1. Opting for “Long Term Operations” Technical, economic and regulatory considerations MARC Conference June 8, 2010 Sean Bushart, EPRI Sr. Program Manager

2. 2 © 2010 Electric Power Research Institute, Inc. All rights reserved. The Long Term Operation Challenge 1929 Marmon (80 years old) 1969 Cadillac (40 years old) 2009 Ford HEV Escape Cost-Effective, Environmentally Sustainable, Safe Operation with High Performance Through 40, 80 or More Years

3. 3 © 2010 Electric Power Research Institute, Inc. All rights reserved. Long Term Operations: Presentation Overview The Big Picture: Determining the Electricity Generation Mix of the Future Generation Example: Coal Fleet –Business Decision Making Drivers –Technology Drivers and EPRI Roles Generation Example: Nuclear Fleet – Business and Regulatory Drivers –Technology Drivers and EPRI Roles

4. 4 © 2010 Electric Power Research Institute, Inc. All rights reserved. A Low Carbon Future Needs A Full Portfolio of Technologies EIA Base Case 2009 0 500 1000 1500 2000 2500 3000 3500 199019952000200520102015202020252030 U.S. Electric Sector CO 2 Emissions (million metric tons) 58% reduction in 2030 from 2005 level is technically feasible using a full portfolio of technologies Efficiency Renewables Nuclear Fossil Effic, CCS PEV Electro- Technologies EPRI Prism: Technical Potential to Achieve CO2 Reductions Achieving all targets is very aggressive, but potentially feasible.

5. 5 © 2010 Electric Power Research Institute, Inc. All rights reserved. Comparison of Current to Future U.S. Electricity Generation Based on 2009 Prism Coal Gas Nuclear Coal + CCS Renewables “TODAY” “FUTURE”

6. 6 © 2010 Electric Power Research Institute, Inc. All rights reserved. Coal Plants: Business Decision Making Factors for Long Term Operations “Trilemma” of security of supply, regulatory uncertainty, cost –Impact of large scale deployment of variable output renewables on the existing generation fleet –Regulatory uncertainty, e.g. ash, CO 2, power plant water usage, and unknown costs associated with these issues –Financing uncertainty and financial risk

7. 7 © 2010 Electric Power Research Institute, Inc. All rights reserved. EPRI R&D Response: Provide strategic guidance on the new wave of industry decisions Market-based simulation of alternative cycling/ shutdown strategies Technologies to shift cycling burden Complexities of retirement planning due to changing regional assets Synergies with modeling pace and costs of CO 2 compliance, incl. technology choice Regional case studies of factors affecting timelines Accommodating Cycling Retirement Strategy Timelines for Capacity Turnover timing mission

8. 8 © 2010 Electric Power Research Institute, Inc. All rights reserved. R&D Focus: Advanced Coal, Carbon Capture and Storage Cost-effective coal-based generation with near-zero emissions and carbon capture and storage Economics/Planning –Technology knowledge databases –Fuel market analysis Future Assets –Advanced combustion design/performance/demonstration –IGCC design/cost improvements/demonstrations Deploying Carbon Capture and Storage –Design for CCS Retrofit –Capture and storage technologies

9. 9 © 2010 Electric Power Research Institute, Inc. All rights reserved. Nuclear Long Term Operations: Both a Technical and Regulatory Challenge Original fleet of plants licensed by the NRC for 40 years of operation License renewal process established to extend operations from 40-60 years. –EPRI led technical basis for first plants (e.g. Calvert Cliffs) –NEI led with NRC interactions R&D underway to extend beyond 60 years –EPRI/ DOE collaborating on the technical basis effort –NEI is industry regulatory interface –Utility Executives: Significant investment –likely required to make this leap (early estimates of $350M-$1B/ unit)

10. 10 © 2010 Electric Power Research Institute, Inc. All rights reserved. Nuclear Long-Term Operations: EPRI R&D Scope Provide the technical basis for license renewal and life extension decisions beyond 60 or 80 years Aging of passive structures and components On-line diagnostics to prevent equipment failures Managing crack growth in primary system metals Realistic and efficient safety analysis tools

11. 11 © 2010 Electric Power Research Institute, Inc. All rights reserved. R&D Focus: Materials Aging Extension of Materials Degradation Matrix for primary metals for failure mechanisms to 80 years

12. 12 © 2010 Electric Power Research Institute, Inc. All rights reserved. Demo Plant Activities: Ginna and Nine Mile Point 1 EPRI, U.S. DOE, and Constellation Energy → 3-year collaboration to demonstrate the assessment of aging concerns –Plants are beyond 40 year life Examine data, inspect and test for aging degradation Pilot technical products for long term operations –Developing lead tasks jointly Key results to date –Comprehensive containment examination –Incremental reactor internals inspection for > 60 years

13. 13 © 2010 Electric Power Research Institute, Inc. All rights reserved. Conclusions Meeting the objectives of a low carbon future will require a full portfolio of generation technologies Specific selections of retrofit, retire, replace, or extend must be made on case-by-case basis –based upon specific business and regulatory drivers EPRI R&D is: –helping utilities to make these decisions –overcoming the technology gaps for “long term operations” in a cost-effective manner

14. 14 © 2010 Electric Power Research Institute, Inc. All rights reserved. Together…Shaping the Future of Electricity