Transcript Slide 1

U.S. Nuclear Industry
Life in the Fast Lane
Thomas A. Christopher
President and CEO AREVA NP Inc.
CEO and Vice-Chairman AREVA Inc
The Energy Highway
> U. S. is facing dramatic challenges in energy
supply
 Volatile fuel costs
• Coal prices increased 57% in two years
• Demand for natural gas expected to double in three years
 Rising electricity prices
• Electricity demand 3.3% last year – higher than forecast
• Rate shocks in 10 states this year
 Seven regions need to build new generation
• Texas experienced a brownout this past summer
 Increasing environmental obligations
 Personnel resource shortages
Energy Will Be a Key Issue in the 2008 Political
Campaign
AREVA NP Inc.
MIT Student Presentation Nov. 5, 2007
2
Current U.S. Plant Capacity and Age
73
8
800
600
Total Coal Plants
Total Gas Plants
Total Nuclear Plants
53
7
500
24
6
20
9
400
300
48
12
12
55
200
100
0
N umber of Units
700
0
100-499
500-999
1000+
N ameplate Capacity - MW
Average Age of Plants (years)
“New” gas,
“Old” Coal and
Nuclear
100 - 499
500 - 999
1000+
Natural Gas
18
10
12
Coal
40
29
29
31
21
Nuclear
AREVA NP Inc.
MIT Student Presentation Nov. 5, 2007
3
Combined Cycle Power Plant
500 – 600 MW Class CC: Air Emissions
Pollutant
Nitrogen Oxide (NOx)
Carbon Monoxide (CO)
Volatile Organic
Compound (VOC)
Particulate (as PM 10)
Sulfur Dioxide (SO2)
Formaldehyde
Benzene
H2SO4 Mist
Ammonia
Potential to Emit
(tons per year)
219 *
108 *
30
117 *
22
1
0.2
6
212
Source: Duke
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4
Coal Production Cost Example
TVA’s Cumberland Plant is One of Their Largest Baseload Plants
• 2 coal-fired units @
1300MWs each
• Both on line in 1973
• Burns pulverized #9
bituminous coal (3%
sulfur & 10% ash)
Nitrogen oxide
AREVA NP Inc.
MIT Student Presentation Nov. 5, 2007
Sulfur Dioxide
5
US Spot Fuel Prices Continue to Experience
Volatility
AREVA NP Inc.
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6
Market Drivers: Fuel Prices
Market Faces High and Volatile Natural Gas Prices
Hurricanes
AREVA NP Inc.
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Value of a Nuclear Power Plant
Peak Load
Price
2015
2010
2007
Estimated 2015 Curve
Value of Nuclear
Source: Global Energy Decisions
AREVA NP Inc.
MIT Student Presentation Nov. 5, 2007
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PJM Daily Loads and Locational Marginal
Pricing (LMP)
160,000
$900
Hourly Load
140,000
$700
$600
100,000
$500
80,000
$400
60,000
$300
40,000
20,000
0
AREVA NP Inc.
$800
LMP $/MWhr
PJM Load (MWs)
120,000
Average Hourly Price
MIT Student Presentation Nov. 5, 2007
$200
$100
$0
9
Double-digit Residential Electricity Rate Increases
MASSACHUSETTS
From 10% - 72% in 10
states
NSTAR and National Grid
25
-35%
customers saw 25–35%
rate
increases
on 1/1/06
increase
1/06
CONNECTICUT
ILLINOIS
estimate
35% increases in
If Some
auction
adopted,
2007 if auction model is adopted;
increase
could be 35%
utility proposals include single-digit
RHODE ISLAND
Narragansett
13%
increase
Electric
rates rose
13%
on
1/06 1/1/06
ARIZONA
In November 2005,
Regulators
Arizona Public
requested
Service asked
regulators to
20%
approve 20% rate
increase
increases
DELAWARE
Rate
increases will be
Phased
phased in with a 15%
increases
increase effective May
15%a 25%
- 5/06,
2006,
increase
25% - 2007,
1/07and a
January
19% increase effective
19%
- 6/07
June
2007
MARYLAND
February auctions indicated
Increases
range
residential prices
would rise
39%
for35%
Pepco,to
35%
for DP&L,
from
72%
AREVA NP Inc.
Central
Power
10% Maine
increase
rates increased 10%
3/1/06
effective 3/1/06
Regulators approved
22%
increase
22% increase
for
CL&P effective 1/1/06
1/06
annual increases followed by
deferred cost recovery
Rate Caps
Disappearing
MAINE
and 72% for BG&E; recent
stakeholder discussions are
proposing phase-ins of
15–25% increases per year
before a full move to
market-based rates
MIT Student Presentation Nov. 5, 2007
FLORIDA
Rates rise 19%
19%
for
FP&Lfor
and 12%
for Tampa
FPL,
12%
Electric and
othersFlorida
Progress
DISTRICT OF
COLUMBIA
Pepco expects
12%
bills
to IN
rise 12%
in
June
6/06 2006
10
North American Operating Nuclear Sites
Original
Equipment
Manaufacturers
B&W
7
W
48
CE
14
GE
34
A Small Part of the US Market is Deregulated
AREVA Services All Aspects of an Operating
Nuclear Plant
Capital
~2.7B€
Fuel
~2.8B€
Maintenance
~3.1B€
Operations
~4.7B€
~13.3B€
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MIT Student Presentation Nov. 5, 2007
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AREVA NP Inc.
