facilitating a sustainable supply chain & fuel supply
TRANSCRIPT
Facilitating a Sustainable Supply Chain & Fuel
Supply
Shah Nawaz Ahmad
Senior Adviser
India, Middle East and South-East Asia
INBP Conference
Nov 13-14, 2019
Mumbai,
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°C anomalyJuly 2018
Source:NASA GISS
Extreme weather: the global summer of 2018
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© 2015 Organisation for Economic Co-operation and Development 4
Source: International Energy Agency
IEA 2°C Scenario: Nuclear is Required to Provide the Largest Contribution to Global Electricity in 2050
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Nuclear essential in UN-supported Deep Decarbonization Pathways project
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Nuclear largest source of electricity at 21%
Additional 1053 GWnuclear capacity required by 2050
Nuclear generation to increase to 27% for 13 countries Nuclear generation to increase to
Fossils Fuels9%
Fossil Fuel W CCS15%
Nuclear21%
Hydro13%
Wind20%
Solar17%
Other RE5%
Electricity GenerationSource: Deep Decarbonization Pathways Project (2015) UN Sustainable Development Solutions Network (SDSN) and the Institute for Sustainable Development and International Relations
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Decarbonising electricity generation –need for low life cycle emissions:
Nuclear energy is among the best
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Source: World Nuclear Association meta study, incl. IPCC 2014
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Effective safety paradigm
Paul Scherrer Institut 1998: considering 1943 accidents with more than 5 fatalities
The alternatives to nuclear are far more dangerous – even including accidents
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Environment
Chiba refinery fire
Smog in Beijing
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From the society perspective:Increase genuine public wellbeing
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OECD electricity generating cost projections for year 2010 on – 5% discount rate, c/kWh
country nuclear coal coal with CCS Gas CCGT Onshore wind
Belgium 6.1 8.2 - 9.0 9.6
Czech R 7.0 8.5-9.4 8.8-9.3 9.2 14.6
France 5.6 - - - 9.0
Germany 5.0 7.0-7.9 6.8-8.5 8.5 10.6
Hungary 8.2 - - - -
Japan 5.0 8.8 - 10.5 -
Korea 2.9-3.3 6.6-6.8 - 9.1 -
Netherlands 6.3 8.2 - 7.8 8.6
Slovakia 6.3 12.0 - - -
Switzerland 5.5-7.8 - - 9.4 16.3
USA 4.9 7.2-7.5 6.8 7.7 4.8
China* 3.0-3.6 5.5 - 4.9 5.1-8.9
Russia* 4.3 7.5 8.7 7.1 6.3
EPRI (USA) 4.8 7.2 - 7.9 6.2
Eurelectric 6.0 6.3-7.4 7.5 8.6 11.3
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OECD electricity generating cost projections for year 2010 on – 10% discount rate, c/kWh
country nuclear coal coal with CCS Gas CCGT Onshore wind
Belgium 10.9 10.0 - 9.3-9.9 13.6
Czech R 11.5 11.4-13.3 13.6-14.1 10.4 21.9
France 9.2 - - - 12.2
Germany 8.3 8.7-9.4 9.5-11.0 9.3 14.3
Hungary 12.2 - - - -
Japan 7.6 10.7 - 12.0 -
Korea 4.2-4.8 7.1-7.4 - 9.5 -
Netherlands 10.5 10.0 - 8.2 12.2
Slovakia 9.8 14.2 - - -
Switzerland 9.0-13.6 - - 10.5 23.4
USA 7.7 8.8-9.3 9.4 8.3 7.0
China* 4.4-5.5 5.8 - 5.2 7.2-12.6
Russia* 6.8 9.0 11.8 7.8 9.0
EPRI (USA) 7.3 8.8 - 8.3 9.1
Eurelectric 10.6 8.0-9.0 10.2 9.4 15.5
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COUNTRY
NUCLEAR ELECTRICITY GENERATION
2018
REACTORS OPERABLE
August 2019
REACTORS UNDER
CONSTRUCTION
August 2019
REACTORS PLANNED
August 2019
REACTORS PROPOSED
August 2019
URANIUM
REQUIRED
2017
TWh % e No. MWe net No. MWe gross No. MWe
gross No. MWe gross tonnes U
Argentina 6.5 4.7 3 1702 1 27 1 1150 2 1350 195
Bangladesh 0 0 0 0 2 2400 0 0 2 2400 0
Belarus 0 0 0 0 2 2388 0 0 2 2400 0Brazil † 14.8 2.7 2 1896 1 1405 0 0 4 4000 321China 277.1 4.2 47 45,688 11 10,005 43 50,900 170 199,610 8289Finland 21.9 32.5 4 2764 1 1720 1 1250 0 0 494France 395.9 71.7 58 63,130 1 1750 0 0 0 0 9502India 35.4 3.1 22 6219 7 5400 14 10,500 28 32,000 843Japan 49.3 6.2 33 31,679 2 2756 1 1385 8 11,562 662
