Nuclear Power in the European Union

1. Nuclear Power in the European Union Post-Oil Europe Conference on European energy policy options Antony Froggatt a.froggatt@btinternet.com Tallinn, 27th October 2006

2. Summary of Presentation • Historical Development • Aging of Nuclear Reactor • Generation III reactors • Renewed Interest in Energy • Views on New Investment • Nuclear’s Dream Support Programme • Conclusion

3. Global Reactors and Installed Capacity Source: Mycle Schneider

4. Reactors Under Construction (2006)

5. Global Current Status • Not Global Industry • Of the 130-180GW of new capacity each year, 1.5-2.5% is nuclear • 22 of last 31 reactors completed were in Asia

6. EU Nuclear - Development • UK first country to develop commercial nuclear electricity, in 1957 • 147 reactors in operation in EU. Largest nuclear ‘union’ in the world, 8% more than US, three times more than Japan and seven times more than Russia. • 4 countries in world produce 50% or more of electricity from nuclear, all in EU

7. History of New Reactor Completions in the European Union

8. Status of Nuclear Power in Europe

9. Reactors to Be Closed

10. Operating Reactors in Europe

11. Reactor Designs • 50 years of commercial electricity generation. • As with all other technologies considerable changes have occurred in the design, size and use of the nuclear power plants. • Reactor designs have been grouped into various generations: I, II, III, IV

12. Age of Global Nuclear Fleet

13. Reactor Ageing • Materials and components are affected by temperature, pressure, neutrons, ph, mechanical pressures. • These external forces can impact upon the ability of components to function as designed. • Ageing processes are difficult to detect because they usually occur on microscopic level. • Inspection of materials most affected by external pressures often difficult. • Ageing of some components is expected and leads to routine replacement – steam generators – others not.

14. Davis Besse • Cracking thought to begin 1990 • Not detected in numerous inspections • 2001 US NRC ordered inspections in all Vessel Heads • Discovered by accident – March 2002 • Whole vessel head corroded, only inner lining stopped splitting

15. Typical bathtub-curve of typical failure rates at a Nuclear Power Plant

16. Implications of Ageing • Growing problem as reactors get older • Conflict with utilities desires for plant life extension/increase output • Liberalised market means desire to cut costs to increase profitability lead to reduced maintenance.

17. ‘New Threat’ - Terrorism • Nuclear facilities have been targeted; South Africa, Spain • Post 2001, new fears that nuclear facilities become terrorist target. • January 2002 President Bush said that U.S. forces “found diagrams of American nuclear power plants” in al-Qaeda materials in Afghanistan. • Other recent examples of apparent threats: Australia, Russia, UK

18. Technical Issues • Containments not built to withstand large aircraft crash. • Possible implement barriers; no fly zones, anti-aircraft guns. • Other areas of fuel cycle also, even more, vulnerable, e.g. spent fuel stores

19. Generation III • Evolutionary design, largely modification of operational reactors, • Some are operational ABWRs in Japan. • Others under-construction, EPR (Finland), • Others proposed: • AP1000 (Westinghouse) • Pebble Bed Modular Reactor (ESKOM) • APWR (S Korea)

20. European Pressurized Water Reactor • No reactor in operation, but problems already visible with construction. • Finish Safety Agency Report, released in 2006 highlighted a number of problems, including. • ‘The tight cost frame is also a problem in selecting and supervising subcontractors. They have very often chosen a sub-contractor who has given the lowest tender’ • ‘organizations participating in the Olkiluto-3 project have not achieved a shared view of the emphasis on safety awareness in the construction phase’. • ‘the time and amount of work needed for the detailed design of the unit was clearly under-estimated when the overall schedule was agreed on’. • ‘quality control problems in with the reactor base slab’

21. AP 1000 • Not even under construction, but concerns have been raised, in particular in relation to safety vs economics. • AP 1000 is an expanded version of the AP600, which was licensed but never built. • It was expanded to improve the economics, as it has nearly doubled the output, with only marginal increase in construction costs. • UCS claim that this has resulted in, AP-1000 has a ratio of containment volume to thermal power below that of most of current PWRs, increasing the risk of containment overpressure and failure in a severe accident

