Nuclear Power Part of the Generation Portfolio of a European Utility

Transcription

1 Nuclear Power Part of the Generation Portfolio of a European Utility Dr Ralf GÜLDNER, Vice Chairman of the Board of Management, E.ON Kernkraft GmbH and President of German Atomic Forum Helsinki, November 23, 2010

2 An overview. Of us. One of the world s largest investor-owned power and gas companies. More than 88,000 employees generated sales of just under 82 billion in Clearly focused player with leading market positions in power and gas and approximately 30 million customers. Operations in more than 30 countries. Created by VEBA-VIAG merger in June Source: E.ON (2010). 2

3 Our business is power and gas. Active along the entire value chain. Our integrated business model in power and gas extends from power generation and gas production to distribution and sales. We combine international strength with local expertise, enabling us to share good ideas across our company. With a balanced energy mix incorporating all generation technologies, we strive to provide a secure, climate-friendly, and affordable supply of electricity. Source: E.ON (2010). 3

4 innovate.on: pioneering new energy. There are promising technologies to stop climate change. Group-wide innovation effort is aimed at finding the best technology options and taking them from the test lab to commercial-scale applications: High-efficiency coal-fired generation Carbon capture and storage (CCS) Next-generation nuclear power Offshore wind Biomethane Concentrated solar power Smart grids Micro combined heat and power Natural gas heat pumps Electromobility 4

5 Since 2000, the number of power plants within the E.ON group has grown significantly 2000 ~ 30 GW Generation capacity (60*) GW Generation capacity *operated capacities 5

6 Additionally, E.ON entered new European markets step by step From the fleet in its home market to affiliates in other markets to a global network 6

7 Conclusion: Functional Fleet Management as the answer to secure the leading position of E.ON's generation business World's leading power & gas company Vision Strong market position 2010 National focus ~ 1996 National focus European Growth 2000 European growth Strong perspective on local markets 2009 Europe.on with first functional mindset Setup of GSCs and bundling of competences in CoCs Functional empower-ment ment of generation Introduction of fleet mindset Securing of local synergies via FMCs 7

8 The Four Fleets Steam Fleet Gas-CCGT Fleet Hydro Fleet Nuclear Fleet 8

9 E.ON 1 st in Germany and among the first in Europe Forsmark 21 units in operation (9 units operated by E.ON, 12 with minority stakes) 5 units shut down / under decommissioning and dismantling Installed capacity 11 GW Employees Availability* 92,8 % Power generation Other shares: Uranium fuel supply - Urenco Waste management - GNS Source: EKK (2010) * NPPs operated by E.ON Kernkraft GmbH 73 TWh Unterweser Emsland Würgassen Stade Grafenrheinfeld Brunsbüttel Brokdorf Hannover Grohnde Krümmel Isar 1 Isar 2 Gundremmingen B und C Ringhals Barsebäck Malmö Oskarshamn E.ON s nuclear portfolio Nuclear power plant operated (9) Nuclear power plant Minority interest (12) Nuclear power plant Decommissioning and dismantling (4) Nuclear power plant Decommissioning and dismantling Minority interest (1) E.ON Head Quarters 9

10 German Energy Concept outlines a comprehensive strategy with important implications for Germany s energy future 1 Renewables 6 E-mobility 2 Energy efficiency 7 Energy R&D 3 Nuclear and fossil-fuel fuel plants 8 Energy supply Federal Cabinet adopted the Energy Concept on 28 September High-performance grid infrastructure 5 Energy-efficient efficient (new- )building 9 Transparency & acceptance Source: German Federal Government (September 2010) 10

11 Highlight on government's agreement to extend operating times of nuclear power plants Operating times of German nuclear power plants will be extended by an average of 12 years by 8 years (7 npp) by 14 years (10 npp) The agreement does place some significant economic burdens on the nuclear power plant operators fund for the development of renewable forms of energy additionally collected nuclear fuel tax from 2011 to 2016 Regulations on safety requirements will be expanded "in the context of the Atomic Energy Act amendment and updated to the highest technical level. Source: German Federal Government (September 2010) 11

12 Nuclear Energy in the European Union 15 member states are using Nuclear Power 144 NPP generate 1/3 of total EU electricity production 131 GWe net installed in 2010 Age of plants 25 years on average Nuclear energy is the most significant source of carbon-free base-load electricity Electricity production from nuclear avoids 700 Mio. tons of CO 2 EU-MS with NPP EU-MS without NPP Sources: Eurostat (2010); IEA (2008); IAEA (2009), PRIS (2009),VGB (2010). 12

13 More than 50 % of Europe's generation has to be replaced by 2030 Development of generation from existing power plants in EU-27 (excl. replacement) GWh/a Demand groth 1.5 %/a Demand groth 0.5 %/a 65 % 57 % Hard coal Lignite Gas/Oil REN Hydro Nuclear Sources: CERA, EWEA, E.ON (2010). 13

