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2011 Energy Summit - OCI Presentation by David Marinacci
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  • 1. Nuclear Supply Chain
    Clarington Energy Summit 2011
    D.W. Marinacci, General Manager May, 30th, 2011
  • 2. Promoting a Healthy Nuclear Industry
    Agenda
    • Organization of CANDU Industries
    • 3. Customers
    • 4. Canadian Nuclear Industry
    • 5. Economic Benefits of Nuclear
    • 6. Global Nuclear Potential
    • 7. Status of US Reactor Market
    • 8. Decommissioning & Waste Management
    • 9. Overview / Conclusions
  • Organization of CANDU Industries
    Promoting a Healthy Nuclear Industry
    The Organization of CANDU Industries is an industry association representing the interests of the suppliers of goods and services to the Canadian nuclear industry.
    OCI represents 160 + companies spanning Canada’s major engineering firms such as AMEC, Hatch and SNC Lavalin, and constructors and large scale fabricators such as AECON, Babcock & Wilcox, Black and MacDonald, Comstock and E.S.Fox … to the many small and medium equipment providers, logistics operators and even nut and bolt manufacturers that make up the Canadian nuclear industry.
    We collectively employee over 30,000 people.
  • 10.
  • 11. OCI Background
    Promoting a Healthy Nuclear Industry
    Incorporated in 1979 by several privately owned Canadian manufacturers and engineering consultants to promote companies in the Canadian private sector engaged in the supply of goods and services for CANDU and LWR nuclear power plants in both domestic and export markets.
    The Canadian supply chain has been critical to the success of Canada’s vast nuclear build program.
    Canada has built - for the domestic and export markets
    36 power reactors
    16 research reactors
    2 prototype / demonstration reactors
    6 heavy water plants
  • 12. Evolution of OCI
    Promoting a Healthy Nuclear Industry
    Over the years the number of member companies has increased and along with it markets and customers.
    OCI companies now supply products and services in support of nuclear research, isotope production, nuclear medicine, uranium mining in addition to power reactors.
    For over 60 years OCI and its predecessor companies have supported Canada’s pioneering nuclear research programs and operations at AECL sites and Universities across the country.
    OCI supplies goods and services to the Canadian Uranium industry that mines processes and manufactures nuclear fuel and is one of the largest in the world.
    OCI companies support and supply goods and services to the Canadian nuclear medical industry the largest supplier of medical isotopes in the world.
  • 13. Customers
    Promoting a Healthy Nuclear Industry
    Domestic Utilities
    Ontario Power Generation
    Bruce Power
    Hydro Quebec
    New Brunswick Power
    International Utilities
    Romania
    Korea
    China
    Argentina
    India - future
    Universities
    McMaster University - Pool type reactor
    EcolePolytechnique - Slowpoke – 2 research reactor
    Dalhousie University - Slowpoke – 2 research reactor
    Saskatchewan Research Council - Slowpoke – 2 research reactor
    University of Alberta - Slowpoke – 2 research reactor
    Royal Military College of Canada - Slowpoke – 2 research reactor
  • 14. Customers continued
    Promoting a Healthy Nuclear Industry
    Nuclear Waste Management Operations (NWMO)
    Deep Geological Repository for Low & Intermediate Level Waste
    Deep Geological Repository for Nuclear Spent Fuel
    Hospitals - nuclear equipment, Isotopes, medicine & waste handling
    COG - CANDU Owners Group
    Many OCI member Companies are also OCI customers
    Cameco - Uranium mining & fuel manufacture
    General Electric – Hitachi – fuel manufacturer, fuel machines, equipment
    Babcock – Steam generators, equipment
    Large Engineering & Construction firms like SNC Lavalin, AMEC, CH2MHill, Aecon, Comstock etc.
    Tier 2 & 3 Suppliers for major projects
  • 15. Canadian Nuclear Industry
    Promoting a Healthy Nuclear Industry
    Nuclear Industry – from theCNA
    The Nuclear Industry is currently a $6.6 billion/year industry
    $1.5 billion in federal & provincial revenues are generated through taxes
    The industry employs over 71,000 people
    21,000 direct jobs
    10,000 indirect jobs
    40,000 spin-off jobs
    Over 160 companies export over $1.2 billion of goods
  • 16. Local Economic Benefits of Nuclear
    Promoting a Healthy Nuclear Industry
    The nuclear industry in Durham already employs thousands of people and generates billions of dollars of economic activity.
    Ontario’s plans to refurbish 10 CANDU reactors and build two new plants (4 in Durham) will act as a catalyst to rejuvenate the nuclear industry, creating thousands of new high-paying jobs, both locally and across Ontario.
    These investments will provide the momentum for exports that will contribute billions of dollars of economic activity to the region and to the Canadian economy.
  • 17. Economic Benefits of Nuclear
    Promoting a Healthy Nuclear Industry
    Regional economic benefits accrue to the community over the complete reactor life cycle, from research to decommissioning, as well as from exporting products & services in support of the global nuclear renaissance.
  • 18. Economic Benefits of Nuclear
    Promoting a Healthy Nuclear Industry
    Operations
    • Extrapolating from the CME’s study “Annual Economic Impact of operating reactors in Ontario” the annual economic impact of operating OPG’s 10 reactors in the Durham Region would be ~ $1.59 billion / year.
    Refurbishment Projects
    • Extrapolating from the CME’s study “Annual Economic Impact of Refurbishments in Ontario” the annual economic impact of refurbishing 4 reactors in the Durham Region would be ~ $1.0 billion / year over 11 yrs.
