Might Nuclear be Blown Away? Cambridge, February 2014

Transcription

1 Might Nuclear be Blown Away? Cambridge, February 2014

2 What is the challenge for Nuclear? Winning the public hearts and minds? Winning the investors hearts and minds?

3 The playing field have changed Electricity Market Privatisation and Deregulation? Smaller utilities Different balance of priorities Need for quicker returns of investment Need to raise finance for their projects

4 What we ll look at Part 1: The UK electricity supply market Part 2: The future market Part 3: What s the problem? Part 4: The nuclear reaction Part 5: Disruptive technologies? Summary

5 Part 1: The UK electricity supply market

6 The UK will be at increased risk of blackouts over the next two years unless electricity generators are given new financial incentives, according to the Royal Academy of Engineering (RAE). 17/10/13 Britain faces risk of blackouts, warns Ofgem Britain faces an increasing risk of power blackouts and higher electricity bills in the next four years, power regulator Ofgem has warned in a report 5/10/12

7 Demand and Generation Background Source: UK Future Energy Scenarios; Gone Green Scenario ; National Grid; September 2012

8 Fuel Type and Carbon Intensity Source: UK Future Energy Scenarios; Gone Green Scenario ; National Grid; September 2012

9 Part 2: The future market

10 UK Energy Policy Tricotomy

11 UK Energy Policy Tricotomy

12 UK Energy Policy Tricotomy

13 Demand and Generation Background to 2050 Source: UK Future Energy Scenarios; Gone Green Scenario ; National Grid; September 2012

14 Part 3: What s the problem?

15

16 Whilst the overall direction is clear, major uncertainties remain over both the most cost effective mix of technologies and the pace of transition. The Government is committed to ensuring that the low carbon technologies with the lowest cost will win the largest market share. The Carbon Plan: Delivering our low carbon future HMG December 2011

17 The price challenge 115/MWhr 80/MWhr 95/MWhr Sources: UK Future Energy Scenarios; Gone Green Scenario ; National Grid; September 2012 Electricity Generation Costs ; DECC; December 2013

18 The price challenge 115/MWhr 80/MWhr 95/MWhr Sources: UK Future Energy Scenarios; Gone Green Scenario ; National Grid; September 2012 Electricity Generation Costs ; DECC; December 2013;

19 Could it all go wrong for nuclear? Source: Electricity Generation Costs ; DECC; December 2013;

20 Down comes the gas price Councils that back fracking will get to keep more money in tax revenue, David Cameron has said as he urged opponents to "get on board". The prime minister said English local authorities would receive all the business rates collected from shale gas schemes - rather than the usual 50%. The BBC January 13 th 2014

21 Down comes the wind price? Offshore generation costs of about 140/MWhr today could drop to about 100/MWhr by 2020, according to the reports published on Wednesday by the Crown Estate, which sells licences to build offshore wind farms, and from the Offshore Wind Cost Reduction Task Force, set up by the Department of Energy and Climate Change with the wind industry. The Guardian June 13 th 2012

22 So what might this mean? 115/MWhr 80/MWhr 95/MWhr Sources: UK Future Energy Scenarios; Gone Green Scenario ; National Grid; September 2012 Electricity Generation Costs ; DECC; December 2013;

23 Part 4: The nuclear reaction

24 What costs a lot? Time control of schedule is paramount Olkiluoto Flamanville Taishan

25 What costs a lot? Materials trend is for more One-off and non-standardisation $20bn for 4X1400MW vs 7bn for 1650MW

26 What costs a lot? Uncertainty Over time Over cost capital cost Over electricity price (hence CfD) Over output here capacity factor Over end of life Lack of Flexibility

27 What we have to achieve Project Delivery during construction Strong Operational Performance Stable Political Environment and Electricity Market = large amount of reasonably priced carbon free electricity

28 Part 5: Disruptive technologies?

29 Nuclear Fusion? Reality of Fusion Power Progress is being made but it is slow Finance of fission technology is difficult where over 400 plants already exist Fusion really is FOAK in many aspects and it is complicated Competing with existing technologies BUT...the gains would be immense and bring unequivocal change to the energy sector and beyond