14 European Commission presents its new strategy towards top priorities identified Energy savings Pan-European integrated energy market with infrastructures 27 States, one voice on energy in the world Leadership in energy technology and innovation Safe, secure and affordable energy through active consumers Günther Oettinger The energy challenge is one of the greatest tests for us all. To have an efficient, competitive and lowcarbon economy we have to europeanise our energy policy and focus on a few but pressing priorities. Ambitious energy and climate-change objectives for 2020: Reduce GHG emissions by 20 %, Increase the share of REN to 20 % and Make a 20 % improvement in energy efficiency. Sources: Energy strategy 2020 (November 2010) 14

15 Europe: Various milestones give strong backing for nuclear Aim of the EU-KOM till 2020: 2/3 of the electricity production should be carbon free (incl. nuclear energy) Share of nuclear generation in EU s energy mix should be kept at actual levels Jose Manuel Barroso Nuclear energy could contribute to Europe's battle against climate change, because nuclear energy generates at present 2/3 of EU's CO 2 free electricity. Nuclear plays an important role in the transition to a low carbon economy Sources: SER II/PINC: 5th Illustrative Nuclear Programme (2008). 15

16 Nuclear New Build in Europe Lithuania New build of up to 3,4 GW at Ignalina, COD 2020 Netherlands New build planned at Borssele site UK Project development for several new NPP (in sum approx. > 10 GW by 2025) France NPP under construction in Flamanville Project development for Penly 3 Plans for additional NPP Slovakia Completion of NPP Mochovce 3 and 4 Planning for 2 new units at Bohunice Switzerland Plans for up to 3 new NPP units Slovenia New build of 1-2 units at Krsko site planned, COD after 2020 Italy New build of several NPP units under investigation Finland NPP Olkiluoto III under construction, COD Project development for to 2 NPP Russia/Kaliningrad Plans for 2 Units, COD Poland, Belarus, Estonia New build planning of at least one NPP each Czech Republic New build of Temelin 3&4 planned Hungary New build planning at Paks site Romania Project development of Cernavoda Units 3 and 4 Bulgaria Planning for 2 new NPP units at Belene Turkey Planning for NPP at two sites Source: E.ON (2010). 16

17 Objective: climate precaution We agree that deep cuts in global emissions are required according to science, and as documented by the IPCC Fourth Assessment Report with a view to reduce global emissions so as to hold the increase in global temperature below 2 degrees Celsius, and take action to meet this objective consistent with science and on the basis of equity. Copenhagen Accord of 18 December 2009 To do so requires annual emissions to be reduced to some 13 Gt of CO 2 per year by 2050 Source: UNFCCC United Nations Framework Convention on Climate Change (2009). 17

18 Challenge 2: sustainable energy mix is not just about climate precaution Security of supply Environmental soundness Competitiveness Nuclear can contribute to these goals in a sound an well balanced energy mix Source: EKK (2010). 18

19 Nuclear has the potential to play a very significant role in the decarbonisation of electricity generation max. g(co2 equivalent)/ kwh min. g(co2 equivalent)/kwh Lignite Hard coal Natural oil Natural gas 399 Photovoltaic Wind Hydro Considering the whole lifecycle emissions of energy sources nuclear is in the same range as wind or hydro power Nuclear Sources: PSI (2004, 2007); ILK (2004); IER (1997, 2000); EU (2007); Öko-Institut (2006) 19

20 E.ON will achieve a >50% reduction of specific CO2-emissions in Europe already by 2020 E.ON s CO 2 emissions in Europe [g/kwh] Clear commitment >50% Intentional shift of original 2030 E.ON target to 2020 for European portfolio Explicit commitment and evident contribution towards the climate and energy targets set forth by the EU CCGT reference Target level in 2020 far below carbon intensity of modern gas-fired power stations 1 Basis for 1990 was adjusted to reflect recent divestments & acquisitions 2 An extension of nuclear lifetimes for Germany is assumed 20

21 Precondition for every engagement in nuclear new builds is a reasonable framework Strategic criteria Market attractiveness (returns, growth, regulation, country risk, efficient licensing, political and public acceptance). Target attractiveness (asset quality, market position, management quality). Value creation potential (cost reduction, integration benefits, transfer of best practice). Vendor selection criteria Demonstrated capability to deliver NPP projects on schedule Well established supply chain Competitive conditions in terms of costs and risks Technically convincing product meeting state of the art safety requirements Source: EKK (2010). 21

