20122012Developments Developments
in the in the Global Nuclear Global Nuclear
IndustryIndustry
George Borovas (Tokyo, London)George Borovas (Tokyo, London)Elina Teplinsky (Washington, DC)Elina Teplinsky (Washington, DC)
Developments in the Nuclear Industry: Table of Contents
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Future of Nuclear Power
▪ Economics: Supply/price of natural gas ▪ especially in the U.S., but likely internationally as
well
▪ Climate change: especially impacts on coal
▪ Post-Fukushima: especially political and regulatory impacts
▪ Long-term energy strategy: Middle East and North Africa as post-fossil backbone for energy supply; China and India
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U.S. Reactor Developments
▪ New Plants▪ Vogtle, V.C. Summer licensed and
under construction▪ Other projects – licensing continuing
without commitments to build▪ UniStar – coming apart without US
partner?▪ AP 1000’s continuing; US EPR’s ?
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U.S. Reactor Developments
▪ Waste Confidence▪ D.C. Circuit decision vacating rule needed
for licensing of new plants, license renewals ▪ environmental consequences of spent
nuclear fuel at reactor sites beyond license term
▪ Commission order that no new plant licenses or license renewals until either new rule or site-specific analysis completed▪ Could (but shouldn’t) take years.
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U.S. Reactor Developments
▪ Current plants▪ Fukushima impacts▪ Seismic, severe accident review▪ Additional equipment for loss of power, flooding▪ Spent fuel pool instrumentation▪ Costs certain, but operational impacts less likely
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U.S. Reactor Developments
▪ Current plants▪ Economics▪ Gas prices
▪ Physically troubled plants▪ Crystal River▪ San Onofre Nuclear Generating Station (SONGS)
▪ Politically troubled plants▪ Indian Point▪ Vermont Yankee
▪ Impact of power uprates▪ U.S. nuclear industry added a total of 6,194 MW
to the grid via uprates since 1977▪ Applications with NRC for 2,911 MW in uprates
are pending; NRC expects additional applications totaling 1,246 NW in uprates
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International: Regulatory and Political Developments
▪ Japan▪ Limited restarts – Ohi 1 & 2▪ Likelihood for additional restarts?▪ Local political approvals▪ Economic consequences
▪ Restructured regulatory system▪ post-Fukushima energy mix▪ September 2012: announced new energy policy, would seek to
phase out nuclear power by 2040▪ strategy subject to vast change due to political changes
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International: Post-Fukushima Regulatory and Political Developments
▪ Germany▪ May 2012: government decides to shut down all
reactors by 2022▪ leaves 8 oldest reactors closed; remaining 9 closing by end
of 2022▪ Germany expecting to increase electricity imports from
France, Poland and Russia, mostly from coal and nuclear sources, and Russia is expected to export significantly more gas.
▪ Germany's four nuclear power utilities pressing claims for compensation and suing the government over continuing with the nuclear tax on the 8- and 14-year license extensions agreed in September 2010
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International: Regulatory and Political Developments
▪ Belgium ▪ 2003 Act: moratorium on new plants, limited operation of existing plants
to 40 years (to 2014-2025)▪ phaseout can be overridden by a recommendation from the electricity and
gas regulator if Belgium's security of supply is threatened▪ 2009: commissioned panel recommended 10-year life extension for
three oldest reactors; 20-year life extension for other four▪ Due to elections, recommendations never implemented; new government
decided to proceed with phaseout if adequate power could be secured from other sources and prices would not rise unduly
▪ July 2012: Council of Ministers announced that Doel 1 and 2 are to close in 2015 after 40 years of operation; Tihange 1, which will turn 40 in 2015, to be permitted to operate to 2025 to avoid risk of blackouts.
▪ Other four Belgian reactors not immediately affected by decisions.▪ Newly discovered reactor pressure vessel flaws in Doel.
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International: Regulatory and Political Developments
▪ France▪ Impact of Hollande Election ▪ Pledged to lower France’s reliance on nuclear energy ▪ In April 2012, backed away from accord with the Greens to
shut 24 of France’s 58 nuclear reactors by 2025 in light of union support for the industry and the perceived threat to jobs
▪ Near-term: ▪ EDF’s oldest plant at Fessenheim to be closed within five years
because of safety concerns ▪ New EPR at Flamanville in Normandy will be completed
▪ Mid-longer term:▪ Proportion of power production from nuclear lowered to 50%
(currently 75%) by around 2025.
