Nuclear Options: The Global Outlook Ed Lyons 1

OVERVIEW/RELEVANCE Correlation of Electricity consumption and Economic Expansion Renewable sources of electricity Coal Gas Define nuclear power Pros of Nuclear Power Cons of Nuclear Power China (Germany and Japan) Conclusions Outlook 2

Global Energy Use 1980 to 2030 ALL ENERGY SOURCES 3

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ELECTRICITY DRIVERS Population, economic growth Manufacturing and service mix Technology Financial incentives Sources – type and location Environmental concerns Roles of governments: controls, political, financial & legal Costs Reliability Security Grid 5

Real GDP growth (%) Global US Japan Euro area China Eastern Europe Asia & Australasia (excl Japan) Latin America Middle East & North Africa Sub-Saharan Africa World inflation (%; av)

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Relationship: ENERGY & ECONOMIC GROWTH 8

CORRELATION (varies by country) US POPULATION and Electricity Consumption – stable in developed world US GDP and Energy Usage: ELECTRICITY – Reduced manufacturing as % of GDP – Efficiency/productivity of manufacturing – Appliance - cost of running a refrigerator was cut in half 1978 to 1994(PG&E.com) – Energy-efficient lighting and occupancy sensors, variable-speed drives, and low-flow water fixtures, HVAC.. – Energy management – costs, consumption, efficiency and environmental impact monitored in real time (manage not only measure) – Energy Star programs – industry – ISO – sustainability/energy management standard – Vehicles: HV, PEVs, fuel cells Developing countries and electricity consumption 9

ONE EXAMPLE: 1600 Lumens Incandescent Bulb – 100 watts – 750 hours – Price = $0.37 LED Bulb – 20 watts – 20,000 hours – Price = $45 10

ENVIRONMENTAL CHALLENGES Carbon emissions the world global electricity generators emitted about 9 billion tons of CO2; industrial 30 billion tons Climate change UN estimate to limit global warming to less than 2°C, CO2 emissions should be reduced to 44 billion tonnes by 2020 Global fossil fuel emissions increased by 5.9 per cent in 2010 and by 49 per cent since 1990 – the reference year for the Kyoto protocol. Mining – coal, oil, gas, fracturing - safety 1% reduction of coal equates to more than 40 million megawatt hours of generation that has to come from another source. Deforestation Water Ethanol - food alternative 11

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NON-NUCLEAR OPTIONS Regional Differences 53% of Americans support "a moratorium on new nuclear reactor construction in the United States," if "increased energy efficiency and off the shelf renewable technologies could meet our energy demands for the near term." Renewable sources – Hydro- Wind - Geothermal -Bio-fuels – Biomass- Wave/heat pump - Solar Oil Gas – shale gas Clean coal 13

RENEWABLE ENERGY 14

Annual hydroelectric production (TWh)TWh Installed Capacity (GW) Capacity factor % % total electricity China Canada Brazil United States Russia Norway India Venezuela Japan Sweden LARGEST HYDRO PRODUCERS 15

HYDRO Most common form of renewable energy Majority of the internal electric energy production is from hydroelectric power: Brazil, Canada, New Zealand, Norway, Paraguay, Austria, Switzerland, Venezuela Multiple planned/under construction: China, India, Brazil Other: Vietnam, Venezuela, Russia, Burma Agra transmission project $1.1 bil. transmission from NE India to Agra Concerns: – Environmental – Political – Capital – Security – Relocation Opportunities – limited, reduced share of total electricity 16

SOLAR Drivers: – Cost of alternative energy – Environmental – Government incentives/guarantees – Rapid depreciation US v China PV trade dispute – China ~50% market share solar cell production – China produced 11.5 GW of PV in 2011 Shutdowns: – SOLON Photovoltaik GmbH, SOLON Nord GmbH and SOLON Investments GmbH – BP Solar shuttered its module facility in Maryland, Solyndra, Evergreen Solar, SpectraWatt 17

SOLAR SUCCESSES Prices for solar modules fell 70% 2009 to today (1). Worldwide market $80 bil. solar photovoltaic systems. BP solar cell/module JV in India with Tata Power (125MW) Google/KKR investing $94 mil. in 4 solar farms Kauai Island Utility Cooperative (KIUC)12 MW Anahola Solar Facility will include an integrated battery energy- storage systemKauai Island Utility Cooperative a 2.6 MW PV Boeing's 787 assembly facility - 18,000 thin-film PV solar modules that cover 10 acres of the building's roof 18

