NUCLEAR POWER: PAST ACCOMPLISHMENTS, FUTURE CHALLENGES E. Gail de Planque Strategy Matters, Inc

It’s difficult to make predictions,

especially about the future !

Ignalina – Lithuania

CURRENT SITUATION 438 plants provide 16% of the world’s electricity (6% of energy) Nuclear supplies ~ 35% of the EU (50% off peak) Nuclear supplies ~20 % of the US Worldwide, 93 plants planned for 2016, 37 are under construction, 8 scheduled for operation in 2002

CURRENT SITUATION OF THE WORLD’S TOTAL ENERGY SUPPLY, ABOUT 75 PERCENT IS SUPPLIED BY FOSSIL FUELS ( ~ 6% is nuclear )_

Top Nuclear Generating Countries (2000) billion kilowatt-hours Source: Platt’s World Nuclear Performance

Nuclear Industry’s Total Operation Experience in Reactor Years (as of December 31, 2000) Total = 9,722 reactor years

PAST ACCOMPLISHMENTS

SAFETY

Worldwide Unplanned Capability Loss Factor

Worldwide Unplanned Automatic Scrams

Unplanned Automatic Scrams The unplanned automatic scrams per 7,000 hours critical indicator tracks the median scram (automatic shutdown) rate for approximately one year (7,000 hours) of operation. Unplanned automatic scrams result in thermal and hydraulic transients that affect plant systems. The scram rate has been significantly reduced since In 2000, 59 percent of operating units had zero automatic scrams. Source: WANO 2000 Performance Indicators

Significant Events: Annual Industry Average ( ) Source: NUS Significant Events (SEs) are those events that the NRC staff identifies for the PI Program as meeting one or more of the following criteria:  degradation of important safety equipment;  a major transient or an unexpected plant response to a transient;  degradation of fuel integrity, the primary coolant pressure boundary, or important associated structures;  a reactor trip with complications;  an unplanned release of radioactivity exceeding the technical specifications or regulations;  operation outside the technical specification limits;  other events considered significant

Yearly Severity Levels I, II & III Violations ( ) Source: SCIENTECH*Violations through October 2001

Collective Radiation Exposure (PWRs) The collective radiation exposure indicator monitors the effectiveness of personnel radiation exposure controls for pressurized water reactors and boiling water reactors. Low exposure indicates strong management attention to radiological protection. Worker exposure has been reduced significantly over the past decade. The 2000 values continue to be better than the 2000 goals. Source: WANO 2000 Performance Indicators

Capacity Factor Performance vs Risk Levels ( ) Source: Safety Benefits of Risk Assessment at US Nuclear Power Plants, June 2001 (EPRI)

PAST ACCOMPLISHMENTS SAFETY OPERATIONS

Typical Scope of Supply (Korean Contracts) Westinghouse Newington-Mfg Equipment –reactor vessel internals –control rod drive mechanisms –reactor coolant pumps Procured Equipment –reactor coolant pump motors, hydraulics –in-core, ex-core neutron detectors –auxiliary equipment Nuclear I&C Equipment Control Rod Assemblies Engineering Design, Support

Worldwide Unit Capability Factor

US Nuclear Industry Is Achieving Record Levels of Performance ( )

Volume of Low-Level Solid Radioactive Waste (PWRs) This indicator monitors the volume of solid radioactive waste processed per unit for pressurized water reactors and boiling water reactors. Minimizing radioactive waste reduces storage, transportation and disposal needs, lessening the environmental impact of nuclear power. The 2000 values continue to be better than the 2000 goal. Source: WANO 2000 Performance Indicators

PAST ACCOMPLISHMENTS SAFETY OPERATIONS ECONOMICS

Nuclear Share of US Electricity Generation ( ) Source: EIA Nuclear (bkWh) %

US Electricity Production Costs (in constant 1999 cents/kWh) Source: UDI for actual data, converted to 1999 dollars by NEI

Nuclear Plant Output: Growth During the 1990s Equivalent to 22 1,000-megawatt power plants Satisfied approximately 22% of growth in U.S. electricity demand Year Billion kWh

