1. Current Market & Industry’s Path Forward
Janet Schlueter
Senior Director,
Radiation and Materials Safety
Nuclear Energy Institute

2. Today’s Market: How Did We Get Here?
Electricity Service is a Monopoly Requiring Regulation to Help Ensure Availability and Avoid Price Fluctuations
Individual Companies Cannot Set Prices but Must Cover Costs of Service and Provide Return on Investment
Public Utility Commissions Regulate Utilities, Determine Prudency of Costs, and Review Resource Plans
Electricity Competition is Good!

3. Operating Nuclear Power Plants – 60 59 Sites in 30 States (Oyster Creek Ceased Operations 9/17/18)

4. Nuclear Contributions

5. U.S. Electricity Generation Fuel Shares in 2017
Wind – 6.3%
Biomass & Petroleum – 2.1%
Solar – 1.3%
Geothermal – 0.4%
~20% of U.S. energy generation comes from nuclear
99, 635 MWe of baseload capacity
804.9 billion kWh
~56% of U.S. emissions-free energy comes from nuclear
Nuclear
20.0%
Hydro
7.6%
Coal
30.1%
Natural Gas
31.7%
Source: U.S. Energy Information Administration
Updated: March 2018

6. Continuing Surge in Supply of Low-Cost Shale Gas
Industry Challenges
Continuing Surge in Supply of Low-Cost Shale Gas
Low Growth in Total Electricity Demand
Failure of Markets to Recognize Environmental Attributes
Fuel/Technology Diversity is Undervalued
State and Federal Policies Promote Only Renewables
Transmission Constraints
Market Design Issues

7. Declining Electricity Prices

8. Premature Nuclear Power Plant Closures and Announced Shutdowns
MWe
Closure Year
Reason
Final Year Generation
(billion kWh per year)
Final Year CO2 Avoided
(M tons/year)
Crystal River 3
860
2013
Mechanical
7.0
3.8
San Onofre 2 & 3
2,150
18.1
8.0
Kewaunee
566
Market
4.5
Vermont Yankee
620
2014
5.1
2.4
Fort Calhoun
478
2016
3.4
3.3
Oyster Creek
625
2018
Policy
5.4
4.0
TOTAL
5,299
43.5
25.3
Three Mile Island 1
803
2019
6.9
5.0
Pilgrim
678
2.3
Davis-Besse
908
2020
7.9
5.7
Duane Arnold
619
5.2
Indian Point 2 & 3
2,061
Market & Policy
15.3
7.1
Beaver Valley 1 & 2
1,872
2021
11.1
Perry
1,268
9.8
Palisades
789
2022
6.1
5.3
Diablo Canyon 1 & 2
2,240
17.9
11,238
89.5
55.5
Source: Emissions avoided are calculated using regional and national fossil fuel emissions rates from the U.S. Environmental Protection Agency and latest plant generation data from the U.S. Energy Information Administration Updated: September 2018.

9. Impacts of Plant Closures
Communities are Stressed Financially
Loss of Hundreds of Well-Paying Jobs
Erosion of Tax Base Impacts Local Services, e.g., Schools
Emissions Increase
Vermont Yankee’s generation replaced by Natural Gas
San Onofre Led to Additional 9M tons of CO2 emissions
Electricity Prices Increase
CA Consumers paid $350M more
Energy Replacement is Expensive

10. NATIONAL NUCLEAR ENERGY STRATEGY CREATE THE NUCLEAR IMPERATIVE
PRESERVE
SUSTAIN
INNOVATE
THRIVE
Appropriately value nuclear generation
Create sustainability via improved regulatory framework and reduced burden
Innovate, commercialize, and deploy new nuclear
Compete globally

11. Appropriately value nuclear generation
Preserve Deliverables
PRESERVE
SUSTAIN
INNOVATE
THRIVE
Appropriately value nuclear generation
Create sustainability via improved regulatory framework and reduced burden
Innovate, commercialize, and deploy new nuclear
Compete globally
Significantly impact conversation around proper valuation of nuclear generation
Advance state-level policy actions
Pursue ISO and FERC market reforms to recognize nuclear power attributes

12. State of the States

13. Nuclear Plants Saved from Premature Closures by State Action
MWe
Projected Closure Year
Reason for Potential Shutdown
Electricity Generated in 2017
(billion kWh per year)
CO2 Emissions Avoided in 2017
(Million metric tons/year)
Clinton
1,065
2017
Market
8.3
8.1
Fitzpatrick
852
6.2
2.9
Ginna
582
4.7
2.2
Hope Creek
1,172
~2020
10.6
7.7
Millstone 2 & 3
2,096
16.5
7.4
Nine Mile Point 1 & 2
1,770
16.0
Quad Cities 1 & 2
1,819
2018
15.4
11.2
Salem 1 & 2
2,328 ~
18.0
13.1
TOTAL
11,683
95.7
60.0
Benefits:
11,683 MWe baseload capacity
More than 7,400 direct jobs saved
More combined electricity generation than all utility solar in 2017
60.0 million metric tons of CO2 avoided
Source: Emissions avoided are calculated using regional and national fossil fuel emissions rates from the U.S. Environmental Protection Agency and latest plant generation data from the U.S. Energy Information Administration Updated: August 2018.

