Presentation by Anthony Doherty, Green Island Capital for the Young Engineers / Chartered Accountants Ireland event - explores the business case for nuclear power in Ireland and concludes that investing in renewable power and interconnection is a more attractive proposition for Ireland Inc.

1. Nuclear Power, Now or
Never for Ireland?
ACA Professionals & Young Engineers - 6 December 2012

2. Agenda
• The business case for nuclear
• The financial risks and rewards
• The alternatives - a financial perspective
• The UK's nuclear renaissance
• What direction should Ireland follow?
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3. The Business Case for Nuclear Power
It is a major contributor towards global energy needs
• First large scale nuclear plant opened at Nuclear Power Production (GWe)
Calder Hall in Cumbria, England in 1956 150
• There are now c.440 nuclear reactors in 100
existence (USA represents close to ¼)
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• While the USA is the largest producer (104
0
GWe), France has the highest concentration
USA France Japan Russia
(58 plants produce 75% of total electricity)
Nuclear energy produces c.14% of the world’s electric power needs
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4. Is the Nuclear Power Business Attractive?
Do the Pros outweigh the Cons?
The Pros
• Fission is the most energy for the least fuel
• Uranium is common in the earth's crust
• Plants have very high capacity factors,
• No combustion, no CO2 etc.
• Does not require back-up and storage
facilities like solar and wind
The Cons
• Much smaller footprint, takes up less land
than Solar or wind • Fear of nuclear – accidents do happen
• Dealing with nuclear waste
• Security concerns and proliferation
• Low level radiation from operations
• High cost to build - long pay back
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5. The Business of Nuclear Power in Europe
Europe is an interesting mix of nuclear producers & nuclear opposers
• Global top 5 in terms of % are in Europe
- France (75%); Slovakia (53%); Belgium
(51%); Ukraine (48%); Hungary (43%)
• In 2011, Germany announced that all 17
nuclear plants will be closed by 2022
• EU concern over safety of old-Soviet
plants in Eastern Europe (e.g. Lithuania
moved from level of 80% nuclear)
• While Polish nuclear ambitions have
diminished, new plants are planned in
Czech Rep, Ukraine, Russia, France
European power markets are getting more integrated - so like it or not, nuclear
produced power will be consumed across the region through interconnectors
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6. The Three Technology Players in Europe
Only the very largest engineering power houses can compete in nuclear
• Areva is the French public services co. owned developer of the
European Pressurized Reactor (EPR)
 4 EPR units are under construction – Finland, France and 2 in China
• GE Hitachi Nuclear Energy was established in 2007 as a global
nuclear alliance created by General Electric and Hitachi
 In Nov 2012 it acquired the Horizon nuclear project in the UK from
RWE / E.ON for £700m
 Hitachi has strong balance sheet & record
• Westinghouse Electric is the US based nuclear
power company owned by Mitsubishi
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7. The Financial Risks & Rewards
Recent experiences have not been very favourable for nuclear
• Fukushima nuclear accident has changed the landscape
 Now only 2 of the 50 reactors are in operation
 Was 30% nuclear - moving to 30% renewables by 2030
• Areva indicated (Dec ’12) that the 1.65GW Normandy
plant will cost €8.5bn to construct (€3.3bn originally)
 New, more advanced reactor – first in 15 years
 Capex of €5.1m v €1.2m / MW for onshore wind
• The nuclear plant under construction in Finland is 4
years behind schedule and >€2bn over budget
“It’s just hard to justify nuclear, really hard. Gas is so cheap and at some point,
really, economics rule” Jeff Immelt, CEO General Electric
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8. What About the Alternatives?
Could renewable energy sources meet our requirements?
• Solar: near zero emissions power
– less than 1% of our power
needs come from direct sunlight
• Solar on 1% of world’s desert
could meet all power demand
• Wind is produced from solar
induced pressure differentials and
is a major source of energy
Studies show that Ireland has the ability to generate 345 TWh from renewable
sources - x19 our annual power consumption!
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9. The Alternatives – A Financial Perspective
Renewable energy and gas continue to drop in cost
• Shale Gas energy revolution in
North America ($3.40/MBtu US
v $16/MBtu in Asia)
• Onshore wind is competitive
with conventional power in high
wind intensity regions
• Installed cost of Solar PV has
halved in 5 years ($6 v $3 / w)
• Intermittency of wind is the
challenge
“I think some combination of gas, and either wind or solar … that’s where we see
most countries around the world going” Jeff Immelt, CEO General Electric
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10. The UK Nuclear Renaissance
Question mark over how many new nuclear reactors will actually be built
• Majority of existing nuclear plants will
close by 2023 – talk of major build plan
 Hitachi (x6) – spend £20bn on 2 plants at
Wylfa & Oldbury;
 EDF (x4) UK site licence awarded for 2 @
Hinkley Point – will Centrica exit?
• Pricing of Contract for Differences will be
critical – nuclear needs >£135/MWh(?) v
onshore wind <£95/MWh and
>£110/MWh for offshore wind
• “Dash for Gas” instead? New gas build of
20GW now referenced by UK Govt
Two big questions – what price will UK consumers pay for nuclear power and who
will fund the EDF’s initial investment in Hinkley Point, Somerset
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11. What Direction Should Ireland Follow?
Developing renewable over nuclear power is financially attractive
• A nuclear energy plant would be expensive
& controversial
• Ireland has a wealth of renewable
resources that can harnessed competitively
• Addressing intermittency is the challenge –
greater interconnection & storage is the
solution
Studies point to a potential reversal of our energy import bill from €6bn to €10bn
export p.a. – a €16bn swing would a major prize for Ireland Inc.
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12. Key Takeaways
• Nuclear energy is a major component of the world’s
existing electricity generation capacity
• Nuclear energy is attractive in terms of its low carbon
and base load characteristics
• The Fukushima accident and high cost of building new
nuclear reactors is a major handicap
• The alternatives in terms of renewable power and gas
are economically attractive and will displace previously
planned reactors
• Ireland has a wealth of renewable resources which with
the appropriate level of interconnection / storage can
turn the country into a net energy exporter
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13. Anthony Doherty
Founder & Director – Green Island Capital
Mobile: +353 87 2311441
Email: anthony.doherty@greenislandcapital.com
Green Island Capital helps companies
achieve their sustainability goals and
be more successful!
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