THE BENEFITS OF INTERNATIONAL PARTNERSHIPS AND INSIGHTS INTO NUCLEAR PROGRAMMESIN EUROPE

October 2019

TOM JONES VICE PRESIDENT INTERNATIONAL DEVELOPMENT, ASSYSTEM

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The crucial role of nuclear power today

02 The global nuclear market

03 Case study: UK Energy trilemma + nuclear renaissance

04 The stakeholders that orbit nuclear power

05 Benefits of partnering

06 Summary

OVERVIEW

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3

Crucial Role of Nuclear

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The crucial role of nuclear power today

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CO2 emissions per kwh per technologyGlobal economic drivers Geo-political drivers

Energy demand x 2 by 2050

Increasing difficulty of extracting resources leading to

higher prices

The global response to climate change

To keep global temperature rise, this century, well below 2 degrees Celsius above pre-industrial levels

The need for stable + predicatable global energy

costs

195 countries recognise thatwe face a climate emergency

The aim of the UNFCC is net zero by 2050

UK has legislated on the commitment to net zero by

2050

Worlwdide population: ~10bn by 2050

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The global nuclear market

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REACTORS - OPERATIONALReactors Operable

REACTORS – UNDER CONSTRUCTIONReactors Under Construction

Reactors Planned

Reactors Proposed

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TECHNOLOGY

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Technology preference mirrors geo-political alliances

50 % of the reactor market is supplied by EDF, CGN/CNNC and Rosatom, with a mixture of technologies in the remaining 50%

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FINANCING NUCLEAR NEW BUILD

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The construction risk is still rated as the main risk to an

investment

The nuclear industry has bad reputation for cost over-runs and

delays

►On average European new build projects exceeded cost forecasts

by 159% and construction schedules by 78%

Contractors cannot shoulder the burden of cost escalation and

delays to schedules as the reputation of entire project is at risk

It is critical to manage and mitigate construction risk

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Case study: UK energy trilemma

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THE ENERGY TRILEMMA

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Private sector led approach since 1990s

Global events impact public perception of nuclear

Private investors need confidence to invest

NPPs pause due to limited investment

The supply of secure energy from nuclear is at risk

Trust and confidence

Capital cost

Secure supply

UK ENERGY MIX OCTOBER 2019

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WHEN THE LIGHTS GO OUT

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Nuclear supply is required to support renewables fill the gap left by coal and gas

Nuclear energy has a key role as a counterbalance to renewables during periods of intermittent supply

Delay in the development of new nuclear has reduced its percentage in the mix to 17-18%

To maintain a secure baseload the UK can either replace existing with new build or double nuclear capacity with a mixture of large scale, SMR and Gen IV

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RENEWED CONFIDENCE IN NUCLEAR

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Key announcements from the UK Government this year bring confidence to the market:

July 2019 UK government legislates on its commitment to net zero carbon greenhouse gas emission by 2050 – putting the low carbon benefits of nuclear power back into public debate

July 2019 – Launch of consultation into Regulated Asset Base(RAB) financing model for nuclear power plants

Construction at the HPC NPP is well underway

July 2019 – announcement of an initial investment of £18 million in Autumn 2019 in phase 1 of UK SMR

July 2019 Prime Minister Boris Johnson champions the economic benefits and export potential that UK SMR

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Stakeholders of nuclear

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Industry Supporting & Skills Bodies

Fuel Manufacturing

Government

Regulators

Supply chain

Decommissioning

New Build

Existing Generation

Academic Institutions & Professional Bodies

Research & Development

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The benefits of partnering

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NUCLEAR NEW BUILD CONTRACTING APPROACHES

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Multi-package

Owner-operator

Internalised D&B

Island model

Smaller number of EPC-type Contracts

Turnkey

Single EPC Contract

Turnkey +

Operate and/or own

Transfer of ‘Risk’ to EPC support orgn.

No two NNB developments are the same

Whatever the approach, the client and the extended supply chain need to be truly intelligent customers and intelligent deliverers across critical core nuclear skill-sets

AkkuyuTurkey

HPC UK

Horizon WylfaUK Moorside

UKBarakah UAE

CGN BradwellUK?

PARTNERING OFFERS FOR DEVELOPERS, OPERATORS AND VENDORS TO ADD VALUE AND REDUCE THE RISK THROUGHOUT THE NNB LIFECYCLE

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Project

Inception

System Studies

and Planning

Feasibility

and Feed

General

Specifications,

and work

packages

Detailed Design,

Specifications, RFQ

and Procurement

Management

Build and

Install

Testing and

Commissioning

Operations and

Maintenance

Plan Life

Extension and

Upgrade

OWNER ENGINEER

ARCHITECT ENGINEER

OPERATING LICENSE

OPERATOR ENGINEERCONSTRUCTION

LICENSEDISMANTLING LICENSE

VENDOR

SELECTION PSAR

IAEA Status Assessment ► National position► Funding and financing► Legislative framework► Regulatory framework► Radiation protection

► Electrical grid► Emergency planning► Industrial involvement► Procurement

► Nuclear Safety► Management► Human Resource Development► Stakeholder involvement► Site & supporting facilities► Security & physical protection► Safeguards

► Environmental protection► Nuclear fuel cycle► Radioactive waste

Assystem Offers

LESSONS OF INTERNATIONAL PARTNERING

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01

02

03

04

05

Choose the right partners

Aligned goals and business metrics

Put customers first

Executive commitment to the opportunity

Take local context seriously

Assystem credentials

UK HPC/Wylfa + UK SMR

Finland Okiluoto

Turkey Akkuyu

UAE Barakah

France Flamanville

China Taishan

Egypt El Dabaa

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GLOBALLY THE MARKET HAS SHIFTED; TOWARDS

• THE MIDDLE EAST,

• EASTERN EUROPE, AND

• CANADA

• UK

• AFRICA?

SMR MARKET DYNAMICS – 2035 OUTLOOK A CREDIBLE ALTERNATIVE?

USA – significant near term uncertaintyChina, Russia, India – Strong domestic programmes

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SOME FINAL THOUGHTS….

Climate ChangeNuclear has a role to play in driving down global emissions

CooperationNuclear power is reliant on strong relationships between governments, vendors, utilities and regulators

Capacity Robust workforce planning for new nuclear

programme

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CapabilityInvesting in developing the skills to support the industry now and in the future

CompetitivenessStriking the balance between value for the customer and good returns for investors

www.assystem.com

ENABLER OF ENERGY & DIGITAL REVOLUTIONS

TOM JONES VICE PRESIDENT INTERNATIONAL BUSINESS DEVELOPMENT | ASSYSTEM UK MOBILE : +44 (0)7741142907TJONES@ASSYSTEM.COM | MORE INFORMATION ON WWW.ASSYSTEM.COM

October 2019