22. New Interest in Energy Policy • Security of supply concerns • Growing awareness and concern over climate change and environmental considerations • Need for significant new investment

23. Security of Supply

24. IEA Global Business As Usual Energy Demand Forecast (MToe)

25. Global Nuclear Programme • Nuclear power uses uranium, which is limited. • Current resources estimates suggest that uranium will be depleted, at current use levels, quicker than the other major fuels. • A rapid increase in the use of nuclear will accelerate the depletion rate of uranium • Decreasing uranium reserves lead to plutonium economy - Generation IV reactors.

26. Climate Change:

27. Socolow – Climate - Wedges

28. Investment Needs ($ billion in 2000 dollars)

29. Views on New Investment and Nuclear Power • Key actors have differing views, these are: • Nuclear Vendors • Financial Community

30. Nuclear Industry • Currently, very active in promoting their products and claim that: • GE: 66 GW of new capacity to be ordered by 2015 • Areva: 150-250 GW by 2030 • Westinghouse: 20 GW in India – 1 GW each year. • NNC (China): 30 GW by 2020 • World Nuclear Association • ‘nuclear power in the 21st Century will be economically competitive even without attaching economic weight to the global environmental virtues of nuclear power or to national advantages in price stability and security of energy supply’

31. Financial Community • Standard and Poors • ‘If new construction of nuclear power is to become a reality in the U.K., Standard & Poor's has significant concerns over the future structure of the generating industry. In particular, the potential for increased regulation of the liberalized generating industry, a higher level of political interference in the market structure, and the ongoing prospects for nuclear power in a competitive power market. Standard & Poor's expects that investment in nuclear power will rely on the long-term sustainability of high electricity prices in the U.K. energy market • Developing new nuclear generation in the deregulated European market environment is a high-risk venture, given the long construction times and high capital costs. Siting issues are likely to be more sensitive today than in the 1970s and 1980s when most reactors were built. Furthermore, political support will remain fragile to nuclear safety performance worldwide. Another Chernobyl-like accident can rapidly cool the current cordial sentiments. Fundamental issues, such as the final storage of nuclear waste and far-reaching social consensus, are still likely to be required before a potential large-scale renaissance can happen

32. UBS • a potentially courageous 60-year bet on fuel prices, discount rates and promised efficiency gains • HSBC • Hence this financial risk [new build] coupled with unforeseen construction delays, the risk of cumbersome political and regulatory oversight, nuclear waste concerns and public opposition could make new nuclear a difficult pill to swallow for equity investors.

33. The US Nuclear Support Programme • In the US the 2005 energy Act allocated around $12 billion for nuclear new build, through, production tax credits, loan guarantees, research and development, decommissioning support and framework against regulatory delays. – the nuclear industry dream package.

34. Targeting of Public Funds • Analysis undertaken by Amory Lovins suggests: • Every $0.10 spent on a new nuclear kWh could have resulted in: • 1.2-1.7kWh of Windpower • 0.9-1.7 kWh of gas fired • 2.2-6.5 kWh of co-generation • Several to 10+kWh of energy efficiency. • There is an opportunity cost of different support schemes.

35. Prospects • 148 reactors operating in 13 EU Member States • Installed capacity is 130.5 GW • Average age of reactors is 22 years. • Assuming operating life of 50 years just to maintain current level of nuclear in EU, there would need to be 3 new EPRs connected to the grid every year. • At best 2 will connected in next 10 years

36. Conclusion • Nuclear Power has numerically started to decline. • New Government interest in energy policy, for security of supply and environmental reasons • Unprecedented level of investment needed in coming decades, especially in power sector • How much new nuclear will depend on the subsidy/support schemes introduced • These schemes will divert funding/attention away from real solutions, energy efficiency and renewables