Industry Insights into Nuclear R&D

1. SKC Symposium Industry Insights into Nuclear R&D Eero Vesaoja / 16.10.2018

2. Who is that talking? • Eero Vesaoja • @evesaoja • Eero Vesaoja • Nuclear R&D Manager at Fortum • SAFIR Steering Group, Energiforsk Nuclear portfolio board, FORATOM IR&D WG, etc. • D.Sc. (Tech) student in the school Electrical Engineering at Aalto • M.Sc. (Tech.) Aalto 2012 • Automation and control systems • IT and mathematics

3. Outline of the presentation • This is Fortum • Four big trends in Nuclear (R&D) • Nuclear R&D at Fortum • SMRs • Questions and comments

4. This is Fortum

5. Fortum in brief We are the largest electricity retailer in the Nordics and one of the leading heat producers globally. We have 2.5 million customers. 96% of our electricity production is CO2 free in Europe, 61% in all operations Our core Hydro and nuclearCombined heat and power productionCircular economyEnergy-related products and expert services 9,000professionals in the Nordics, the Baltics, Russia, Poland and India 2/3 of our power production is hydro and nuclear

6. Our Nordic market positionFortum has the largest electricity customer base in the Nordics Electricity retail 15 million customers ~350 companies Power generation in 2016 395 TWh >350 companies Vattenfall Fortum Others Others Vattenfall Statkraft Ørsted E.ON BKK Statkraft Fortum Agder Energi SEAS-NVE Ørsted Helen E-COEnergi Uniper PVO SE-Syd Energi Norsk Hydro Din El, Göteborg Jämtkraft Source: Fortum, company data, shares of the largest actors, pro forma 2016 figures (Fortum incl. Hafslund’s 1.1 million customers)

7. Fortum in 2017 Markets Key figures 2017 Sales EUR 4.5 bn Nordic countries Power generation 45.4 TWh Heat sales 5.0 TWh Electricity customers2.4 million Comparable operating profit EUR 0.8 bn Poland Power generation 0.5 TWh Heat sales 3.7 TWh Russia (PAO Fortum) Power generation 26.3 TWh Heat sales 19.8 TWh Balance sheet EUR 22 bn Baltic countries Power generation 0.7 TWh Heat sales 1.4 TWh Personnel 8,800 India Power generation 0.3 TWh

8. Four Big Trends in Nuclear (R&D)

9. Trend one: Solving the Climate Change Source: IPCC Special Report on Global Warming of 1.5º

10. Source: IPCC Special Report on Global Warming of 1.5º

11. Roughly Nordic electricity & District Heat District heat Key, 1 ball ~= 20TWh = 72PJ Electricity Norway Sweden Finland Denmark Sweden Finland Denmark Hydro Biomass / Waste Wind Nuclear Sold Fossil / Biomass Fossil Export 11

12. Roughly Nordic electricity & District Heat – CO2 emissions District heat Electricity Key, 1 ball ~= 20TWh = 72PJ Norway Sweden Finland Denmark Sweden Finland Denmark Hydro Biomass / Waste Wind Nuclear Sold Fossil / Biomass Fossil Export CO2! 12

13. Roughly Nordic electricity & District Heat – CO2 emissions District heat Electricity Key, 1 ball ~= 20TWh = 72PJ Norway Sweden Finland Denmark Sweden Finland Denmark Hydro Biomass / Waste Wind Nuclear Sold Fossil / Biomass Fossil CO2! Export CO2! 13

14. Roughly Nordic electricity and DH in 2035? District heat Key, 1 ball ~= 20TWh = 72PJ Production / consumption Norway Sweden Finland Denmark Sweden Finland Denmark Hydro X Biomass / Waste X X Wind X New! Nuclear New! ? ? Fossil / Biomass Fossil In total around all countries -1 demand with energy efficiency? +1 with heat pumps But how about the rest? Waste is limited, and should be recycled Biomass should be used for higher value And burning = CO2 Export Heat pumps Export New! New! Import Based on Nordic Energy Technology Perspectives 2016

15. Roughly Nordic electricity & District Heat: Flexibility? District heat Key, 1 ball ~= 20TWh = 72PJ Electricity Norway Sweden Finland Denmark Sweden Finland Denmark Hydro Biomass / Waste Wind Nuclear Sold Fossil / Biomass Fossil Export Variable 15

16. Roughly Nordic electricity and DH in 2035? Security of supply? District heat Key, 1 ball ~= 20TWh = 72PJ Production / consumption Norway Sweden Finland Denmark Sweden Finland Denmark Hydro X Biomass / Waste X X Wind X New! Nuclear New! Fossil / Biomass ? ? Fossil Flexibility from DH? Export Heat pumps Export Variable New! New! Import Based on Nordic Energy Technology Perspectives 2016

17. Of course, it is bigger than DH only, when it comes to heat…

18. Trend two: Long term operation Nuclear Illustrative Programme Presented under Article 40 of the Euratom Treaty - Final (after opinion of EESC)