SOLAR TECHNOLOGY “ average cost of installing a solar system on a typical home is $6.50 per watt, or $32,500. “ GE’s goal $4.00 to $4.50/W(1) Rapid changes: – Cost decreases – Thin film cadmium telluride vs crystalline silicon – Printed circuits – MIT – ‘suntrap’ of thin (0.75 µ) tungsten with microscopic pits laminated to a indium gallium arsenide – Anticipate consolidation Challenge - installation costs Excellent conversion efficiency of 23.3% on interdigitated back- contact (IBC) silicon solar cells. OPINION: significant changes in technology – efficiency, materials, costs – Significant growth 19

WIND POWER 20

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WIND TRENDS U.S.: bonus tax depreciation (expiring) and Section 1603 cash-grant programs US long-term growth of the wind power?? – U.S. and European bearish macroeconomic conditions – Logistics China: 5 GW by 2015 and 30 GW by 2020 (2). Ambitious! India - possible expiration of the accelerated- depreciation scheme OPINON: Offshore wind - growth 32% (CAGR) from 2010 to 2016 (2). Pull back on-shore 23

ENERGY STORAGE Renewables challenge Energy-storage devices; – dielectric and double-layer capacitors — entail serious limitations – capacitance versus fabrication costs – ultracapacitors, flywheels and fuel cells Opportunity - highly polarizable membrane is simple, readily scalable, and of low fabrication cost. Earth Techling - 20-year service life of the iron-phosphate batteries suitable for utility-scale load leveling application OPINION: No clear solution – Wave and geothermal options – Location – transmission loss 24

BOTTOM LINE - RENEWABLES Global energy demand - increase by 50% by 2030 (CAGR of 3%) – Developing world Pew'’s research indicates that in 2010, world investment in the clean energy sector increased to $243 billion, representing a 30-percent growth rate over the previous year. Renewable energy to 15% from 10% - maintain share Renewable energy will NOT meet the growing energy demand If not renewable sources - what? 25

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OIL AND GAS TRENDS Oil NOT a major source of electricity Price of oil: if $100/barrel or $200 – renewables – Peak production 2020 (R. Watson) The Deepwater Reserves : 7MBD, 8% of world’s supply (oil and gas) - Gulf of Mexico, off coasts of Brazil, Australia, India, west coast of Africa. -But only ~ 10% deepwater oil and gas fields have been extensively explored and drilled. -Cost factor -Environmental concerns Canadian tar sand - more than 1.5 MBD Shale OPINION: oil not significant change; gas sharp volume increase 27

SHALE GAS Between 2010 and 2035 shale gas development - $1.9 trillion in capital (IHS Global Insight) (1) Shale and other tight rocks. - Price of natural gas has plummeted,. - Hydraulic fracturing, or fracking (water, sand and chemicals at high pressures to fracture hard rock) used for decades. Combining that practice with horizontal drilling US – 4.9 trillion cu.ft. in 2011 (12X the 2000 level) Shale gas - 25% of gas; 50% by 2035(2) Issues??: groundwater contamination; methane leakage, earth tremors (3) OPINION: significant growth prospects – less reliant on oil 28

ost coal-fired electric capacity was built before

COAL: TRENDS &OPPORTUNITIES ~50% of electricity generation China's electricity 80% from coal, 2% from oil, 1% gas and hydropower 15% in 2006 – today + Extensive reserves Shutter or replace older plants Comply with environmental regs. (mercury, particulate, NOX & SOX-acid rain) ‘Clean Coal’ initiatives Gasification of coal OPINION: FUTURE? 30

COAL - Sierra Club 31

NUCLEAR BEGINNING US Atomic Energy Act of 1954 commercial nuclear power US’s Nuclear Regulatory Commission was created in 1975 Global: today 443 reactors Safety record in 2030? 32

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AFTERMATH of Fukushima Japan? Switzerland will shutdown all 5 of its plants by – 39 percent of Switzerland's power Germany-shutdown: 17 nuclear plants (23 reactors); 8 are closed, 6 closed by 2021, and 3 by 2022 – Nuclear power currently 25%of Germany's power – Electricity costs in Germany? 6%/year next 9 years (1) Source of electric power?? 34

Nuclear energy consumption by region 35

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Top Ten Nuclear Countries Net nuclear capacity (gw) Change % Change United States France Japan Russia Germany South Korea Ukraine Canada United Kingdom China Total

