christopher by qtRl7C1X

VIEWS: 7 PAGES: 30

									            U.S. Nuclear Industry
             Life in the Fast Lane


            Thomas A. Christopher
 President and CEO AREVA NP Inc.
CEO and Vice-Chairman AREVA Inc
                                                             The Energy Highway

                > U. S. is facing dramatic challenges in energy
                  supply
                    Volatile fuel costs
                            • Coal prices increased 57% in two years
                            • Demand for natural gas expected to double in three years
                    Rising electricity prices
                            • Electricity demand 3.3% last year – higher than forecast
                            • Rate shocks in 10 states this year
                    Seven regions need to build new generation
                            • Texas experienced a brownout this past summer
                    Increasing environmental obligations
                    Personnel resource shortages


                     Energy Will Be a Key Issue in the 2008 Political
                                       Campaign
AREVA NP Inc.     MIT Student Presentation Nov. 5, 2007                                  2
                                                       Current U.S. Plant Capacity and Age
                                               800




                                                                   8
                                                                73
                                               700                                 Total Coal Plants
                                                                                   Total Gas Plants




                                                         7
                                               600


                            N umber of Units




                                                      53
                                                                                   Total Nuclear Plants
                                               500
                                               400




                                                                                 6
                                                                              24

                                                                               9
                                               300




                                                                            20
                                               200




                                                                                                        55
                                                                                   48
                                               100




                                                                                                      12
                                                                                                     12
                                                                0
                                                0
                                                         100-499               500-999                1000+
                                                                    N ameplate Capacity - MW




              “New” gas,                                         Average Age of Plants (years)
            “Old” Coal and                                             100 - 499         500 - 999    1000+
               Nuclear
                                                     Natural Gas          18                10          12
                                                        Coal              40                29          29
                                                      Nuclear                               31          21
AREVA NP Inc.   MIT Student Presentation Nov. 5, 2007                                                         3
                                                         Combined Cycle Power Plant




                                                               500 – 600 MW Class CC: Air Emissions


                                                                    Pollutant          Potential to Emit
                                                                                        (tons per year)
                                                               Nitrogen Oxide (NOx)          219 *
                                                              Carbon Monoxide (CO)           108 *
                                                                  Volatile Organic            30
                                                                Compound (VOC)
                                                              Particulate (as PM 10)         117 *
                                                               Sulfur Dioxide (SO2)            22
                                                                   Formaldehyde                1
                                                                     Benzene                  0.2
                                                                    H2SO4 Mist                 6
                                                                     Ammonia                  212

                Source: Duke
AREVA NP Inc.    MIT Student Presentation Nov. 5, 2007                                                     4
                                                        Coal Production Cost Example
            TVA’s Cumberland Plant is One of Their Largest Baseload Plants

                                                                  • 2 coal-fired units @
                                                                    1300MWs each

                                                                  • Both on line in 1973
                                                                  • Burns pulverized #9
                                                                    bituminous coal (3%
                                                                    sulfur & 10% ash)


                                  Nitrogen oxide                         Sulfur Dioxide




AREVA NP Inc.   MIT Student Presentation Nov. 5, 2007                                      5
                         US Spot Fuel Prices Continue to Experience
                                                           Volatility




AREVA NP Inc.   MIT Student Presentation Nov. 5, 2007               6
                                                        Market Drivers: Fuel Prices
                 Market Faces High and Volatile Natural Gas Prices




                                 Hurricanes




AREVA NP Inc.   MIT Student Presentation Nov. 5, 2007                             7
                                                         Value of a Nuclear Power Plant

                                                                                   Estimated 2015 Curve




                                                                            2010
                                                                     2007




                                                                                        2015
                    Peak Load                            Price    Value of Nuclear
                Source: Global Energy Decisions
AREVA NP Inc.    MIT Student Presentation Nov. 5, 2007                                                    8
                                                  PJM Daily Loads and Locational Marginal
                                                                            Pricing (LMP)
                                 160,000                                                        $900
                                                                         Hourly Load
                                 140,000                                 Average Hourly Price   $800

                                                                                                $700
                                 120,000

                                                                                                $600
                PJM Load (MWs)




                                 100,000




                                                                                                       LMP $/MWhr
                                                                                                $500
                                  80,000
                                                                                                $400
                                  60,000
                                                                                                $300

