New Nuclear Power PlantsNeed and Status

ASQ-EED 31st Energy & Environmental Division Conference

September 12, 2004

Adrian Heymer, NEIaph@nei.org, 202-739-8094

Nuclear Power PlantsCurrent Status

• 103 Operating Units– One under major refurbishment

– Average capacity factor ~ 90% over last 4 years

• 20% of US electricity capacity -- Nuclear• 30% US generation is emission-free

– 70% Nuclear; Hydro 18%; Wind 1%; Solar 0.1%

• Eliminates ~700 million tons/year of Greenhouse gases

Safety & Economic Improvement

20

30

40

50

60

70

80

90

100

90 91 92 93 94 95 96 97 98 99 00 01 '02 '03

65

70

75

80

85

90

95

Relative CostRisk (CDF) Capacity Factor

Year

Based on UDI, DOE & NUS Data plus info. from ERIN Eng & EPRI

Relative Cost

Relative Risk

CapacityFactor

The Need for New Nuclear

• US needs 300,000+MW of new generation by 2025

• Increased environmental controls raise siting and cost problems for fossil fuel plants

• US industry needs low cost energy to sustain global competitiveness– A diverse and balanced generating portfolio– Non/low-emission base-load generation – Greater energy independence

• Nuclear lowest cost base-load generating option

Natural Gas PricesHenry Hub

Mar-2003$8.06

Jan-2001$9.13

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

$9.00

$10.00

Jan-95

Jul-95

Jan-96

Jul-96

Jan-97

Jul-97

Jan-98

Jul-98

Jan-99

Jul-99

Jan-00

Jul-00

Jan-01

Jul-01

Jan-02

Jul-02

Jan-03

Jul-03

Jan-04

$/M

MB

tu

Why No New Nuclear for 30 Years?

• Until mid 90s, anemic operating record• Unpredictable licensing & regulatory process• Design/Construct-As-You-Go approach

– Unreliable and prolonged construction

• Cost of financing large capital intensive projects in competitive market– Need for innovative approach to financing– Not unique to nuclear

• Need for certainty in spent fuel disposal

Improved Approach for Licensing New Plants

• Make licensing process more efficient and performance-based– Resolve issues as early as possible

– Make more information available earlier

– ITAAC concept

– One hearing -- opportunity for a second, if acceptance criteria not satisfied

– Bank sites & pre-approve standard designs

• Complete design prior to construction

Financing New Nuclear Plants

• Significant changes since 1970s– Many companies not operating in cost-of-service

• Wall Street nervous over improved, yet unproven licensing process

• Large capital projects diminish financial performance metrics

• Innovative approaches to financing large capital projects– Consortium approach– Public-Private financial structure for large projects that support

essential national infrastructure– Loan guarantees, accelerated depreciation, low cost loans,…

Public Perception

• Wide ranging policymaker support– Congress & current Administration

• Majority of US public support nuclear power plants (60% vs 36%)– Greater among graduates

• Public support is substantial, but not deep– Need for continuing education

– Existing plants need to maintain high standards of safety performance

New Plant Status

• Three designs certified -- Eight in pipeline– LWR & non-LWR designs

• Three Early Site Permits under review -- 2006• Three consortia testing new COL process

– DOE-industry partnership -- awaiting DOE decision– 16 companies involved– Industry committed to multi-year project - $650M– Trial license applications being developed– Decisions to order ~ 2008– Start construction 2009-2010

New Plant Status

• Combined construction and operating license application guideline scheduled to be submitted 12/04 for NRC endorsement in 2005

• 24 issues linked to new licensing process• Most being addressed through the NRC review of the COL

application guide

• NEI Executive Task Force provides oversight of industry issue task forces

• Interactions with Congress, States & Wall Street

Need for Continued US Global Leadership in New Nuclear

• One third of the world has no electricity• Estimate 70%+ growth in global demand for

electricity over next 20 years– If fossil, what’s the impact on the environment &

price?

– If not fossil, then?

• US is a leader in nuclear power technology– If no new nuclear orders in US, technical leadership

will be relinquished to Asia, Africa & Europe

Generation IV & Hydrogen

• Without Gen III (AP1000 et al) no Gen IV– 50% of workforce will retire in the next decade– Knowledge retention a major issue

• Hydrogen – need for pilot plant activities to test & develop infrastructure– Hydrogen is where gasoline was in 1890s

• Huge potential for nuclear energy• Long-term need for simplified designs

Need for Involvement

• Get involved– YGN, Dominion, a superb example of nuclear

workers advocating, on their own time, the benefits & need for nuclear energy

– Speak out & attend meetings in your local area– Write to your Congressman, Senator and local

officials

New Nuclear Plants?

• Yes, if:– Prove new licensing process is predictable & stable

– Establish a financial structure for financing large capital cost projects

– Nation gets serious about environment

– Certainty on spent fuel disposal

• Energy costs, the economy & environmental issues will overcome hard-core opposition

Nuclear Energy• Nuclear power plants are safe• US needs a diversified and balanced energy

portfolio that provides low-cost and reliable electricity– Nuclear energy is an essential element in

maintaining US global competitiveness

• More information at: – http://www.nei.org – Public website– http://member.nei.org/ -- for NEI members