1. 1 The Challenges Facing New Generation Capacity An overview and discussion Paolo Gaio Westinghouse International NPP

2. 2 The Nuclear Renaissance Has Arrived However, it must not be forgotten that the Renaissance would not be possible without the continued safe and effective operation of the current worldwide fleet Capacity factors are up and safety-related occurrences are down, providing the most economic baseload generation in the world. THIS IS BOTH A SHARED RESPSONSIBLITY AND ACKNOWLEDGEMENT TO ALL OPERATORS AND VENDORS

3. 3 AP1000 Created and Designed to meet Customer Requirements AP1000 Was Developed To Meet Advanced Light Water Reactor Utility Requirements (ALWR URD) –Issues were discussed with EPRI ALWR Staff and Utility Staff –All issues were resolved  Sometimes the design was changed  Sometimes URD requirements were changed

4. 4 AP1000 Satisfies EUR AP1000 assessed against EUR, AP1000 Assessment detailed and thorough –Over 5000 requirements assessed EUR Certified on 15 May, 2007

5. 5 Simplification and Standardization are Key to Future Nuclear Plant Construction Simplicity and standardization in Design through reduced number of components and bulk commodities Simplicity in Safety through use of passive safety systems Simplicity in Construction through modularization Simplicity in Procurement through standardization of components and plant design Simplicity in Operation and Maintenance through use of proven systems and components, and man-machine interface advancements Improved Safety, Competitive Economics and Good Performance

6. 6 Essential Change: The New Licensing Process – 10 CFR 52 I TAAC metConstruction Operation Combined Construction and Operating License (COL) Early Site Permit (ESP) Design Certification AP1000 Certified

7. 7 Supply Management Challenges Abrupt, expanding demand; diminished supply chain Long lead times for specialty steel forgings, SG tubing Logistics of moving large components around the world Competition with supply to other industries and competitors Standardized plant advantages - efficiency, lower costs: Opportunity to establish a learning curve Multiple standard plants = higher production volumes

8. 8 Nuclear is a Local Project Too Opportunities for local industry - Craft construction labor and materials - Module fabrication - More engagement according to capability - Operation. Possibly technology transfer, as in: - Republic of Korea - China.

9. 9 Project Socio-Economic Impact Locally: - Develops local artisan force - Creates higher skilled, higher paying jobs - Ripple-effect to local economy.

10. 10 Human Resource Challenge After the 1970s, nuclear business retrenched, hiring stalled Declining enrollment in nuclear engineering schools Legacy: Gap in the US nuclear work force. Average age, 48 years. But now… Nuclear school admissions growing Opportunities for new graduates at Westinghouse - 500 new graduates hired over past 5 years - Expect 150 more/year through at least 2010 - Plus experienced hires US NRC, 200-400 to be hired/year through 2008

11. 11 Modular Construction Allows More To Be Done in Parallel Resulting in Shorter Construction Schedule 36-48 month construction period for the Nth plant, and financing costs that are >25% lower than earlier generations

12. 12 New Designs Have to Deliver Cost basis that can compete with other energy sources - High degree of certainty for schedule and cost - Reduced construction time and cost Increased levels of safety Easier to operate and maintain Standardized plants Expanded Grid Capability

13. 13 The Current Position for Grid operators Grid operators need to maintain the quality, the voltage and frequency of the electricity generated under increasing the pressure of: –Increasing Electrical Demand –Aging Generation Plant & Transmission Infrastructure –Pressure to Reduce CO 2 – Driving Renewables Result – More Flexible Generation Required

14. 14 Traditional Generation Mix Base load typically comprises of Coal and Nuclear – Plants which have long start up times high capital costs and low fuel costs. Peak load is usually supplied from gas fired and hydro plants that are must faster to come online and have increasingly higher fuel cost

15. 15 Future Generation Mix Increase in Renewable Generation –Wind & Solar has Transient Output There is extensive evidence of large-scale mid- winter weather in which very little wind generation was available across Northern Europe Oswald J et al, ‘Will British Weather Provide Reliable Electricity?’ 2008 and Bach P-F

16. 16 AP1000 - Smarter Generation The AP 1000 uses ‘Grey Rods’ to control the reactor ouput – Not water boronation. This provides the ability for: –5% per minute ramp changes –50% Load change per day and a 2 hour linear ramp characteristic and this is in addition to… –Follow load changes of less than 10% peak-to- peak at a rate of 2% per minute of rated load –(That’s equivalent to 12MW in 30seconds) Full Generation Flexibility while maintaining a 60 Year life

17. 17 Questions ?