Nuclear Energy 2016: Status and Outlook ECA Peer Exchange February 17, 2016

Record Capacity Factor in 2015 U.S. Nuclear Plant Capacity Factor U.S. reactors set record capacity factor: 91.9% Nuclear plants generated 798 billion kWh in 2015 Average refueling outage duration declined again: 2015: 36 days 2014: 37 days 2013: 41 days U.S. Nuclear Plant Capacity Factor 91.9% in 2015* 91.7% in 2014 89.9% in 2013 86.1% in 2012 89.1% in 2011 91.1% in 2010 Source: Energy Information Administration * NEI estimate

Status of First License Renewal Forty reactors have passed 40-year mark Approximately 31,000 MW of nuclear capacity will reach 60 years between 2029 and 2035 Approximately one-half U.S. nuclear capacity will reach 60 years by 2040 81 Reactors Approved 11 Reactors Under Review 6 Reactors Intend to Renew Source: Nuclear Regulatory Commission

Status of Second License Renewal NRC regulatory process stable, well-understood; existing regulations adequate In November 2015, Dominion Virginia Power announced intent to file second license renewal application for Surry nuclear plant Decision to renew a second time depends on whether market conditions justify capital investment required

New Nuclear Plant Construction Watts Bar 2 ready for commercial operation around midyear Major project management improvements at Vogtle, Summer projects Westinghouse purchase of CB&I/Stone & Webster EPC contracts restructured Excepted online 2019 and 2020 Fuel assemblies being loaded into Watts Bar 2

Preserving the Nuclear Option NuScale Power expects to file design certification for its small modular reactor in 4th quarter Growing interest in GEN-IV reactors

Market Stresses … In Brief Low growth (in some cases, no growth) in electricity demand Continuing surge in supply of low-cost shale gas Fuel/technology diversity is taken for granted and undervalued State and federal mandates and subsidies for renewables distort markets Transmission constraints Market design issues Failure of markets to recognize valuable attributes Price suppression in energy markets

Solutions Emerging Among the States States beginning to recognize need to act Ohio considering PPA for Davis-Besse New York – Reliability Support Services Agreement for Ginna Illinois considering low-carbon portfolio standard, New York developing Clean Energy Standard States can also use tools available under Clean Power Plan Closing nuclear facilities “would eviscerate the emission reductions achieved through the state’s renewable energy programs, diminish fuel diversity, increase price volatility, and financially harm host communities.” – New York Gov. Andrew Cuomo Dec. 2, 2015

Creating Additional Margin By Increasing Efficiency

Industry Goals: Safety, Reliability and Improved Efficiency Sustain high levels of safety and reliability Identify opportunities and re- design plant processes to improve efficiency and effectiveness Use innovative technology to increase efficiency across the industry The goal: $12/megawatt-hour cost reduction industrywide

The Goal: 30% Reduction in Cost Why 30%? To drive innovative thinking, not just tinkering at the margin How the Arithmetic Works Starting point: 2012 total generating cost* $40/MWh Goal $12/MWh reduction Where Does the $12/MWh Reduction Come From? Reduction in capex 2012-2014 $3.50/MWh Estimated reduction in capex through 2020 $3/MWh Estimated reduction in fuel costs through 2020 $2/MWh Estimated cost reductions from improved industry efficiency * 2012 was peak year for total generating cost

Taxpayers Paying Billions For Federal Government’s Failure to Accept Used Nuclear Fuel $5.3 Billion paid from taxpayer-funded Judgment Fund as of September 2015 for damages incurred because DOE did not begin accepting used nuclear fuel in 1998 Liabilities will continue to grow after DOE begins accepting used fuel until backlog eliminated (decades) DOE estimates the total taxpayer liability at $29 Billion if it begins accepting used fuel in 2021 Every year of delay in opening a facility will cost the taxpayer an additional $500 million (estimated) Taxpayer liabilities not paid from Nuclear Waste Fund So far 4.5 billion paid Liabilities continue to grow – estimated at 27.1 billion last year if they begin moving used fuel in 2021

Everett Redmond Nuclear Energy Institute elr@nei.org 202-739-8122 Questions? Everett Redmond Nuclear Energy Institute elr@nei.org 202-739-8122