areva forward-looking nuclear energy - las/anslas-ans.org.br/papers 2013/35 poets.pdfgeopolitics...

AREVA Forward-looking Nuclear Energy

Karl-Heinz Poets

AREVA South America

AREVA Forward-looking Nuclear Energy LAS-ANS, BUENOS AERES –June 2013 – p.2

Energy market: continued growth announced

Geopolitics Resources Environment

Limitation of fossil

resources

20501990 2010 2030

Barils

GHG emissions cut

by half by 2050

20501990 2010 2030

BUSINESS

AS USUAL

450ppm

SCENARIO

tCO2

0

25

50

75

100

$2011/barrel of oil

1990 1970

Economics Macroeconomics

Energy demand

multiplied by 2

by 2050

20501990 2010 2030

BUSINESS

AS USUAL

tep

20501990 2010 2030

BUSINESS

AS USUAL

tep

2010

0

25

50

75

100

125

150

175

+70% +60%

Reference

case

+6%

Fuel

price

x2

CO2 price

x2

Nat. gas

CCGT Nuclear Coal

Source: IEA ETP: reference scenario 2012 - UNFCC, CERA 2009

Production in barrels of oil

* Billions of toe

Demand in nuclear energy*

Demand in renewable energies*

+1.9% / year

+2.4% / year

WEO 2012 2010 – 2035

Scenario

Global primary demand in energy* +1.2% / year

Ineluctable decline of

fossile resources +

pressure on prices

GHG emissions: goal=

50% reduction by 2050

Energy independance and

security of supply

Energy cost, stability,

predictability

Energy demand:

x2 by 2050


After Fukushima, the Fundamentals for Nuclear Energy remain Unchanged

Fundamentals

Need for more electricity production capacity

Drivers

Climate change

Geopolitics

Fossil resources

Construction and operating costs

Public acceptance

Financing

Energy demand multiplied by 2 by 2050

Greenhouse gas emissions to be cut by half by 2050

Energy independence and security of supply imperative

Limited resources, short and mid-term perspectives show rising prices

of fossil energies

Marginal impact on Gen 3 NPP new builds and limited impact on existing NPPs

Access to financing restricted to new build NPP projects complying with

the highest safety standards

Public acceptance concerns favour nuclear technology leaders

promoting highest safety standards


Global nuclear capacity is projected to increase by 54% by 2030

159

304

583

378

0

250

500

750+54%

2030 installed base New-builds Life-extensions 1 Life-end

(258)

2010

installed base

1. Including power uprates

(Net output, GW)

AREVA 2011 forecast of 2010-2030 evolution of the global nuclear installed base


Major energy policy developments announced since Fukushima

USA

Construction/achievement of 3

reactors confirmed;

73 licenses to operate 60 years

granted by August 2012, 80

years now being studied

France (“CPN” held in Sept. ‘12)

Support to nuclear industry

(domestic and export);

Closure of Fessenheim in 2016;

Confirmation of the recycling

solution

United Kingdom

Introduction of the new

energy bill in the UK which

includes a tripling of funds

by 2020 to support low-

carbon power generation

Ongoing new build projects

resumed late 2012, with

accelerated move towards

generation III reactors

China

1st reactors restarted in

2012;

Creation of a new safety

authority;

Announcement of a

potential new energy

policy to be re-assessed

Japan

Germany

Phase-out confirmed in 2011


Safety of our

Customers

Safety of our

Products

Safety of our

Operations

AREVA Group

Safety is the Cornerstone of our Strategy

Maintaining the highest level of

safety throughout the lifecycle of

our nuclear facilities

Reduced accident frequency rate

(number of accidents per million

hours worked) from 6.6 in

2004 to 1.7 in 2011

A wide new-generation reactor

portfolio that offers the highest

safety features

Supporting utilities in

demonstrating and upgrading

the safety of their fleet


Reference year: 2010

360 + Nuclear Reactors are

served by AREVA

O&M support

M&FE 98

North America

122

O&M support

M&FE 2

South America

4

O&M support

M&FE 15

United Kingdom

1

O&M support

M&FE 90

Asia

17

M&FE

India O&M support

M&FE 75

Europe – Middle East & Africa

72

O&M support

M&FE 3

Russia & CIS

5 O&M support

M&FE 15

United Kingdom

1

325 reactors

for M&FE

257 reactors

for O&M support

O&M support

M&FE

Central Europe & Nordic Countries

35

36

7

AREVA serves 360+ reactors


Post-Fukushima safety upgrades investment will only have a marginal impact on the profitability of