                                  40,000
                                                                                                $200

                                  20,000                                                        $100

                                           0                                                    $0




AREVA NP Inc.                    MIT Student Presentation Nov. 5, 2007                                              9
                              Double-digit Residential Electricity Rate Increases
                                                                                    MASSACHUSETTS
           From 10% - 72% in 10                                                    NSTAR and National Grid
                                                                                   25 -35%saw 25–35%
           states                                                                  customers
                                                                                   increase 1/06
                                                                                   rate increases on 1/1/06
                                                                                                                        MAINE

                                                                                                                   10% increase
                                                                                                                  Central Maine Power
                                                                             CONNECTICUT                          rates increased 10%
                                              ILLINOIS                                                             3/1/06 3/1/06
                                                                                                                     effective
                                                                            Regulators approved
                               If Some estimate 35% increases in
                                  auction adopted,                           22% increase
                                                                            22% increase for
                                 2007 if auction model is adopted;
                                                          35%
                               increase could besingle-digit                1/06effective 1/1/06
                                                                            CL&P
                                utility proposals include
                                   annual increases followed by                                                      RHODE ISLAND
                                      deferred cost recovery
                                                                                                                        Narragansett
                                                                                                                     13% increase
                                                                                                                     Electric rates rose
                          ARIZONA                                                                                    1/06 on 1/1/06
                                                                                                                       13%

                       In November 2005,
                      Regulators
                         Arizona Public                                                                                 DELAWARE
                      requested
                         Service asked
                          regulators
                      20% 20% to                                                                                      Phased
                                                                                                                    Rate increases will be
                                                                                                                    phased in with a 15%
                       approve       rate                                                                             increases
                                                                                                                    increase effective May
                      increase
                            increases                                                                                 15% - 5/06,
                                                                                                                     2006, a 25% increase
                                                           MARYLAND
                                                                                                                      25% 1/07
                                                                                                                     January- 2007, and a
                                                    February auctions indicated                                     19% increase effective
                                                   Increases range rise
                                                   residential prices would                                           19% - 6/07
                                                                                                                          June 2007
                                                   from Pepco, 35% for DP&L,
                                                   39% for35% to 72%
                                                     and 72% for BG&E; recent
                Rate Caps                           stakeholder discussions are         FLORIDA               DISTRICT OF
                                                       proposing phase-ins of                                  COLUMBIA
                Disappearing                         15–25% increases per year
                                                                                      Rates rise 19%
                                                                                      19% and
                                                                                     for FP&Lfor 12%          Pepco expects
                                                        before a full move to
                                                                                      FPL, 12%
                                                                                         for Tampa            12% rise
                                                                                                              bills to IN 12%
                                                         market-based rates             Electric and
                                                                                      others                  6/06 2006
                                                                                                                in June
                                                                                     Progress Florida




AREVA NP Inc.     MIT Student Presentation Nov. 5, 2007                                                                                      10
                 North American Operating Nuclear Sites




Original
Equipment
Manaufacturers
B&W         7
W          48
CE         14
GE         34




            A Small Part of the US Market is Deregulated
                         AREVA Services All Aspects of an Operating
                                                      Nuclear Plant


                       Capital              ~2.7B€


                           Fuel
                                             ~2.8B€


                Maintenance
                                             ~3.1B€



                 Operations                  ~4.7B€




                                           ~13.3B€

AREVA NP Inc.      MIT Student Presentation Nov. 5, 2007          12
                                                                      AREVA NP Inc.
                                                   North American Locations – June 2007
                     Richland, WA
                     •571 People                  Denver, CO                Naperville, IL                                                      Marlborough, MA
                     •Fuels                       (shared AREVA)            •19 People            Toronto, Canada                               •113 People
                     •Federal                                               •NE-A                                                               •NE-A
                                                  •6 People                                       •60 People
                                                  •NS                       •I&C                                                                •NE-R
                                                                                                  •AREVA NP
                                                                                                  Canada Ltd.              Pittsburgh, PA
                                                                                                                          •20 People
                                     •                                                                                    •I&C/ES
                                                                                                                                                        Westborough, MA
                                                                                                                                                        •12 People
       Idaho Falls, ID –
       (Shared AREVA)                                                                                                                                   •E-Lab
       •1 Person
                                                   •                                                                            •               ••
                                                                                                                                                        •NE-A