22 Adequate framework given E.ON is willing to invest in New Nuclear Capacities Focus of current activities: UK Horizon Nuclear Power: E.ON/RWE-Joint-Venture develops two sites, Wylfa as lead site and Oldbury as second site Transparent process for Vendor Selection (EPR from AREVA and AP1000 from Westinghouse) Next steps: approval process, construction and operation Finland Fennovoima: Strategic cooperation with Finnish companies Finnish Parliament s decision to endorse Fennovoima s proposal to build a new nuclear power plant UK D S E.ON Generation FIN Other countries such as France, Italy and Sweden F I Source: EKK (2010). 22

23 Spotlight on UK: Breakthrough on the way to next generation of NPP Joint Venture of E.ON and RWE (Horizon Nuclear Power - HNP) developes sites for Nuclear New Build in Wylfa and Oldbury Draft National Policy Statement of Department of Energy and Climate Change confirms the suitability of sites and states that sites are needed to reach UK low carbon policy HNP plans Nuclear New Build with a minimum capacity of MW Belfast Wylfa Edinburgh Next steps: Focussing on vendor selection (early 2011), licensing process/gda (2011), site application (2011/12) and construction (2013/14) Oldbury London Source: EKK (2010). 23

24 Spotlight on Finland: Finland power markets offers an attractive and stable market environment Significant market size within Nordic: 3 rd largest generation market 2 nd largest downstream market largest gas market Growing demand for both power and gas Proximity to E.ON s activities in Sweden, the Baltic states and Russia Political atmosphere in favour of developing the energy sector Stable and reliable investment framework - an attractive growth market 24

25 Spotlight on Finland: E.ON is willing to contribute to Finland's share in achieving ambitious EU energy targets Security of supply Competition Climate protection EU targets Possible E.ON contribution Investments in nuclear generation heat production and distribution Strengthen competition Target of Top 5 market position in Finland by 2020 Renewable energy investments in wind, biomass, waste Energy efficiency e.g. sustainable city 25

26 Spotlight on Finland: E.ON is already active in Finland today which provides a basis for further development E.ON activities in Finland 100 % E.ON ~ customers E.ON share 20% hold by E.ON Ruhrgas Kainuun Energia 50,5 % E.ON ~ 60,000 customers 150 GWh heat prod. Karhu Voima 100 % E.ON 14 industrial cust. E.ON share 34% hold by E.ON Sverige Generation Fully support Fennovoima project with E.ON group wide expertise Investments in renewable energy and other highly efficient power plants Retail/ Sales Increase retail customer base through organic growth and acquisitions Evaluation cooperation opportunities with municipal and/or regional utilities Increasing overall E.ON brand awareness Position E.ON as partner for municipal to develop sustainable city concepts Heat Further opportunities for E.ON Growth in heat production and distribution 26

27 Spotlight on Finland: Current status of nuclear power in Finland Nuclear is generated by two companies Loviisa 1 2 in Loviisa (8% share of el. generation) 2x 490 MWe, WWER, commissioned in 1978, 1980 Operated by Fortum (former IVO, established in early 1930 s); state owned company, partly privatized Owns nuclear assets in Sweden (Oskarshamn) Olkiluoto 3 Olkiluoto 1 2 Olkiluoto 1 2, OL 3 in Eurajoki (30% share) OL 1 2: 2x860 MWe, ASEA BWR, commissioned in 1980, 1981 Operated by TVO TVO, established in late 1960 s; private company owned by mainly forest industry OL 3: 1,600 MWe EPR under construction since 2005 Loviisa

28 Spotlight on Finland: Fennovoima s ownership structure 48 firms 15 firms local energy utilities industrial, merchandise and service companies 55% 45% Power Company SF 66% E.ON 34% Fennovoima Fennovoima will be NPP owner and operator Generation is sold to shareholders at cost (Finnish Mankala principle); shareholders are committed to cover all generation costs E.ON acts as Fennovoima s nuclear backbone 28

29 Spotlight on Finland: Fennovoima Project - Two alternative greenfield sites Simo and Pyhäjoki Sufficient land area secured Sufficient land area acquired Conventional permitting completed in 2010 Simo Pyhäjoki Olkiluoto 3 Olkiluoto 1 2 Oulu OL 4?? Environment and safety Both sites are environmentally feasible and safe for new nuclear power plant Regions support Fennovoima Both municipalities and regions support Fennovoima s project Site selection Fennovoima will select the site in early 2011 Helsinki Loviisa

30 Spotlight on Finland: Positive decisions taken on Fennovoima s application October 2009: The Radiation and Nuclear Safety Authority Finland (STUK STUK) stated that Fennovoima has all the needed qualifications to manage and construct a NNB project in Finland May 6 th, 2010: The Finnish Government Finnish Government made a positive Decision-in-Principle According to this DiP, Fennovoima may construct a one unit NPP up to 1,800 MWe has to apply a construction license in five years (until June 30 th, 2015) present an agreement with Posiva on final disposal of spent fuel or start an environmental impact assessment process on its own repository in six years (until June 30 th, 2016) The Government s DiP forms excellent conditions for a successful project. July 1 st, 2010: The Finnish Parliament Finnish Parliament approved Government decision by votes

