U.S. Nuclear Industry Life in the Fast Lane Thomas A. Christopher President and CEO AREVA NP Inc....
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Transcript of U.S. Nuclear Industry Life in the Fast Lane Thomas A. Christopher President and CEO AREVA NP Inc....
U.S. Nuclear IndustryLife in the Fast Lane
Thomas A. Christopher
President and CEO AREVA NP Inc.
CEO and Vice-Chairman AREVA Inc
2MIT Student Presentation Nov. 5, 2007AREVA NP Inc.
The Energy Highway
> U. S. is facing dramatic challenges in energy supply Volatile fuel costs
• Coal prices increased 57% in two years• Demand for natural gas expected to double in three years
Rising electricity prices• Electricity demand 3.3% last year – higher than forecast• Rate shocks in 10 states this year
Seven regions need to build new generation• Texas experienced a brownout this past summer
Increasing environmental obligations Personnel resource shortages
Energy Will Be a Key Issue in the 2008 Political Campaign
3MIT Student Presentation Nov. 5, 2007AREVA NP Inc.
Current U.S. Plant Capacity and Age
0
100
200
300
400
500
600
700
800
100-499 500-999 1000+
Nameplate C apacity - MW
Nu
mb
er
of
Un
its
Total Coal P lantsTotal Gas P lants
Total Nuc lear P lants
100 - 499 500 - 999 1000+
Natural Gas 18 10 12
Coal 40 29 29
Nuclear 31 21
Average Age of Plants (years)“New” gas, “Old” Coal and
Nuclear
4MIT Student Presentation Nov. 5, 2007AREVA NP Inc.
Combined Cycle Power Plant
Source: Duke
Pollutant Potential to Emit(tons per year)
Nitrogen Oxide (NOx) 219 *Carbon Monoxide (CO) 108 *
Volatile Organic Compound (VOC)
30
Particulate (as PM 10) 117 *Sulfur Dioxide (SO2) 22
Formaldehyde 1Benzene 0.2
H2SO4 Mist 6Ammonia 212
500 – 600 MW Class CC: Air Emissions
5MIT Student Presentation Nov. 5, 2007AREVA NP Inc.
Coal Production Cost Example
•2 coal-fired units @ 1300MWs each
•Both on line in 1973 •Burns pulverized #9
bituminous coal (3% sulfur & 10% ash)
Nitrogen oxide Sulfur Dioxide
TVA’s Cumberland Plant is One of Their Largest Baseload Plants
6MIT Student Presentation Nov. 5, 2007AREVA NP Inc.
US Spot Fuel Prices Continue to Experience Volatility
7MIT Student Presentation Nov. 5, 2007AREVA NP Inc.
Market Drivers: Fuel Prices
Market Faces High and Volatile Natural Gas Prices
Hurricanes
8MIT Student Presentation Nov. 5, 2007AREVA NP Inc.
Value of a Nuclear Power Plant
20
15
20
10
Estimated 2015 Curve
20
07
Peak Load Price Value of Nuclear Source: Global Energy Decisions
9MIT Student Presentation Nov. 5, 2007AREVA NP Inc.
PJM Daily Loads and Locational Marginal Pricing (LMP)
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000P
JM L
oad
(M
Ws)
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
LM
P $
/MW
hr
Hourly Load
Average Hourly PriceAu
g. 1
, 200
6
Aug.
2, 2
006
Aug.
3, 2
006
Aug.
4, 2
006
Aug
. 5, 2
006
Aug.
6, 2
006
Aug
. 7, 2
006
Aug
. 8, 2
006
10MIT Student Presentation Nov. 5, 2007AREVA NP Inc.
