Delivering the Nuclear Promise

Transcription

1 Delivering the Nuclear Promise Rod McCullum Nuclear Energy Institute NCSL Nuclear Legislative Working Group New Orleans, LA November 16,

2 Nuclear Energy s Full Value Proposition 24/7 electricity production Prevents carbon emissions Provides clean air compliance value Provides electricity price stability Anchors the local community: jobs, tax base Supports grid stability Nuclear energy s value Contributes to fuel & technology diversity

3 Nuclear Ready to Deliver U.S. reactors set record 92% capacity factor in billion kwh 62.9% of U.S. carbon free electricity 4 new reactors being built U.S. Nuclear Plant Capacity Factor* 92.2% in % in % in % in % in % in licenses extended to 60 yrs. 1 st application for extension to 80 years submitted (Surry in VA) *Source: Energy Information Administration

4 Nuclear Plant Shutdowns: The Situation Reactor shutdowns - Four in 2013 (2 in California, Florida, Wisconsin) - One at the end of 2014 (Vermont) - One in 2016 (Nebraska) Wisconsin, Vermont, Nebraska shut down because of adverse market conditions Announced shutdowns Prior to 2020: 3 in Illinois, 1 in Massachusetts, 1 in New Jersey 2025: 2 in California Others at risk The carbon-free electricity lost when San Onofre closed down was greater than the carbon-free electricity from all California s wind and solar generating capacity 18,097 GWh 16,985 GWh San Onofre 2 & 3 generation in last full year of operation (2011) California wind and solar generation full-year

5 Snapshot of 2015 U.S. Nuclear Plant Costs ($ per MWh) Average generating costs have decreased from peak of $39.75/MWh in 2012 to $35.50/MWh in Average generating costs have decreased 2.4% from Capital spending down 3% from 2014, and 26% from 2012 peak. $6.25 billion in 2015 capex Generating Cost 2015 Average Generating Costs First Quartile Industry Average Single Unit Sites Multi- Unit Sites Total generating cost = fuel + capital + operating. Source: Electric Utility Cost Group.

6 Declining Wholesale Electricity Prices $45-75/MWh Price Range $30-50/MWh Price Range $30-42/MWh Price Range Forward Prices

7 Market Stresses In Brief Low growth (in some cases, no growth) in electricity demand Continuing surge in supply of low-cost shale gas Market design issues - Fuel/technology diversity taken for granted and undervalued - State and federal mandates and subsidies for renewables - Lack of recognition of valuable attributes of nuclear - Price suppression in energy markets Transmission constraints

8 Losing Nuclear = Higher Prices to Customers Pilgrim announcement met with $2.30/MWh increase in futures price for New England - ~$330 million in additional costs to consumers in one year Market reaction to Vermont Yankee similar to Pilgrim PJM estimated losing three atrisk Illinois plants would raise prices $ $3.80/MWh in ComEd zone Pilgrim Announcement Oct $2.30/MWh New England Forward Power Prices for 2019 Vermont Yankee Announcement Aug New England Forward Power Prices for 2015 $2.50/MWh Sources: Platts Mass Hub average forward power prices; 2020 New England Energy Demand: 145 GWh; ISONE 2015 CELT Report 8

9 You are here 9

10 Genesis of the Nuclear Promise Our industry is operating in electricity markets that are deluged with natural gas at historically low prices Nuclear industry capability factor and reliability is at extraordinary levels but total generating costs at nuclear plants have increased 28% in the last 12 years. Business as usual approach will not successfully address the challenges of rising costs and inadequate revenue Advance safety, reliability and economic performance together.

11 Part of the Solution: Delivering the Nuclear Promise Sustain high levels of safety and reliability Identify opportunities to re-design plant processes, drive innovation to improve efficiency and effectiveness Gain greater value for nuclear energy in electricity and clean air policy Goal: Average cost of electricity is $28 per megawatt-hour

12 Four Building Blocks Analysis and Monitoring Objective: Analyze plant cost drivers and identify opportunities to improve efficiency Value Recognition Objective: Leverage federal and state policies to ensure recognition of nuclear energy s value Process and Program Redesign Objective: Re-design nuclear plant processes to improve efficiency while advancing the fundamentals of safe, reliable operation Strategic Communications Objective: Implement a communications strategy to ensure industry engagement and stakeholder awareness