19. What LTO needs? • Expertise • Materials: metals, concrete and polymers • IC, electrical • Operations • Investments • Replacing old components • Research reactors • The will

20. Trend three: The Costs • The problem with new build in Europe? • Long construction time • High risk for the financier? • High interest rate? Nuclear Illustrative Programme Presented under Article 40 of the Euratom Treaty - Final (after opinion of EESC)

21. Cost-efficiency of nuclear power can be improved 64 x • A car, ca. 30 000 components • Several electronic systems and mechanical components that contribute to safety • Price incl. taxes 19 000 € • 1 valve plug/stem assembly • No nuclear safety classification • Price excl. taxes ca. 21 000 € • Bolts and nuts for flanged connection of pipes • Safety class 2 • Price excl. taxes ca. 20 000 € • Off the shelf without certificates, ca. 160 € • Qualification of an individual cable fitting: 250 000 € • Design basis specification for a simple component: 250 000 € • Qualification of software for a protective relay: 1 000 000 € Source: TVO

22. Trend four: Safety and acceptability • Even amidst all the trends and pressures, the future of the industry depends on the safety • We are under focus all the time and often misunderstood if communication is not sufficient • The fundamentals of safety and hazard must also be understood in relation to other alternatives • Long term safety of deep geological disposal • Acceptability has gone down in Finland • Decommissioning • Timely in Sweden • Fuel cycle

23. Nuclear R&D at Fortum

24. Overview • Improve the profitability of all nuclear business areas with research and development • Structure, three portfolios: • 1. Safe and efficient operations • Both Loviisa and co-owned Swedish plants • 2. Nuclear Business Growth • Develop new products and improve existing ones for Nuclear Services • 3. Future Nuclear Technologies • Guarantee expertise and understanding of technology development • Additionally many forms of co-operation, SAFIR, Energiforsk, NKS, etc.

25. Safe and Efficient Operations • Highlight: • Based on research in our pool side inspection equipment “ATULA” new fuel design is adopted, saving millions • Fuel and reactor physics • Aging management • Nuclear waste and decommissioning • Plant modelling and environmental measurements • Overall safety and design management • Thermal-hydraulic analysis and PRA • Others

26. Nuclear Business Growth • Highlight: • Developed a new way of producing a nano-scale NURES product that improves several features • ADLAS, Licensing and safety design tool • APROS, Process modelling and simulation tool • NURES, Inorganic selective nuclide treatment • Virtual reality and control room services • Decommissioning services • Maintenance concepts • Smaller scale new ideas

27. Future Nuclear Technologies • Highlight: • Our SMR projects and co-operations have contributed to a lot of positive news coverage about possibilities of nuclear in Finland recently, politicians getting interested • SMR • Nuclear CHP • Fusion projects • Experimental designs • Decommissioning

28. SMRs

29. We need to push nuclear technology development • Advanced large reactors • Utilize economy of scale and extensive past experience • How to utilize lessons from recent projects? • Gradual evolution towards simplification, harmonization of requirements, standardization and improved constructability • Small reactors (<300 MWe) • How to break the old rules of economy of scale? • Manageable projects, stepwise investments • Extremely simplified, standardized concepts • Internationally harmonized regulatory approach Future NPP

30. Driving forces of SMR?

31. SMRs - Hot topic in Finland 15.10.2018, News from YLE TV1 at 20:30

32. SMRs for variouspurposes • Traditionaldeployment for energyproduction • Nicheapplications (remotelocations, non-electrical products, e.g. waterdesalination, processheat)

33. Canada: • Well structured nuclear regulator and regulatory system, CNSC performing design reviews for several SMR designs • IMSR (Terrestrial Energy Inc.) phase 1 complete of pre-licensing process • Russia: • Focus on sea-based LWR SMRs, planned to be used in the Russian Arctic • South Korea: • SMART (LWR) construction planned in Saudi Arabia • Sodium-cooled fast reactor development • United Kingdom: • On-going SMR competition • UK SMR (Rolls-Royce) • Westinghouse, NuScale Power, EDF Energy and CNNC working on SMR designs • United States: • NuScale under licensing process • Other significant projects: TerraPower, GE-Hitachi PRISM, X-Energy.. • China: • R&D programs for essentially all major types of advanced nuclear, for instance swimmingpool reactor development • HTR-PM under construction, expected to be completed later this year • India: • Indigenous resources of Thorium • Goals to utilize domestic uranium and thorium reserves • AHWR aims to utilize thorium-based fuel • Argentina: • CAREM-25 is in advanced stage of construction, expected to be operational in 2019

34. SMR R&D at Fortum • Actively monitor international activities, different concepts and participation to various activities • Main focus • Licensing, safety design issues • Development of thermal hydraulic simulation tool (Apros) • SMRs and CHP studies

35. Questions, comments?

36. Thank you!