Double-digit Residential Electricity Rate Increases
February auctions indicatedresidential prices would rise39% for Pepco, 35% for DP&L,
and 72% for BG&E; recentstakeholder discussions are
proposing phase-ins of15–25% increases per year
before a full move tomarket-based rates
MARYLAND
Central Maine Powerrates increased 10%
effective 3/1/06
MAINE
NSTAR and National Gridcustomers saw 25–35%rate increases on 1/1/06
MASSACHUSETTS
NarragansettElectric rates rose
13% on 1/1/06
RHODE ISLAND
Regulators approved22% increase for
CL&P effective 1/1/06
CONNECTICUT
Rate increases will bephased in with a 15%increase effective May 2006, a 25% increaseJanuary 2007, and a19% increase effective
June 2007
DELAWARE
Some estimate 35% increases in2007 if auction model is adopted;
utility proposals include single-digitannual increases followed by
deferred cost recovery
ILLINOIS
Pepco expectsbills to rise 12%
in June 2006
DISTRICT OFCOLUMBIA
In November 2005,Arizona PublicService askedregulators to
approve 20% rateincreases
ARIZONA
Rates rise 19%for FP&L and 12%
for TampaElectric and
Progress Florida
FLORIDA
25 -35% increase 1/06
10% increase 3/1/0622% increase
1/06
13% increase 1/06
Regulators requested 20% increase
Increases range from 35% to 72%
12% IN 6/06
Phased increases 15% - 5/06, 25% - 1/07
19% - 6/07
19% for FPL, 12% others
From 10% - 72% in 10 states
Rate Caps Disappearing
If auction adopted, increase could be 35%
North American Operating Nuclear Sites
Original Equipment Manaufacturers
B&W 7
W 48
CE 14
GE 34
A Small Part of the US Market is Deregulated
12MIT Student Presentation Nov. 5, 2007AREVA NP Inc.
AREVA Services All Aspects of an Operating Nuclear Plant
Capital
Fuel
Maintenance
Operations
~13.3B€
~2.7B€
~2.8B€
~3.1B€
~4.7B€
13MIT Student Presentation Nov. 5, 2007AREVA NP Inc.
North American Locations – June 2007
Lynchburg, VA (4)•1,842 People•All
Atlanta, GA•45 People•I&C/ES
Richland, WA•571 People•Fuels•Federal
Benicia, CA•44 People•NE-A•NS•New Plants
Charlotte, NC
561 People•All
Naperville, IL •19 People•NE-A•I&C
Marlborough, MA•113 People•NE-A•NE-R
Toronto, Canada•60 People•AREVA NP Canada Ltd.
Philadelphia, PA(shared AREVA)•10 People•I&C/E S•Federal
•
•
•
•
•
•
•
•
••
•
••
Westborough, MA•12 People•E-Lab •NE-A•
•••
Pittsburgh, PA•20 People•I&C/ES
Aiken, SC – shared AREVA•1 Person•Federal
Albuquerque, NM (shared AREVA)•5 People•Federal
Denver, CO (shared AREVA)•6 People•NS
Idaho Falls, ID –(Shared AREVA)
•1 Person
•Federal •
20 Locations
3,378 Employees/Contractors
Erwin, TN•9 People•Fuels
•
Fort Worth, TX•59 People•I&C/ES •NE
AREVA NP Inc.
14MIT Student Presentation Nov. 5, 2007AREVA NP Inc.
Historical US Nuclear Plant Construction Costs Were Out of Control Due to Regulatory Changes and Escalating Costs
0
1000
2000
3000
4000
5000
6000
7000
1965 1970 1975 1980 1985 1990
Co
nst
ruct
ion
Co
sts
$/k
We
DresdenQuad Cities
Oconee
McGuire 1 & 2
Catawba
LaSalle 1
Palo Verde 1
Braidwood
Perry
Vogtle
Hope Creek
Wolf Creek
Beaver Valley 2
March 1979
TMI Accident
Diablo Canyon
15MIT Student Presentation Nov. 5, 2007AREVA NP Inc.
