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NEW NUCLEAR POWER. Ed Cummins Westinghouse Electric Company June 29, 2006. A Nuclear Renaissance is Beginning. Major Driving Factor - Price of natural gas more than doubled. - Volatility of natural gas prices - High long-term projections for natural gas prices Additional Considerations

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new nuclear power

NEW NUCLEAR POWER

Ed Cummins

Westinghouse Electric Company

June 29, 2006

a nuclear renaissance is beginning
A Nuclear Renaissance is Beginning
  • Major Driving Factor

- Price of natural gas more than doubled.

- Volatility of natural gas prices

- High long-term projections for natural gas prices

  • Additional Considerations
    • Energy security
    • Uncertainty in the future emissions regulations (monetization of airborne pollutants such as carbon and mercury)
    • Availability of advanced nuclear plant designs
    • Relative stability of regulatory environment
    • Public policy (political) support (Energy Legislation in the U.S.)
  • Challenges
    • Spent fuel disposal
    • Resource availability (human and supply chain)
    • Project Management
new plant licensing process
New Plant Licensing Process
  • New NRC Licensing Process
u s government support
U.S. Government Support

“To build a secure energy future, we need to expand production of safe, clean nuclear power.”

President George W. Bush

new plant licensing process1
New Plant Licensing Process
  • Early Site Permit

- ESP is a partial construction permit .

- ESP addresses site safety issues, environmental protection

issues and plans for coping with emergencies.

- Independent of the review of a specific nuclear plant design

- Three ESP applications submitted in 2003 (Dominion,

Exelon and Entergy).

- Southern Company has scheduled an ESP application

in August 2006.

new plant licensing process cont d
New Plant Licensing Process Cont’d.
  • Combined License (COL)

- COL authorizes construction and conditional operation of a

nuclear power plant.

- COL application should include information required for a

construction permit and operating license.

- Must include the proposed inspections, tests and analyses which

the licensee shall perform and associated acceptance criteria

(ITAAC) .

- The NRC must also find that the ITAAC have been met before

granting authorization to operate.

nuclear power 2010
Nuclear Power 2010
  • Dominion pursuing COL for ESBWR at North Anna.
  • NuStart Project Status

- Two sites selected for COL Application - Bellefonte (TVA) for AP1000 and Grand Gulf (Entergy) for ESBWR.

- GE filed an application for design certification of ESBWR in August 25, 2005.

- Design certification of AP1000 was issued in December 2005 .

- Engineering work needed for COL applications under way.

  • Submit COLs in the fourth quarter 2007.
  • Obtain COL license in 2010.
  • Plant operation 2015.
united states new plant market status
United States New Plant Market Status
  • Commitments for COL License

AP1000

NuStart (TVA) 2 units

Duke 2 units

Progress 2 units North Carolina

Progress 2 units Florida

SCANA 2 units

Southern 2 units

12 units

ESBWR

Dominion 2 units

Entergy 2 units

4 units

EPR

Constellation 1-2 units

ABWR

South Texas 2 units

Power Companies Evaluating Technology

Florida Power and Light

AMEREN UE

Texas Utilities

  • Strong preference for passive plants
  • Preference for design and licensing maturity of AP1000
2005 energy policy act
2005 Energy Policy Act
  • President Bush signed the comprehensive energy bill into law, called 2005 Energy Policy Act. on August 8, 2005.
  • Nuclear Related Provisions

- Federal risk insurance that would pay up to $2B if there

are delays in full power operations of the first six

advanced power reactors receiving NRC’s new combined

construction and operating licenses. This covers

100% of the cost of delay for the first two new plants, up to

$500M each, and 50% of the delay costs up to $250M

each for plants three to six.

2005 energy policy act cont d
2005 Energy Policy Act Cont’d.
  • Nuclear Related Provisions (continued)

- Federal loan guarantee of up to 80% of the project cost.

- Production tax credit for new reactors of 1.8 cents per kilowatts-hour for nuclear generated electricity over eight years. Implementing rules share benefits among qualifying new plant projects.

- All decommissioning funds are taxed at 20% rate (reduced from the current rate).

- Extension of Price-Anderson Act through 2025 (accident insurance).

ap1000 schedule to commercial operation
AP1000 Schedule to Commercial Operation

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

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FDA

AP1000 DC

COL Engineering

Submit COL

FOAK Design Details

COL Issued

Place Order

Pre-Construction Site Activities

Construction

Early Procurement Activities

Startup

Commercial Operation

slide13

Westinghouse Fifteen Year Investment in Passive Technology

Westinghouse developed AP600, its first passive safety reactor

system in the early 1990s (1,300 man-years of design and testing).

