Is Sustainable Energy Feasible Without Nuclear ?

REMOO 2013 – Belgrade 2013-09-16Dr. Alexander Wolski, Director Strategic Projects

According to ENR (Engineering News Record) for 2013 WorleyParsons ranks 1st among the top international design firms according to revenue for design services performed in 2012 in $ millions, and ranks 2nd among the companies in the global Power market.

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“Long-term safe, reliable, affordable and sustainable energy is the basis for people’s well-being, industrial competitiveness and the overall functioning of society.”Guenther Oettinger, European Commissioner for Energy

Sustainable Energy

Nuclear contribution cut in halve

Renewable contribution tripled

Hard Coal - 4.5%

German “Energiewende”Electricity Generation by Source

2012: PV largest installed generator ( > 32 GW)

2012: Total Installed Renewable sufficient for peak load (> 70 GW)

German “Energiewende”German Electricity in Europe

Stable Electricity Generation (630 TWh) Import : 44 TWh / Export 67 TWh – Record net export Germany is the largest electricity exporter in the world

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German “Energiewende”Price – Mid-Size Industrial Consumer

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2009S1 2009S2 2010S1 2010S2 2011S1 2011S2 2012S1 2012S2

Cen

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EU27DenmarkItalyGermanySpainUKBelgiumCzech RepublicSwedenFranceFinland

4.1%

8.6% 8.5%

4.9% 4.7% 4.1% 3.9% 3.3% 2.8%0.9% -1.8%

-2.0%0.0%2.0%4.0%6.0%8.0%

10.0% Average Annual Price Change 2008-12 *) including all taxes and levies

German “Energiewende”Electricity Price – Private Consumer

*) including all taxes and levies

10.0012.0014.0016.0018.0020.0022.0024.0026.0028.0030.00

2009S1 2009S2 2010S1 2010S2 2011S1 2011S2 2012S1 2012S2

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ts p

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Whr

EU27DenmarkItalyGermanySpainUKBelgiumCzech RepublicSwedenFranceFinland

4.2%

9.7%5.3%

5.0% 4.8% 4.8% 3.8% 3.1% 1.8%1.2% 1.0%

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10.0%Average Annual Price Change 2008-12

German “Energiewende”Macro-economic impact

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2009 11,771 8,922 2,374 1,886 1,591 1,520 1,047 10,337 3,6152012 12,923 9,485 2,666 2,032 1,927 1,566 1,029 12,644 4,640

9% 6% 11% 7% 17% 3% -2% 18% 22%

German “Energiewende”The Renewable Energy “Paradoxon”

• Peak power often is cheaper than base-load.• The number of hours with negative prices increases.• Peat and nuclear plants run at higher capacities during

times of low prices.• Hard coal and gas plants run at only 10 percent capacity

when prices are negative.

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German “Energiewende”It is not “for free” !

German “Energiewende”A “Cheaper” Alternative1 NPP 1400 MW x 8760 hrs x 85% 10.4 TWh / year

10.4 TWh x 60 years 625 TWh / lifetime3 NPP 625 TWh x 3 1876 TWh (1750)

Investment 3 x NPP @ 8 G€ 24 G€O&M and D&D 1876 TWh @ 3 ¢/kWh 56 G€

Total cost *) 80 G€ (330)OR *) assuming ZERO O&M / D&D for Renewables

12½ NPP 12½ x 625 TWh 7818 TWh (1750)Investment 12½ x NPP @ 8 G€ 100 G€

7818 TWh @ 3 ¢/kWh 234 G€Total cost *) 334 G€

• For 60 years instead of 20• Constant, predictable, controllable base load• Virtually CO2-free

German “Energiewende”WHY?

Because THEY CANChallenge for German Engineering to be mastered

Because THEY CAN AFFORD IT“Only Germans can do this, no other country is rich enough” Bill Gates, 07/2011

The estimated annual amount of cost allocation is approximately 1% of GDP

And most importantly

Because THEY WANT TOThere is political consensus between all political parties.

Polls consistently demonstrate 70 to 92% endorsement of the population.

17.5.2010 Intergovernmental Agreement (IGA) between Turkey and Russia for the construction of 4 x 1200 MW at the Akkuyu site, to be operational 2019-22 (1st nuclear BOO model with PPA)

3.5.2013Turkish-Japanese IGA granting “exclusive negotiating rights to build a nuclear power plant” with 4 x 1000 MW at the Sinopsite; to be operational 2023-2028. The agreement includes site selection work for 3rd nuclear site in Turkey

29.5.2013 – Taner Yildiz, Minister of Energy “ the [Turkish] government has already started making plans for a

third nuclear plant because growing domestic energy needs are unlikely to be met by the first two.”

Turkey

TurkeyGDP Development

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500%Turkey : 11.1%/yearGermany : 2.2 %/year

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125.0%

Discontinuity ignored

TurkeyPopulation Development

Turkey : +1.6 %/year (74.7 Mio)Germany : +0.03 %/year (81.8 Mio)

TurkeyGDP / Energy Consumption

• Economic growth and electricity consumption are synchronized.