License Renewal: Unlocking Additional Value Already filed Hatch 1,2 Turkey Point 3,4 North Anna 1,2 Surry 1,2 Peach Bottom 2, Catawba 1,2 McGuire 1, Point Beach 1,2 St. Lucie 1,2 Summer Fort Calhoun Robinson Arkansas Nuclear One Unit 2 Browns Ferry 2,3 Cooper Farley 1,2 Dresden 2,3 Quad Cities 1,2 Approved Calvert Cliffs 1,2 Oconee 1,2,3 Arkansas Nuclear One Unit Brunswick 1, 2 Beaver Valley 1,2 Pilgrim Davis-Besse 2007 Sequoyah 1,2

PAST ACCOMPLISHMENTS SAFETY OPERATIONS ECONOMICS INFRASTRUCTURE

WANO Organization Coordinating Center Regional Centers London Paris Moscow Tokyo Atlanta

INFRASTRUCTURE WANO (operators) IAEA (UN) NEA (OECD) INRA (regulators) INLA (lawyers) INDUSTRY GROUPS PROFESSIONAL SOCIETIES

FUTURE SITUATION By the world’s population is expected to grow to ~ 6-10 billion with the developing countries at ~ 4-8 billion If the per person world energy use reaches 1/3 that of the US today, the world use of energy will tripple

FUTURE CHALLENGES

TECHNICAL ECONOMIC INFRASTRUCTURAL SOCIAL AND POLITICAL

TECHNICAL CHALLENGES

Westinghouse View on Products for Future Markets Markets that are still regulated, majority of energy imported, and/or have limited sites (e.g., Asia) –Large advanced LWRs (e.g., APWR, APR1400) are a good fit –Larger passive plants are also being evaluated Markets that are deregulated with pipeline natural gas as principal competition and/or where potential sites are plentiful, but may be limited by thermal aspects or grid infrastructure (e.g., US/UK) –Passive plant technology (e.g., AP600, AP1000) –Small/modular designs with substantial shop fabrication (e.g., PBMR)

Argentina China 86,420 Czech RP Iran 22,111 Japan 3 3,190 Korea RP 4 3,820 Romania Russia 32,825 Slovak RP Ukraine 4 3,800 TOTAL 29 25,196 Source: International Atomic Energy Agency (IAEA) World Nuclear Power Reactors Under Construction (2000) Country Units Total MWe

What Do Customers Want? Large Plants Small Plants Innovative Technology Proven Technology

The Westinghouse AP1000 A Competitive Nuclear Option Available Today

ECONOMIC CHALLENGES

COST

COST ISSUES CONSTRUCTION COST CONSTRUCTION TIME OPERATING COSTS FUEL CYCLE COST REGULATORY COST LIABILITY

Nuclear Industry Power Uprates: (cumulative power capacity increases) Source: NRC (SECY Power Uprate Application Reviews July 2001 updated through November 2001 by NEI)

Fuel as a Percent of Electric Power Industry Production Costs (1999) Source: UDI

PRODUCTION COSTS ARE NOW LOWER THAN FOR GAS, COAL AND OIL

INFRASTURCTURAL CHALLENGES

INFRASTRUCTURE WANO (operators) IAEA (UN) NEA (OECD) INRA (regulators) INLA (lawyers) INDUSTRY GROUPS PROFESSIONAL SOCIETIES

Peer Review History Cumulative

IAEA DEVELOP NEW REACTOR REQUIREMENTS FOSTER GLOBAL STANDARDS IMPROVE SAFETY WORLDWIDE COMBAT NUCLEAR PROLIFERATION ADDRESS NUCLEAR TERRORISM

INRA FOSTER CONSISTENT, COMPATIBLE AND RELIABLE REGULATORY ENVIRONMENTS

INLA FOSTER CONSISTENT, COMPATIBLE AND RELIABLE LEGAL ENVIRONMENTS

WORKFORCE (USA) ~ 75 % of DOE and national lab workers expected to retire within 5 years ~ 30 % of nuclear plant workers can retire within 5 years ratio of NRC workers over 60 to those under 30 is 5 to 1

WORKFORCE (USA) - POOL NUCLEAR ENGINEERING UNGRADUATES HAVE DECLINED FROM ~1800 TO ~600 IN 20 YEARS UNIVERSITY REACTORS HAVE DECLINED FROM 64 IN THE ‘70s TO % OF UNIVERSITY LEVEL NUCLEAR FACULTY ARE OVER 60 NAVY TRAINS ABOUT 1/3 LEVEL OF ‘80s

