XIV CBE - MESA 4 - Yves Crommelynck - 24 outubro 2012

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XIV CBE - MESA 4 - Yves Crommelynck - 24 outubro 2012

  1. 1. International IPP view on main prerequisite issues when considering an investment in nuclear new build XIV Congresso Brasileiro de Energia Elétrica COPPERio, Brazil Yves Crommelynck,October 24, 2012 Vice President Strategy, Partnerships & International Associations - Nuclear Development DivisionCONFIDENTIALL 2012 10 24_GDFSUEZ_CBEE_Rio_YC
  2. 2. TABLE OF CONTENTS  GDF SUEZ profile and presence in Brazil  Stress Tests and Long Term Operation of Belgian NPPs  GDF SUEZ landscape for nuclear investment  ConclusionsInternational IPP view on mainprerequisite issues whenconsidering an investment in NNBRio, BrasilOctober 24, 2012 2012 10 24_GDFSUEZ_CBEE_Rio_YC
  3. 3. GDF SUEZ, a world leader in the energy sector  No.1 Independent Power Producer (IPP) in the world  Active across the entire Energy value chain  Answering the great challenges • responding to energy needs • fighting against climate change • maximizing the use of resources  Diversified supply sources  Flexible and highly efficient power generation  Innovative energy solutions to individuals, cities and businesses  Our History began in 1822 2012 10 24_GDFSUEZ_CBEE_Rio_YC 3
  4. 4. Key figures and breakdown of power generation Capacity: 117.3 GW€90.7 billion installed €11 billion inin 2011 218,900 14.8 GW under gross investmentsrevenues employees construction in 2012 Breakdown by fuel Breakdown by region at December 31, 2011 (in TWh)* at December 31, 2011* 254.7 Europe Natural gas North America Biomass 41.2% and biogas 2.6 464.7 Wind power 7 10.4% 20.1% Asia TWh Other 8.7 11% Middle East 44.5 12.3% 5% Nuclear 59.4 73,8 Hydro power** Latin Australia Coal America * Including 100% of the capacity of GDF SUEZ assets regardless of the actual holding rate, exc. International Power. ** Including pumped storage. 2012 10 24_GDFSUEZ_CBEE_Rio_YC 4
  5. 5. GDF SUEZ is the largest private energy player in Brazil…… through Tractebel Energia… Present in Brazil since 1998 8.630 MW of total installed capacity managed, being 6,908 MW own • 83% hydro or other renewable sources, 22(1) plants in operation all around the country; 2.024 MW under construction • 3,750 MW Jirau HPP (1,879 MW group’s share) and 145 MW from wind farms 100% own; …and is well positioned to play a consolidating role (1) 20, being one thermo power plant complex with 3 plants 2012 10 24_GDFSUEZ_CBEE_Rio_YC
  6. 6. GDF SUEZ in Brazil A continental country…… and a diversified portfolio of assets, with strategic location: 2012 10 24_GDFSUEZ_CBEE_Rio_YC
  7. 7. Estreito hydro power plant1,087MW hydroelectric power plant at Estreito was inaugurated onOctober 17th, 2012 by the President of Brazil, Dilma Rousseff and theChairman and CEO of GDF SUEZ, Gerard Mestrallet.
