1) Nuclear power provides electricity without fossil fuels or emissions, but new nuclear plants have high upfront capital costs that may not be offset without carbon credits. 2) Only a few new nuclear reactor designs are currently under construction worldwide, and the winning commercial designs will be determined over the next decade as more units are built and experience is gained. 3) Public opinion on nuclear power varies globally, with some countries strongly supporting it for its carbon-free energy and energy independence, while others remain opposed or concerned over costs and waste disposal.

1. Global
Nuclear
Power
EUAA
National Climate Change Briefing
Edward Kee
Vice President
Sydney [live Web connection with Washington]
20 August 2009

2. Disclaimer
The slides that follow do not provide a complete record of this
presentation and discussion.
The views expressed in this presentation are mine; these views may
not be the same as those held by our clients or by my colleagues.
1

3. New nuclear power
Electricity without fossil fuel or emissions
– Energy independence (e.g., France, Japan, Korea)
– Post-petroleum strategic investment (e.g., Middle East)
– Clean and carbon-free (e.g., Scandinavia and US)
May not be low-cost resource without carbon credits
– High capital costs offset by stable and low energy costs
– Upward pressure on electricity prices to recover capital investment
Vendor/design market shake-out underway
– Only a handful of new designs under construction; fewer in operation
– Winning vendors/designs determined in next decade
– More units sold early more orders learning curve/supply chain
2

4. Nuclear opinion polls
“Do you support or oppose Australia “Should your country start using or
developing nuclear power plants for the increase the use of nuclear power?”
generation of electricity?” - 27 Jan 2009 - March 2009
India 67% 29% 4%
China 62% 29% 9%
35%
43%
S. Africa 55% 33% 12%
USA 57% 24% 19%
22% World 29% 40% 31%
0% 100%
Support Don't know Oppose Yes Yes, if concerns addressed No
3

5. Energy Density
Producing
1 GWh of
electricity
requires:
Uranium (5% enriched) Coal
Fuel 3 kg 400,000 kg
(300 cubic cm) (265 cubic meters)
Waste 3 kg (no reprocessing) 1,090,000 kg of CO2,
0.1 kg or 10 cubic cm (with NOx, SOx, particulates,
reprocessing) ash, arsenic, mercury, etc
4

6. Nuclear energy = green?
Exelon Energy -
Emission-Free Energy
Certificate (EFEC) – energy
is from nuclear, wind, and
other carbon-free sources
RWE - ProCLimate
2011 in Germany – nuclear
and hydro at fixed prices
Atoomstroom.nl -
nuclear energy retailer in
Netherlands – CO2 free
and subsidy free nuclear
5

7. New nuclear plants expensive
Ga Pwr (AP1000, '08)
Moody's ('08)
Calvert Cliffs (EPR, '07)
Lazard ('08)
Levy County (AP1000, '08)
Turkey Point (AP1000, '07)
S&P ('08)
TVO (EPR, '05)
STP (ABWR, '08)
2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 6,000 6,500
$USD/kW
Overnight capital cost ESTIMATES from public reports
6

8. Nuclear carbon control
Not easy to monetise nuclear CO2 benefits
Uncertainty may delay or stop investment
1,041
622
46 39 18 17 15 14
Coal Natural Gas Biomass Solar PV Hydro Nuclear Geothermal Wind
Life-cycle tons of CO2 equivalent per GWh
Source: "Life-Cycle Assessment of Electricity Generation Systems and Applications for Climate Change Policy Analysis," Paul J.
Meier, University of Wisconsin-Madison, August 2002.
7

9. Nuclear vs. other options
Source: "The Economics of Nuclear Reactors,” Mark Cooper, June 2009, p. 56
Notes: US dollars and cents; Circle size and number are estimated construction time in months
8

10. Nuclear power plant design
Generation I
Generation II
Generation III+
Early
Prototypes Most operating
commercial Evolutionary LWRs with advanced safety
power reactors and other features
Gen IV
1950 1995 2000 2005 2010 2015 2020
Vendors competing to become a world standard design
– Identical pre-approved designs at multiple sites around the world
– Long production lines for components; sharing of strategic spares, etc
– Replicate nuclear fleet approach in France and US nuclear navy
– 50Hz units dominate now; fewer North American 60 Hz units
9

11. Global nuclear construction
starts (MWe)
2000 - 2008 2009 - 2018
Gen III
Gen II
AP1000 EPR ABWR VVER CPR1000
10

12. Operating (11 units, 8,587 MWe)
Under Const. (16 units, 14,517 MWe)
Planned (59 units, 60,219 MWe) Hongyanhe (WaFangDian) 4 x CPR-1000
Shidaowan 1 x HTR-PM (200 MW PBMR) , 4 x CPR1000
Rushan / Hongshiding 6 x CPR1000
HaiYang 6 x AP1000
Beijing Tianwan 4 x AES 91 VVER
Lianyungang 6 x CPR1000
Wuhu / Bamaoshan 6 x CPR1000
Qinshan I II III 1 x 279 MW PWR, 2 x CNP-600, 2 x CANDU-6
Qinshan IV 2 x CNP-600
Fangjiashan / Qinshan V 2 x CPR1000
Sanmen 2 x AP1000
China Xianning 4 x CPR1000
Ningde 6 x CPR1000
Fuqing 6 x CPR1000
Daya Bay 2 x 944 MW PWR
LingAo 4 x CPR1000
Taishan 2 x EPR
YangJiang 6 x CPR1000
Bailong 6 x CPR1000
Changjiang / Hainan Island 2 x CNP-600
11

