Merits and Demerits in the Concepts of Suppliers-led Multilateral Assurance of Nuclear Fuel: from the Perspective of Consumers Presented at the 7 th UN-ROK Joint Conference 24 November 2008 Yongsoo Hwang Korea Atomic Energy Research Institute

2 Power of Pellets Each cylindrical pellet of enriched uranium – around one-half of an inch in length and the diameter of a piece of chalk – has the same amount of stored energy as 2,205 pounds of coal.

3  Energy Consumption World Rank 9th  Oil Consumption World Rank 7th  Oil Import World Rank 4th (2.7 mb/day) Energy Status in Korea Year 2007 Total energy imports in 2007 $94.5 bn (25% of total exports)  BP Statistics of World Energy % of primary energy sources were imported in Self-sufficiency [%] Energy self-sufficiency (without nuclear power) Energy self-sufficiency (including nuclear power)  Energy Balance of OECD Countries (IEA)

4 OECD Factbook 2008 : Economic, Environmental, and Social Statistics Increase in CO 2 Emission (1990 vs. 2005) China Korea India Brazil Spain South Africa Canada United States Japan Italy United Kingdom Poland Germany Russian Federation World Total

5 Current Status of NPPs: NE saves 12.4 B US Dollars/yr 20 units in operation 16 PWRs (6 OPR1000) 4 PHWRs (CANDU) Under construction 4 OPR1000 Shin-Kori : ’05.1 ~ Shin-Wolsung : ’05.10 ~ 2 APR1400 Shin-Kori : ’07.9 ~ Under license review 2 APR1400 Shin-Ulchin (As of Dec. 2007) Installed Capacity Total :68.3 GWe Nuclear :17.7 GWe (26 %) Electricity Generation Total :403.1 TWh Nuclear :142.9 TWh (36%) In operation Under license review OPR1000 Under construction APR1400 Kori Ulchin Wolsung Yonggwang

6 G-5 without NFC??? 20 units in operation 16 PWRs (6 OPR1000) 4 PHWRs (CANDU) 6 units under construction 4 OPR1000 Shin-Kori : ’05.1 ~ Shin-Wolsung : ’05.10 ~ 2 APR1400 Shin-Kori : ’07.9 ~ 2 units under preparation 2 APR1400 Shin-Ulchin Basic National Energy Policy ( ) Current Policy (By 2020) Nuclear share 36% (2007) → 59% (2030) ▶ About 10 units more by 2030 New Policy (By 2030)

7 Issues in Nuclear Fuel Cycle & NPPs Storage: saturation in 2016 at AR facilities Reprocessing/Recycling: minimizing waste volume and toxicity and/or solving the problem of storage Disposal: The biggest size potential repository to host SNF, more than 100,000 MTU Enrichment: No problem so far relying on long term commercial supply. What about the future in the advent of Nuclear Renaissance Effort for exporting a new reactor: Fuel supply & SNF issues

8 Three Roots of a Triangle for Advanced Fuel Cycle Scientific Evidence Fairness Authenticity -Feasibility in commercial scale -Non-proliferation characteristics -Cost-effectiveness -Environmental benefit -Urgent need to solve the SNF accumulation -Tight plan to enhance transparency & non-proliferation -History of observing non- proliferation -Avoiding burden to the future generation

9 Solutions Near Term: Storage Mid Term: (Potential Recycling?) Long Term: Final Disposal Policies: Implementation based on the recommendation from KPSE by MKE R&D Action Plan by MEST

10 Link of Fuel Cycle Elements

11 Five Elements for the Confidence Building in NFC Same Vision for PR-PP and PSI Understanding Needs of Partners Identifying Proper Mechanisms Mutual TrustGoing Together: Participation

The Megatons to Megawatts™ Program is a unique, commercially financed government-industry partnership in which bomb-grade uranium from dismantled Russian nuclear warheads is being recycled into low enriched uranium (LEU) used to produce fuel for American nuclear power plants. USEC, as executive agent for the U.S. government, and Techsnabexport (TENEX), acting for the Russian government, implement this 20-year, $8 billion program at no cost to taxpayers. 345 metric tons of bomb-grade HEU have been recycled into 10,010 metric tons of LEU, equivalent to 13,795 nuclear warheads eliminated. (9/30/08) Current Status I: Down Blending