World Nuclear Power Generation and Capacity As of August 2010 Country Number of Nuclear UnitsNuclear Capacity (MW) Argentina2935 Armenia1375 Belgium75,934 Brazil21,884 Bulgaria21,906 Canada1812,569 China1310,048 Czech RP63,678 Finland42,721 France5863,130 Germany1720,490 Hungary41,889 India194,189 Japan5446,823 Korea Rep.2118,665 Lithuania*-- Mexico21,300 Netherlands1487 Pakistan2425 Romania21,300 Russia3222,693 Slovakia41,762 Slovenia1666 South Africa21,800 Spain87,516 Sweden 109,303 Switzerland53,238 Taiwan, China64,980 U.K.1910,137 U.S.**104100,683 Ukraine 1513,107 Total441374,633 * The last operating unit was permanently shutdown in ** IAEA and EIA nuclear capacity and generation figures vary slightly. Source: International Atomic Energy Agency and World Nuclear Association 2/index.html Updated: 8/10 38

ROLE OF NUCLEAR Satisfy electricity demand Reduce global warming Few pollutants Reduce reliance on fossil fuels- imports ENOUGH???? – Many proposed – Guarantees – Simplified design – Governmental approval – SAFETY – MAJOR ISSUE 39

BASICS OF NUCLEAR POWER 1.FUEL PROCESSING: mine, solvent used to remove uranium as uranium oxide “yellowcake” - 70% to 90% (U 3 O 8 ) triuranium octoxide by weight. Other oxides such as (UO 2 ) and (UO 3 ) 2.Treat yellowcake converting it into uranium hexafluoride – consists of both U235 and U238 - Nuclear fuels 3.U235 is only 1% of the mix; ‘enrich’ the mix 3% to 5%; U235 is unstable and splits easily (fissions) 4.Convert into pellets 5.Fission in reactor - splitting of uranium’s protons and neutrons in the nucleus 6.Neutrons hit other uranium atoms – they split – release more neutrons + HEAT: fission continues to form a chain reaction – self-sustaining 7.Control rods are inserted into the bed of uranium pellets to control the reaction 8.The heat generated - creates steam - turns turbines - connect to generators - produce electricity 40

Mine Waste U308U308 UF6 U % U 235 Enrichment “Tailings” Depleated ” U Pellets Reactor Steam Used Fuel Reprocess PU Waste Storage Disposal U RODS Cooling water 41

WHY/WHY NOT NUCLEAR POWER? WHY? – Plentiful supply of uranium (regionally) – not oil dependent – No alternative uses – Green – no GHGs – Increasing costs of fossil fuel – Improved technology increases safety – Low transport cost – 10,000 times less than oil and 1 mil times less than coal – Controlled environment – no pipelines, oil and coal fields – Economic growth - globally – Environmental benefits – avoid runoff, oil spills, etc,. – avoid acid rain – Safety WHY NOT? – High capital fixed costs? – Political and safety concerns – PAPERWORK, filings – Waste disposal – Dismantling 42

CHINA ENERGY China: consumes 3 bil. metric tons or coal China 2 bil. KW of land wind power and 500+ mil. KW kilowatts offshore. Solar power: 2011 capacity of 3 mil. KW (800,000 KW in 2010) Hydro: 200 mil. KW end of 2010 – Three Gorges of 18.2 GWe and Yellow River of 15.8 Gwe (2) 43

CHINA “Nuclear power to become ‘foundation’ of country’s electrical system” China Daily 12/7/11 Carbon goal 'impossible without nuclear energy‘ (2) Today 40 mil. KW of nuclear (1.05 bil.KW total)(1) Nuclear Goal: 26 mil. KW/year next years(1) 44

ELECTRICITY GENERATION GLOBAL (2005): – Coal 39% – Gas19% – Nuclear17% – Hydro16& – Oil 7% – Other 2% CHINA (2009): – Coal 80% – Gas 1% – Nuclear 1% – Hydro15% – Oil 2% – Other 1% 45

CHINA NUCLEAR FACILTIES 46

CHINA NUCLEAR 77 reactors at various stages of construction, planning and discussion Technology by state-run China National Nuclear Corp enables re-use irradiated nuclear fuel, – "China's proven uranium sources will last only 50 to 70 years, but this now changes to 3,000 years," TARGET: 15% of its power from renewable sources by China GWby 2020, 5% of the country's total installed power capacity Currently produces: ~750 tons of uranium/year but annual demand could rise to 20,000 tons a year by

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CONCERNS Safety and health Waste storage Age – up-rating, life extension Transport Site - NIMBY Capital cost Time span 50