In 1989, a New Licensing Process Introduced by the NRC
> Goal: simplify the two-step process
> The Nuclear Regulatory Commission (NRC), following numerous hearings and input from utilities, drafted new rules for licensing
> Congress amended the Atomic Energy Act to confirm the NRC’s authority to issue statutory combined licenses
Apply forConstruction Permit
Construction
Apply for Operating License
Operating License Issued
Operation
Construction Permit Issued
Early Site Permit
DesignCertification
Combined LicenseIssued
ConstructionITAAC
Verification Operation
Old Process 10 CFR Part 50
New Process 10 CFR Part 52
16MIT Student Presentation Nov. 5, 2007AREVA NP Inc.
New Build Scope Yesterday and Today
10%
90%
1970s - 1980s Typical Scope
2010 – 2020 Typical Scope
AREVA Scope Will Be 50% of Total Plant Contract
NSSS, Equip. RV, SG, RCP
Nuclear system design & licensing
I & C , NSSS
Fuel handling equipment
Reactor containment: equipment design &
supply
Nuclear auxiliary building: equipment
design & supply
Emergency diesel generator:
building design & supply
Safeguards buildings
equipment supply & design
Total Plant Contract
50%50%
Total Plant
17MIT Student Presentation Nov. 5, 2007AREVA NP Inc.
A Number of Utilities Are Moving to Create a New Nuclear Option
Site Selection
COL Prep
COL Submit & NRC Review
COL Hearings
COL Issued
2006 2007 2008 2009 2010 2011 2012
AP1000Duke
Progress
SCE&G
TVA
Southern
ESBWREntergy
Dominion
ABWRNRG
Dominion
US EPRCEG #1
CEG #2
CEG #3
Ameren
2010-1140-Year License
To Build
18MIT Student Presentation Nov. 5, 2007AREVA NP Inc.
New Business Model Emerges to Respond to Capacity Demand - as UniStar
Marketing Activity 2005-2006
Owners
CEG / Utility #1
Owners
CEG / Utility #1
Owners
CEG / Utility #2
Owners
CEG / Utility #2
PO EPR (AREVA)PO EPR (AREVA)
PO EPR (AREVA)PO EPR (AREVA)
CONTRACT #1
CONTRACT #2
PO CEG Operator
PO BECHTEL
STG Vendor
STG Vendor
Owner
CEG
Owner
CEG
PO EPR (AREVA)PO EPR (AREVA)CONTRACT #3
STG VendorPower Purchase
Agreement
(Utility #3)
Power Purchase
Agreement
(Utility #3)
CEG
AREVA
Standard Plant EPR Offering
CEG Part Owner / Operator
Standard Plant EPR Offering
CEG Part Owner / Operator
BECHTEL
Owner
CEG
Owner
CEG
PO EPR (AREVA)PO EPR (AREVA)CONTRACT #4
STG Vendor
Power Purchase
Agreement
(Utility #3)
Power Purchase
Agreement
(Utility #3)
PO BECHTEL
PO BECHTEL
PO BECHTEL
19MIT Student Presentation Nov. 5, 2007AREVA NP Inc.
AREVA’s Third Generation US EPR is Designed to Meet Today’s Needs
20MIT Student Presentation Nov. 5, 2007AREVA NP Inc.
Each Safety Train is Independent and Located Within a Physically Separate Building.
Four Train Concept
21MIT Student Presentation Nov. 5, 2007AREVA NP Inc.
Four-Train Concept
> On-line maintenance without entering action statements
> Radial arrangement simplifies layout and reduces piping
> Active cross-connects eliminated Simplifies systems Minimizes components Reduces operator burden in case of accident
> Reduced component sizes
> Separate safeguards buildings Physical separation Improved hazards mitigation
• fire, flood, external events
SYSTEMEPR Westinghouse 4-Loop
Pump HX Tank Valve Pump HX Tank Valve
SI / RHR 8 4 4 335 4 6 5 351
CVCS incl. Boration, Demin/Seal Water
11 6 8 397 11 13 14 751
CCW 8 14 6 404 7 13 7 758
Total 27 24 18 1136 22 32 26 1860
5 More Pumps8 Less HX
8 Less Tanks724 Less Valves
22MIT Student Presentation Nov. 5, 2007AREVA NP Inc.