13 Urenco enrichment plants in the UK (Capenhurst), Germany (Gronau) and the Netherlands (Almelo). In the US, another Urenco subsidiary, Louisiana Energy Services LLC (“LES”), is currently constructing an enrichment plant (the National Enrichment Facility) in New Mexico, which is expected to become operational in Current Status II: URENCO

14 The International Uranium Enrichment Center at Angarsk: In January 2006, Russian President Vladimir Putin announced his country’s intent to develop a network of multilateral nuclear fuel cycle centers. These centers would, in the context of a global renaissance of nuclear energy, provide assured nuclear fuel cycle services to states on a non-discriminatory basis, while limiting the proliferation of uranium enrichment technology. In September 2007, Russia's pilot enterprise of this kind–the International Uranium Enrichment Center (IUEC) at the Angarsk Electrolytic Chemical Combine–was incorporated as a joint venture between two major nuclear fuel cycle service providers, Russia's Tekhsnabeksport and Kazakhstan's Kazatomprom.Angarsk Electrolytic Chemical CombineTekhsnabeksportKazatomprom This issue brief examines the “Iranian origins” of Moscow’s proposal to create a multilateral fuel enrichment enterprise and a fuel bank with low-enriched uranium fuel. It also reviews the progress of this initiative to date. Moscow’s goal is to start operating the IUEC, which already has a total of four committed state-participants and is open to all other interested parties, in late 2008-early Yet, before it’s able to declare the IUEC a success, Russia must finalize an agreement with the International Atomic Energy Agency (IAEA) on safeguarding the nuclear materials at the center and the fuel bank and find creative ways to engage additional countries in the project.International Atomic Energy Agency Current Status III: IUEC

15 Current Status IV : Eagle Rock Enrichment Facility AREVA Inc. plans to build Eagle Rock Enrichment Facility, the 2 B dollar project, to help meet the country's projected demand for uranium enrichment services. The future plant will have a yearly production capacity of approximately 3 million SWU, with the possibility of expanding capacity if market conditions are favorable.

16 USEC is in the process of demonstrating its next-generation American Centrifuge uranium enrichment technology. USEC is operating a Demonstration Facility in Piketon, Ohio, for the purposes of demonstrating and evaluating the Company’s enhancements to U.S. centrifuge technology and centrifuge performance in a cascade configuration. The American Centrifuge Plant is planned to have an annual production level of approximately 3.8 million SWU. Current Status V: USEC ACP

17 Korean Situation: Korea – France, UK KHNP – URENCO-AREVA : 10yr deal Areva products From Areva George Besse II Uranium Price: from 75$/lbf at the end of 2007 to 135$/lbf in early June(80% increase) and expected to be 154 $/lbf in 2009 SWU Price: from 135$ at the end of 2007 to 140$ in June(4% increase) and expected to be 160$ - UXC -

18  Motivation:  Understanding the demand and supply. Free Market force + Binding Option via MNA  Contribution to the international society:  G5 in NE  Preventing a potential loophole  Stable supply: Nuclear Renaissance  Stability  Steroid :NP & Confidence building ++ Transparency -> Potential solution for SNF management

19  Coaching: Get expert opinions on AoS, Physical Bank etc  Statistics: Study pros and cons of a proposed option very carefully and real lessons from previous attempts  Batting Practice:  Understanding the importance of long term supply  Development of Consumer-lid MNA proposals  Stay healthy throughout the season: Diversification & Cost effectiveness  Contact:

20 Conclusions New Vision Suppliers vs Consumers Free market force vs MNA Nuclear Renaissance No cartel Understanding natures Contracting time Future tech development Demand of fresh fuel Good strategy so far Free market force Long term contract Global leader Potential NE supplier