Korea RO (South)
127.1 23.7 24 23,231 4 5600 0 0 2 2800 4730
Pakistan 9.3 6.8 5 1355 2 2322 1 1170 0 0 217Romania 10.5 17.2 2 1310 0 0 2 1440 1 720 183Russia † 191.3 17.9 36 29,139 6 4973 24 25,810 22 21,000 5380Slovakia 13.8 55.0 4 1816 2 942 0 0 1 1200 651Slovenia 5.5 35.9 1 696 0 0 0 0 1 1000 141Spain 53.4 20.4 7 7121 0 0 0 0 0 0 1275Turkey 0 0 0 0 1 1200 3 3600 8 9500 0
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COUNTRY
(Click name forCountry Profile)
NUCLEAR ELECTRICITY GENERATION
2018
REACTORS OPERABLE
August 2019
REACTORS UNDER CONSTRUCTION
August 2019
REACTORS PLANNED
August 2019
REACTORS PROPOSED
August 2019
TWh % e No. MWenet No. MWe
gross No. MWegross No. MWe
grossBangladesh 0 0 0 0 2 2400 0 0 2 2400
China 277.1 4.2 47 45,688 11 10,005 43 50,900 170 199,610India 35.4 3.1 22 6219 7 5400 14 10,500 28 32,000Japan 49.3 6.2 33 31,679 2 2756 1 1385 8 11,562Korea RO (South) 127.1 23.7 24 23,231 4 5600 0 0 2 2800
Pakistan 9.3 6.8 5 1355 2 2322 1 1170 0 0Russia † 191.3 17.9 36 29,139 6 4973 24 25,810 22 21,000Turkey 0 0 0 0 1 1200 3 3600 8 9,500UAE 0 0 0 0 4 5600 0 0 0 0
WORLD* 2563 c 10.3** 444 /(167)
395,756 54/(39) 57,808 111/(
86) 121,829 330/(239) 360,782
TWh % e No. MWe No. MWe No. MWe No. MWeNUCLEAR
ELECTRICITY GENERATION
OPERABLE UNDER CONSTRUCTION PLANNED PROPOSED
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New reactor starts in 2016-17
South Korea: Shin Kori 3China: Ningde 4China: Hongyanhe 4
USA: Watts Bar 2China: Changjiang 2China: Fangchenggang 2
Russia: Novovoronezh 2 1India: Kudankulam 2
China: Fuqing 3Pakistan: Chasnupp 3
China: Yangjiang 4Pakistan: Chasnupp 4
China: Fuqing 4China: Tianwan 3
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New reactor starts in 2018-19
Russia: Rostov-4Russia: Leningrad 2-1China: Yangjiang 5China: Taishan 1China: Sanmen 1China: Haiyang 1China: Sanmen 2China: Haiyang 2China: Tianwan 4
South Korea: Shin Kori 4Russia: Novovoronezh 2-2China: Taishan 2China: Yangjiang 6
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Scheduled start ups by 2020
MWe2019 Belarus Ostrovets 1 11942019 China, Fangchenggang 3 11802019 China, Fuqing 5 11502019 China, Hongyanhe 5 11192019 China, Huaneng 2102019 Russia, Pevek FNPP 70
MWe2020 Belarus, Ostrovets 2 11942020 China, Hongyanhe 6 11192020 China, Fangchenggang 411802020 China, Fuqing 6 11502020 China, Tianwan 5 11182020 China, Bohai shipyard 602020 Finland, Olkiluoto 3 17202020 India, Kalpakkam PFBR 5002020 Japan, Shimane 3 13732020 Korea, Shin Hanul 1 14002020 Russia, Leningrad II-2 11702020 Slovakia, Mochovce 3 4712020 UAE, Barakah 1 1400
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Innovative nuclear energy
During 5 years, between 2016 and 2020 there are due to be:
• 47 new reactors online• Based on 20 different designs• Built in 11 countries• 2 are newcomer countries• 9 of the 20 designs being built for
the first time
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Reactors reaching 50 years of operation this year
Beznau 1, Switzerland
Ginna, USA
Nine Mile Point 1, USA
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Tarapur 1
Tarapur 2
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Reactors perform well over entire lifetime:Mean capacity factor by age (2014-2018)
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Long-Term Operation (LTO)• In principle, operating for a longer period than initially
expected should normally be economically attractive.• Nuclear power is characterized by high initial capital costs
and low fuel costs, • For well-managed plants with low O&M costs, the cost of
producing electricity can be very competitive. (Tarapur 1&2)• However the licensing requirements that need to be
completed for extending operation vary significantly • In US, some industry commentators have predicted that
over 90 percent of the US reactors could apply for and be granted licence extensions.