NRC issued AP600 design certification in 1999 following extensive

licensing review of more than 130 man-years and independent

confirmatory testing of critical systems.

Westinghouse embarked on AP1000 development to improve cost

competitiveness.

Half billion dollars and over 15 years invested in the development

of passive technology.

ap1000 no technology risk
AP1000: No Technology Risk
  • AP1000 power generation systems (fuel, NSSS, turbine generator, support systems) are of “traditional design” and involve no new or novel technology. Operating experience is directly applicable.
  • “Passive” safety systems are, in general, very simple consisting largely of tanks, pipes and a few air or DC operated valves.
  • Expected performance under accident conditionsvalidated by extensive testing (>$40 MUSD) and regulatory review.
  • Modular construction techniques well proven in non-nuclear applications (ship building, off-shore drilling platforms)
  • Mature in design and licensing – 60% complete
slide15
AP1000

Design Features

the westinghouse ap1000
The Westinghouse AP1000
  • A compact station
  • 3415 MWt. Primary system
  • 1117 MWe
  • 2-loops, 2 steam generators
ap1000 provides safety and investment protection
AP1000 Provides Safety and Investment Protection

AP1000

Results

U. S. NRC

Requirements

Current

Plants

US Utility

Requirements

1 x 10-4 (a)

5 x 10-5

1 x 10-5 (a)

5.1 x 10-7 (a)

Core Damage Frequency per Year

Note (a) CDF includes random and internal hazard events from at-power and shutdown conditions.

ap1000 simplifications
AP1000 Simplifications
  • Safety
    • Use of passive safety systems
  • Design
    • Reduced number of components and bulk commodities
  • Procurement
    • Standardization of components
  • Construction
    • Extensive use of modules reduces on-site construction
    • Multiplexed I&C communication reduces cables
  • Operation and Maintenance
    • Use of proven systems and components
    • Man-machine interface advancements
passive safety what is it all about
Passive Safety – What is it all about?
  • Passive Safety Systems utilizes naturally occurring physical phenomena such as natural circulation of air, water and steam.
  • Gravity and gas pressure drive the flow of cooling water.
  • Natural heat transfer occurs through conduction, convection and evaporation.
  • Flow and cooling occur in accordance with nature’s laws – There are no pumps and motor-operated valves.
  • A few valves align the passive safety systems upon actuation signals.
  • Greatly reduced operator dependency
  • AC electrical power is not required for plant safety.
the ap1000 is smaller and dramatically simpler than evolutionary plants
The AP1000 is Smaller and Dramatically Simpler than Evolutionary Plants

Sizewell B

AP1000

74147A

standardization
Standardization
  • Standardization has been a key element of New Plant Commercialization for 20 years – NPOC Strategic Plan.
  • The Utility Requirements Document standardized the Power Company requirements for New Plants.
  • Design Certification commits the Plant Supplier and the Nuclear Regulatory Commission to a “Standard Plant”.
  • NRC approach to Design Centered Combined Construction and Operating License (COL) enhances standardization.
  • NRC will “punish” departure from Design Centered review with “extended” licensing schedule.
  • Economics provide incentives for Standardization Beyond Design:
      • Operations - Supply Chain
      • Engineering - Maintenance
standard plant design scope
Standard Plant Design Scope
  • Since the start of the AP600 program, Westinghouse has maximized the scope of the Standard Plant:
    • Forced Draft Cooling Tower for non-safety related Essential Service Water System
    • Spring Mounted Turbine Table Top is not sensitive to Site Soil Conditions.
    • Use of Broad Set of Environmental interface criteria established by the URD (snow, rain, temperatures, wind, soil conditions)’
  • Standard Plant is described in AP1000 Design Control Document, Chapter 1.2.
  • The Scope of Standardization includes the entire plant.
  • Passive Plant Standardization is enhanced by:
    • No need for Safety Related AC Power
    • No need for Safety Related Ultimate Heat Sink (Intake Structure)
standard plant market approach
Standard Plant Market Approach
  • Reduced risk to both buyers and sellers
  • Lower power generation cost
  • Shorter construction schedules
  • Enhanced public confidence
  • Smoother regulatory review
  • Improved perception/