       •Federal
                                                                                                                                     •
                                                                                                          •                                 •
                           •                                                                                                                         Philadelphia, PA
                                                                                                                                                     (shared AREVA)

       Benicia, CA
                                                                        •                                                            •
                                                                                                                                                     •10 People
                                                                                                                                                     •I&C/E S
     •44 People                                                                                                                                      •Federal
     •NE-A
     •NS
     •New Plants
                                                                                                                        •        •               Lynchburg, VA (4)
                                                               •                                                                •
                                                                                                                                                 •1,842 People
                                                                                                                                                 •All
                                                                                                                            •
                       Albuquerque, NM
                       (shared AREVA)                                                    •                                                       Charlotte, NC
                       •5 People
                                                                   Fort Worth, TX                                                                561 People
                       •Federal
                                                                   •59 People                                                                    •All
                                                                   •I&C/ES
                                                                   •NE                                                                      Aiken, SC –
                                                                                             Erwin, TN           Atlanta, GA
                                                                                                                                            shared AREVA
                                                                                             •9 People        •45 People
                     20    Locations                                                         •Fuels           •I&C/ES
                                                                                                                                            •1 Person
                                                                                                                                            •Federal
                     3,378 Employees/Contractors

AREVA NP Inc.          MIT Student Presentation Nov. 5, 2007                                                                                                            13
          Historical US Nuclear Plant Construction Costs Were Out of
            Control Due to Regulatory Changes and Escalating Costs
                                           7000


                                                                                                                  Vogtle
                                           6000


                                                                                                                       Perry
                                           5000

                                                                                                     Beaver Valley 2
                Construction Costs $/kWe




                                                                                                            Hope Creek
                                           4000
                                                                                                      Braidwood


                                           3000                                                                                Diablo Canyon
                                                                                   March 1979                                   Wolf Creek

                                                                                   TMI Accident      Catawba                    Palo Verde 1
                                           2000


                                                                                         LaSalle 1
                                                                   Oconee
                                           1000
                                                              Quad Cities
                                                    Dresden                                                    McGuire 1 & 2


                                             0
                                             1965        1970               1975             1980                   1985                       1990


AREVA NP Inc.   MIT Student Presentation Nov. 5, 2007                                                                                                 14
                                                           In 1989, a New Licensing Process
                                                                      Introduced by the NRC
                 > Goal: simplify the two-step process

                 > The Nuclear Regulatory Commission (NRC), following numerous
                   hearings and input from utilities, drafted new rules for licensing

                 > Congress amended the Atomic Energy Act to confirm the NRC’s
                   authority to issue statutory combined licenses
                Old Process 10 CFR Part 50
                Apply for                        Construction
            Construction Permit
                                                                   Construction
                                                 Permit Issued

                                                                 Apply for            Operating
                                                             Operating License
                                                                                                      Operation
                                                                                    License Issued
                New Process 10 CFR Part 52
                               Early Site Permit


                             Combined License                                      ITAAC
                                                            Construction         Verification
                                                                                                Operation
                                 Issued

                                     Design
                                   Certification
AREVA NP Inc.      MIT Student Presentation Nov. 5, 2007                                                          15
                                             New Build Scope Yesterday and Today
                                          1970s - 1980s Typical Scope
                                                                                   Total Plant Contract
                  NSSS, Equip.
                  RV, SG, RCP                              I & C , NSSS                       10%




                 Nuclear system                            Fuel handling
                design & licensing                          equipment                               90%




                                              2010 – 2020 Typical Scope
                                                                                        Total Plant
                  Reactor containment:                       Emergency diesel
                  equipment design &                         generator: building
                        supply                                design & supply
                                                                                        50%
                                                                                                          50%

                Nuclear auxiliary building:                Safeguards buildings
                  equipment design &                       equipment supply &
                         supply                                  design


                           AREVA Scope Will Be 50% of Total Plant Contract
AREVA NP Inc.      MIT Student Presentation Nov. 5, 2007                                                        16
                             A Number of Utilities Are Moving to Create a
                                                     New Nuclear Option
                      COL Issued
                                                                                                 2010-11
                                                                                                            40-Year License
                    COL Hearings                                                                                To Build


