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Slide 1 Doc.ppt 0144 NEW NUCLEAR POWER Ed Cummins Westinghouse Electric Company June 29, 2006.

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Presentation on theme: "Slide 1 Doc.ppt 0144 NEW NUCLEAR POWER Ed Cummins Westinghouse Electric Company June 29, 2006."— Presentation transcript:

1 Slide 1 Doc.ppt 0144 NEW NUCLEAR POWER Ed Cummins Westinghouse Electric Company June 29, 2006

2 Slide 2 Doc.ppt 0144 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

3 Slide 3 Doc.ppt 0144 New Plant Licensing Process New NRC Licensing Process

4 Slide 4 Doc.ppt 0144 AP1000 Design Certification Received From NRC 12/30/05

5 Slide 5 Doc.ppt 0144 U.S. Government Support “To build a secure energy future, we need to expand production of safe, clean nuclear power.” President George W. Bush

6 Slide 6 Doc.ppt 0144 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.

7 Slide 7 Doc.ppt 0144 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.

8 Slide 8 Doc.ppt 0144 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.

9 Slide 9 Doc.ppt 0144 United States New Plant Market Status Commitments for COL License AP1000 NuStart (TVA)2 units Duke2 units Progress2 units North Carolina Progress2 units Florida SCANA2 units Southern2 units 12 units ESBWR Dominion2 units Entergy 2 units 4 units EPR Constellation1-2 units ABWR South Texas2 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

10 Slide 10 Doc.ppt 0144 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.

11 Slide 11 Doc.ppt 0144 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).

12 Slide 12 Doc.ppt 0144 AP1000 Schedule to Commercial Operation Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4 20142013200420092010201120122005200620072008 Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4 20162015 COL Engineering Early Procurement Activities Pre-Construction Site Activities Constructi on Startup FOAK Design Details AP1000 DC Commerci al Operation COL Issued Place Order Submit COL FDA

13 Slide 13 Doc.ppt 0144 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. Westinghouse Fifteen Year Investment in Passive Technology

14 Slide 14 Doc.ppt 0144 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 conditions validated 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

15 Slide 15 Doc.ppt 0144 AP1000 Design Features

16 Slide 16 Doc.ppt 0144 The Westinghouse AP1000 A compact station 3415 MWt. Primary system 1117 MWe 2-loops, 2 steam generators

17 Slide 17 Doc.ppt 0144 AP1000/AP600 Reactor Coolant System

18 Slide 18 Doc.ppt 0144 AP1000 Turbine-Generator

19 Slide 19 Doc.ppt 0144 AP1000 Provides Safety and Investment Protection 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 U. S. NRC Requirements Current Plants US Utility Requirements AP1000 Results Note (a) CDF includes random and internal hazard events from at-power and shutdown conditions.

20 Slide 20 Doc.ppt 0144 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

21 Slide 21 Doc.ppt 0144 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.

22 Slide 22 Doc.ppt 0144 The AP1000 is Smaller and Dramatically Simpler than Evolutionary Plants 74147A Sizewell BAP1000

23 Slide 23 Doc.ppt 0144 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

24 Slide 24 Doc.ppt 0144 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)

25 Slide 25 Doc.ppt 0144 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

26 Slide 26 Doc.ppt 0144 Impact of New Nuclear Plants on Wholesale Electricity Costs

27 Slide 27 Doc.ppt 0144 Source: Global Energy Decisions Updated: 6/06 Production Costs = Operations and Maintenance Costs + Fuel Costs U.S. Electricity Production Costs

28 Slide 28 Doc.ppt 0144 Source: DOE/EIA – Electric Power Monthly Natural Gas Price U.S. Electric Generation

29 Slide 29 Doc.ppt 0144 Generation Fuel Cost

30 Slide 30 Doc.ppt 0144 Generation Capital Cost

31 Slide 31 Doc.ppt 0144 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).

32 Slide 32 Doc.ppt 0144 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.

33 Slide 33 Doc.ppt 0144 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”.

34 Slide 34 Doc.ppt 0144 Deregulated Market Pricing Example: Plants are Dispatched in Order of Bid Price Each Plant Assumed to be 1,000 MWe

35 Slide 35 Doc.ppt 0144 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 Marginal Plant Market Clearing Price

36 Slide 36 Doc.ppt 0144 The Demand for Electricity Is Driven by the Shape of the Load Duration Curve for Each of the Regions

37 Slide 37 Doc.ppt 0144 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%

38 Slide 38 Doc.ppt 0144 $2,400-3,200/kwe Breakeven with NGCC $1,800-2,300/kwe Breakeven with Coal Nuclear Breakeven Capital Cost

39 Slide 39 Doc.ppt 0144 Market Based Nuclear Generation Dispatching 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.

40 Slide 40 Doc.ppt 0144 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.

41 Slide 41 Doc.ppt 0144 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.

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