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 AREVA NP Inc. MIT Student Presentation Nov. 5, 2007 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. MIT Student Presentation Nov. 5, 2007 6 Market Drivers: Fuel Prices Market Faces High and Volatile Natural Gas Prices Hurricanes AREVA NP Inc. MIT Student Presentation Nov. 5, 2007 7 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 8 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€ AREVA NP Inc. MIT Student Presentation Nov. 5, 2007 12 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 MIT Student Presentation Nov. 5, 2007 • • 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 AREVA NP Inc. MIT Student Presentation Nov. 5, 2007 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 15 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 16 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 19 Four Train Concept Each Safety Train is Independent and Located Within a Physically Separate Building. AREVA NP Inc. MIT Student Presentation Nov. 5, 2007 20 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. MIT Student Presentation Nov. 5, 2007 22 Progress at Flamanville AREVA NP Inc. MIT Student Presentation Nov. 5, 2007 23 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 27 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 28 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 29 AREVA