Nuclear Growth at Home and Abroad

Transcription

1 Nuclear Growth at Home and Abroad Building the Next Generation of Nuclear Energy Edward Kee Vice President NEI Nuclear Energy Assembly Charlotte - 22 May 2012

2 Disclaimer The slides that follow are not a complete record of the presentation and discussion The views expressed in in these slides and the discussion today are mine My views may not be the same as the views of NERA s clients or my colleagues 1

3 Topics Global league tables Electricity industry & nuclear business models Insights 2

4 Global nuclear power Advanced LWR designs AP1000? CPR1000 VVER-1200 EPR ABWR APR1400 VVER-1000 OPR 1000 APWR CAP1400 ESBWR In operation Under construction Planned Proposed Source: NERA global nuclear power database 3

5 Global nuclear power (same data by country) China Russia India USA Saudi Arabia Korea Japan UK South Africa Turkey Vietnam UAE Iran Canada Finland Poland Lithuania Jordan France Belarus Indonesia Egypt In operation Under construction Planned Proposed Source: NERA global nuclear power database 4

6 Nuclear development factors Politics & public opinion Electricity industry & nuclear business model Electricity fundamentals Merchant Regulated Government 5

7 Merchant nuclear plants This is really hard none have been built Project and market risk assumed by developer Project cost & completion risk - before COD Project availability and market price risk - after COD Project finance approach strained by High capital intensity and large project size Long development and construction period Lack of revenue certainty NPV / IRR / payback period for investors/lenders 6

8 FOAK issues add difficulty Today Later Concept FOAK Learning Mature Unit Cost Conceptual cost estimates Actual cost first unit EPC contracts Detailed engineering & licensing Learning on additional units reduces risk, time and cost Long production lines for standard unit components Years 7

9 Regulated nuclear plants Ratepayers take most project and market risks, with oversight by regulator (long-term view) But not all risk - in 1980s, ex post prudence reviews shifted project (and market) risks to shareholders Regulatory approach in US reflects lessons learned in earlier nuclear cases Resource planning / IRP processes Regulatory oversight of projects 8

10 Government nuclear plants Government assumes project and market risk May mean faster decision-making Big purchases by creditworthy buyer may mean strong bargaining position with vendors Buyers want power and non-power outcomes Develop local jobs and skills Develop industrial capability / join global supply chain Implement energy / climate change policy 9

11 French nuclear fleet 8,000 70,000 Annual MWe added (by COD) 7,000 6,000 5,000 4,000 3,000 2,000 1, Framatome founded; obtains Westinghouse PWR license Seven 900 MWe units ordered OPEC oil crisis; Sixteen 900 MWe units ordered Ten 900 MWe units and twenty 1,300 MWe units ordered 60,000 50,000 40,000 30,000 20,000 10, Cumulative MWe Annual Cumulative Source: NERA global nuclear power database 10

12 National nuclear power champion Decide to adopt nuclear power Establish state-owned nuclear entities Acquire nuclear technology Build nuclear plants for government utility Gain experience and build supply chain Compete in global market Act as vendor, investor, maybe even operator 11

13 National nuclear fleet Invest in capability Build fleet Concept FOAK Learning Mature Unit Cost Conceptual cost estimates Actual cost first unit EPC contracts Detailed engineering & licensing Learning on additional units reduces risk, time and cost Long production lines for standard unit components Years 12

14 State Capitalism National Corporations & State-Owned Enterprises State domination of markets over long-term Gov t - to - Gov t deals with multiple objectives Strategic objectives more important than profitability Published by Portfolio/Penguin in May

15 Insights New nuclear outside US; large government role Vendors have big nuclear tenders on horizon Merchant nuclear needs low project cost/risk, good electricity fundamentals, and capital National nuclear vendors have increasing role Buyer need for non-power objectives and investment capital may mean G - G deals 14

16 Contact Us Edward Kee Vice President NERA Washington, DC +1 (202) Copyright 2012 National Economic Research Associates, Inc. All rights reserved.