PP571.1

The Prospects for New Nuclear The Prospects for New Nuclear ConstructionConstruction

Eugene S. GrecheckEugene S. GrecheckVice PresidentVice President Nuclear Support Services Nuclear Support Services

ANS Virginia Section MeetingANS Virginia Section MeetingMarch 16, 2004March 16, 2004

PP571.2

What You May Have HeardWhat You May Have Heard(or what happened to the predictions of 1000 (or what happened to the predictions of 1000 reactors by 2000?)reactors by 2000?)

No new nuclear plant orders since 1978 Licensing and construction takes too long Last new plant began operation in 1996 Construction and operations and

maintenance costs are too high Licensing is unpredictable

PP571.3

If That’s True, Then…………...If That’s True, Then…………...

Many existing units will shut down prematurely

Licenses will not be renewed No new units will ever be built Nuclear will fade from the nation’s energy

portfolio

So…… IS IT TRUE????

'80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02

55

60

65

70

75

80

85

90

95

Ca

pa

cit

y F

ac

tor

(%)

Industry Capacity FactorIndustry Capacity FactorContinues at Record LevelContinues at Record Level

86.8% in 1999

89.6% in 2000

90.7% in 2001

91.5% in 2002

Nuclear Energy Institute

Production Costs ShowProduction Costs ShowSteady, Sustained ImprovementSteady, Sustained Improvement

'81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01

1.5

2

2.5

3

3.5

Pro

du

ctio

n C

ost

(cen

ts/k

Wh

)

2.09 cents/kWh in 1998

1.90 cents/kWh in 1999

1.81 cents/kWh in 2000

1.68 cents/kWh in 2001

(production cost in cents per kilowatt-hour)

PP571.6

US Electricity Production Costs (1981-2002)US Electricity Production Costs (1981-2002)in 2002 cents per kilowatt-hourin 2002 cents per kilowatt-hour

0.0

2.0

4.0

6.0

8.0

10.0

12.0

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

Nuclear 1.71

Coal 1.85

Gas 4.06

Oil 4.41

Source: RDI /EUCG. Converted to 2002 dollars by NEI.

PP571.7

Industry Safety Performance shows steady Industry Safety Performance shows steady Improvement………………………Improvement……………………… Number of Unusual Events Reported to NRC Number of Unusual Events Reported to NRC (1989-2002)(1989-2002)

151170

135

10392

66 63

4026

3418 13 14

197

0

20

40

60

80

100

120

140

160

180

200

89 90 91 92 93 94 95 96 97 98 99 2000 2001 2002Source: NRC

Note: A Notification of Unusual Event for power and non-power reactor licensees is a condition involving potential degradation of the level of plant safety that does not represent an immediate threat to public health and safety.

769 780

577

641674

728754

500

600

700

800

1990 1994 1998 1999 2000 2001 2002

Nuclear Plant Output:Growth During the 1990s

Equivalent to 26 new 1,000-megawatt power plants

Year

Bill

ion k

Wh

PP571.9

License Renewal: License Renewal: Unlocking Additional ValueUnlocking Additional Value

Already filedCatawba 1,2McGuire 1,2Fort Calhoun

Announced 2003Arkansas Nuclear One Unit 2Cook 1,2Browns Ferry 1,2,3

Announced 2004Millstone 2,3Nine Mile Point 1,2Brunswick 1,2Beaver Valley 1,2Davis-BessePilgrim

ApprovedCalvert Cliffs 1,2Oconee 1,2,3Arkansas Nuclear One Unit 1Hatch 1,2Turkey Point 3,4North Anna 1,2Surry 1,2Peach Bottom 2,3St. Lucie 1,2

Already filed (cont’d)Robinson 2V.C. Summer GinnaDresden 2,3 Quad Cities 1,2Farley 1,2

Source: NRC

Updated : October 2003

Announced 2005Entergy PlantEntergy Plant

Announced 2006Susquehanna 1,2Entergy PlantWolf Creek

PP571.10

Today’s State of the Nuclear IndustryToday’s State of the Nuclear Industry

440 commercial reactors in 31 countries 103 commercial reactors in the U.S. Overall, 16% of the world’s electricity 15 countries: Over 25%, some over 70% 31 new reactors under construction in

other countries - but none in the U.S. …….yet!

PP571.11

96

231

313

393

0

50

100

150

200

250

300

350

400

450

2005 2010 2015 2020

Years

Gig

aw

att

s..

.

Source: EIA Annual Energy Outlook 2001

Projected U.S. Energy GrowthProjected U.S. Energy Growth

PP571.12

Capacity Brought on Line by Fuel Type Capacity Brought on Line by Fuel Type (1950-2002) (1950-2002)

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

Na

me

Pla

te C

ap

ac

ity

MW

Other Petroleum Hydro Nuclear Gas Coal

Source: RDI PowerDat database. Last updated 9/15/03.

PP571.13

Current U.S. Electricity GenerationCurrent U.S. Electricity GenerationFuel Diversity (2002)Fuel Diversity (2002)

Hydro8%

Natural Gas17%

Oil2%

Renewables3%

Nuclear20%

Coal50%

Source: NEI

Emission-free sources

50,000 MWe of New Nuclear!50,000 MWe of New Nuclear!

30%non-emitting

30%non-emitting

Oil, Gas & Coal

Hydro & Renewables

New Nuclear Capability (50,000 MWe)

Enhanced Nuclear Capability (10,000 MWe)

Existing Nuclear Capability

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

2000 2020

Billion

kW

h

PP571.15

What Has Changed---and Is It What Has Changed---and Is It Enough?Enough?