North American Locations – June 2007
Richland, WA
•571 People
•Fuels
•Federal
Denver, CO
(shared AREVA)
•6 People
•NS
Naperville, IL
•19 People
•NE-A
•I&C
Toronto, Canada
•60 People
•AREVA NP
Canada Ltd.
•
Idaho Falls, ID –
(Shared AREVA)
•1 Person
Pittsburgh, PA
•20 People
•I&C/ES
•
•
•Federal
•
Benicia, CA
•44 People
•NE-A
•NS
•New Plants
•
•
•
Albuquerque, NM
(shared AREVA)
•5 People
•Federal
20
Locations
3,378 Employees/Contractors
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•
•
Fort Worth, TX
•59 People
•I&C/ES
•NE
••
•
•
•
AREVA NP Inc.
Marlborough, MA
•113 People
•NE-A
•NE-R
•
•
Westborough, MA
•12 People
•E-Lab
•NE-A
•
Philadelphia, PA
(shared AREVA)
•10 People
•I&C/E S
•Federal
Lynchburg, VA (4)
•1,842 People
•All
Charlotte, NC
561 People
•All
Erwin, TN
•9 People
•Fuels
Atlanta, GA
•45 People
•I&C/ES
Aiken, SC –
shared AREVA
•1 Person
•Federal
13
Historical US Nuclear Plant Construction Costs Were Out of
Control Due to Regulatory Changes and Escalating Costs
7000
Vogtle
6000
Perry
Construction Costs $/kWe
5000
Beaver Valley 2
Hope Creek
4000
Braidwood
3000
March 1979
TMI Accident
Diablo Canyon
Wolf Creek
Catawba
Palo Verde 1
2000
LaSalle 1
Oconee
1000
Quad Cities
McGuire 1 & 2
Dresden
0
1965
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1970
1975
1980
1985
1990
14
In 1989, a New Licensing Process
Introduced by the NRC
> Goal: simplify the two-step process
> The Nuclear Regulatory Commission (NRC), following numerous
hearings and input from utilities, drafted new rules for licensing
> Congress amended the Atomic Energy Act to confirm the NRC’s
authority to issue statutory combined licenses
Old Process 10 CFR Part 50
Apply for
Construction Permit
Construction
Permit Issued
Construction
Apply for
Operating License
Operating
License Issued
Operation
New Process 10 CFR Part 52
Early Site Permit
Combined License
Issued
Construction
ITAAC
Verification
Operation
Design
Certification
AREVA NP Inc.
MIT Student Presentation Nov. 5, 2007
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New Build Scope Yesterday and Today
1970s - 1980s Typical Scope
Total Plant Contract
NSSS, Equip.
RV, SG, RCP
I & C , NSSS
Nuclear system
design & licensing
10%
Fuel handling
equipment
90%
2010 – 2020 Typical Scope
Reactor containment:
equipment design &
supply
Emergency diesel
generator: building
design & supply
Total Plant
50%
50%
Nuclear auxiliary building:
equipment design &
supply
Safeguards buildings
equipment supply &
design
AREVA Scope Will Be 50% of Total Plant Contract
AREVA NP Inc.
MIT Student Presentation Nov. 5, 2007
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A Number of Utilities Are Moving to Create a
New Nuclear Option
COL Issued
2010-11
40-Year License
To Build
COL Hearings
COL Submit & NRC
Review
COL Prep
Site Selection
2006
AREVA NP Inc.
2007
2008
2009
2010
2011
US EPR
AP1000
ESBWR
ABWR
CEG #1
CEG #2
CEG #3
Ameren
Duke
Progress
SCE&G
TVA
Southern
Entergy
Dominion
NRG
Dominion
MIT Student Presentation Nov. 5, 2007
2012
17
New Business Model Emerges to Respond to Capacity
Demand - as UniStar
CEG
AREVA
Standard Plant
EPR Offering
CEG Part Owner
/ Operator
CONTRACT #1
PO EPR (AREVA)
Owners
BECHTEL
CEG / Utility #1
PO CEG Operator
Marketing Activity
2005-2006
CONTRACT #2
Owners
CEG / Utility #2
PO BECHTEL
STG Vendor
PO EPR (AREVA)
PO BECHTEL
STG Vendor
CONTRACT #3
PO EPR (AREVA)
Power Purchase
Owner
Agreement
CEG
PO BECHTEL
STG Vendor
CONTRACT #4
PO EPR (AREVA)
(Utility #3)
Power Purchase
Owner
Agreement
CEG
(Utility #3)
AREVA NP Inc.
MIT Student Presentation Nov. 5, 2007
PO BECHTEL
STG Vendor
18
AREVA’s Third Generation US EPR is Designed
to Meet Today’s Needs
AREVA NP Inc.