• Low case scenario predicts shortages already in 2017.

“Turkey’s decision to make nuclear a significant part of its energy mix is the result of its need to reduce natural gas imports over the next decade”

“Turkey’s nuclear energy projects are very important for the further industrialization of the country, as it will set a new market in the country.”

Taner Yildiz, Minister of Energy and Natural Resources

Turkey“Why?”

Increasing the amount of energy the UK gets from low-carbon technologies such as renewables and nuclear, and reducing emissions through carbon capture and storage (CCS), will help us to: make sure the UK has a secure supply of energy reduce greenhouse gas emissions to slow down climate change stimulate investment in new jobs and businesses

Electricity Market Reform – Contract for Difference to stimulate investment in low-carbon technologies (PPA with market adjustment mechanism)

Simplified and streamlined nuclear licensing process to decrease investor’s licensing risk (Generic Design Assessment).

United KingdomGovernment Policy

Long-Term Nuclear Energy Strategy“The government believes that nuclear energy has an important role to play to deliver our long term objective of a secure, low carbon, affordable, energy future. For nuclear energy to reach its full potential, we must meet significant challenges in the short term and for the longer term to 2050 and beyond.”

Nuclear Industrial Strategy“The Nuclear Industrial Strategy identifies priorities that government and industry will work on together in a long-term partnership. It aims to provide more opportunities for economic growth and creating jobs through an increased share of all aspects of the nuclear market.”

United KingdomGovernment Strategies

United KingdomImplementation

EdF Energy Has received Generic Design Approval for its

EPR design on 13.12.2012. Plans to build two 1600 MW EPR at Hinkley

Point. Has received Planning Consent for the project

on 20.3.2013. Has received UK government loan guarantees

on 28.6.2013. Is still negotiating the “strike price”; an

agreement is expected between 113 and 119 €/MWh.

HORIZON Nuclear (owned by Hitachi) Has commenced the GDA process for the

ABWR design Plans to build up to six 1300 MW ABWR at the

Wylfa and Oldbury sites. ROSATOM

Has joined forces with Rolls Royce and Fortumand commenced the GDA preparation for the VVER2006 design

MoU on cooperation in the Nuclear Power Industry signed with UK government.

Strike Prices €/MWhWind-onshore 119Wind-offshore 184-160Tidal stream 360

EC Energy Roadmap 2050Decarbonization of Energy

European Union Goal to reduce greenhouse gases by 80 to 95 % by 2050 through Energy Efficiency Almost emission free electricity generation Two-thirds of electricity generation from renewables

Five different scenarios analyzed in detail. The roadmap confirms economic feasibility with similar

cost for all scenarios. Decarbonized scenarios are overall not more expensive

than continuation of current policy. Commercialization of new technologies is critical, and

drive the preferred scenario (energy storage and CCS).

Major investments are required as a new investment cycle is starting

The price of electricity will continuously raise until approximately 2030 under all scenarios

Energy will become more important 15% of GDP in 2050 compared to 10% in 2005

Electricity will play a much greater role than today (x2 in 2050)

Energy systems will transition from high fuel cost to high capital intensity

EC Energy Roadmap 2050The European Energy System

Nuclear today is providing most of the low-carbon electricity consumed in the EU.

Nuclear will have to provide an important contribution under all scenarios, especially in the market-driven models.

The amount of nuclear development will be bigger if the large-scale introduction of CCS is delayed.

Nuclear energy contributes to lower system cost and electricity prices.

EC Energy Roadmap 2050The Role of Nuclear

Selection of an appropriate energy strategy is complex Indigenous resources Value of energy independence vs. import dependency Exposure to fossil fuel price volatility Current and forecast level of industrialization and energy demand Level of coupling of economic growth from energy consumption Air pollution and health benefits …

Sustainable Energy system development requires Government to play a critical role, pure market mechanisms are

not adequate. Strong consensus on policy and strategy within policy makers and

population Cross-border harmonization

There is no simple answer

Nuclear Units in the 21st Century

45 UNITS27.9 GW

48 UNITS37 GW 83 UNITS

76 GW

Nuclear world-wide

0 10 20 30

ChinaRussia

IndiaKorea

USAJapan

PakistanSlovakiaUkraine

Abu DhabiArgentina

BrazilFinlandFrance

69 Units under Construction Active Development Programs Chile, Canada South-Africa, Kenya, Nigeria,

Ghana Egypt, Saudi-Arabia, Dubai,

Jordan, Iran Kazakhstan, Bangladesh,

Vietnam UK, Poland, Lithuania, Czech

Republic, Hungary, Bulgaria, Turkey

… and others; >45 acc. WNA

Future plants decided

Nuclear energy will be needed to provide a significant contribution in the energy transformation process in those member states where it is pursued. It remains a key source of low carbon electricity generation. The highest penetration of nuclear comes in delayed CCS and diversified supply technologies scenarios which show the lowest total energy cost.

European Commission, Energy Roadmap 2050

The conclusion