The Economy of SMR CNPE, CNNC

Transcription

1 The Economy of SMR CNPE, CNNC

2 Self and Company Introduction: Zheng Baojun Economic Evaluation Division, CNPE, CNNC 2010 until now, focused in NPPs' economy work. Economic Evaluation Division: Biggest consultant in nuclear power and nuclear chemical industry (waste and spent fuel management ) in China. It is in charge of most cost estimate and economic analysis of CNNC' projects, together with technical service of cost control and bidding quotation.

3 Contents 1 Potential market in China 2 Economic Analysis Method 3 Economic Analysis of SMRs Non-Electric Application 4 Conclusion and Suggestion

4 Contents 1 Potential market in China

5 1 Potential market in China Power grid Replacement of small coal-fired units; Industrial steam Residential heating Desalination of sea water Remote area or independent power supply Exploit Island & Sea Elimination of coal-fired; Urbanization, elimination of coal-fired heating; Limited gas reserves, thermal prices are high; Water shortages in North China; Lack of power; Difficult to develop fossil energy due to the policy or environment requirement; Integrated demand: power supply, desalination 5

6 Contents 2 Economic Analysis Method

7 2 Economic Analysis Method What does investor care about? Competitiveness and sales of product; How much money need to be invested? How high is the return of investment (ROI) expected as; How great are the risks to invest the project; -- product cost & sale price -- Total capital cost --ROI -- Risk evaluation

8 2 Economic Analysis Method! For electricity generation projects, economic analysis includes: Step1 Conform invest parties Step2 Estimate project s cost - determine the level of investment Estimate investment; Assess and assume financing conditions; Step3 Economic analysis - identify project revenue Evaluate the benefits based on capital cash flow; Given a product price, calculate earnings, whether acceptable; Risk analysis and assess the acceptability;

9 2 Economic Analysis Method! For Non-Electric or cogeneration projects, adjustment as follows: Step2 Estimate the cost of the project Additional investment for related facilities; Step3 Economic analysis Cost estimation of new product; Evaluate new products price and revenue; Risk analysis is more complex;

10 Contents 3 Economic Analysis of SMRs Non-Electric Application

11 3 Economic Analysis of SMRs Non- Electric Application 3.1 Power Grid Supply Demand Relatively stable;!!!! Competition is fierce; Higher proportion of clean energy, the replacement demand gradually reduced. Market price!! Relatively fixed, electricity price to grid is about 0.4RMB/KWh, unlikely to increase in near future;!! Wind and solar energy are developing very fast, with cost and electricity price decreasing; Result: 1. Utilization and income FACE much RISK; 2. Compared with wind energy ( /KWh), solar energy ( /KWh), SMRs are facing little pressure. Not a perfect choice 11

12 3 Economic Analysis of SMRs Non- Electric Application 3.2 Industrial steam supply Demand Market price The demand in industrial regions is strong, but less stable, greatly affected by the development of local industry; Decided by local governments and enterprises, can withstand a certain premium; Heavily affected by fuel price: 150RMB/ton in Shijiazhuang; 230RMB/ton in Beijing; Mostly about 200 RMB/ ton: In developed areas with higher environmental requirements, gas fuel leads higher steam prices; Low subsidies exist, market prices reflect actual costs. Results The need to match steam parameters may affect the product price; Steam supply seem a little better if we get stable customers. 12

13 3 Economic Analysis of SMRs Non- Electric Application 3.3 Residential heating Demand Not stable, Seasonal variation, and also unstable in a single day; In a long term, the demand will increase clearly. Market price Subsidies needed, heating prices can not really reflect the cost; The heating price is controlled and the return of investment can not be high. Heating enterprise profits: cost profit rate not higher than 3%, or the return rate of net asset is 2%-3% higher than long-term (5 years or more) treasury (4%-5%). Results SMR shouldn't compare the product price, cost comparison is more reasonable; Subsidies needed in this application, will not get great profit, suitable for the first small reactor. 13

14 3 Economic Analysis of SMRs Non- Electric Application 3.4 Desalination of sea water Demand Stable, with a broad market for a long term, in North China. Market price The water price is decided by the state, large subsidy for water supply costs; Beijing: residents: 5RMB/ton, industrial: 8.15RMB/ton, rising. Results As water prices rise, desalination market is enlarged, though its cost is high; Developed areas should be targeted; The subsidies exist in entire industry, profit controlled if supplied to pipeline; Desalination projects are profitable if directly provide water to industry in an independent region. 14

15 3 Economic Analysis of SMRs Non- Electric Application 3.5 Power supply to remote area or independent Demand The lack of population and industrial in remote area lead no big demand; Specific areas have stable customers; Market price Without access to power grids and heating networks, prices can be negotiated; Industrial electricity price is RMB/KWh, if SMRs price is RMB/KWh, stable client are possible; Results The specific area should the main market, and SMRs will be competitive if gets RMB/KWh, ; Focus on areas with high environment requirements, avoid competition with self-owned coal-fired; Facing with greater risk of load fluctuation. 15