  8. 8. 50 years of expertise in nuclear energymastering the whole nuclear value chain Stakeholder in Europe first commercial PWRs  BR 3 (1962-1987)  Chooz A (1967-1991) Operator of 7 reactors in Belgium (3 at Tihange and 4 at Doel) Tihange The Group capacities : 6 134 MW  Belgium 4 226 MW  France 1 208 MW (Chooz B and Tricastin)  Germany 700 MW (Unterweser, Gundremmingen B&C, Grohnde) Strengths  Independent from suppliers & vendors  Reactors from several vendors (all of PWR design) Participations in Georges Besse II (Uranium enrichment plant) Doel Nuclear Safety and Nuclear Security are our overriding priorities 2012 10 24_GDFSUEZ_CBEE_Rio_YC 8
  9. 9. Our ambition in nuclear projectsNuclear is part of the solution to face Energy challenges • Energetic independence & Fuel security of supply • Stable, predictable and competitive generation costs • Low greenhouse gas emissions United Kingdom • Ambition: 3 600 MW – COD 2023 • NuGeneration Ltd - Joint venture GDF SUEZ – Iberdrola • Option on Moorside, nuclear land adjacent to Sellafield • Preparing for selection of technology : AP1000 or EPR Other considered countries • Europe : Poland, Turkey , The Netherlands,… • Middle East : Saudi Arabia, UAE • Asia : Thailand, … • Americas : Brazil, USA/Canada GDF SUEZ to develop Nuclear capacities Based on international IPP developer experience, as co-Owner and co-Operator of highest nuclear safety level nuclear reactors 2012 10 24_GDFSUEZ_CBEE_Rio_YC 9
  10. 10. TABLE OF CONTENTS  GDF SUEZ profile and presence in Brazil  Stress Tests and Long Term Operation of Belgian NPPs  GDF SUEZ landscape for nuclear investment  ConclusionsInternational IPP view on mainprerequisite issues whenconsidering an investment in NNBRio, BrazilOctober 24, 2012 2012 10 24_GDFSUEZ_CBEE_Rio_YC
  11. 11. Results of BElgian Stress Testsand main short term improvements on Belgian NPPs  Results have confirmed the robustness of Belgian NPPs thanks to  Double containment  Bunkerised 2nd level of protection including emergency diesels  Ultimate heat sink  Most issues related to oldest NPPs (Doel 1 & 2 and Tihange 1)  Some improvements have already been implemented at NPPs in order to increase the robustness of the installations with regard to extreme scenarios  to guarantee core cooling in case of total Station Black Out  to refill the Spent Fuel Pools in case of total Station Black Out of long duration  Other improvements are in progress:  to ensure power supply and cooling capacity from dry places in case of beyond design flooding  to guarantee correct operation in case of beyond design earthquake 2012 10 24_GDFSUEZ_CBEE_Rio_YC 11
  12. 12. Long Term Operation of Belgian nuclear power plants December 23, 2011 In parallel to the Stress Tests, Electrabel submitted its Long Term Operation reports July 3, 2012 The FANC concluded that Long Term Operation of 3 oldest units (Doel 1 & 2 and Tihange 1) beyond 2015 was technically feasible if appropriate identified investments would be carried out in order to manage ageing and upgrade safety level July 4, 2012 Belgium Government decided o To phase out Doel 1 & 2 units in 2015 and to shutdown all units by 2025 o To allow Tihange 1 to operate for 10 more years o To force Electrabel to sell the electricity generated by Tihange 1 to the market at cost (including safety improvements) with a reasonable margin o To slightly reduce the existing nuclear tax Further negotiations are on-going 2012 10 24_GDFSUEZ_CBEE_Rio_YC 12
  13. 13. Overview of the checks in progressat Doel 3 and Tihange 2The facts In addition to regulatory inspections, Electrabel and AFCN agreed to subject 7 active reactors to specific additional inspections during ten-year review process These additional checks carried out on the full thickness of the wall and the entire surface of the vessel Inspections in Doel 3 and Tihange 2 revealed indications in the material of the reactor vessel  apparently “hydrogen-related defects” (HRD), • Flake-type indications • Said to occur during manufacture of the vessel • In the metallic mass in the inner 120 mm of the wall (itself 200 mm thick)Guaranteed safety HRD not source of any radioactive release Reactors Doel 3 and Tihange 2 shut down Fuel removed from reactorNext steps Analysis process on-going, in close collaboration with Authorities, international experts and experts from the Group (Laborelec, Tractebel Engineering, ECNSD) Edition of justification file Review of the justification file by FANC and its external experts. 2012 10 24_GDFSUEZ_CBEE_Rio_YC