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International Developments: New Plants
▪ UAE▪ Federal Authority on Nuclear Regulation (FANR) issued construction
license for Braka NPP in July 2012▪ August 2012: Emirates Nuclear Energy Corporation (ENEC) awarded
six contracts worth $3 billion related to the supply of natural uranium concentrates, conversion and enrichment services and thepurchase of enriched uranium product.
▪ Saudi Arabia▪ Plans to build up to 16 reactors to meet growing energy needs▪ King Abdullah City for Atomic and Renewable Energy (K.A.CARE)
established in 2010 with mandate to launch program▪ Saudi Arabia has signed nuclear cooperation agreements with the
Republic of Korea, France, China, and Argentina, among others; 123 Agreement discussions with the U.S.
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International Developments: New Plants
▪ Turkey▪ Akkuyu plant (Atomstroyexport design) received site license; site
works expected begin mid-2013, with full constructed expected to start in 2015.
▪ In discussions with Japan, Canada, China and South Korea to build a second nuclear power plant at Sinop.
▪ Jordan▪ Expected to start building a 750-1200 MWe nuclear power unit in
2013 for operation by 2020 and a second one for operation by 2025.
▪ May 2012: the lower house of parliament voted to suspend the country’s nuclear program.▪ Jordan Atomic Energy Commission stated that motion was qualified in
effect to endorse its cautious proceeding.
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International Developments: New Plants
▪ China▪ China National Nuclear Power Co. (CNNPC) and China Nuclear
Engineering Construction Co. Ltd (CNECC) planning IPOs▪ CNNC’s IPO will go toward financing part of five power projects worth $27.2B
▪ India▪ Kudankulam (constructed by Atomstroyexport)
▪ Unit 1 expected to begin start-up by Dec. 2012; unit 2 is three months behind unit 1
▪ Westinghouse signed early works agreement with NPCIL in June 2012▪ Mithi Virdi in Gujarat will host up to six Westinghouse AP1000 units.
▪ Republic of Korea▪ Shin-Kori 2 came online in July 2012▪ KHNP postponed construction of 10 nuclear plants due to expected
delays in obtaining governmental approvals post-Fukushima
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International Developments: New Plants
▪ Vietnam▪ Preparations underway for construction of the first NPP (VVER) in
central Ninh Thuan Province, construction scheduled to commence in 2014, operation in 2020.
▪ Japan negotiating to build second plant▪ Interest for possible third project
▪ Malaysia▪ Undertaking feasibility, site selection and regulatory studies
contemplating construction of 2-4 reactors
▪ Thailand▪ New nuclear development postponed after Fukushima
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International Developments: New Plants
▪ Czech Republic▪ July 2012: CEZ accepted bids from Westinghouse, AREVA and
Atomstroyexport to build two new reactors at Temelin▪ Vendor for $10B project to be selected next year
▪ Lithuania, Latvia and Estonia▪ Visaginas nuclear power plant, a single 1350 MWe ABWR, to be
constructed by Hitachi-GE in Lithuania▪ Stakes in the project: Hitachi - 20%; Latvia - 20%; Estonia – 22% and
Lithuania – 38%; concession agreement with Hitachi signed in May 2012▪ European Commission issued favorable opinion for construction of
project▪ Lithuania held a non-binding referendum on new plant in October 2012—
final political decision expected by May 2013
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International Developments: New Plants
▪ Poland▪ State-controlled Polska Grupa Energetyczna (PGE) tasked, to lead a
consortium to build 6 GW of nuclear capacity by 2030▪ Tender for project, originally scheduled for Q2 2012, delayed because
government is still working on financing model for project▪ GE Hitachi, AREVA and Westinghouse likely bidders▪ Ministry of Treasury stated it would like several state-owned power and
mining companies to combine to finance the project
▪ Bulgaria▪ Shelved plans to build a new plant at Belene in March 2012 after
failing to attract foreign investors▪ August 2012: selected Westinghouse to prepare proposal to build third
reactor at Kozloduy site
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International Developments: New Plants
▪ UK▪ Horizon Nuclear Power – JV between German-based RWE with E.ON,
planned three AP1000s or two EPRs▪ 2012: RWE and E.ON sold Horizon to Hitachi, Ltd.
