1

PAUL M. MURPHYSenior Counsel

Bechtel Power Corporation

Vienna, Austria

November 8, 2007

International Atomic Energy Agency:

Milestones for Nuclear Power Infrastructure Development

Opening Remarks - Finance

2

The Journey: 19 MilestonesThe Journey: 19 Milestones

National Position

Management

Legislative Framework

Regulatory Framework

Stakeholder Involvement

Site & Supporting Facilities

Environmental Protection

Nuclear Fuel Cycle

Industrial Involvement

Procurement

Nuclear Safety

Safeguards

Radiation Protection

Electrical Grid

Human Resources Development

Emergency Planning

Security & Physical Protection

Radioactive Waste

Funding & Financing

Role of Government

Leadership / Commitment

Legal Framework & Rule of Law

Institution Building

3

Key MotivationsKey Motivations

Overall Growth in Demand for Energy Linkage between energy and development

Energy Security / Self-Reliance

Energy Diversity

4

World OverviewWorld Overview

Global electricity demand to increase 50% by 2025 1.6%/yr for

industrial world 3.6%/yr for

developing world

0

2

4

6

8

10

12

Bil

lio

ns

(p

eo

ple

)

Year

ICA

PP

04

1850 1900 1950 2050 21002000

6.4

9

0

10

20

30

40

50

ICA

PP

04

Tri

llio

n k

Wh

1850 1900 1950 2050 21002000Year

13

31

5

0

100

200

2003 2010 2015 2020 2025 2030

World Overview

Percent Growth in Nuclear CapacityWorld Overview

Percent Growth in Nuclear CapacityPe

rcen

t Gro

wth

(GW

e) 137%

Developing Nations

Industrial Nations

6

World Overview

Forecasted Nuclear CapacityWorld Overview

Forecasted Nuclear Capacity

0

100

200

300

400

2003 2010 2015 2020 2025 2030

GW

e C

apac

ityy

Asia Western Europe North America

Asia

WesternEurope

NorthAmerica

Mature Market Economies (industrial nations)

7

0

50

100

150

2003 2010 2015 2020 2025 2030

World Overview

Forecasted Nuclear CapacityWorld Overview

Forecasted Nuclear CapacityG

We

Cap

acity

y

Other Asia Europe and Eurasia

Other

Asia

EuropeAnd

Eurasia

Emerging Economies (developing nations)

8

World Overview

U.N. Human Development IndexWorld Overview

U.N. Human Development Index

4,000 8,000 12,0000.3

1.0

India

China

Pakistan

Russia

GermanyAustralia

Canada

UKFrance Japan

U.S.

Annual Electricity Use kWh/Capita

0.6

9

Key MotivationsKey Motivations

Overall Growth in Demand for Energy Linkage between energy and development

Energy Security / Self-Reliance

Energy Diversity

Economics Low operational costs relative to other forms of power

10

United States Perspective

Electricity Production CostsUnited States Perspective

Electricity Production Costs

1995–2005 (averages in 2005 cents per kWhr)

Production costs = operations and maintenance costs + fuel costs

Source: Global Energy Decisions

85 87 89 91 93 95 97 99 01 03

0

1

2

3

4

5

6

7

8

9

10

11

05

2005

Oil 8.09

Gas 7.51

Coal 2.21

Nuclear 1.72

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Key MotivationsKey Motivations

Overall Growth in Demand for Energy Linkage between energy and development

Energy Security / Self-Reliance

Energy Diversity

Economics Low operational costs relative to other forms of power

Emissions / Global Warming

12

16% of world’s electricity Displaces 2.5 billion metric tons of CO2 /year 38 GW brought on line or under construction

since 2000

World Overview

Quick Facts—NuclearWorld Overview

Quick Facts—Nuclear

13

1041

622

17 46 14 39 15180

200

400

600

800

1000

1200

NaturalGas

Hydro Wind Geo-thermal

Tonn

es C

O2-e

quiv

/GW

eh

Coal Nuclear Biomass SolarPV

World Overview

Life Cycle CO2 Emissions AnalysesWorld Overview

Life Cycle CO2 Emissions Analyses

14

Key MotivationsKey Motivations

Overall Growth in Demand for Energy Linkage between energy and development

Energy Security / Self-Reliance

Energy Diversity

Economics Low operational costs relative to other forms of power

Emissions / Global Warming

Note: Drivers are different, depending on national situation

15

Financing IssuesFinancing Issues

High Capital Costs

Long Construction Periods Return on Investment is an Issue

First-of-a-Kind Risk

Sustainability of Government Commitment

Regulatory Uncertainty

Commitment to International Regimes

Supply Chain

Fuel Cycle

Operational Success & Safety Culture

Human Resources

16

What makes nuclear power unique?What makes nuclear power unique?

Scale Cost Development / Construction

Period

Safety

Public Perception / Public Relations

17

Source: Bisconti Research Inc.

Important

for our energy

future

91%

Keep the option to build nuclear plants

84%

Definitely build

nuclear plants in

future

77%

Accept new

reactors at nearest

plant

71%

Favor use of nuclear

energy

82%

United States Perspective Increasing Public SupportUnited States Perspective Increasing Public Support

Summer 2007 survey of residents living near Nuclear power plants.

18

What makes nuclear power unique?What makes nuclear power unique?

Scale Cost Development / Construction

Period Safety

Public Perception / Public Relations

Regulatory Environment

Fuel Cycle

Site Security

International Features Treaty Regimes / Legal

Framework Cross-Border Non-Proliferation

Interdependence of the Nuclear Industry

Impact of Success/Failure

Being Part of the “Nuclear Club”

Commitment to Excellence

19

PROJECT

Parties Involved In a Nuclear Power Project

Risk Allocation?

Labor

Subcontractors Consultants

Commercial Banks

ECAs GovernmentRegulation &

LicensingFinancial

CommitmentsTreaty Commitments

& National Law

Equipment & Material Suppliers

Multilaterals Government

Public

Spent Fuel Managemen

t

Offtakers

Operators

Human Capital

Owners

EPC Contractor

Fuel Supply

NSSS Suppliers

Financing Entities

Decommissioning

20

Concluding ThoughtsConcluding Thoughts

There is no one, right way to achieve success

However, there are certain fundamental principles that will enhance the chances of success