acceptance of financial markets

slide27

U.S. Electricity Production Costs

Production Costs = Operations and Maintenance Costs + Fuel Costs

Source: Global Energy Decisions

Updated: 6/06

slide28

Natural Gas Price

U.S. Electric Generation

Source: DOE/EIA – Electric Power Monthly

electricity regulatory environment
Electricity Regulatory Environment
  • Nuclear plants can be implemented in either regulated or unregulated electricity markets.
  • All power companies committed to obtaining AP1000 COL licenses operate in regulated markets (Southern, Duke, Progress, SCANA).
  • In regulated markets, the plant owner obtains a predetermined regulated return on investment. The price of electricity is set by the regulator to achieve this return.
  • Regulators evaluate and approve generating capacity additions based on consideration of (cost, fuel diversity, fuel volatility and security of supply).
electricity regulatory environment cont d
Electricity Regulatory Environment-Cont’d.
  • New nuclear plants have been proposed in unregulated markets (Dominion and Constellation).
  • Market based owners of nuclear plants sell electricity at the “market price” and obtain a return on investment based on the difference between market price and the production costs.
  • Uncertainty in market price leads unregulated power companies to seek long-term power purchase contracts.
slide33

Electricity Pricing Under Regulation Is Based On Recovering Utility Revenue Requirements

Electricity Price =

Revenue Requirements / Electricity Generation (kwh)

Revenue Requirements =

Operating Costs + Rate Base x Allowed Rate of Return

Operating Costs =

O&M + Fuel + Depreciation & Amort. + Taxes + Fees + Accruals

Rate Base =

Gross Investment - Accumulated Depreciation

Allowed Rate of Return =

Value Determined by State or Federal Regulatory Commissions

  • The price of electricity is established by the regulator to provide generating plant owners on agreed return.
  • New nuclear plants are approved if the expected cost of electricity is less than for alternate generating sources
  • “Least Cost Plan”.
slide34

Deregulated Market Pricing Example:

Plants are Dispatched in Order of Bid Price

Each Plant Assumed to be 1,000 MWe

slide35

Deregulated Market Pricing Example: At a 5,000 Mwe Demand

Level All Plants Operating Receive $15/mwh

Each Plant Assumed to be 1,000 MWe

Market Clearing Price

Marginal Plant

slide36

The Demand for Electricity Is Driven by the Shape of the Load Duration Curve for Each of the Regions

analyzing 2006 wholesale electricity costs in new england
Analyzing 2006 Wholesale Electricity Costs in New England
  • 2006 Regional System Plan (RSP06) estimated how certain actions can affect costs
  • RSP06 will model a number of scenarios to determine their effect on prices, including:
    • Addition of a 1,000 MW base load resource
    • Addition of a 1,000 MW clean-coal generator
    • 5% load growth without generation addition
  • Nuclear base loads impact is similar to coal. A low cost generator is added to the generation mix.
  • Owners return is based on integrated difference in market price and generating cost.
  • Change in wholesale price
  • 5.7%
  • -5.6%
  • 5.8%
slide38

Nuclear Breakeven Capital Cost

$2,400-3,200/kwe Breakeven with NGCC

$1,800-2,300/kwe Breakeven with Coal

market based nuclear generation dispatching resources
Market Based Nuclear GenerationDispatching Resources
  • ISO uses least expensive mix of resources to meet minute-to-minute power needs of the region.
    • Impact of additional units depends on size of ISO and characteristics of electric load.
  • Most expensive needed resource sets market clearing price for all (Uniform Clearing Price Auction).
    • Sends a clear signal to investors and the region on what resources should be developed.
    • Responds immediately to changed market conditions.
    • Encourages marginal-cost based offers so that the most efficient units are dispatched.
  • Marginal cost for nuclear fuel cost $5.0/MWK
  • O&M costs are treated as fixed at about $10.0 MWH.
  • Return on capital is dependent on cost of plant and capacity factor.
summary
Summary
  • The current resurgence of interest in nuclear power in the U.S. is based on several factors:
    • Need for additional base load generation in the 2010-2015 period
    • High price of natural gas makes nuclear plants the lowest cost generation source.
    • Uncertainty in Environmental Legislation (carbon, mercury, other pollutants) results in reluctance to build coal plants.
    • Concern about carbon emissions is expected to result in carbon taxes or emission free incentives.
summary cont d
Summary – Cont’d.
  • The Energy Act of 2005 provides very attractive incentives for the first few nuclear plants.
  • The AP1000 is attractive as the only advanced plant that has completed Design Certification.
  • Prediction: There will be AP1000 plants operating in the U.S. by 2015.