The Challenges of a Civil Nuclear Future for the UK 2014-2050 Gordon Waddington 23 rd January 2014 2012 Rolls-Royce plc The information in this document is the property of Rolls-Royce plc and may not be copied or communicated to a third party, or used for any purpose other than that for which it is supplied without the express written consent of Rolls-Royce plc. This information is given in good faith based upon the latest information available to Rolls-Royce plc, no warranty or representation is given concerning such information, which must not be taken as establishing any contractual or other commitment binding upon Rolls-Royce plc or any of its subsidiary or associated companies.
Topics l Civil nuclear in the UK history l The alternatives and the need for a mixed energy policy l Public opinion l The key challenges Skills Manufacturing Construction l Why UK plc cannot afford to let down EdF and Areva l The EU l Waste l The next 12 months l The future and small modular reactors
UK history l 1956 Calder hall starts operation l 1986 Chernobyl:- Level 7 event l 1997 Peak power output at 26% of the electricity supply l 2002 Energy Review l 2003 Energy White Paper l 2006 Energy Review l 2007 High Court throws out the 2006 review l 2008 Go ahead for New Nuclear, 10 sites identified l 2011 Fukushima:- Level 7 event l 2012 RWE and EON pull out l 2013 Agreement on strike price l 2013 16 operational plants l 2022 1 operational plant
UK Civil Nuclear Sites Bradwell Dungeness Hartlepool Heysham Hinkley Point Oldbury Sizewell Hunterston Torness Wylfa Sellafield
The need for a balanced energy portfolio Wind 13GW by 2020 155-100/MWh Nuclear 16GW by 2030 92.5/MWh for HPC Solar 10GW by 2020 125-110/MWh Bio Fuel 11% by 2020 105/MWh Wave/Tidal 27GW by 2050 305/MWh for the next 6 years Shale Gas???
The need for a balanced energy portfolio l We all want the lights to stay on l Reducing greenhouse gases is critical l We cannot afford for the UK to become uncompetitive l The country with the fastest reducing CO2 footprint is the US. l Every single energy source has issues for Nuclear it is waste the high capital costs and the critical need for safety l Carbon sequestration (CCS) on an industrial scale is not yet practical l North Sea Oil is declining
Hinkley Point C l Is in a beautiful quiet corner of England l Surrounded by country roads l 7% of the UK s electricity l Power for 5m homes l 2m cars worth of avoided CO2 l No rail link l 25000 jobs l 3.2 Gigawatts of power l FID not yet taken but 1.4b spent
Public Opinion % in favour of Nuclear 2005-2011 France Germany India Indonesia Japan Mexico Russia UK USA
Public Opinion l 2002-2003 a significant proportion of public opinion was against nuclear power l 2005 support grows particularly if it part of a balance energy portfolio l 2011 support drops by 12% post Fukushima but recovers within a few months l 2013 YouGov poll suggests that nuclear is the most popular choice for future energy needs
Meeting the Challenge in the UK Current State HMG Nuclear Supply Chain Action Plan Future State Nuclear Readiness Design Engineering & Safety Case Product Delivery Civil/Site Construction Install & Commission (Mech & Elec) Nuclear Energy Skills Quality Rolls-Royce proprietary information
The skills challange l Demographics l Early retirement l 2/3 of the current skills pool will have gone by 2025 l Skilled welders l Electricians and Mechanical fitters l The M25 effect l Over the next 10 years a rise in 14,000 specialist jobs l Safety assessment and quality
Manufacturing - Products Reactor Vendors are increasingly protective over nuclear island sourcing Pumps Simple Hx Other Heavy vessels SG Internals RPV Head Small pipework Accumulators Primary Pipework RPV SG Large, complex Hx CRDM RVI Simple Tanks Valves Increasingly locally sourced Increasing barriers to entry / capital investment Rolls-Royce proprietary information
The construction challenge l 16b projected build costs l 5600 employed on site down country lanes l 2023 before both reactors are connected to the grid l 59% will use park and ride and be bussed to the main site. l 38% will travel directly to the main site by dedicated bus/coach l 3% will travel directly to the main site by car l Installation and commissioning skills may be available but not in Somerset
EPR PWR Flamanville is 4 years behind the original plan Olkiluoto is no better Chinese construction on schedule
Hitachi ABWR s GDA will be different to PWR s 700m paid for Wylva and Oldbury Japanese Nuclear Industry quiet The design is credible and different to Fukushima Commitment to 60% UK content
Delivering for EdF, Hitachi, Westinghouse and the Chinese l Do you ever want the first car off a production line l We cannot afford another Sizewell B l Offshore wind generates very few high value jobs in the UK l 45% of the jobs will come to the UK whatever happens; the challenge is between 45 and 70% l Japanese and French factories are quiet l Huge support from HMG but not at any price
The EU l The EU has started an investigation into the strike price deal for HPC to ensure it is not a subsidy l Günther Oettinger, the European union's energy commissioner discribed the UK nuclear project as soviet. The strike price deal is scheduled to last for 35 years. l Without Electricity Market Reform; HPC or any other new nuclear reactor in the UK will not happen l EU elections are in mid 2014 l Much of Europe is watching this debate
Waste l New nuclear will learn lessons from past mistakes Ed Davey l The UK has the largest storage of civil plutonium anywhere in the world l Cumbria County Council; Allerdale and Copeland borough councils are divided on the suitability of Sellafield as a long term storage site l The tunnel network would be the size of the channel tunnel l The critical issue is geological suitability Reusing plutonium in fast reactors needs to be taken very seriously if we are to address the public s genuine long term concerns
The next 12 months l The nuclear industry is capable of massive debate and glacial paced action l The EU may hold up HPC for another 12 months and that will put the date of on stream power back but HPC is going to happen l It is not reasonable to expect EdF to recommence significant work on site until they are confident that they can go ahead l If the UK manufacturing industry does not step up to the plate then we will only get 45% of the work and no significant export opportunities
New Build Markets for the UK today: U.S. Market virtually stalled due to dash for gas. Local content will be required Brazil small new build programme and geographic distance lower the priority UK home market vital that UK industry does well with the help of political pressure Turkey 1 st plant will be provided by Rosatom, their UK market entry ambitions, and financing make deals possible Czech Republic Czech supply chain largely aligned with Russians CEE territories Little local capability outside of Czech Republic. Affordability is a key question in the near term. Possibilities could arise through global agreements or financing Saudi large local programme but absence of a Gov-Gov agreement today allowing competitors to get ahead. Export would require RV agreements OR other initiative India large local capability will make access very difficult Russia large local industry will supply all the critical requirements China growing industry with local content mandated S. Africa Large local programme where financing sought. 20
The future and small modular reactors l l l l l l Nuclear units sizes have historically increased in size 1st generation 900 MWe 2nd generation 1300-1500 MWe 3rd generation 1650 MWe Large plants benefit from scaling factors: Construction costs per MWe lower for large plants Similar workforce need independent of plant size In many places even first generation size reactors are too large for the electrical infrastructure and development costs unaffordable Challenge will be to make the smaller plants cost effective in this market Small module sizes may make additional sites viable
The future and small modular reactors l Designs range from 10 MWe to 600 MWe l 10MWe is broadly similar to a large wind turbine l 600MWE similar to existing UK reactors (MAGNOX & AGR) l Although the proposed designs are small in terms of output, they are often not small in terms of physical size l Economic and business case will be the over-riding factor Single units have significant one off site related costs meaning where possible clusters will make sense l Need to be careful not to exaggerate the potential benefits l IPR is the major disadvantage that the UK has at the moment in large Civil reactors- this does not have to be the case fro SMR s
Questions