31 Spotlight on Finland: Way forward Political & regulatory framework is backing new nuclear projects in Finland Strong political support (Government, Parliament) for the Project positive DiP Stable regulatory framework and an experienced regulator Two sites preselected and approved by STUK Strong communal support on each site Project is not the First of its kind NNB project in Finland (OL3) Challenging but still realistic schedule to start operation in

32 Conclusions (1) The energy mix of the next decades will be defined today. Thus countries have to set up reliable and efficient frameworks to enable the necessary investments. (2)According to the significantly increasing challenges for energy supply worldwide, it is vital to consider every option, which can contribute to a sustainable energy mix. (3)Nuclear alone is not the solution for all problems but there will be no sustainable solution without nuclear. 32

33 Thank you for your attention! 33

34 Back-up 34

35 Nuclear installed capacity projected to increase significantly (1) NEA s Low scenario projects an increase of just over 200 GWe up to 580 GWe ,400 NEA s High scenario projects an increase just over GWe up to 1,400 GWe GWe Low scenario High scenario In NEA s projections, CO 2 emissions would be reduced by up to 12 Gt/yr in 2050 Sources: NEA/OECD, Nuclear Energy Outlook (2008). 35

36 Nuclear installed capacity projected to increase significantly (2) IEA s Baseline scenario projects an increase of just 230 GWe up to 610 GWe ,000 IEA s Blue scenario projects an increase of just 820 GWe up to 1,200 GWe IEA s hi NUC scenario projects an increase of just 1,600 GWe up to 2,000 GWe GWe ETP BLUE Map In IEA/ETP s projections, CO 2 emissions would be reduced by more than 12 Gt/yr in , WEO REFERENCE & ETP BASELINE scenario Blue ETP BLUE hi NUC Sources: IEA World Energy Outlook (2009), IEA Energy Technology Perspectives (2008 & 2010) 36

37 Final disposal of radioactive waste is technically feasible and safe but political decisions have to be taken the technology is available and could be put into practice quickly. ( ) Unfortunately, Member States have so far failed to use this technology by lack of political decision. Andris Piebalgs, Member of the European Commission, responsible for Energy, Brussels, 28th February 2005 Final disposal of high-level radiactive waste: Finland and Sweden to be the first, thanks to political decisions Final disposal of low-level and medium-level radioactive waste: Approved and in operation worldwide Technology for safe final disposal: Available Responsibility: Clarified Source: EKK (2010). 37

38 Different load ranges require different technologies nuclear economically most attractive for base load Index Long-term base load (8,000 h/a) costs 60 CCGT (20 /t CO2) CCGT (40 /t CO2) Hard Coal (20 /t CO2) Hard Coal (40 /t CO2) Nuclear Source: E.ON assumptions (2010). 38

39 Future Technology Generation I Generation II Nearly all in Units in operation Fusion Generation IV future concepts, nuclear hydrogen Generation III (ABWR, EPR, KERENA, AP1000) Source: EKK (2010). Nuclear may be foreseen for a wide range of non electric applications such as hydrogen production, nuclear seawater desalination, CHPG 39

40 Safety first Safe operation of our plants has first priority and is a precondition for all new build activities Safety level of plants Continuous intvestment Standards und philosophy 2010 Staff WENRA IAEA WANO State control/transparency Experience and exchange Source: EKK (2010). 40

41 Spotlight on Finland: Finnish Nuclear licensing process Decisive statements Decision makers Environmental Impact Assessment STUK, Ministry of Environment Ministry of Employment and Economy Fennovoima schedule February 20, 2009 STUK, Municipality Decision-in-Principle Government, Parliament July 1, 2010 STUK Construction License Government Application end of 2013 Granting expected mid 2015 STUK Operating License Government 2019 Source: FENNOVOIMA, E.ON (2010). 41

42 Challenge 1: worldwide strongly growing demand of energy European Union % + 75 % + 21 % Index Index Primary PEC Electricity CO2 2 Energy Generation emissions Consumption World population to increase by 2.25 billion over the next 40 years Source: IEA World Energy Outlook (2010). UN Population Division (2010) 42

43 The energy of the future? We re making it happen. With our wide range of research and development (R&D) activities we ve long pursued two objectives: 1. Develop key technologies Deploy research results in operational applications and accelerate their transition to commercial viability 2. Optimize our existing facilities and processes Foresee changes and find innovative solutions to operational challenges E.ON also supports energy research at universities: Basic research at universities Develop new ideas and solutions for the energy challenges of the future R&D staff and expense R&D staff R&D expense Total expense 1, in millions. 2 R&D expense including support for universities and demonstration projects. Source: E.ON (2010). 43