    Darlington New Build Project
    • The Conference Board of Canada’s report, entitled “Economic Impact of New Nuclear Investments in Canada”, identified a capital investment in Canada of $7.4 billion dollars and employment of 64, 277 person years (considering direct and indirect employment)
  • Global Nuclear Potential
    Promoting a Healthy Nuclear Industry
    Power reactor Market
    • There are currently ~ 440 nuclear power reactors operating in 30 countries, with a combined capacity of over 376 GWe providing ~ 15% of the world's electricity.
    • 19. Approximately 155 reactors are planned to be built internationally with over 60 power reactors currently under constructed in 15 countries.
    • 20. Most reactors on order or planned are in the Asian region, though there are major plans for new units in Canada, Europe, the US and Russia
    • 21. Significant further capacity is being created by plant upgrading in Canada and in the US through refurbishment and life extension programs.
  • Global Nuclear Potential
    Promoting a Healthy Nuclear Industry
    World Nuclear Association Outlook
  • 22. Status of US Reactor Market
    Promoting a Healthy Nuclear Industry
    Design Certification (DC)
    • Two designs are certified;
    • 23. GE ABWR; Westinghouse AP1000
    Early Site Permit (ESP)
    • Four issued by NRC
    • 24. Two applications under NRC review
     
    New Nuclear Plant Orders
    • Four Engineering, Procurement, & Construction Contracts signed
    • 25. TVA resumed construction of Watts Bar 2 & reconsidering Bellefonte 1 & 2
    Combined Construction and Operating License (COL)
    • 18 COL applications submitted, 12 remain under active NRC review
  • Status of US Reactor Market
    Promoting a Healthy Nuclear Industry
    Components & Manufacturing
    • Nine utilities ordered large, long-lead forgings from three vendors AREVA, Toshiba & Westinghouse
    • 26. Westinghouse ordered reactor coolant pumps & containment liner plates
    • 27. Progress, SCE & G & Southern contracted Westinghouse for long-lead forgings
    • 28. Entergy & Exelon contracted GE-Hitachi for long-lead forgings
    • 29. Ameren UE & UniStar contracted AREVA for long-lead forgings
    • 30. NRG Energy signed an agreement with Toshiba for long-lead forgings
     
    Supply Chain
    • Areva & Northrop Grumman are building a 300,000-square-fort facility in Virginia, to manufacture heavy components for the EPR – to open in 2013
    • 31. Shaw & Westinghouse built a 410,000-square-foot facility in Louisiana, to produce structural, piping, equipment, & other modules for the AP1000
    • 32. Internationally: Japan Steel Works is expanding capacity; AREVA, Doosan, BWXT, & Russia’s (OMZ) are developing large forging capabilities
  • Decommissioning & Waste Management
    Promoting a Healthy Nuclear Industry
    • Over 400 civil nuclear reactors worldwide will need to be decommissioned over the next several decades
    • 33. The global market is est. to be $485 Billion US over the next 30 years
    • 34. Decommissioning and cleanup of the global civil nuclear legacy represents a massive management, technological and environmental challenge for the international community over the next century
    * Global Decommissioning Opportunities Report (Commissioned by the UK Department of Trade and Industry, UK Trade and Investment and Scottish Development International)
  • 35. Decommissioning & Waste Management
    Promoting a Healthy Nuclear Industry
    Regional Activities
    • Pickering units #2 & #3 are in layup status to be decommissioned in the future.
    • 36. Pickering Waste Management Facility (PWMF) provides dry fuel storage for Pickering.
    • 37. Darlington Waste Management Facility (DWMF) provides dry fuel storage for Darlington.
    • 38. Port Granby in Clarington, under the Port Hope Area Initiative, is developing and implementing a safe, local, long-term management solution for the historic Low Level Radioactive Waste.
    Opportunities for Regional Business Development
    • There are many opportunities for local companies to participate in these projects, develop products and services and market their capabilities.
    • 39. Canada nuclear liability legacy is estimated at $2.7 billion, and the government is investing over $100 million / year to address it.
    • 40. Deep Geological Repository for used fuel. Funded by reactor operators the Nuclear Waste Management Operations (NWMO) is charged with establishing safe long-term storage facilities for used fuel. The estimated cost for the facility is $5.4 billion (present value) for 2.2 million bundles.
    • 41. Deep Geological Repository (DGR) for low and intermediate level waste. The NWMO is seeking regulatory approval, on behalf of Ontario Power Generation, for the construction the DGR.
    • 42. The Department of Industry and Trade in the UK estimates the global decommissioning and waste management market to be ~ $485 billion (US)
  • Overview / Conclusion
    Promoting a Healthy Nuclear Industry
    • The Canadian nuclear supply chain has extensive experience supplying products and services to the domestic and international CANDU markets
    • 43. With the Darlington project and refurbishment of ten CANDU’s committed there are enormous opportunities for the supply chain in Canada
    • 44. With 155 reactors planned and > 60 under construction there are significant opportunities for the Canadian supply chain in international markets
    • 45. The Canadian supply chain is in a good position to pursue the US reactor market; which is set to grow rapidly in the next few years
    • 46. With an est. $485 Billion global decommissioning & waste management market developing there are opportunities for more suppliers in this sector
    • 47. For suppliers to be successful they must carefully evaluate their products & services against global opportunities, reactor technologies and vendor quality requirements and develop a “value proposition”