▪ EDF and Centrica (acquired British Energy) plan to build four EPRs ▪ UK government in discussions regarding a fixed “strike price” for the electricity
from proposed new reactors
▪ Finland▪ TVO now projects August 2014 for commercial operation of Olkiluoto 3▪ Other potential new projects: Olkiluoto 4 (1000-1800 MWe PWR or BWR)
and Hanhikivi 1 (1250-1700 MWe EPR or Toshiba ABWR)
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International Developments: New Plants
▪ Russia▪ Ten reactors under active construction, including a large fast neutron
reactor. ▪ 14 further reactors are planned, some to replace existing plants; by 2017
ten new reactors totaling 9.2 GWe should be operating.
▪ Kazakhstan▪ Proposals to construct 20 or more small reactors each of 50-100 MWe
to supply dispersed towns
▪ Belarus▪ In July 2012, signed a $10B contract with Russia to build its first, two-
unit, nuclear power plant.▪ Russia will provide Belarus a $10B loan for the project
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Developments in Nuclear Liability
▪ Post-Fukushima questions about:▪ adequacy of insurance coverage post-Fukushima ▪ “grave natural disaster” exceptions
▪ Nuclear liability in Japan▪ Japan’s Law on Compensation for Nuclear Damage:▪ operator has unlimited liability; required to maintain JPY 120B ($1.5B) insurance per reactor▪ government may relieve the operator of liability if it determines that damage results from “a
grave natural disaster of an exceptional character”▪ Japanese Government did not deem Fukushima a “grave natural disaster of an
exceptional character”
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Developments in Nuclear Liability
▪ Japanese Government concluded Indemnity Agreement with TEPCO for JPY 120B ($1.5B)
▪ As of August 2012, TEPCO estimate of nuclear damage compensation: JPY $2,809B ($38B)
▪ In 2011 Japanese government established “Facilitation Corporation” to manage a fund which receives contributions from the government and TEPCO
▪ Insurance issue:▪ TEPCO formerly covered by the Japan Atomic Energy Insurance Pool▪ Pool did not renew TEPCO’s contract after it expired in mid January 2012. ▪ TEPCO is seeking coverage from private-sector insurers.
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Nonproliferation Issues
▪ U.S. 123 Agreements (nuclear cooperation agreements)▪ In accordance with Section 123 of the U.S. Atomic Energy Act (AEA), provides a
framework under which the U.S. can transfer certain nuclear material and equipment to other nations;
▪ AEA Section 123 dictates required provisions in agreements, including:▪ ENRICHMENT AND REPROCESSING: Transferred material and material used in or produced
through the use of transferred material or facilities shall not be reprocessed or enriched without the U.S. consent.
▪ RETRANSFER CONSENT: transferred facilities or special nuclear material produced through the use of such facilities or transferred material shall not be retransferred to third parties without U.S. consent.
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Nonproliferation Issues
▪ “Gold Standard”▪ In 2008, the U.S. and the UAE signed a 123 agreement; in that
agreement, the UAE has agreed to forego enrichment and reprocessing▪ this portion of the agreement goes beyond requirements of the AEA,
became known as “Gold Standard”▪ Advocates in Congress for making “Gold Standard” pledge a pre-
requisite for all future 123 Agreements (HR 1280)▪ current agreements under negotiation: Vietnam, Jordan, Saudi Arabia
▪ In January 2012, State and DOE sent letter to Congress stating that “Gold Standard” was going to be applied on a case-by-case basis
▪ Interagency recommendation that “Gold Standard” be applied to all except countries with reprocessing/enrichment, Korea and IAEA.