                COL Submit & NRC
                          Review


                         COL Prep



                    Site Selection



                                                 2006        2007    2008      2009       2010       2011         2012


                                                  US EPR            AP1000            ESBWR                ABWR
                                                   CEG #1            Duke              Entergy           NRG
                                                   CEG #2           Progress          Dominion         Dominion
                                                   CEG #3           SCE&G
                                                   Ameren             TVA
                                                                    Southern
AREVA NP Inc.        MIT Student Presentation Nov. 5, 2007                                                               17
                   New Business Model Emerges to Respond to Capacity
                                                 Demand - as UniStar
                CEG                                  Standard Plant
                                                      EPR Offering
                                                     CEG Part Owner
                                                       / Operator
                AREVA                                                     CONTRACT #1         PO EPR (AREVA)

                                                                             Owners
                 BECHTEL
                                                                          CEG / Utility #1   PO BECHTEL

                                                                          PO CEG Operator            STG Vendor


                    Marketing Activity                                    CONTRACT #2         PO EPR (AREVA)

                      2005-2006                                               Owners
                                                                                             PO BECHTEL
                                                                          CEG / Utility #2
                                                                                                     STG Vendor


                                                                          CONTRACT #3         PO EPR (AREVA)


                                                         Power Purchase       Owner          PO BECHTEL
                                                           Agreement           CEG                   STG Vendor
                                                           (Utility #3)
                                                                          CONTRACT #4         PO EPR (AREVA)


                                                         Power Purchase       Owner          PO BECHTEL
                                                           Agreement           CEG
                                                           (Utility #3)                               STG Vendor


AREVA NP Inc.    MIT Student Presentation Nov. 5, 2007                                                             18
                AREVA’s Third Generation US EPR is Designed
                                      to Meet Today’s Needs




AREVA NP Inc.   MIT Student Presentation Nov. 5, 2007     19
                                                        Four Train Concept




                 Each Safety Train is Independent and Located
                    Within a Physically Separate Building.
AREVA NP Inc.   MIT Student Presentation Nov. 5, 2007                    20
                                                                                  Four-Train Concept
         > On-line maintenance without entering action statements
         > Radial arrangement simplifies layout and reduces piping
         > Active cross-connects eliminated
                   Simplifies systems
                   Minimizes components                                                     5 More Pumps
                   Reduces operator burden in case of accident
         > Reduced component sizes
                                                                                                8 Less HX
         > Separate safeguards buildings                                                      8 Less Tanks
                   Physical separation
                   Improved hazards mitigation
                                                                                            724 Less Valves
                       •    fire, flood, external events


                                                                        EPR                      Westinghouse 4-Loop
                              SYSTEM
                                                            Pump   HX    Tank     Valve   Pump      HX      Tank       Valve
                              SI / RHR                       8     4          4   335      4         6       5         351
                     CVCS incl. Boration,
                                                             11    6          8   397      11       13       14        751
                      Demin/Seal Water
                                CCW                          8     14         6   404      7        13       7         758
                                              Total          27    24     18      1136     22       32       26        1860

AREVA NP Inc.       MIT Student Presentation Nov. 5, 2007                                                                      21
                                                        OL–3 EPR Under
                                                           Construction




AREVA NP Inc.   MIT Student Presentation Nov. 5, 2007                 22
                                                        Progress at Flamanville




AREVA NP Inc.   MIT Student Presentation Nov. 5, 2007                         23
                                                                                                       Calvert Cliffs #3 Schedule
                                                                          2005         2006          2007            2008           2009                  2010               2011             2012             2013         2014            2015            2016
                                     Activity                          Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4


                      EPR Design Certification                                            DC Application            Final Design Approval
                                                                                           Submitted                    (FDA) Issued                                   DC Rule Issued

 DC Application Preparation & Review                                     DCA Prep & NRC Interactions           NRC Review                  DC Rule
 (preparation - 33 mos, review - 24 mos, rulemaking - 10 mos)

                               COL Licensing
 Site & Reactor Technology Selection
 (evaluation: 6 mos)                                                                                                                                              (1) Limited Work Authorization (LWA) Issued
                                                                                       Project Plan Approved                                                      (2) Final Environmental Impact Statement (FEIS) Issued
                                                                                                                                                                  (3) Final Safety Evaluation Report (FSER) Issued
 COL Project Planning
                                                                                                                                                    (1)
 (preparation: 6 mos)                                                                COL Application Submitted
                                                                                                                                                (2)              (3)                       COL Issued

