The Urgency to Re-Invent Nuclear Power in the U.S. Presentation to Intermountain Energy Summit - 2017 by Robert Schleicher Chief Engineer General Atomics Ashley Finan Project Director Advanced Energy Systems Clean Air Task Force August 9, 2017

Four Questions Do we need nuclear power in the U.S.? What are the major challenges (technical-economic- political) to current/new nuclear plants in U.S. ? What policy and institutional changes can help make nuclear power successful? How can we spur real innovation in nuclear energy?

Assertions Kewaunee Station U.S. nuclear power is failing economically due to lower cost energy competition and dynamic market conditions Nuclear plant technology has not changed in 60 years – technological progress has made nat. gas, PV solar, wind and batteries less expensive – This progress will continue Scientific consensus: dramatic CO2 emission reductions needed to limit severe environmental disruptions from global warming – we must shift to non-fossil power Current market for new power sources in U.S. is flat but will change in 10 years due to phase out of aging nuclear and coal plants and electric cars Solar PV Cost Needed to meet Paris accord

Plant Replacement and Demand Growth Leads to >50% Shortfall in U.S. Generating Capacity by Mid-Century Increased demand 55% Decline of Coal and Nuclear Existing Capacity 700 GWe of new capacity Area requirements 1.3 GWe Alta Wind Farm ~300 mi2/GWe-year 1GWe PV plant in Ningxia, China ~50 mi2/GWe-year Projected U.S. generation in 2050 = 430 GWe-yrs Required generation area is: - 130,000 mi2 of wind farms – (New Mexico) 21,500 mi2 of solar plants – (West Virgina) 500 mi2 of nuclear plants Callaway Nuclear Plant 1.1 GWe ~1.5 mi2/GWe-year DOE EIA 2014 Annual Energy Outlook

Renewables Alone Will Significantly Increase Power Cost Without New Technology Breakthrough APWR CCGT Wind Solar PV With peaker With battery storage Renewables not sufficient without backup for downtime Renewables with peaker or battery storage is expensive Battery storage only for diurnal cycle Current Current Current Current Current Current Data from EIA, Lazard, NREL, Bloomberg After tax WACC = 6% Natural gas price = $5/mmBtu Project costs include installation, O&M, fuel and transmission $2016 Battery DoD = 80%; efficiency = 92%

Yes, We Need Nuclear in the U.S. Achieve necessary curtailment of CO2 emissions to meet 2oC global rise Maintain affordable power costs during shift to non- carbon sources Provide essential grid reliability Reliance on foreign sources for essential energy (China, Russia, India) National security (both economic and defense)

Challenges to Nuclear Energy in the U.S. Conventional nuclear power is too expensive Deregulated power markets are currently not structured for baseload recovery at reasonable cost Virtually all current U.S. plants in deregulated markets are in the red Regulatory and construction uncertainties pose unacceptable investment risks Low natural gas prices will likely continue in foreseeable future Conclusion: The U.S. nuclear industry must innovate: technical, financial and regulatory

What Is the Ceiling Price-Point for Advanced Nuclear? Monthly avg. on-peak electricity prices at key trading hubs EIA ($/MWh) 2016 average price was ~$25/MWh Suggest Parity with natural gas in 2030 ($5/mmBtu) i.e. < $60/MWh at 8% WACC Henry Hub natural gas price $/mmBtu

Financing Cost and Net Efficiency have Largest Impact on Value of Nuclear Plant Investment Tornado chart for ± 10% variation from base Reduce risk premium Incremental grid additions Short, certain schedule Modular design/construction Regulatory reform Increase net efficiency High temperature Better conversion cycle Reduced hotel load Reduce overnight cost High reactor power density Reduce number of components Modular fabrication?

Ashley to continue