MIT Student Presentation Nov. 5, 2007
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Four Train Concept
Each Safety Train is Independent and Located
Within a Physically Separate Building.
AREVA NP Inc.
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Four-Train Concept
> On-line maintenance without entering action statements
> Radial arrangement simplifies layout and reduces piping
> Active cross-connects eliminated



Simplifies systems
Minimizes components
Reduces operator burden in case of accident
> Reduced component sizes
> Separate safeguards buildings


Physical separation
Improved hazards mitigation
•
fire, flood, external events
EPR
SYSTEM
Westinghouse 4-Loop
Pump
HX
Tank
Valve
Pump
HX
Tank
Valve
SI / RHR
8
4
4
335
4
6
5
351
CVCS incl. Boration,
Demin/Seal Water
11
6
8
397
11
13
14
751
CCW
8
14
6
404
7
13
7
758
27
24
18
1136
22
32
26
1860
Total
AREVA NP Inc.
5 More Pumps
8 Less HX
8 Less Tanks
724 Less Valves
MIT Student Presentation Nov. 5, 2007
21
OL–3 EPR Under
Construction
AREVA NP Inc.
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Progress at Flamanville
AREVA NP Inc.
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Calvert Cliffs #3 Schedule
Activity
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
EPR Design Certification
DC Application
Submitted
DC Application Preparation & Review
DCA Prep & NRC Interactions
Final Design Approval
(FDA) Issued
NRC Review
DC Rule Issued
DC Rule
(preparation - 33 mos, review - 24 mos, rulemaking - 10 mos)
COL Licensing
Site & Reactor Technology Selection
(evaluation: 6 mos)
(1) Limited Work Authorization (LWA) Issued
(2) Final Environmental Impact Statement (FEIS) Issued
(3) Final Safety Evaluation Report (FSER) Issued
Project Plan Approved
COL Project Planning
(1)
(preparation: 6 mos)
COL Application Submitted
(2)
COL Application Preparation & Review
COLA Prep, NRC Mtgs
NRC COLA Reviews
COL Issued
(3)
Hearing
(preparation - 24 mos, review including hearing - 39 mos)
Project Execution
NSSS Components On-Site
Procurement & related engineering
(Major NSSS components on-site - 63 months)
Planning
Long lead component procurement and fabrication
Engineerng Complete
Detailed engineering for Construction
Plng
Detailed engineering for construction
(Final construction ready designcomplete before construction start)
Simulator Order
Placed
Simulator Procurement / Installation
Plng
Start Software
Development
Simulator Operational
Manufacture, Test & Install
Provisional
Turnover
(Simulator required operational 12 months before fuel load)
First Concrete Pour
Plant Construction
Planning Site Preparation
Start Fuel Load
Plant Construction, Start-up Testing
(Site prep - 15 months, construction - 48 months)
AREVA NP Inc.
MIT Student Presentation Nov. 5, 2007
24
Estimated 2006 Production Costs
35
$31.4
30
$23.4
$/MWh
25
20
$14.0
15
10
5
0
4-Loop Plant
US EPR
Coal
New Build Will Cost Less to Operate Than
Existing Plants
AREVA NP Inc.
MIT Student Presentation Nov. 5, 2007
25
AREVA Will Continue to Need New Employees
Current openings end of Feb. 007– 307
Total Full -Time Hires
Total 2006
2007 Goals
Internal
Hires
225
200
External
Hires
337
325
Total Hires
562
525
New Hires Needed
by 2010 = 1000
AREVA NP Inc.
MIT Student Presentation Nov. 5, 2007
26
Types of Engineers Supporting
EPR Projects
> Mechanical – fluids, heat transfer,
FEM
> Civil – soil interaction,
earthquakes
> Structural – linear and non-linear
analyses
> Electrical – design, diesel
generators, one-lines
> Electronics – digital
instrumentation and control
> Nuclear – neutronics,
thermal/hydraulics
> Fire – nuclear fire safety
> Materials – fatigue, stress, FEM
> Construction (just starting)
Olkiluoto 3 RV head
manufacturing
AREVA NP Inc.
MIT Student Presentation Nov. 5, 2007
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The Next Generation of Leaders
> Key skills
 Problem solving and decision making
• Short-term crisis management
• Long-term construction management
 Working with teams (domestic and international)
• JV, LLC, etc.
 Learning from mistakes
 Broadened knowledge base
• New NSSS vendor responsibilities – 50% of entire plan
– Civil
– Structural
– Etc.
 Ability to adapt to rapid innovation and technology
• New ideas
• Technology
• Curiosity
AREVA NP Inc.
MIT Student Presentation Nov. 5, 2007
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In Summary - It’s an Exciting and Challenging Time
> This is a critical time in the energy generation
industry – demand supports the Nuclear
Renaissance
> We face greater economic and environmental
challenges than ever before
> Nuclear is making a comeback
 Environmentally friendly
 Energy independence
> We have the new technologies but success
depends on
 New approaches, innovation, enthusiasm and
dedication
 A new generation of “employees”
Our Business Is Growing Fast – We’ll be Here
For a Long Time
AREVA NP Inc.
MIT Student Presentation Nov. 5, 2007
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AREVA