OL–3 EPR Under Construction
23MIT Student Presentation Nov. 5, 2007AREVA NP Inc.
Progress at Flamanville
24MIT Student Presentation Nov. 5, 2007AREVA NP Inc.
Calvert Cliffs #3 Schedule
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
EPR Design Certification
DC Application Preparation & Review DCA Prep & NRC Interactions NRC Review DC Rule
(preparation - 33 mos, review - 24 mos, rulemaking - 10 mos)
COL Licensing
Site & Reactor Technology Selection(evaluation: 6 mos)
COL Project Planning(preparation: 6 mos)
COL Application Preparation & Review COLA Prep, NRC Mtgs NRC COLA Reviews Hearing
(preparation - 24 mos, review including hearing - 39 mos)
Project Execution
Procurement & related engineering(Major NSSS components on-site - 63 months) Planning Long lead component procurement and fabrication
Detailed engineering for Construction Plng Detailed engineering for construction
(Final construction ready designcomplete before construction start)
Simulator Procurement / Installation Plng Manufacture, Test & Install(Simulator required operational 12 months before fuel load)
Plant Construction Planning Site Preparation Plant Construction, Start-up Testing
(Site prep - 15 months, construction - 48 months)
20122008 2009 2010 2011Activity
2005 2006 2007 2013 2014 2015 2016
(1)
(3)
Start Software Development
Start Fuel Load
COL Application Submitted
Simulator Operational
(2)
Final Design Approval (FDA) Issued
DC Application Submitted
NSSS Components On-Site
First Concrete Pour
Engineerng Complete
Project Plan Approved
Simulator Order Placed
(1) Limited Work Authorization (LWA) Issued(2) Final Environmental Impact Statement (FEIS) Issued(3) Final Safety Evaluation Report (FSER) Issued
DC Rule Issued
COL Issued
Provisional Turnover
25MIT Student Presentation Nov. 5, 2007AREVA NP Inc.
Estimated 2006 Production Costs
$14.0
$31.4
$23.4
0
5
10
15
20
25
30
35
4-Loop Plant US EPR Coal
$/M
Wh
New Build Will Cost Less to Operate Than Existing Plants
26MIT Student Presentation Nov. 5, 2007AREVA NP Inc.
AREVA Will Continue to Need New Employees
Current openings end of Feb. 007– 307
Total Full -Time Hires
Total 2006 2007 Goals
Internal Hires
225 200
External Hires
337 325
Total Hires 562 525
New Hires Needed
by 2010 = 1000
27MIT Student Presentation Nov. 5, 2007AREVA NP Inc.
Types of Engineers Supporting EPR Projects
> Mechanical – fluids, heat transfer,
FEM > Civil – soil interaction, earthquakes> Structural – linear and non-linear analyses> Electrical – design, diesel generators, one-lines> Electronics – digital instrumentation and control> Nuclear – neutronics, thermal/hydraulics> Fire – nuclear fire safety> Materials – fatigue, stress, FEM> Construction (just starting)
Olkiluoto 3 RV head manufacturing
28MIT Student Presentation Nov. 5, 2007AREVA NP Inc.
The Next Generation of Leaders
> Key skills Problem solving and decision making
• Short-term crisis management• Long-term construction management
Working with teams (domestic and international)• JV, LLC, etc.
Learning from mistakes
Broadened knowledge base• New NSSS vendor responsibilities – 50% of entire plan
– Civil– Structural– Etc.
Ability to adapt to rapid innovation and technology• New ideas• Technology• Curiosity
29MIT Student Presentation Nov. 5, 2007AREVA NP Inc.
In Summary - It’s an Exciting and Challenging Time
> This is a critical time in the energy generation industry – demand supports the Nuclear Renaissance
> We face greater economic and environmental challenges than ever before
> Nuclear is making a comeback Environmentally friendly Energy independence
> We have the new technologies but success depends on New approaches, innovation, enthusiasm and
dedication A new generation of “employees”
Our Business Is Growing Fast – We’ll be Here For a Long Time
AREVA