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Supporting Tennessee’s Future Energy Needs… Nuclear Generation Development & Construction Dan Pratt Manager, Pre-Construction Planning March 10, 2009.

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Presentation on theme: "Supporting Tennessee’s Future Energy Needs… Nuclear Generation Development & Construction Dan Pratt Manager, Pre-Construction Planning March 10, 2009."— Presentation transcript:

1 Supporting Tennessee’s Future Energy Needs… Nuclear Generation Development & Construction Dan Pratt Manager, Pre-Construction Planning March 10, 2009

2 2  159 power distributors  62 direct serve industries  Over 8.5 million people in an 80,000 sq mile service area  Public users of land and recreational facilities  Communities with economic development assistance TVA Serves… TVA Serves…

3 3 Fossil Plants Combustion Turbines Nuclear Plants Hydroelectric Dams Pumped- Storage Green Power Fossil/Coal 64%(45%) Hydro 6%(15%) Nuclear 30%(21%) Combustion turbine and green power 1%(19%) TVA’s Diversified Generation Portfolio Generation(Capacity)

4 4 TVA Generating Facilities  11 fossil sites (59 units)  3 nuclear sites (6 units)  29 hydro sites (109 units)  11 combustion turbine sites (72 units)  1 pumped storage station  1 wind energy site  17,000 miles of transmission line

5 5  Use TVA resources to meet demand.  Increase energy conservation and demand reductions.  Provide cleaner, reliable, and still-affordable energy.  Fifty percent of generation from zero or low carbon emitting resources by 2020 For current planning horizon, when large amounts of new generation are required, this means nuclear for base load and natural gas for peaking Elements of TVA Generation Strategy

6 6 Sequoyah Nuclear PlantWatts Bar Nuclear Plant Browns Ferry Nuclear Plant Bellefonte Site TVA Nuclear Plants

7 7 TVA Has Option That Others Do Not Watts Bar Unit 2 Completion  Five-year project began October 2007  Identical to the operating Unit 1  Unit approximately 60 percent complete 1180 MWe Net

8 8 TVA Nuclear – Industry Leader in Nuclear Generation Development Browns Ferry 1 Watts Bar 2 Bellefonte 2 Units 20072012 2017 - 2019 Actual Planned... Units 6 7 9 Megawatts 6,8008,28010,5 – 10,9 Under Construction

9 9 Bellefonte Option Identified Power Planning Need 2017 – 2019 Bellefonte Site (Alabama) Developing Next Option for Baseload

10 10  Option A - Units 3 & 4 (AP1000)  Option B – Units 1 & 2 (original units) Technology Decision For Bellefonte

11 11 U1 License BLN 1&2 /// BLN 3&4 Long Lead Procurement (2 Units) Site Preparation U1 Completion to Fuel Load U1 Startup CP’s Reinstated Detailed Engineering 200820092010201120122013201420152016201720182019 CFR Part 50 Licensing Process U2 Completion to Fuel Load U2 Startup Long Lead Procurement (2 Units) Site Excavation U3 First Concrete to Fuel Load U3 Startup COL Issued License Application Submitted Detailed Engineering CFR Part 52 Licensing Process U4 First Concrete to Fuel Load U4 Startup AP1000 BLN 3&4 Existing Units BLN 1&2 TVA Request U2 License DSEP BOD Decision ITAAC Closure

12 12 Key Insights… So Far  Competition for talent  Value of existing plant infrastructure has increased over last few years as other options have increased in price.  Local communities supportive, but worried about short term cost and services impacts to communities (ex. schools).  Identify or recruit core team early, it takes longer to build this than you think.  Changing NRC leadership

13 13 Competitive Non-Volatile Electric Price Clean Air Value Reliable Energy Supply Zero Air Emissions Protection against CO 2 risk Long-Term Costs Attractive Less Dependence on Oil and Gas High Capacity Factors ~67% of Total Cost Fixed The Benefits of New Nuclear Economic Development ~$1 Local Benefits for every $1 Spent Up to 2000 Jobs During Construction and ~500 Per Unit During Operation Nuclear Options Being Developed Because…

