Update on new nuclear plant development for the kansas energy commission august 15 2007
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Update on New Nuclear Plant Development for the Kansas Energy Commission August 15, 2007. Mary Quillian Director, Business and Environmental Policy Nuclear Energy Institute 202-739-8013, mmq@nei.org. Overview. Factors driving interest in building new nuclear plants:

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Update on new nuclear plant development for the kansas energy commission august 15 2007

Update on New Nuclear Plant Developmentfor the Kansas Energy CommissionAugust 15, 2007

Mary Quillian

Director, Business and Environmental Policy

Nuclear Energy Institute

202-739-8013, mmq@nei.org


Overview
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


Sustained reliability and productivity
Sustained Reliability and Productivity

U.S. Nuclear Capacity Factor

88.1% in 2000

89.4% in 2001

90.3% in 2002

87.9% in 2003

90.1% in 200489.3% in 2005

89.8% in 2006*

Capacity factor (%)

Source:Global Energy Decisions / Energy Information Administration

* Preliminary for 2006


Update on new nuclear plant development for the kansas energy commission august 15 2007

Output Remains Near Record Levels

U.S. Nuclear Generation

Billion kilowatt-hours

754 in 2000

769 in 2001

780 in 2002

764 in 2003

789 in 2004

782 in 2005

787 in 2006*

Billion kilowatt-hours

Source: Global Energy Decisions / Energy Information Administration

* Preliminary for 2006


Update on new nuclear plant development for the kansas energy commission august 15 2007

Solid Economic Performance Continues

U.S. Nuclear Production Cost

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

2006 Cents per kilowatt-hour

Source: Global Energy Decisions


U s industrial safety accident rate 2006
U.S. Industrial Safety Accident Rate2006

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.

Sources: Nuclear (World Association of Nuclear Operators), Electric Utilities and Manufacturing (2005, U.S. Bureau of Labor Statistics).

Updated: 4/07


Update on new nuclear plant development for the kansas energy commission august 15 2007

Fuel as a Percentage of Electric Power Production Costs2005

Conversion

Fabrication

Waste Fund

Enrichment

Uranium

Source: Global Energy Decisions


Update on new nuclear plant development for the kansas energy commission august 15 2007

80

Favor

Oppose

63

60

49

46

40

31

20

Apr-

2007

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

1983

63% Favor Use of Nuclear Energy(Annual Averages)

Source: Bisconti Research, Inc., poll conducted March 30 and April 1, 2007


Five steps of support for new plants

Important

for our

energy

future

80%

Renew

licenses

81%

Prepare

to build

71%

Definitely

build

56%

Accept

new

reactors

at nearest

plant

66%

Five Steps of Support for New Plants

Source: Bisconti Research, Inc., poll conducted March 30 and April 1, 2007


Update on new nuclear plant development for the kansas energy commission august 15 2007

U.S. Electric Power Industry CO2 AvoidedMillion Metric Tons2006

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
Nuclear Energy Has an Environmental Impact Comparable to Renewables

Life Cycle Emissions for Various Electricity Sources

Source: “Hydropower-Internalised Costs and Externalised Benefits,” Frans H. Koch. International Energy Agency


Emissions reductions in perspective
Emissions Reductions in Perspective Renewables

  • 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 challenge
Magnitude of the Climate Challenge Renewables

Under “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
What is a “Wedge” of Nuclear Capacity? Renewables

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.

Source: Keystone-NJFF Report June 2007


Kansas
Kansas Renewables

  • 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 2005

Source: NEI calculations using EPA and EIA data

New nuclear plant size 1,400 MW


Update on new nuclear plant development for the kansas energy commission august 15 2007

SPP Electricity Generation Fuel Shares Renewables2006 and 2030

2030*

2006*

* Forecasted

Source: Energy Information Administration’s Annual Energy Outlook 2007

Updated: 8/07


Update on new nuclear plant development for the kansas energy commission august 15 2007

U.S. Electricity Generation Fuel Shares Renewables2006*

* Preliminary

Source: Global Energy Decisions / Energy Information Administration

Updated: 4/07


Update on new nuclear plant development for the kansas energy commission august 15 2007

U.S. Electricity Generation Forecast Renewables

2005 – 2030, Billion kWh

2030: 5,797 Billion kWh

2005: 4,046 Billion kWh

Source: Energy Information Administration

Updated: 4/07


Update on new nuclear plant development for the kansas energy commission august 15 2007

U.S. Electricity Generation Fuel Shares Renewables2030

* Preliminary

Source: Global Energy Decisions / Energy Information Administration

Updated: 4/07


Update on new nuclear plant development for the kansas energy commission august 15 2007

U.S. Capacity Factors by Fuel Type Renewables2006*

*Preliminary

Source: Global Energy Decisions / Energy Information Administration


Growing need for additional capacity 2006

Electricity demand in 2030 will be 45% greater Renewablesthan today

To maintain current electric fuel supply mix would mean building:

Growing Need for Additional Capacity (2006)

50

Nuclear reactors (1,000 MW)

261

Coal-fired plants (600 MW)

279

Natural gas plants (400 MW)

93

Renewables (100 MW)

Source: 2006 Annual Energy Outlook, Energy Information Administration


Nuclear units under construction worldwide
Nuclear Units Under Construction Worldwide Renewables

Source: International Atomic Energy Agency PRIS database. Updated: 5/07



New nrc licensing process 1992 energy policy act

Early Site Permit * Renewables

Construction Acceptance Criteria *

Combined License *

Construction

Operation

Design Certification *

New NRC Licensing Process(1992 Energy Policy Act)

* Public Comment Opportunity


Standardized plants benefits
Standardized Plants Benefits Renewables

  • 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
The “Once Through” Fuel Cycle: RenewablesThe Old View of Used Fuel Management

Yucca Mountain

Nuclear Plant

Used Fuel


Used fuel management an integrated phased program
Used Fuel Management: RenewablesAn 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
Used Fuel Management: RenewablesNew Strategic Direction

Recycled Nuclear Fuel

Advanced Recycling Reactors

Nuclear Waste

Used Fuel Recycling, Interim Storage

Used Fuel

Yucca Mountain


Capital intensive industries
Capital Intensive Industries Renewables

Capital Intensity1 (three-year average)

Duke3

AmerenUE

PPL Corp.

NRG

Southern Co.

Dominion

Entergy

Exelon Corp.

FP&L

TXU

Progress

Market Capitalization2 (billion dollars)

DTE Energy

BP

SCANA

ExxonMobil

Constellation

Chevron

  • Capital Intensity = total assets divided by total revenues, 2004 – 2006..

  • Market capitalization = number of shares outstanding times share price on 7.3.07..

  • Capital Intensity for Duke is for 2006 only.


Energy policy act of 2005 production tax credit
Energy Policy Act of 2005: RenewablesProduction 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
Energy Policy Act of 2005: RenewablesStandby 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
Energy Policy Act of 2005: RenewablesLoan 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
State Policies Supporting RenewablesNew 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