  14. 14. TABLE OF CONTENTS  GDF SUEZ profile and presence in Brazil  Stress Tests and Long Term Operation of Belgian NPPs  GDF SUEZ landscape for nuclear investment  ConclusionsInternational IPP view on mainprerequisite issues whenconsidering an investment in NNBRio, BrazilOctober 24, 2012 2012 10 24_GDFSUEZ_CBEE_Rio_YC
  15. 15. Business Model and PartnershipBased on international IPP developer experience,Focus on large, complex projects to create value inDevelopment & OperationCo-Owner & Co-Operator for highest safety level PWRtechnology (not designer-constructor) Through sustainable partnerships to share risks and costs • to increase competition and reduce costs • to meet clients requests/demands • with adequate industrial scheme coping with local situation – At equity level : Utilities and/or giant Consumers – At political level : local incumbent Utilities – At contractual level : Suppliers Through Plant delivery contractual schemes with affordable risks 2012 10 24_GDFSUEZ_CBEE_Rio_YC 15
  16. 16. GDF SUEZ landscape for nuclear investmentFurther to Partnership approach and General Nuclear requirementsMain prerequisite issues when considering an investment in a specificcountry are :  Stable long term political commitment  Clear and predictable long term legal and regulatory environment  A suitable electricity market and a reliable High Voltage grid  Site assessment  Technology assessment  Fuel cycle and radwaste management solutions  Economics & Financing  Local acceptance  Reinforcement of local nuclear competences  Risk mitigation measures 2012 10 24_GDFSUEZ_CBEE_Rio_YC 16
  17. 17. General Nuclear Requirements Nuclear operator = unique counter-part of the Safety Authorities during the licensing process, the operation, the decommissioning Knowledge acquisition of targeted designs to facilitate build-up of the “intelligent” Nuclear Operator Pre-licensing phase before the signature of the main contract Part of the detailed design before the signing of the main contract  master the construction schedule minimize risk of delay serious basis for the pre-licensing process 10 -15 years 60 years 1 century 2012 10 24_GDFSUEZ_CBEE_Rio_YC 17
  18. 18. Technology : Highest safety level reactors EPR Areva ATMEA1TM Areva-Mitsubishi AP1000 Westinghouse Internationally recognized Generation III Reactors  Characterized by high level of nuclear safety, more than ever after Fukushima Pressurized Water Reactors (widespread worldwide & 50 year expertise) Actions  Build-up expertise and experience feedback  Assess competitiveness of the models (on technical and industrial point of view)  Compare nuclear technologies to select the most suitable to the project, the country and Utilities’ needs  Keep open position versus other technologies 2012 10 24_GDFSUEZ_CBEE_Rio_YC 18
  19. 19. Financing Nuclear Projects Financing issues different and more challenging than for conventional thermal plants  Nuclear projects highly capital intensive: 2 to 4 times the cost of thermal plants  Construction period 2 to 4 times longer than thermal plants  Technical life time 2 to 3 times longer than thermal plants  High fixed costs and low variable costs make electricity price very sensitive to plant availability and ability to operate in base load  Capex are more front loaded  Specific risks linked to nuclear : licensing, waste management, civil nuclear liability  Will a contractor accept a lumpsum, fixed price EPC contract ? Extensive risk mitigation and allocation is necessary 2012 10 24_GDFSUEZ_CBEE_Rio_YC 19