SOCIAL AND POLITICAL CHALLENGES

Positive Media Signals

GOVERNMENT POSITIVE National Energy Policy - recommends expansion of nuclear Congress supportive - significant funding for DOE and NRC Secretary of Energy - programs aimed at new build before 2010, and extensive support for innovative designs by 2030 Southern Governor’s Association strongly endorses expansion

INDUSTRY POSITIVE Multi-utility coalition is exploring a joint venture for building several new plants Requests for early site approvals are expected as early as 2003 Fed. Reserve Board Chairman has said nuclear is “an obvious alternative to coal in electric power generation.” Financial community thinks it possible

THE PUBLIC IS POSITIVE “Do you strongly favor, somewhat favor, oppose or strongly oppose the use of nuclear energy as one of the ways to provide electricity in the US ?” Bisconti and Richards

WE SHOULD KEEP THE OPTION TO BUILD MORE NUCLEAR POWER PLANTS IN THE FUTURE

WE SHOULD DEFINITELY BUILD MORE NUCLEAR POWER PLANTS IN THE FUTURE

ISSUES FAVORABLE TO NUCLEAR EXPANSION Cost (operation) Fuel diversity / energy independence No “greenhouse” emissions

CLIMATE SITUATION “The seriousness of climate change is still widely misunderstood. Climate influences the productivity of farms, forests, and fisheries, the geography of disease, the livability of cities in summer, damage from storms and floods, property damage from higher sea level, the cost of engineered environments, and even the distribution and abundance of plant and animal species. A few degrees in the average global temperature would entail highly disruptive alterations in climatic patterns.”

CLIMATE CHANGE EVIDENCE Average temperature of the earth has risen ~0.8 degrees C in 100 years 15 of the 16 hottest years since 1860 have occurred since of the hottest years have occurred since 1990 The last 50 years constituted the warmest half century in 6000 years

Life Cycle CO 2 Emissions from Sources of Electricity Generation g C0 2 / kWh Source: CRIEPI/Japan

ISSUES CHALLENGING NUCLEAR EXPANSION Cost (capitol) Proliferation concerns Waste / transportation Security

WASTE / TRANSPORTATION President Bush just recommended Yucca Mountain as a repository, but National Research Council and Harvard/University of Tokyo study suggests new thinking Over 3000 fuel shipments covering 1.6 million miles have been made safely with no release of radioactivity

SECURITY “Nuclear power plants are certainly far more capable of resisting an aircraft attack than any other civilian structure…. Nuclear power plants have long had defensive capabilities that far exceed those of other civilian infrastructure” Chairman Richard Meserve, U.S. Nuclear Regulatory Commission

SO WHAT IS THE BOTTOM LINE ???

“THE CHOICES WE MAKE ABOUT ENERGY... IN THE YEARS AHEAD WILL AFFECT ECONOMIC WELL- BEING, ENVIRONMENTAL HEALTH, AND INTERNATIONAL SECURITY EVERYWHERE IN THE WORLD FOR MOST OF THE 21st CENTURY.” Prof. John Holdren, Harvard University, Kennedy School of Government

SO, WHAT ROLE WILL NUCLEAR POWER PLAY IN THE FUTURE ? FOR THE U.S., FOR THE WORLD?

It’s difficult to make predictions, especially about the future !

Koeberg – South Africa

Nuclear Industry Yearly Power Uprates ( ) (yearly power capacity increases) Source: NRC (SECY Power Uprate Application Reviews July 2001 updated through November 2001 by NEI)

Nuclear Energy is Critical to America’s Energy Future Extensive record of safety and production Industry works continuously to improve Environmentally sound Most economical source of electricity

License Event Reports ( ) Source: NRC

Number of Unusual Events Reported to NRC ( ) Source: NRC Note: A Notification of Unusual Event for power and non-power reactor licensees is a condition involving potential degradation of the level of plant safety that does not represent an immediate threat to public health and safety.

Nuclear Plant Efficiency at Record-High Levels 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% % 20.0% 40.0% 60.0% 80.0% 100.%