14 14 01020304050 Cost of CO 2, $/Metric Ton Levelized Cost of Electricity, $/MWh 30 40 50 60 70 80 90 100 110 120 Wind (32.5% capacity factor) New Nuclear Pulverized Coal IGCC Biomass NGCC ($10/MMBtu) NGCC ($8/MMBtu) Rev. October 2008 95% confidence level The Carbon Factor EPRI Comparative Costs in 2015 NGCC ($6/MMBtu)

15 15 Nuclear Energy Emission Free Generation Nuclear Energy Is On Par with Renewables Natural Gas HydroWindGeo- thermal Tons CO 2 -equiv/GWeh Life Cycle CO 2 Emissions Analyses CoalNuclearBiomassSolar PV

16 16 U.S. New Nuclear - Sites With License Application Projects and Contracts Constellation Calvert Cliffs Southern Vogtle Dominion North Anna TVA Bellefonte Entergy Grand Gulf Entergy River Bend Progress Levy County Duke W. Lee SCE&G V.C. Summer Progress Harris NRG South Texas TXU Comanche Peak Amarillo AmerenUE Callaway DTE Energy Fermi Exelon Victoria County PP&L Bell Bend FP&L Turkey Point Constellation Nine Mile Point EPC Signed COLA Announced

17 17 Key Project Siting Issues  Geologic and Seismic  Water Availability and Usage  Transmission  Population/Emergency Planning  Other Environmental (Meteorological Data)

18 18 New Nuclear Design Alternatives Westinghouse AP1000 1120 MWe Hitachi-GE or Toshiba ABWR 1320 MWe AREVA EPR 1600 MWe GE- Hitachi ESBWR 1550 MWe Mitsubishi US APWR 1700 MWe Current Status of Announced Intentions TechnologyUnits AP100012 TBD8 ESBWR3 EPR3 ABWR2 APWR2

19 19 Simplification Eliminates Components and Reduces Cost to Construct & Operate ** 50% Fewer Valves 35% Fewer Safety Grade Pumps 80% Less Pipe 45% Less Seismic Building Volume 85% Less Cable Passive Benefit

20 20 Pump/Valve Module Raceway Module Structural Module Depressurization Module Module Type Structural Piping Mechanical Equipment Electrical Equipment TOTAL Number 122 154 55 11 342 Designed to Be Built Faster Through Modular Construction AP1000

21 21 Cost of New Nuclear Quiz Vendor Says…. Cost of plant is: $3200/kw Utility Says… Cost of plant is: $4300/kw Which is Correct? Wall Street Says… Cost of plant is: $5500/kw All are the same… and for the same project! Overnight Plus Owners Cost EPC Only Escalated to 2017 Everything Including Interest During Construction

22 22 Major Hurdles for New Plant Construction

23 23 New Nuclear Development Approach Incremental Levels of Increased Certainty Uncertainty Today Future Uncertainty Technology Certainty (Final Design Engineering) NRC Regulatory Certainty (COL Issuance) Time Manage the uncertainty in a planned deliberate manner Project Development Certainty Financial Certainty Working In Parallel

24 24 RISK CATEGORY High Capital Costs High Financing Costs Construction: First Units Major Component Manuf. Market Competition Waste Disposal Electricity Demand Transmission Availability Water Resource Regulatory Efficiency Development (site prep/permit) Accident or Disaster Fuel Price/Supply Technology and System Construction: Later Units Low Risk High Risk Summary of Risk Ratings

25 25 Once Through Versus Closed Fuel Cycle

26 26 Where are We Headed Over Next Decade  Energy Efficiency Technologies  Grid of the Future  Nuclear Sustainability and Expansion  Cleaner Coal  Plug-in Hybrid Vehicles Accelerating Solutions

27 27 Summary Messages  Nuclear will provide clean competitively priced power –Provided risk can be managed in such a way as to keep cost of capital at reasonable levels.  Re-establishing the infrastructure to build plants will likely result in longer planning horizons (with extended timelines for cash flows) for the initial wave of new reactors.  Nuclear will remain a key generation source and expand as part of the energy mix for the foreseeable future.

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