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Supplier Developments
▪ Toshiba▪ Currently holds 67% percent of Westinghouse▪ Purchased the Shaw Group's 20% stake in the company▪ Prior to purchase, interested in selling a 16% stake in
Westinghouse as it looks to prioritize its nuclear business in emerging markets▪ would look to sell the stake to nuclear technology companies
that have strong links to emerging markets
▪ Chicago Bridge & Iron Co. (CB&I)▪ Agreed to buy Shaw Group Inc. for ~$3B▪ extends CB&I’s growth into the U.S. power generation market ▪ combined company will rank third (behind Bechtel and Fluor) in
size of contracts
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Small Modular Reactors
▪ Key Features ▪ Less than 300MW (U.S. definition)▪ Manufactured completely at a factory and delivered and installed at a site in modules
▪ Advantages▪ Small size allows faster deployment▪ Much lower accident risk ▪ Reduced parts modular construction▪ Weapons proliferation resistant ▪ Simplified regulatory and licensing structure▪ Improved safety and security ▪ Reduced capital cost▪ Shorter construction schedules▪ Improved quality with factory fabrication▪ Meets electric demand growth incrementally
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Small Modular Reactors
▪ Licensing Challenges▪ NRC has identified policy and regulatory challenges with
licensing SMRs (SECY-10-0034)▪ Implementation of the Defense-In-Depth Philosophy▪ Appropriate Source Term, Dose Calculations, and Siting▪ Appropriate Requirements for Operator Staffing for Small or
Multi-Module Facilities▪ Security and Safeguards Requirements for SMRs
▪ Key challenge is NRC resources and willingness to dedicate resources to SMRs versus large reactors▪ Most SMRs will not be deployed in the U.S.
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Small Modular Reactors
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Name Capacity Type DeveloperKLT-40S 35 MWe PWR OKBM, Russia
VK-300 300 MWe BWR Atomenergoproekt, Russia
CAREM 27-100 MWe PWR CNEA & INVAP, Argentina
IRIS 100-335 MWe PWR Westinghouse-led, international
Westinghouse SMR 200 MWe PWR Westinghouse, USA
mPower 150-180 MWe PWR Babcock & Wilcox + Bechtel, USA
SMR-160 160 MWe PWR Holtec, USASMART 100 MWe PWR KAERI, South Korea
NuScale 45 MWe PWR NuScale Power + Fluor, USA
ACP100 100 MWe PWR CNNC & Guodian, China
HTR-PM 2x105 MWe HTR INET & Huaneng, China
EM2 240 MWe HTR General Atomics (USA)SC-HTGR (Antares) 250 MWe HTR Areva
BREST 300 MWe FNR RDIPE, Russia
SVBR-100 100 MWe FNR AKME-engineering (Rosatom/En+), Russia
Gen4 module 25 MWe FNR Gen4 (Hyperion), USAPrism 311 MWe FNR GE-Hitachi, USA
FUJI 100 MWe MSR ITHMSO, Japan-Russia-USA
Small Modular Reactors
▪ Impact on component suppliers▪ Simplicity could result in fewer components for SMRs, but it may be that SMR designs,
by the time that they emerge from the NRC review, are significantly more complex than they look today
▪ SMRs likely to supplement conventional large reactor designs, not to replace them▪ If SMRs make it to the market, most of them will likely be in places that wouldn't have
supported large reactors. ▪ If SMRs are deployed, there will be a much larger market for the industrial components
needed for the factory construction of modules ▪ May be a different market for component suppliers, may require other types of components
that aren’t installed in large reactors today
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Small Modular Reactors
▪ LIFE Reactor▪ Inertial Confinement Fusion▪ Fusion shots are a daily occurrence at the National Ignition Facility at the Lawrence Livermore National
Laboratory (LLNL)▪ The world’s most powerful lasers provide the energy to fuse deuterium and tritium▪ Ignition and energy gain expected in months, not years▪ LLNL has developed a concept for a commercial inertial confinement fusion plant to generate electricity –
laser inertial fusion energy -- LIFE▪ Quietly, major vendors, utilities, AEs and foreign governments have toured the NIF and learned of the promises of
LIFE▪ For the last year, Pillsbury has been advising LLNL on commercial and regulatory issues involved in the
commercialization efforts
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Small Modular Reactors
▪ LIFE: ▪ Advantages▪ A high-temperature design that: can be air-cooled without
unacceptable reductions in efficiency; can provide process heat to convert coal to gasoline; can shut down without off-site sources of electrical power
▪ A technology that will assure U.S. competitiveness in the market for energy technology and new power plants for many years.
▪ A power plant that will deliver fusion energy in a timeframe that makes it feasible to commercialize LIFE technology over the next few years.
▪ LLNL is considering a public-private partnership to develop a demonstration plant
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