 COL Application Preparation & Review                                                COLA Prep, NRC Mtgs               NRC COLA Reviews                      Hearing
 (preparation - 24 mos, review including hearing - 39 mos)

                             Project Execution
                                                                                                                                                                                                  NSSS Components On-Site
 Procurement & related engineering
 (Major NSSS components on-site - 63 months)                                             Planning                Long lead component procurement and fabrication

                                                                                                                                                                                         Engineerng Complete

 Detailed engineering for Construction                                                        Plng          Detailed engineering for construction
 (Final construction ready designcomplete before construction start)
                                                                                                                                                                       Simulator Order               Start Software
                                                                                                                                                                          Placed                     Development           Simulator Operational


 Simulator Procurement / Installation                                                                                                                       Plng                 Manufacture, Test & Install
 (Simulator required operational 12 months before fuel load)                                                                                                                                                                                       Provisional
                                                                                                                                                                                                                                                    Turnover
                                                                                                                                                                                     First Concrete Pour
                                                                                                                                                                                                                      Start Fuel Load

 Plant Construction                                                                                                                        Planning Site Preparation                         Plant Construction, Start-up Testing
 (Site prep - 15 months, construction - 48 months)




AREVA NP Inc.                                  MIT Student Presentation Nov. 5, 2007                                                                                                                                                                               24
                                                        Estimated 2006 Production Costs

                               35
                                                                          $31.4

                               30

                                                $23.4
                               25


                               20
                       $/MWh




                                                               $14.0
                               15


                               10


                               5


                               0
                                          4-Loop Plant        US EPR      Coal

                                New Build Will Cost Less to Operate Than
                                            Existing Plants
AREVA NP Inc.   MIT Student Presentation Nov. 5, 2007                                 25
                   AREVA Will Continue to Need New Employees
                Current openings end of Feb. 007– 307


                                Total Full -Time Hires


                                      Total 2006          2007 Goals


           Internal                          225             200
           Hires
           External                          337             325
           Hires
           Total Hires                       562             525



                    New Hires Needed
                     by 2010 = 1000
AREVA NP Inc.     MIT Student Presentation Nov. 5, 2007                26
                                                             Types of Engineers Supporting
                                                                              EPR Projects

                > Mechanical – fluids, heat transfer,
                    FEM
                > Civil – soil interaction,
                    earthquakes
                > Structural – linear and non-linear
                    analyses
                > Electrical – design, diesel
                   generators, one-lines
                > Electronics – digital
                    instrumentation and control
                > Nuclear – neutronics,
                     thermal/hydraulics
                > Fire – nuclear fire safety
                > Materials – fatigue, stress, FEM
                > Construction (just starting)


                                                    Olkiluoto 3 RV head
                                                          manufacturing
AREVA NP Inc.      MIT Student Presentation Nov. 5, 2007                                 27
                                                          The Next Generation of Leaders

                > Key skills
                      Problem solving and decision making
                             • Short-term crisis management
                             • Long-term construction management

                      Working with teams (domestic and international)
                             • JV, LLC, etc.

                      Learning from mistakes

                      Broadened knowledge base
                             • New NSSS vendor responsibilities – 50% of entire plan
                                    – Civil
                                    – Structural
                                    – Etc.


                      Ability to adapt to rapid innovation and technology
                             • New ideas
                             • Technology
                             • Curiosity



AREVA NP Inc.     MIT Student Presentation Nov. 5, 2007                                28
                   In Summary - It’s an Exciting and Challenging Time

                > This is a critical time in the energy generation
                  industry – demand supports the Nuclear
                  Renaissance
                > We face greater economic and environmental
                  challenges than ever before
                > Nuclear is making a comeback
                      Environmentally friendly
                      Energy independence
                > We have the new technologies but success
                  depends on
                      New approaches, innovation, enthusiasm and
                       dedication
                      A new generation of “employees”


                 Our Business Is Growing Fast – We’ll be Here
                               For a Long Time
AREVA NP Inc.    MIT Student Presentation Nov. 5, 2007               29
AREVA

								
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