nuclear

€/MWh

Investment required for post-

Fukushima safety upgrade packages

has been estimated in 2012 between

€100m and €200m per unit by the

European Commission

Such safety upgrades would only

increase the cost of generating

electricity from nuclear power between

1 and 2 euros by MWh and would not

jeopardize its competitiveness

Cost of

electricity

Selling price

(wholesale)

Impact of

safety

upgrades

+ ~1-2 €/MWh

* Main assumptions: remaining plant lifetime 30 years / plant output 1,000 MWe / works spanned over 5 years / load factor 85% / WACC 8%

Impact of post-Fukushima safety upgrade investment on nuclear profit margin


From Safety Alliance to Forward Alliance

In the next decade, 150+ new reactors will be operated after license

renewal


Extending the lifetime of a nuclear power plant for 10-20 years is highly profitable

Revenues generated by nuclear power plants’ lifetime extension

programs exceed the costs incurred for implementing them

2,500

2,000

1,500

1,000

500

0 Electricity

price 60 €/MWh 50 €/MWh

€ million / GW 20 years

extension

* source: OECD, NEA “The Economics of Long-term Operation of Nuclear Power Plants” 2012, EDF 2012

10 years

extension

Gross margin generated

Investment cost

(including post-Fukushima safety upgrades)*

Life extension project value creation for an amortized nuclear plant of 1,000 MW


AREVA and ATMEA Nuclear New Build Perspectives for EPR and

ATMEA1

BIDS TO COME ONGOING NEGOTIATIONS

(BILATERAL)

ONGOING BIDS

USA - EDF / PPL / Duke Energy

South Africa - ESKOM

Poland - PGE

UK - GDF Suez – Iberdrola

Vietnam - EVN

Malaysia - MNPC

Saudi Arabia

Sweden - Vattenfall

Argentina - NA-SA

UAE - ENEC

Turkey

Sinop Project,

4 units

Hungary

Canada

CGNPC

Taishan 3-4

NPCIL

Jaitapur 1-2

EDF

Hinkley Point C

Units 1-2

Fennovoima

Pyhäjoki

CEZ

Temelin 3-4

JAEC

TVO

OL4


Olkiluoto 3 82% complete

(Supply of a turnkey power plant)

Percentage of completion in %, as of June 30th 2012

(AREVA scope)

Flamanville 3

Taishan 1 & 2

62% complete

(Supply of a Nuclear

Steam Supply System)

79% complete

(Supply of 2 nuclear islands)

Global leadership for the construction of Gen III+ reactors (EPR)


EPR: unique lessons learned on projects

Engineering

Construction

Procurement

Total Total construction time

(from 1st concrete to 1st divergence)

Average procurement time

(reliability of procurement planning)

Duration of construction

(from 1st concrete to dome

installation)

Number of engineering hours on the

Nuclear Steam Supply System scope

Evolution between

OL3 and Taishan

50% of the Taishan personnel had participated in OL3

or FA3 projects

-60%

-50%

-65%

-40%


1st of a kind projects are not representative of the EPR cost, which keeps

decreasing offer after offer

Evolution of EPR levelised cost of electricity in Western Europe

0

20

40

60

80

100

120

Target Recent offers 1st of a kind

(Flamanville 3)

€ / MWh


EPR is competitive against other power generation technologies

Levelised cost of electricity of various technologies in Western Europe

0

20

40

60

80

100

120

Onshore wind Coal EPR 1st of a kind EPR target Gas CCGT

€ / MWh


CONCLUSION

2 years after Fukushima incident, AREVA

has a brilliant future in nuclear energy:

New builds with EPR and ATMEA

Installed Base with fuels, services, life time

extension…

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