppliers and state-backed suppliers.

28© All Rights Reserved

New Challenges The future of nuclear energy is currently under harsh

debate in the OECD societies,

including Japan with the post-Fukushima syndrome, and

the United States with the Shale Gas Revolution.

However, the die is cast!It is NOT just a matter of domestic question!

Russia and China are accelerating nuclear reactor exports.

Don’t their “low-margin, high-turnover” strategies

entail proliferation risks?

The U.S.-Japan nuclear twin’s roles and responsibilities in the global nuclear market are even more important and indispensable for the world!


Robust domestic market:

30 reactors in operation.

11 under construction or in the planning stage toward 2030.

Strong state support for exports:

Various financing arrangements:

Nuclear reactors as one of Russia’s very few internationally competitive products.

Strength:

Can offer BOO (build-own-operate); fuel supply & take-back arrangements.

Nuclear energy as a new diplomatic weapon.

Rosatom’s exports in progress*

Contracted: India, Bangladesh,

Turkey, Vietnam, Finland, Iran, Armenia.

Ordered: Egypt, China, Vietnam,

India, Vietnam, Hungary, Slovakia, Jordan.

Currently Proposed: India,

Bulgaria, South Africa, Nigeria,

Argentina, Algeria.

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Source: “Nuclear Power in Russia,” World Nuclear Association, 6 September 2016; etc.

Russia as a frenzy exporter

* Excluding the cases with Russian reactors already in operation.


China as an emerging exporter Rapid expansion of the

domestic market:

35 reactors in operation.

20 under construction & more

than 40 in the planning stage.

Installed nuclear capacity:

28GW (2015) → 58GW(2020-21)

→ up to 150GW (2030)

Strong state support for exports:

Nuclear industry as one of the prioritized areas under the 13th

Five-Year Plan (2016-20).

Accelerated localization of nuclear technologies and nuclear reactor exports: (e.g.) Hualong One reactor

Chinese vendors’ exportsin progress• Pakistan (under construction; existent)

• Romania (planned)

• Argentina (planned)

• Iran (agreed, July 2015)

• Turkey (in negotiation)

• Egypt (MOU, July 2015)

• Kenya (MOU, May 2015)

• Sudan (framework agreement, May

2016)

• Armenia (in negotiation)

• U.K. (planned)

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Source: “Nuclear Power in China,” World Nuclear Association, 20 September 2016; etc.


Increasing Presence by China and Russia:Nuclear reactors under construction, planning or negotiation: an Image

32Source: Illustrated by author on a map of “One Belt, One Road”, published by Xinhua.

What will be the impacts on the global nuclear landscape?


??

Can we overcome looming uncertainties in a timely manner?

Impending major problems to be solved:

Engagement of emerging nuclear partners as responsible stakeholders.

Sufficient human resources, including nuclear engineers, operators, scientists, etc.

Diffusion of best practices of safety regulations, accident responses, and accident-preventive measures.

Minimization of proliferation risks, including detection of illicit and clandestine activities, etc.


Key Takeaways1. Geopolitical logics in the nuclear market have

gradually increased.

The nuclear future is not just a matter of energy, but also a global security question.

2. Public enlightenment on international perspectives on nuclear reality needs to be enhanced.

Each society is overwhelmingly inward-looking.


Key Takeaways3. Robust development of domestic nuclear industry

is sine qua non to maintain its international competitiveness and to carry out global responsibilities for peaceful use of nuclear energy.

Strong government support and closer public-private partnership is required.

4. Greater efforts to enhance transparency over international flows of dual-use technologies, goods, know-how, etc., are needed.


Key Takeaways5. Notwithstanding intensifying commercial

competition, however, no time should be lost to enhance:

Policy adjustments over nonproliferation

R & D

Sharing experiences on safety and crisis management

- among nuclear suppliers, including esp. China, - with emerging nuclear energy countries.

6. Sound growth of the global nuclear market requires both energy and security calculations.


Thank you very much for your attention!

<[email protected]>


alea iacta est

Disclaimer: The opinions expressed here are solely those of the presenter in his private

capacity and do not necessarily reflect any other organization’s views.

Future Nuclear Technologies · SMR plant may cost ~$1 billion vs. $5-8 billion for large reactor....

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