RISKS Safety – terrorist/cyber attacks, natural disasters, human error – Chernobyl, Three Mile Island – Fukushima – Russia's Ural Mountain nuclear contaminations were reported (3). – Age Technology – alternative sources (known and unknown) – relative costs Regulatory - governmental approvals, pricing, taxation, subsidies to alternatives Market – alternative fuels, economic conditions and political climate. – Profitability – ROCE 51

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DESIGN FOR SAFETY Third generation designs: – Westinghouse’s 1,100-MW AP1000 reactor Plant Vogtle near Waynesboro, Ga., the first two reactors that will be built in the U.S. in 25 years “Both the shield building and the containment vessel play significant roles in the passive safety systems of the AP1000 design, which allow it to safely shut down with no, or minimal, operator action and no AC power,” – NRC certified three other standard reactor designs: the third- generation Advanced Boiling Water Reactor, System 80+, and AP600. Applications under review: – GE-Hitachi’s Economic Simplified Boiling Water Reactor – Mitsubishi Heavy Industry’s U.S. Advanced Pressurized Water Reactor – AREVA’s EPR pressurized water reactor 53

NUCLEAR WASTE Issues: toxicity and longevity vs. the cost and complexity 64,000 metric tons of used nuclear fuel rods in the U.S (2) Contaminants are contained vs. dispersed in soil and groundwater. Near-term risk - to workers, transport vs. future risks. Reliance on active control – Deep geologic containment – Reprocessing Monitoring cleanup and maintenance 54

REPROCESSING France, Britain, Russia and Japan use reprocessing facilities. United States abandoned reprocessing 1970s: create plutonium (atomic weapons) and costs MOX Long-term - recycle all transuranics (ex. plutonium), fast reactor Daunting technical and economic challenges Store now – future use? 55

Reasons for Curtailing Operations? historical-earthquakes/

US NUCLEAR CHALLENGE R&D - reprocessing Safety – communicate Time – 1970s ~14 years to commercial operation (coal - 4 years; gas 2 years) Costs – standard designs NIMBY US - to maintain nuclear at ~20% of supply – Replace 40 reactors – operating licenses expire 2030 (2) 57

TECHNOLOGY High-voltage direct current (HVDC) transmit 30%=-40% more energy than AC on conventional overhead lines Bacteria change Uranium (VI) into more insoluble, stationary and thus less harmful Uranium (IV) Cladding material (ceramic composite material based on silicon carbide) for nuclear fuel rods - last longer, burn more of the fuel in a rod, reduce radioactive waste and enhance safety(2) Thorium-fuelled molten salt reactors - reduces radioactive pollution and waste and removes the possibility of a reactor meltdown Small scale reactors: 100 MW and 300 MW. Higher breeding, (higher U-235% than standard) – 15% better efficiency Fast breeder and thermal breeder reactors - after its initial fuel charge of enriched uranium, plutonium or MOX, requires only thorium as input to its fuel cycle enriched uraniumMOXthorium 58

FUSION Pluses: – Minimal pollution – exhaust helium – Avoid meltdown – turns itself off – Raw material – hydrogen* – 8 ounce glass of water = 500,000 barrels of petroleum (1) Concerns: – Always 20 years in the future – Yet to produce a controlled net positive reaction – Extreme temperature to initiate reaction Future: laser fusion – Europe – International Thermonuclear Experimental Reaction (ITER) – US – National Ignition Laboratory – * Deuterium and tritium 59

OUTLOOK Challenge: old coal and nuclear reduce electricity, environmental concerns; costs of alternatives. US - 22 announced, 6 under contract and 4 under construction 1,100-MW AP1000 reactor, Westinghouse’s third- generation reactor design, certified Japan – delay, but necessary Russia - 10reactors in development. OECD countries – (Germany, Switzerland, Italy?) decline at least in the near term. China - 77 reactors at various stages of construction, planning and discussion 60

CONCLUSIONS 50% increase in electricity demand 2030 Nuclear – short vs. long term – Safety and waste – Generation 3 Renewable – commitment everywhere Global – electricity generation produces 9 bil. tons of CO2 – nuclear offset about 2 bil. Tons Economics – will decide the future Technical Research – grid systems, breeder and fusion, renewable, energy storage, energy management systems, reprocessing, waste reduction 61

ACADEMIC INTERESTS Evaluate risks Long time lines Technologies Roles of governmental groups International trade Competitive position – regionally and globally Safety Intellectual property 62