13 Building Block: Analysis and Monitoring CNO-led teams identified priority areas Including improvement opportunities in work management, radiation protection, training, security and preventive maintenance Completed analysis of plant cost drivers Identified opportunities for efficiencies to be gained and administrative burden reduced While maintaining safety and reliability Steering committee identified implementation windows Pace and scope of site implementation to be determined by the company that owns and operates plant

14 Teams and CNO Leads Corrective Action Program Danny Bost, Southern Nuclear Engineering Tim Rausch, Talen Energy In-Processing Bill Pitesa, Duke Energy Oversight and Assessment Mano Nazar, NextEra Energy Preventive Maintenance Templates Neil Wilmshurst, EPRI Radiation Protection Fadi Diya, Ameren Missouri Regulatory Efficiency Mano Nazar, NextEra Energy Risk-Informed Operations Bob Bement, Arizona Public Service Security Bryan Hanson, Exelon Training Randy Edington, Arizona Public Service Transform Organization Tim O Connor, Xcel Energy Work Management Preparation Dennis Koehl, South Texas Project Supply Chain Adam Heflin, Wolf Creek Nuclear Operating Corp.

15 Building Block: Process and Program Redesign 45 efficiency bulletins expected by end 2016 Enabled savings approaching $500 million Efficiency must take its place with hallmarks of safety, reliability Anticipating and addressing emerging regulatory or technological issues

16 NEI Efficiency Bulletins Vehicle for deploying efficiency ideas to fleet Value proposition - explains how idea advances safety, reliability and efficiency; Points to applicable guidance Levels of Commitment: - Mandatory Initiative o All must implement if approved by 80% vote of industry CNOs - All expected to implement - Utility discretion 16

17 Examples of Completed Efficiency Bulletins EB 16-02: Implement Graded Approach to Walk-downs EB 16-04: Source Checking Personnel and Tool Contamination Monitors EB 16-22: Implementing and Effective and Efficient Work Management Process EB 16-26a,b,c,d: Standardization of Nuclear Access Requirements, In-processing Training, Radiation Worker Training, and Supplemental Supplier Contracts

18 Building Block: Value Recognition Increasing value recognition for existing reactors - Earning value for clean air attributes New York s new clean energy standard Upstate nuclear plants to receive appropriate compensation Precedent for other state, regional policy - Advocating changes in electricity markets for additional value: Capacity pricing Energy price formation - Pursuing changes at FERC and RTOs - Clean Power Plan implementation plans should recognize value of nuclear energy

19 Solutions Emerging Among the States (redesign) New York Clean Energy Standard approved by Public Service Commission Ohio/Pennsylvania First Energy actively seeking a solution for nuclear units recognizes their environmental benefits Illinois Evaluating legislative proposal similar to New York Connecticut Legislation including Millstone cleared Senate

20 Building Block: Strategic Communications Communications emphasizing industry s effort to enhance efficiency, need for value recognition Advocating greater value for nuclear power plants in electricity and clean air markets Workforce Communications

21 A few words about the back end Effective Management of Decommissioning and Used Fuel 21

22 Decommissioning Landscape NRC has a proven regulatory framework for decommissioning activities - 10 plants have safely completed decommissioning - 19 plants are in the process of decommissioning - 5 plants* planning near term shutdown There currently is no regulatory framework to govern the transition from operations to decommissioning - The process of transitioning from operations to decommissioning is highly inefficient Rulemaking needed Stranded used fuel is a major cost driver Less than 25% of decommissioning $ are spent actually tearing down the plant *Pilgrim, Oyster Creek, Quad Cities 1&2, Clinton

23 Vast Energy Produced Small Volume All the used nuclear fuel generated, if stacked, would only cover one football field <10 yards high 23

24 Yucca Mountain 24

25 Other Used Fuel Management Improvements Private entities are seeking to develop consolidated interim storage at away from reactor sites Waste Control Specialists has applied for an NRC license to store used fuel in West Texas The Eddy-Lea Energy Alliance plans to do the same thing in New Mexico DOE is now seeking to engage 25

26 Game Changers on the Drawing Board Accident Tolerant Fuel Small Modular Reactors Advanced Reactors 26

27 Conclusion The future of nuclear energy in the U.S. Growth? Decline? Industry s Delivering the Nuclear Promise initiative seeks to keep nuclear in the mix How states interact with electricity markets will significantly affect the outcome 27

28 Questions? Rod McCullum Nuclear Energy Institute