30 Fusion Technology (History) Year Event 1920 s Fusion postulated 1952 Uncontrolled demonstration 1958 Controlled Magnetic Fusion (LANL) 1962 Laser Fusion postulated Z machine (Sandia) 1968 Tokamak tested 1991 First controlled release of fusion power (JET UK) 2003 Z Machine fusion experiment Sandia 2007 Formation of ITER 2009 NIF at LLNL - 5 years late 4x over budget 2012 Magnetised Linear Inertial Fusion (MagLIF) postulated 2013 Break -Even achieved at NIF (only fusion reactor to demonstrate) 2020? Predicted ITER first plasma 2027? Predicted start of D-T operation - 500MW for 1,000s cf JET 16MW for <1s

31 The SMR revolution?

32 Current SMR Technologies Currently 32 designs encompassing 4 distinct technologies Light Water Reactors Design & Development internationally. Global interest including China, Japan, South Korea, Europe, USA, Russia, Brazil and Argentina. By far the most interest in the LWR SMR with 18 of the 32 designs based on LWR technologies. Heavy Water Reactors Design & Development to date limited to Canada and India (3 designs) Note the HWR units are all ABOVE 300MW(e) IAEA SMR threshold Gas Cooled Reactors Design & Development to date limited to China, South Africa and USA (4 designs) Electricity generation but main attraction is in use of process heat for industrial applications e.g. Desalination, hydrogen production, tar sands and oil shale. Liquid Metal Cooled Reactors - Design & Development internationally, but much smaller scale than LWR, China, Japan, India, Russia, USA (7 designs). Potential for sustainable nuclear fuel services including breeding new fuel and consuming recycled nuclear waste or material from nuclear weapons programme - perceived as most technically challenging but could be of significant strategic importance

33 Key SMR Developments Name Power (MWe) Technology Producer Stage PHWR HWR NPCIL - India 18 units operation PHWR HWR NPCIL-India 4 units under construction KLT-40s (IB) 70 LWR OKBM - Russia 2 units under construction HTR-PM 250 HTGR Tsinghua U - China 2 units under construction CAREM LWR CNEA - Argentina Site excavation PFBR FBR IGCAR - India Planned operation 2014? CNP LWR CNNC - China 3 units Op, 2 units under Con SMART 100 LWR KAERI Rep Korea Design Approval mpower 180 LWR B&W - USA Detailed Design (DoE $226M funded for NRC Cert) NuScale 45 LWR NuScale Inc - USA Detailed Design (DoE $226M funded for NRC Cert) SVBR MS (FNR) JSC Eng - Russia Detailed design for prototype 4S 10 Molten Salts Toshiba - Japan Detailed Design PRISM 311 MS (FBR) GEH - USA Detailed Design IRIS 335 LWR W/house led - Int Concept Design Flexblue LWR DCNS - France Concept Design EM2 240 HTGR GA - USA Concept Design

34 Perceived Advantages and Challenges Technological Issues Non-Technological Issues Advantages Modularisation lends itself to shorter construction period Potential for enhanced safety & reliability Design simplicity Re-use of existing nuclear e.g. LWR Suitability for non-electric application (e.g. desalination) Replacement for ageing fossil plants and GHG emission reduction Suitability for smaller electricity grids Options for matching demand growth with staged capacity increase Site flexibility (relaxation in site constraints) Potential to reduce emergency planning zone Lower up-front capital costs Lower investment risk easier financing scheme Challenges Licensability (innovative or FOAKE systems, materials and components) Non-LWR technologies Operability performance/record Human factor engineering; staffing requirements Waste and fuel management, radiochemistry, impact on GDF Post Fukushima action items on design & safety Public engagement Integration into existing infrastructure Economic competiveness FOAK cost estimate (to get on the bar) FOAK cost estimate (thru-life cost) Insurance and indemnity provisions Decommissioning cost assurance Regulatory infrastructure to support assessment and operation Post Fukushima action items on design & safety

35 Summary

36 These are exciting times for the UK nuclear industry; 2 utilities have active UK programmes, with a 3 rd utility making positive moves. As we move forward in time and demand for further low carbon sources of electricity develops, we must ensure the nuclear industry presents an attractive commercial proposition against other competing technologies. Central to this is driving down the nuclear cost base, through learning for others and relentless development of technology. New technologies will have an exciting role to play, but we need to remain focused and realistic. The industry has always underestimated budget and schedule leading to increase in costs and programme, undermining confidence with investors, the investment playing field has changed and we as an industry need to respond to that. As a future leader of the industry, you will play a central role in achieving this aim. Drive the industry forward.