New licensing process New plant designs More reliable and efficient operation

PP571.16

New NRC Licensing ProcessNew NRC Licensing Process

NRC revised its regulations--Part 52--for new nuclear plants over a decade ago

Part 52 has three elements:

– Design certification

– Early site permitting

– Combined license

PP571.17

Early Site Permit

Design Certification

Combined LicenseIssued

Construction ITAAC Operation

Apply forConstruction

PermitConstruction

Apply for Operating

License

Operating License Issued

Operations

OLD LICENSINGPROCESS

NEW LICENSINGPROCESS

NRC Licensing Process

License Issued BEFORE Large Capital Investment

License Issued AFTER Large Capital Investment

Construction Permit Issued

What this Process ChangesWhat this Process Changes

Licensing decisions will be made BEFORE large capital investments are made.– Safety and environmental issues will be resolved before

construction starts– NSSS and BOP design will be well developed before

COL application is submitted– Plants will be almost fully designed before construction

starts Result: High confidence in construction schedule

and cost control

PP571.19

Design CertificationDesign Certification Design Certification addresses design issues

early in the process Plants are designed to be constructed in less

than 48 months Each manufacturer’s plants will be a standard

certified design 3 Design Certificates have been issued, 1 active

application in review

PP571.20

Early Site Permits (ESP)Early Site Permits (ESP)

Obtaining an ESP allows a company like Dominion to “bank” a site for 20 years, with an option to renew

If and when market conditions warrant, nuclear may then be considered among a variety of generation options

Dominion has no plans to build another nuclear plant yet.

PP571.21

ESP Application StatusESP Application Status

Dominion’s ESP Application was submitted on 9/25/03

Exelon submitted on 9/25/03

Entergy submitted on 10/21/03

PP571.22

Combined LicenseCombined License

Combines the Early Site Permit and the Design Certification into a site and technology specific document

When approved, provides authorization to build and operate

Resolves operational and construction issues before construction begins

Process has yet to be tested

PP571.23

New Nuclear TechnologiesNew Nuclear Technologies Innovative new reactor technologies are being

developed for deployment Passive and active safety system designs Some based on existing light and heavy water

designs; some on new gas-cooled technologies Bases in existing technology expected to yield

reliable operation Designed for short construction periods and

reduced construction costs All can be economically attractive

PP571.24

General Electric Advanced Boiling General Electric Advanced Boiling Water ReactorWater Reactor

Net plant output, 1356 Mwe, 3926 MWth, with uprate to 1500 Mwe, 4300 MWth

Single, stand-alone unit Licensed in three countries Improved safety systems Engineered in detail, except for site

engineering Has been constructed in 48 months Next ABWR unit will be the 5th in the

series Design Certification has been issued

PP571.25

Westinghouse AP1000Westinghouse AP1000

3400 MWth, 1200 MWe 2 steam generators, 4 canned

reactor coolant pumps Based on much existing

technology Passive Design Features Modular construction

– 36 Month Construction, First Concrete to Fuel Load

Design Certification application has been filed. Approval expected in 2005

PP571.26

Atomic Energy Atomic Energy Canada, LTD Canada, LTD ACR-700ACR-700

739 MWe, 1983 MWth Designed for simultaneous

LOCA and Loss of ECCS On-Power Refueling Robust, safe, economical Fuel

Design Compact, smaller Calandria Horizontal fuel channels Reduced Heavy Water

Inventory Design Certification application

expected in 2004

PP571.27

General Electric ESBWRGeneral Electric ESBWR

1380MWe, 4000MWth Passive Safety Systems to

Simplify Plant Design Natural Circulation Reactor

Vessel Designed for Improved

Reliability and Maintainability

Design Certification application expected in 2005

PP571.28

Other Plant DesignsOther Plant Designs Framatome SWR-1000

– 1250 MWe BWR, active and passive safety systems Framatome EPR

– 1600 MWe advanced PWR, improved thermal performance

Westinghouse IRIS– 330 MWe PWR, single pressure vessel houses all

major components Pebble Bed Modular Reactor

– 160 MWe Gas cooled, single cycle General Atomics GT-MHR

– 285 MWe Gas cooled, single cycle

PP571.29

DOE Nuclear Power 2010DOE Nuclear Power 2010

Objectives:– Develop new technologies– Demonstrate licensing process– Encourage new nuclear development

Cost-sharing approach Also supports advanced research and critical

education pipeline

PP571.30

Barriers to the Decision to BuildBarriers to the Decision to Build Licensing uncertainties with untested

processes High initial unit costs Financing risks Earnings dilution during construction High level waste disposal Price-Anderson renewal

PP571.31

What’s Next?What’s Next? Energy Bill

– Still stalled in Congress– Potential for incentives to assist development of the

first new plants– Gas Reactor Demonstration Project at INEEL

NP2010– DOE solicitation to develop COL application to test

next step in licensing process – Includes DOE match for FOAKE

PP571.32

Hypothetical Timeline for First PlantHypothetical Timeline for First Plant

Develop COL Application, complete necessary first of a kind engineering (FOAKE)– 24 months

NRC Review and Approval of COL Application– 24-36 months– Complete remainder of FOAKE

Construction of new plant– 48-54 months, start of construction to commercial

operation

IT CAN ALL HAPPEN AS SOON AS 2013

PP571.33

Can it Really Happen?Can it Really Happen?

Price stability Energy diversity Emission-free generation

It Can… and Must!

PP571.34

““The best way to predict the The best way to predict the future is to create it.”future is to create it.”

-- Peter F. Drucker

PP571.35