• A sustainable supply chain for equipment and services is most relevant for LTO
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• Professor William D’haeseleer study for the European Commission suggested that extending operations for a further 20 years could typically cost less than US$ 1,000/kWe. (New Build EU Overnight cost est $5,500/kWe)
• This would suggest that long-term operation is the cheapest way of providing nuclear power over a 20-year period.
• However, low gas prices in North America have undermined the case for long-term operation, although these cannot be assumed to last indefinitely. (In some projections natural gas prices increase within the time frame of building new nuclear plants).
• The total value of work for long-term operation could amount to some US$ 50-100 billion (depending on the amount of refurbishment deemed necessary by the regulatory body).
• This could amount to around US$ 4 billion a year of international procurement
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Nuclear Power Market • The the market is not a ‘sellers’ market’; however neither is
it a ‘buyers’ market’.
• The main technical barriers to trade are the licensing requirements imposed by the nuclear regulatory bodies for the protection of health and safety and to safeguard materials and know-how from misuse.
• Although a number of technology vendors have obtained regulatory approval for their reactor models across several jurisdictions, no vendor is able to offer its technology everywhere.{Cooperation in Design Evaluation & Licencing (CORDEL)/ Multinational Design Evaluation Programme (MDEP)}
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• There are today eleven consolidated technology vendors offering their technology and services across much of the nuclear fuel cycle.
• While the industry remains weighted towards domestic markets, most vendors are, internationally diversified in terms of their corporate make-up and their supplier base.
• International trade in nuclear components has the potentialto reach nearly US$ 30 billion a year, according to World Nuclear Association reference scenario estimates.
• The value of the investment in new nuclear build to 2035 is of the order of US$ 1.5 trillion, with significant international procurement of US$ 24 to $ 30 billion a year after 2025 (up from about $6-10 billion a year currently).
• About US$ 730 billion will consist of equipment purchases.
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• Competitive pressures are encouraging the localization of manufacturing, joint ventures and international procurement.
• As a result, production is located in several jurisdictions with materials, semi-processed and finished fabrications perhaps crossing several borders prior to reaching the final destination for assembly and installation.
• Services are also performed in different countries either as a result of subcontracting or through the participation of specialist divisions of the same transnational corporation or industrial group.
• Globalization, in short, is as much a part of the civil nuclear scene as it is in other industries.
• The World Nuclear Association believes that the system for import and export between countries should be reviewed to streamline procedures while preserving a sound safeguards regime.
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• A competitive global market exists for the construction and procurement of nuclear power plants.
• Around a decade ago, there were concerns that some ‘choke points’ existed along the supply chain, for instance in terms of heavy forging capacity.
• However, a combination of factors, including i) the cancellation of some planned plants, which followed the March 2011 Fukushima Daiichi accident, ii) investment by existing suppliers and iii) the transfer of technology and localization of manufacturing (especially to China), means there are now sufficient suppliers available to fabricate key reactor components under currently known plans.
• Potentially bottlenecks could re-emerge in the event of multiple reactor orders being issued at the same time as an upturn in capital investment.
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Localization • Localization supports the transfer of technology and raises productivity
in the host country, but needs significant additional efforts. (Need for vendor oversight)
• It creates employment, especially in professional and skilled occupations, directly and indirectly as local companies develop their capabilities and relationships with global companies.
• Direct employment is created from the ‘backward linkages’ in the supply chain through the processing and manufacture of basic inputs and intermediate products and services.
• Jobs may also be stimulated indirectly by helping local suppliers upgrade their capacities so that they are more competitive in international markets, although economic evidence pertaining to its impact is inconclusive.
• Localization attempts to capture some of the investment in electrification for national economic development by raising productivity among local firms and moving their product portfolio ‘up the value chain’.