13. Operating (31 units, 21,983 MWe)
Under Const. (9 units, 6,755 MWe)
Bilibino 4 x 11 MWe LWGR
Planned (11 units, 13,200 MWe)
Baltic/Kaliningrad 2 x 1200 MWe VVER
Kola 4 x 411 MWe VVER
Leningrad 4 x 925 MWe RBMK4 x 1200 MWe VVER
,
Severodvinsk 2 x 40 MWe KLT PWR
Tver 1x 1200 MWe VVER
Kalinin 4 x 950 MWe VVER
Smolensk 3 x 925 MWe RBMK
Nishhegorod 1x 1200 MWe VVER
Kursk 5 x 925 MWe RBMK
Moscow Novovoronezh 2 x 385 MWe, 1 x 950 MWe2VVER MWe VVER
, x 1200
Balakovo 5 x 950 MWe VVER
Rostov/Volgodonsk 2 x 950 MWe VVER , 2 x 1200 MWe VVER
Beloyarsk 1 x BN600, 1 x BN800
Sversk/Tomsk 1 x1200 MWe VVER
Russia
12

14. Operating (17 units, 3,779 MWe)
Under Const. (6 units, 2,910 MWe)
Planned (10 units, 11,360 MWe)
Narora 2 x 202 MWe PHWR
Rajasthan 1 x 90, 1 x 187, 4 x 202 MWe PHWR , 2 x 640 MWe PHWR
Kakrapar 2 x 202 MWe PHWR MWe PHWR
, 2 x 640
Tarapur 2 x 150 MWe BWR, 2 x 490 MWe PHWR
Jaitapur 2 x 1600 MWe PWR
Kaiga 4 x 202 MWe PHWR , 2 x 1600 MWe PWR
Madras/Kalpakkam 2 x 202 MWe PHWR1 x 470 MWe FBR
,
Kudankulam 2 x 917 MWe VVER , 2 x 1200 MWe VVER
India
13

15. Middle East and North Africa
Under
Proposed Planned
construction
14

16. Role of Government
All existing nuclear power plants were built with
government/public ownership or support
– Government or government utility owner
– Regulated utility owner
Most of the world new nuclear build is by governments
(China, Russia, etc.)
Some existing units operate as merchants (e.g.,
Constellation, Entergy, Exelon in US, BE in UK)
Unclear if there is a feasible merchant power plant model
for new nuclear, even with government assistance (e.g.,
US DOE Loan Guarantees)
15

17. Gen III market share in US
AP1000 14
EPR 2 2
ABWR 2
APWR 2
ESBWR 2 ?
0 2 4 6 8 10 12 14 16
In operation Under construction Development Planned
Source: EDK analysis, Aug 2009
16

18. Gen III market share outside US
VVER 2 7 14 4
ABWR 4 2 9 & &
AP1000 2 2 4
EPR 2 2 2
APR-1400 2 2
APWR 2
0 5 10 15 20 25 30
In operation Under construction Development Planned
Source: EDK analysis; April 2009
17

19. New nuclear plant design risk
New construction approaches
– Lessons from Areva OL-3/TVO – nuclear build is not easy
– Modular construction – how & who & where?
Technical issues still unresolved
– Passive safety approach
– All-digital Instrumentation & Control
– Very large single-unit turbine generators
Operational performance
– New round of latent defects?
– French N4 design experience
18

20. Rise of the i-nuke
Toshiba 4S (Super Safe, Small and Simple; 10
MWe)
Hyperion (25 MWe)
NuScale (40 MWe)
19

21. Nuclear renaissance –
overtaken by events?
Economic depression/recession
Difficult to finance any large capital project
Electricity demand lower, need for new capacity lower/later
Natural gas cheaper, increased use for electricity generation
Climate change policy (in US)
Emphasis on renewable energy
Nuclear not in stimulus bill or energy bills
Carbon benefits for nuclear remain unclear
High capital cost estimates
Conservative, so less chance of cost overruns
Nuclear power economics not so good
20

22. US second wave projects
US COL & DC filings US second wave
construction starts
US first wave
construction begins
US first wave
First US COL project COD
approvals
2008 2010 2015 2020
OL-3 First UAE
China, EPR unit COD
Finland COD
& EdF Flamanville
building EPR COD
First Chinese Many uncertainties about
UAE vendor AP1000 COD new nuclear resolved –
selection
much lower risk for 2nd
wave investors
21

23. Nuclear Spin
Pro-Nuclear Anti-Nuclear
Past lessons were learned; Cost overruns and delays will
Capital costs: nuclear can be competitive happen again; OL-3 is proof
Excellent experience; lowest High uranium prices not yet in
Operating costs: fuel costs ever nuclear fuel costs
Excellent recent performance; Long outages and issues with
Performance: best ever some units remain
Nuclear CO2: Carbon-free energy Life-cycle C02 emissions
Current on-site approach is Need million-year solution
Spent fuel: fine; 50 years with no problem before building any new plant
Nuclear power = nuclear
Weapons: National policy and IAEA
weapons
Safety: Very high level of safety TMI, Chernobyl, “close calls”
22

24. What’s my spin?
Nuclear power needed to control CO2
Nuclear power is good technology; but
expensive to build, operate and maintain to
meet current high level of safety and reliability
Very large capital investment
– High operating margins once operational
– 60-year or longer operating life
– Commercial projects difficult
– Governments role may be required
23

25. Sanmen 1
Sanmen 1
(Chinese AP1000)
840 tonne CA20 module
placement - July 2009
24

26. Contact Us
Edward Kee Greg Houston
Vice President Director
Washington, DC Sydney
+1 202 370 7713 +61 2 8864 6501
edward.kee@nera.com greg.houston@nera.com
© Copyright 2009
National Economic Research Associates, Inc.
All rights reserved.