  20. 20. Financing Nuclear Projects : Risk allocation Lenders : • Are unlikely to assume licensing, development & construction risk – Governments and regulatory bodies to set adequate legal framework – Developers, Utilities and Contractors to assume construction risks (delays, cost overruns) • May take limited amount of market risk if coverage ratios are robust – Governments to offer clear environmental policy (Kyoto, CO2 allocation) – Developers to opt for the most secure possible environment (PPAs, regulated market, capacity fees, ...) • Will require significant insurance before assuming liability and safety risk – National Energy Policies, International Conventions and National Acts and Laws • Unlikely to assume waste disposal costs and decommissioning risk – Government to commit to solutions for waste disposal – Sharing of risk by industry players and/or Government 2012 10 24_GDFSUEZ_CBEE_Rio_YC 20
  21. 21. The challenge of local acceptance Reason Feelings Nuclear energy image has been deeply damaged More than ever, communication to the public is of paramount importance and nuclear industry needs to improve communication Need to meet public expectations :  Main concerns: safety + proliferation + long-lived nuclear waste  Aim : reassure & explain  Tone : transparent, factual Our Objectives  More than ever proactively assume an educational mission  Promote nuclear energy as an acceptable and legitimate way of meeting energy needs  Build up GDF SUEZ image as an legitimate stakeholder in nuclear energy Examples of actions carried out in Belgium  “Belgian Nuclear Forum” campaigns (2009, 2010, 2011)  Surveys, barometers (SCK-CEN, BNF,…) 2012 10 24_GDFSUEZ_CBEE_Rio_YC 21
  22. 22. 2009: no image campaign, but an invitation to think about nuclear energy NUCLEAR ENERGY. ARE YOU FOR, ARE YOU AGAINST, OR DON’T YOU USE ELECTRICITY? 2012 10 24_GDFSUEZ_CBEE_Rio_YC 22
  23. 23. 2010: Rock festival Werchter • raise awareness • invite to participate to the debate 2012 10 24_GDFSUEZ_CBEE_Rio_YC 23
  24. 24. 2011: Transparency campaign after Fukushima Invite public to ask questions 2012 10 24_GDFSUEZ_CBEE_Rio_YC 24
  25. 25. Reinforce local nuclear competences Mobilization of local graduated and specialized people Set up of local manpower competency  Concrete associations with research centres and Universities  Bilateral support agreements with other nuclear countries  Training programs Typical staffing curve (COD 2023) 2012 10 24_GDFSUEZ_CBEE_Rio_YC 25
  26. 26. The Human Resources action plan On the long term, we need: 5.300 people with skills and > 2.000 people (460 engineers know-how in the nuclear energy 500 technicians – 1.000 workers) for the on-going business 2013 Now Future Action plan: Recruitment+Training+Dévelopment Nuclear Training Programs NTP-J  Nuclear Trainees Program for young engineers (J=Junior) NTP-M  Nuclear Trainees Program for experienced engineers (M=Major) NTP-S  Nuclear Trainees Program for support services (S=Support) NTP-G  Nuclear Trainees Program for generation key staff (G=Generation) NTP-T  Nuclear Trainees Program for technicians (T=Technicians) 2012 10 24_GDFSUEZ_CBEE_Rio_YC 26
  27. 27. TABLE OF CONTENTS  GDF SUEZ profile and presence in Brazil  Stress Tests and Long Term Operation of Belgian NPPs  GDF SUEZ landscape for nuclear investment  ConclusionInternational IPP view on mainprerequisite issues whenconsidering an investment in NNBRio, BrazilOctober 24, 2012 2012 10 24_GDFSUEZ_CBEE_Rio_YC
  28. 28. Conclusion GDF SUEZ to pursue operation of existing NPPs and to develop new Nuclear capacities as co-Owner and co-Operator of highest nuclear safety level nuclear reactorsin key strategic countries, including Brazil based on :  international IPP developer experience,  50 years expertise as Owner and Operator of NPPs through :  developing sustainable partnerships to share risks and costs  opting for plant delivery contractual schemes with affordable risks  choosing the most secure possible environment (PPAs, regulated, capacity fees, etc.)  relying on Pressurized Water Reactors with the highest level of safetyWe definitely believe Brazil will take advantage of the long term experience of international classic investors-operators, like GDF SUEZ, in partnership, in bankable schemes. 2012 10 24_GDFSUEZ_CBEE_Rio_YC 28
  29. 29. 2012 10 24_GDFSUEZ_CBEE_Rio_YC

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