16 3 Economic Analysis of SMRs Non- Electric Application 3.6 Island and offshore platforms Demand No big population or huge industry, the demand will not be too big, kind of stable; Offshore platforms create opportunities for floating SMR. Market Price Offshore wind generation cost is high, the price reached 0.8 RMB/KWh or more; Some islands lack fresh water, customers are not sensitive to water price ; Results Stable customer are required but very possible; The product price has the ability to provide profit for SMRs, even without subsidies. 16

17 3 Economic Analysis of SMRs Non- Electric Application 3.7 Example in China Type SMR (PWR), Twin units, coastal, land, typical LR site 2 100MWe Assumed Investment Assumed static investment: 42,500RMB /KWe(2013) as common conditions of SMRs worldwide Load factor 8000h/ years (91% of a year) Cost condition China standard, 2013 price.

18 3 Economic Analysis of SMRs Non- Electric Application 3.7 Example in China - power supply With tax, the average price of electricity is 0.9RMB/KWh (IRR=9%); Equal or little higher than industrial electricity price; Much higher than the average price of electricity to grid; The average generation cost is 0.6RMB/KWh; SMRs Can be used as an independent industrial power supply. Equal to the solar power price. 18

19 3 Economic Analysis of SMRs Non- Electric Application 3.7 Example in China steam and heating Scenario A: Power supply + industrial steam: Single unit 100% heat load provide industrial 4.0MPa steam steam quantity 250t/h electric power 50MWe; Scenario B: Power supply + industrial steam + heating: Single unit 100% heat load heating in heating seasons, heating area: 4 million m 2, provide industrial 4.0MPa steam in other time, 250t/h electric power 50MWe; Scenario C: Power supply + industrial steam: Single unit 50% heat load providing industrial 4.0MPa steam 125t/h turbine power 70MWe; 19

20 3 Economic Analysis of SMRs Non- Electric Application 3.7 Example in China steam and heating Power supply + industrial steam: Power supply + industrial steam + heating: Power supply + industrial steam: Scenario A: electricity price: 0.43 RMB/KWh; steam price: 250 RMB / ton. Scenario B: electricity price: 0.43 RMB/ KWh; steam price: 180 RMB/ ton (Shenyang); heating price: 80 RMB/m2; Scenario C: electricity price: 0.43 RMB/KWh, steam price:420 RMB/ ton. Or: steam price: 180 RMB/ ton (Shenyang); Internal rate of return of capital:9%; electricity price: 0.8 RMB/KWh. 20

21 3 Economic Analysis of SMRs Non- Electric Application 3.7 Example in China steam and heating Electricity price:0.43 RMB/KWh-0.8 RMB/KWh; Steam price: RMB/ton Already been quite competitive; Heating price: 80 RMB/m2 with industrial steam prices at 180 RMB/t, reduced to 60 RMB/m 2 with industrial steam prices at 250 RMB/t, close to gas heating costs (40 RMB/m 2 ). According to state requirements, return rate of heating supply can not reach 9%, if reduced by 1/3-1/2 as required, the price are more attractive, but can not attract investment. The price of these products are all higher than the market price, but the supply of steam is clearly better. Followed by electricity + industrial steam; Finally the residential heating. Even if we choose power supply, SMRs has the ability to provide electricity to island and offshore platforms or other conditions, further research remains for floating power plant. Consider carbon emissions subsidies, the heating price can be reduced by10 RMB/m2, or reduce the steam price 25RMB/t, SMRs economy will be further optimized. 21

22 3 Economic Analysis of SMRs Non- Electric Application 3.7 Example in China Desalination of sea water Investment Desalination facilities with tons/d needs limited investment, 20 million dollar; Water cost RO: 6 RMB/ ton (electricity price at 0.43 RMB/KWh); MED: 2 RMB/ton, less electricity generation (10000 tons/d, less generation 7MWe); Comprehensive cost reached or exceeded 8RMB/t, slightly higher than water price; Result Industrial water prices is high, directly supply water to industrial users may make SMR desalination profitable; The island lack of fresh water is one main direction, but as its low demand, it is necessary to carry out deeply market research; Desalination combines with other industries, such as salt. 22

23 Contents 4 Conclusion and Suggestion

24 4 Conclusion and Suggestion Industrial steam: possible market in Southeast China, both in demand and predicted profit ability; Residential heating: market in Northeast China, facing greater competition, need policy support, ordinary return of investment; Desalination: need subsidies, or water supply to an independent base, ordinary profit if supplied to pipeline, North china; Generation: remote areas and specific areas. Together with industrial steam will further lower the electricity price. 24

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