The Challenges Facing New Generation Capacity

1. The Challenges Facing New Generation Capacity An overview and discussion Paolo Gaio Westinghouse International NPP

2. The Nuclear Renaissance Has Arrived • However, it must not be forgotten that the Renaissance would not be possible without the continued safe and effective operation of the current worldwide fleet • Capacity factors are up and safety-related occurrences are down, providing the most economic baseload generation in the world. THIS IS BOTH A SHARED RESPSONSIBLITY AND ACKNOWLEDGEMENT TO ALL OPERATORS AND VENDORS

3. AP1000 Created and Designed to meet Customer Requirements • AP1000 Was Developed To Meet Advanced Light Water Reactor Utility Requirements (ALWR URD) • Issues were discussed with EPRI ALWR Staff and Utility Staff • All issues were resolved  Sometimes the design was changed  Sometimes URD requirements were changed

4. AP1000 Satisfies EUR • AP1000 assessed against EUR, • AP1000 Assessment detailed and thorough • Over 5000 requirements assessed • EUR Certified on 15 May, 2007

5. Simplification and Standardization are Key to Future Nuclear Plant Construction • Simplicity and standardization in Designthrough reduced number of components and bulk commodities • Simplicity in Safety through use of passive safety systems • Simplicity in Construction through modularization • Simplicity in Procurement through standardization of components and plant design • Simplicity in Operation and Maintenance through use of proven systems and components, and man-machine interface advancements Improved Safety, Competitive Economics and Good Performance

6. Essential Change: The New Licensing Process – 10 CFR 52 Early Site Permit (ESP) CombinedConstructionand OperatingLicense(COL) Construction I TAAC met Operation Design Certification AP1000 Certified

7. Supply Management Challenges • Abrupt, expanding demand; diminished supply chain • Long lead times for specialty steel forgings, SG tubing • Logistics of moving large components around the world • Competition with supply to other industries and competitors Standardized plant advantages - efficiency, lower costs: • Opportunity to establish a learning curve • Multiple standard plants = higher production volumes

8. Nuclear is a Local Project Too • Opportunities for local industry - Craft construction labor and materials - Module fabrication - More engagement according to capability - Operation. • Possibly technology transfer, as in: - Republic of Korea - China.

9. Project Socio-Economic Impact • Locally: - Develops local artisan force - Creates higher skilled, higher paying jobs - Ripple-effect to local economy.

10. Human Resource Challenge • After the 1970s, nuclear business retrenched, hiring stalled • Declining enrollment in nuclear engineering schools • Legacy: Gap in the US nuclear work force. Average age, 48 years. But now… • Nuclear school admissions growing • Opportunities for new graduates at Westinghouse - 500 new graduates hired over past 5 years - Expect 150 more/year through at least 2010 - Plus experienced hires • US NRC, 200-400 to be hired/year through 2008

11. Modular Construction Allows More To Be Done in Parallel Resulting in Shorter Construction Schedule 36-48 month construction period for the Nth plant, and financing costs that are >25% lower than earlier generations

12. New Designs Have to Deliver • Cost basis that can compete with other energy sources - High degree of certainty for schedule and cost - Reduced construction time and cost • Increased levels of safety • Easier to operate and maintain • Standardized plants • Expanded Grid Capability

13. The Current Position for Grid operators • Grid operators need to maintain the quality, the voltage and frequency of the electricity generated under increasing the pressure of: • Increasing Electrical Demand • Aging Generation Plant & Transmission Infrastructure • Pressure to Reduce CO2 – Driving Renewables • Result – More Flexible Generation Required

14. Traditional Generation Mix • Base load typically comprises of Coal and Nuclear – Plants which have long start up times high capital costs and low fuel costs. • Peak load is usually supplied from gas fired and hydro plants that are must faster to come online and have increasingly higher fuel cost

15. Future Generation Mix • Increase in Renewable Generation • Wind & Solar has Transient Output • There is extensive evidence of large-scale mid-winter weather in which very little wind generation was available across Northern Europe Oswald J et al, ‘Will British Weather Provide Reliable Electricity?’ 2008 and Bach P-F

16. AP1000 - Smarter Generation • The AP 1000 uses ‘Grey Rods’ to control the reactor ouput – Not water boronation. • This provides the ability for: • 5% per minute ramp changes • 50% Load change per day and a 2 hour linear ramp characteristic and this is in addition to… • Follow load changes of less than 10% peak-to-peak at a rate of 2% per minute of rated load • (That’s equivalent to 12MW in 30seconds) Full Generation Flexibility while maintaining a 60 Year life

17. Questions ?