14. Modernize NRC regulatory requirements and oversight
Sustain Deliverables
PRESERVE
SUSTAIN
INNOVATE
THRIVE
Appropriately value nuclear generation
Create sustainability via improved regulatory framework and reduced burden
Innovate, commercialize, and deploy new nuclear
Compete globally
Modernize NRC regulatory requirements and oversight
Reduce financial burden on nuclear operators
Advance new and used fuel regulations

15. U.S. Nuclear Capacity Factors (percent)
92.2% in 2017
92.1% in 2016*
92.2% in 2015
91.7% in 2014
89.9% in 2013
86.1% in 2012
* NEI’s 2016 capacity factor calculation does not include Fort Calhoun Nuclear Generating Station
Source: U.S. Energy Information Administration
Updated: March 2018

16. Expected Subsequent License Renewal Applications
Industry’s intent to pursue SLR and operate for 80 years has increased significantly in last two years
Initial survey was conducted in 2016 showing a total of 20 expected SLR application submittals by plant
2018 survey shows an increase of licensees interested in pursuing SLR and a total of 53 units, demonstrating that over half of the industry currently intend to pursue SLR
Initial SLR applications for 2018 will potentially exceed expectations by 200%
Peach Bottom was the only SLR application initially expected for 2018 and was hand-delivered to NRC on July 10th, on schedule since 2009
The Turkey Point application was submitted on January 30, 2018 and was accepted for NRC review on April 26th
The Surry application is expected in 1st quarter 2019 but is ahead of schedule
NRC is rushing to complete and approve first license renewal applications by the end of 2018 in order to focus all resources on SLR
Early announcements or letters of intent to NRC for those utilities looking to submit in the early 2020’s would be very beneficial for our industry and to the NRC
Source: NEI June 2018 Survey

17. NRC Transformation Initiative
NRC not prepared for new technologies including Digital I&C and advanced fuels and reactors
Industry-identified areas where transformation needed, e.g.,
Utilize qualitative and quantitative risk insights to guide regulatory decision making
Recognize current inherent safety margins
Transform ROP program, e.g., eliminate white finding
Risk-inform Security and EP      
Allow alternative methods of compliance       

18. Right Size NRC Budget NRC Budget ($M) Fee Recovery ($M) 18
* All Numbers Include Office of the Inspector General Funding 18

19. Innovate, commercialize, and deploy new nuclear
Innovate Deliverables
PRESERVE
SUSTAIN
INNOVATE
THRIVE
Appropriately value nuclear generation
Create sustainability via improved regulatory framework and reduced burden
Innovate, commercialize, and deploy new nuclear
Compete globally
Encourage technology innovation
Advance development of commercial deployment pathway (financing)
Advance an efficient and stable regulatory framework

20. Continuum of Innovation
AP1000
Advanced Non-LWRs
Hi-temp gas
Liquid metal
Molten salt
GEH ESBWR
Large LWRs
2016
2020
2025
2030
Watts Bar 2
Small
Modular
Reactors
Watts Bar 2
Vogtle 3 & 4
NuScale
Power
Module

21. Rapid Commercialization
Ensuring US continued leadership in nuclear means:
Maximizing investments in advancing technology
Significant steps to improve licensing efficiency

22. Scale of New Builds With SLR, 20% market share requires adding ~90 GW
Maintaining a role for nuclear at 20% of the electricity supply will require a significant wave of new construction. Even if many plants pursue a second license renewal, around 90 GW of new capacity will be needed to maintain that market share.
Assumptions:
40% of declared capacity retires early; 20% of concern capacity closes early; 75% of operating capacity receives SLR; 20% nuclear in 2050 with 20% of new builds from large LWRs, 30% from SMRs and 50% from advanced reactors

23. Licensing Inefficiency
Obstacles to Deployment
Added Time
Added Cost
Added Uncertainty
Lack of flexibility requires case-by-case reviews creating unnecessary delays
Overly detailed reviews add unnecessary cost
Unclear licensing for new technology cause issues and delays in developing new designs
Uncertainty in licensing processes discourages investors and drives innovation outside of the U.S.

24. New Reactor Regulatory Strategy

25. Create Federal government alignment in support of more nuclear exports
Thrive Deliverables
PRESERVE
SUSTAIN
INNOVATE
THRIVE
Appropriately value nuclear generation
Create sustainability via improved regulatory framework and reduced burden
Innovate, commercialize, and deploy new nuclear
Compete globally
Create Federal government alignment in support of more nuclear exports
Increase U.S. nuclear exporter access to global markets
Ensure that U.S. Export-Import Bank is fully functioning
Pursue reforms to export controls

26. International Export Advocacy
Trade Promotion: Identify Key Market & Advocacy
Export Control Reform: 123 Agreements, 10 CFR 810
Improved Financing Options: Ex-Im Bank
Playing Defense on “Bad Legislation”: Federal Advocacy
Market Access
Federal Coordination

27. International Nuclear Influence
China and Russia are leading in constructing their domestic designs
CHINA 28 11 6 9
RUSSIA 5 21 11 4 4
S. KOREA
Constructed Since 1997 (domestic design) 10 5
INDIA
Under Construction (domestic design)
Domestic Design being Constructed in Other Countries
(Since Under Construction)
USA 1 2 8
Source: International Atomic Energy Agency: PRIS Database
Updated: March 2018

28. THRIVE  GLOBAL REACTORS UNDER CONSTRUCTION2 18 5 4 1
Building additional reactors
Planning or interested in additional reactors
“Newcomers” building reactors
“Newcomers” planning or interested in building
Source: IAEA PRIS Database. March 15, 2018.

29. SUMMARY
Domestic nuclear power industry faces challenges both at home and abroad
Progress is being made at State and Federal Level including increased access to foreign markets by U.S. designers and suppliers
NEI is working with members and broader industry to help effect positive change in the U.S. market and increase the use of nuclear globally