• Care needs to be taken that localization should not impact project schedules & cost
• A local supply base can provide a convenient service during plant operation and maintenance. The procurement policies for spare parts, supplies and maintenance by plant operators are another important factor
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Export Control • Growing international technical exchange, trade and
investment is presenting a challenge to the existing regime of export control, which was developed at a time of much more limited international business interaction.
• Most export control authorities do not issue general export licences for nuclear-related items, even though they do issue such licences for certain non-nuclear dual-use items,
• This places the nuclear industry at a disadvantage in comparison with the aerospace and defence industries.
• The degree of scrutiny accorded to nuclear technology should be risk-based.
• A nuclear power reactor poses a relatively low technology risk with respect to proliferation
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Uranium• Production from world uranium mines now supplies 90% of the
requirements of power utilities. • Primary production from mines is supplemented by secondary
supplies, formerly most from ex-military material but now the products of recycling and stockpiles built up in times of reduced demand.
• World mine production has expanded significantly since about 2005.• Each GWe of increased new capacity will require about 150 tU/yr of
extra mine production routinely, and about 300-450 tU for the first fuel load.
• Because of the cost structure of nuclear power generation, with high capital and low fuel costs, the demand for uranium fuel is much more predictable than with probably any other mineral commodity.
• Once reactors are built, it is very cost-effective to keep them running at high capacity and for utilities to make any adjustments to load trends by cutting back on fossil fuel use.
• Demand forecasts for uranium thus depend largely on installed and operable capacity, regardless of economic fluctuations.
• However, this picture is complicated by policies which give preferential grid access to subsidised wind and solar PV sources
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Uranium Prices (Graph courtesy of UxC)
(
The reasons for fluctuation in mineral prices relate to demand and perceptions of scarcity. The price cannot indefinitely stay below the cost of production, nor will it remain at very high levels for longer than it takes for new producers to enter the market and anxiety about supply to subside.
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U Purchase Strategies• Govt to Govt Contracts
• Market based purchase✓ Spot Purchase✓ Short / Long Term Contracts
(Most trade is via 3-15 year term contracts with producers selling directly to utilities sometimes at a significantly higher price than the spot market, reflecting the security of supply).
• Market Based Security of Supply ✓ Individual Contract✓ Above contract backed by industry consortium✓ IAEA Fuel Bank
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Conversion• The uranium conversion sector is characterized by a small
number of companies producing UO2 for those reactors fuelledwith natural uranium and UF6 for those using enriched uranium.
• For the last eight years the market was in oversupply caused by reduced conversion requirements and the accumulation of sizeable UF6 stockpiles.
• Excess capacity resulted in the reduction, suspension and even closure of conversion production.
• Today, annual primary production is far lower than annual conversion requirements.
• The market has begun a period of rebalancing, largely absorbing inventories in the near term.
• In the medium term idled capacity is expected to be resumed, while in the long term (towards the end of the next decade in the Reference Scenario), capacity expansion is expected to be needed
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Enrichment • Excess global enrichment capacity has resulted in the
indefinite postponement of new US projects and extensive use of existing capacity for underfeeding and tails re-enrichment.
• Of the major suppliers of enrichment services, CNNC will be the only one to significantly expand its capacity over the forecast period due to the Chinese target of achieving self-sufficiency.
• The three other major suppliers will not need to expand their capacity through to 2040 in the Reference Scenario.
• In the Upper Scenario, additional capacity might be needed as early as in the first half of the next decade.
• However, given the modular nature of centrifuge technology and the construction times for nuclear power reactors, enrichment capacity expansion can take place in a timely way, and supply challenges should be avoided
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Fabricated Fuel • The fuel fabrication market differs from the other stages of
nuclear fuel cycle due to the specificity of the product. • Fuel assemblies are highly engineered and technological
products. • Moreover, the market itself is more regional in character
than global, but this is changing.• Localization can assure long term supply. • At present, existing fuel fabrication capacities are sufficient
to cover anticipated demand for both first cores and reloads; however, in some circumstances it is still possible that supply bottlenecks could occur for certain designs.
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Harmony programme 2016-2050Cumulative 1000 GW new nuclear capacity to 2050
Construction rate doubled from trend of less than 5GW/y to 10GW/y
Then we need to triple from today’s level
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Harmony Programme
The Harmony programme provides a framework for action, helping industry reach out to key stakeholders so that barriers to growth can be removed.
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Level playing field
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Markets should be reformed to:
• support capital investments• include grid system costs• eliminate nuclear-only taxes• reform subsidies• give credit for low carbon
emissions• value 24/7 reliability• support innovative finance
solutions
