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Understanding our Nuclear Future - Global Growth in Nuclear Power Raymond James 2007 Uranium Conference by Milton Caplan, President, Dr. Terry Thompson,

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Presentation on theme: "Understanding our Nuclear Future - Global Growth in Nuclear Power Raymond James 2007 Uranium Conference by Milton Caplan, President, Dr. Terry Thompson,"— Presentation transcript:

1 Understanding our Nuclear Future - Global Growth in Nuclear Power Raymond James 2007 Uranium Conference by Milton Caplan, President, Dr. Terry Thompson, Senior Advisor MZConsulting Inc 2007 May 8

2 2 Outline Uranium and its use Nuclear New Build Nuclear Characteristics –Performance –Project schedules –Economics Alternative Fuel Cycles Future Projections

3 3 The World of Uranium Spot price hits $113/lb, breaking through $100 as expected “It could quite conceivably get to $150 a pound before the end of this year “ Thomas Neff says “Nuclear Plans may Stall on Uranium Shortage” “China is finding it hard to get enough uranium to fuel nuclear plants” Understanding Uranium Demand

4 4 Uranium Energy Highly energy intensive source of energy Uranium Pellet Coal 7 grams (.24 oz) 1,780 lbs (or 17,000 cu ft of gas) =

5 5 Only with Nuclear Power Need a nuclear power plant to realize this energy

6 6 Uranium – without Nuclear Power It’s nothing but a rock!! Demand for Uranium is a direct function of the number of nuclear plants in operation and their performance

7 7 The Global Nuclear Fleet 435 reactors in operation 30 countries Producing –368 GWe –16% of global electricity Burning 66,500 tonnes of uranium/year 1,000 MW reactor uses about 230 tonnes/ year 28 units under construction, 64 planned and 158 proposed Source: WNA

8 8 Uranium Supply and Demand Understanding Future Demand means understanding Nuclear Growth

9 9 Potential for Growth The Stars are Aligned!! Finland constructs Olkiluoto 3 France to build at Flamanville UK considers new nuclear Germany to do energy review Sweden supports ongoing nuclear operations China planning a fivefold increase in nuclear power by 2020 Russia planning to play a major role in nuclear power construction Canada commits to nuclear US supports nuclear energy G8 supports nuclear power as part of the mix Nuclear power is part of Australia’s future Bush reopens nuclear cooperation with India Environmentalists now supportive

10 10 Why Nuclear? Environmental – Climate Change continues to move up the political agenda and nuclear emits no GHGs Security of Supply Economics Excellent performance of existing fleet

11 11 What are the Alternatives? Fossil fuels falling from favour –Coal is dirty, new clean coal technology under development –Gas prices volatile and increasing Renewables increasing in use –Acceptance that it can’t do it all Nuclear is the only large scale generation option available for baseload (24/7) requirements

12 12 Hype vs. Reality Understanding nuclear characteristics that lead to growth

13 13 Global Forecasts WNA base case predicts 542 GW by 2030 with a high case of 740 GW IEA World Energy Outlook (WEO) predicts a more modest 416 GW in its reference case and 519 GW in it alternative scenario USA –applications for COL for 33 or more new reactors. –EIA Annual Energy Outlook (AEO) assume 12.5 GW to be built by 2030

14 14 Nuclear Performance Capacity Factors Source: WANO

15 15 Performance Capacity Factors in the US consistent at ~90% WEO assumes that capacity factors will improve from global average of 85% in 2005 to 91% in 2030 Performance has peaked and no further improvements are likely

16 16 Project Schedule Nuclear plants are capital intensive projects Schedules are long relative to alternatives Planning can take from 3-5 years Construction can take from 5-8 years Total schedule anywhere from 8 to 13 years There are no surprise increases in demand

17 17 Economics Nuclear high Nuclear low CCGTCoal steam IGCCWind onshore US cents per kWh CapitalOperation and maintenanceFuel Source: IEA WEO 2006

18 18 Competitiveness of Nuclear Source: IEA WEO 2006

19 19 Impact of 50% increase in Fuel Costs 0% 10% 20% 30% 40% NuclearIGCCCoal steamCCGT increase in generating cost Source: IEA WEO 2006

20 20 Fuel Cost is Important Operational Costs ~ 1.7 cents/kWh Fuel Costs ~.4 cents/kWh –Uranium cost ~.1 cents/kWh –At uranium price of $10/lb –At uranium price of $100/lb –Uranium cost ~1 cent/kWh Total Operational Cost ~2.6 cents/kWh

21 21 Alternative Fuel Cycles Today thermal reactors (US, Canada, Sweden, Finland, Spain, South Africa) use a “once through” or “open” fuel cycle Only about 0.7% of the uranium mined is used Some countries (Japan and Western Europe) have started to recycle and use MOX (uranium and plutonium oxide) fuel –Typically reactors can use MOX for 1/3 of their core US GNEP Program

22 22 Longer Term Fuel Use Fast reactors consume virtually all uranium mined 100 times more efficient than thermal reactors –Best for burning plutonium –Thorium cycle (India leading) At any price, fuel is cheap With fast reactors, uranium as a fuel is inexhaustible Only nuclear power can replace fossil fuels in the long term

23 23 Demand Forecast 740 Gwe 542 Gwe 519 Gwe (WEO Alt) 368 Gwe 416 Gwe (WEO Ref) Dashed lines – 2003 report Stable until 2020

24 24 Summary Uranium needs nuclear power Demand is predictable in the short to medium term Nuclear renaissance has just begun Long term demand is more uncertain

25 25 And so…… The future is bright as Nuclear Power remains the only emissions free large scale form of electricity production

26 Thank You Milton Caplan MZConsulting Inc


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