Nuclear Power: Opportunities, Challenges and

Solutions Black Sea Energy Conference - April 2006

Ron Cullen

General Manager and Project Director

Romania and AECL Nuclear Construction Division

Atomic Energy of Canada Limited

2

Presentation Outline

• Global Nuclear Renaissance

• Making the Case for a Nuclear Future

• AECL and CANDU

• Nuclear Solutions

3

Global Nuclear Renaissance• Shift in global consciousness about nuclear:

– Worldwide energy demands and market volatility increasing

– Nuclear power - security of supply and stable pricing

– Nuclear - attractive base load option in a balanced supply mix

– low operating / fuel costs /competitive

• Private sector sees value and is increasingly involved in nuclear energy

• Many environmentalists endorsing nuclear - non-GHG emitting source of electricity

• Renewed interest in nuclear in Canada, home of CANDU

$5+ Billion/y industry

~ 50% of Ontario’s power

4

What Is Needed For Nuclear New Build

• Strength and Clarity of electricity market

• Determined approach and plan on the demand side

• Strengthened and sustained incentives for carbon reduction

• Planning for security of supply

5

Nuclear Now in Romania

• Reduction of the dependence on external suppliers of primary resources, geographically outside of Europe, which is in line with the EU policy to increase the “Security of Energy Supply”

• Cernavoda Nuclear Power Plant represents a safe, efficient and clean source of electricity, included in the national strategy of social and economic development of Romania

• Proven performance (90% in 2005) and tangible econmic benefits from the development of the Romanian nuclear industry.

• Knowledge transfer permits Fuel and Heavy water to be produced in Romania with domestic resources and labour.

• Spent Fuel Knowledge transfer for storage facility.

6

Employment and Industrial Benefits

Domestic Benefits:

• Engineering, Construction and support industry employment

• Development of high quality manufacturing capability and capacity.– 40,000 jobs associated with

reactor construction

Export Benefits:

• Prepares industry for future manufacturing exports

• Ensures industry develops high quality QA programs.

New CANDU Builds means jobs, economic benefits, and cost-effective

base-load electricity that keeps economy competitive –model for

Cernavoda 3&4

7

Stable Fuel Supply = Benefits for Energy-Intensive Industries

• Nuclear Fuel – Natural Uranium • Nuclear fuel is made in Romania -

insulated from fluctuating world fossil fuel prices– A 100% increase in price of uranium =

5% increase in the price of electricity

• Nuclear fuel is highly efficient– A single fuel bundle = 380 tonnes of

coal or 1,800 barrels of oil

• Uranium is mined and refined in Romania– Avoids reliance on fuel from outside

Romania and volatile fossil energy supply and prices

8

Romania and Future

• Nuclear provides for:– base load supply security and price stability

– Modern alternative and competitive solutions to electricity generation

– reduction of GHG emissions

– utilization of domestic resources

– improved local industry capability through technology of work and enhanced quality programs required by nuclear

9

Romania and Future

• Plans underway for Units 3 & 4 at Cernavoda

• Increased local supply and services

• Increased Romanian construction and commissioning management

• Canada committed to long term partnership with Romania in energy field

10

AECL: A Total Nuclear-Solution Company (ACR shown below)

• Research, development and design facilitating innovation

• Continuous CANDU reactor construction program around the world

• Refurbishment of existing reactors for life extension

• Waste management technology

• AECL produces ~60% of the world’s supply of isotopes used more than 67,000 times / day

• Enhanced CANDU 6 (EC6)

• Advanced CANDU Reactor (ACR)

11

CANDU Future on Strong Foundation

1. Project Delivery Record Major CANDU projects on time and on budget

2. Plant Performance and Reliability CANDU 6 world leader in lifetime capacity factor

3. Project Model Risk sharing with owner

4. Employment/Industrial Benefits Technology and QA plus stable prices

5. Waste Non GHG and are long-term solutions for spent fuel

12

Track Record: CANDU Solution

Project Management: • On time, on budget delivery of

turnkey projects internationally, with globally-recognized partners

Quality and Safety: • CANDU technology recognized as

safest – 2 shut down systems • 2 additional passive water heat

sinks

Service: • Support our technology on a life-

cycle basis

Innovation:• Construction methods • Design optimization • Financial structures and risk

mitigation

QinshanPhase III, Unit 1, China

2002

On budget, on scheduleWolsongUnit 4, S. Korea1999

QinshanPhase III, Unit 2, China

2003

On budget, on schedule

On budget, on schedule

StatusPlantIn-Service

Date

On budget, 6 weeks ahead of schedule

QinshanPhase III, Unit 1, China

2002

WolsongUnit 4, S. Korea1999

On budget, 4 months

ahead of scheduleQinshanPhase III, Unit 2,

China2003

Wolsong Unit 3, S. Korea1998

Wolsong Unit 2, S. Korea1997

StatusPlantIn-Service

Date

Team CANDU’s New-build Track RecordTeam CANDU’s New-build Track Record

13

Track Record: CANDU Project Efficiency

• Construction Strategy: Prefabrication Modularization Open Top construction Parallel Construction Advanced engineering tools

• Design optimization and

“evolution” - New stations built on

experience of earlier designs and utility feedback

- Advanced materials- Longer life and easier

maintenance

14

CANDU 6 Plants

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

Qinshan Cernavoda Embalse

Gentilly 2 Point Lepreau Wolsong 1/2/3/4

15

Reliability: CANDU 6 Operations

• Operating experience of all

CANDU 6 plants has been

world class – 10 units, 5

countries

• Romania Cernavoda 1 good

performer

• Ontario -OPG’s Darlington 4

unit design delivered 90% CF

in 2005 – world class

performance

Name of UnitIn-Service

Date

Lifetime Capacity Factor

Pt. Lepreau Feb. 1, 1983 83

Gentilly 2 Oct. 1, 1983 79

Wolsong 1 April 22, 1983 86

Wolsong 2 July 1, 1997 93

Wolsong 3 July 1, 1998 94

Wolsong 4 Oct. 1, 1999 97

Embalse Jan. 20, 1984 85

Cernavoda 1 Dec. 2, 1996 87

Qinshan 1 Dec. 31, 2002 86

Qinshan 2 July 24, 2003 89

16

Project Model: Risk Mitigation– Host Government Provides stable policy environment

and institutional framework

price support (PPA) Market support mechanism (carbon credit, nuclear

obligation credits) regulatory certainty Nuclear liability obligations

– AECL and partners – Shares project delivery risk– CANDU Utility – Takes plant operating risk– FINANCING by ECAs and private sector investment

model becoming attractive

17

Proven Project Risk Model

• For the turnkey Qinshan Project in China, AECL and its subcontractors assumed:– Fixed price for design, equipment procurement, construction and

commissioning management – Schedule and plant performance guarantees– Equipment warranties

• In Romania unit 2– Fixed price equipment procurement and technical assistance with

equipment warranties– Joint contractors/SNN construction and commissioning– Romania has local detailed design scope and capability – Romania has local equipment supply scope and capability

18

Waste Solutions Are in Place Canada and Internationally

Nuclear Waste Management Organizationrecommendation:

Re: Long-term waste management– On site storage for 30 years– Centralize shallow below ground for 60

years– Deep geologic disposal at 90+ years

The CanadianShield

The CanadianShield

500 -1000 m

500 -1000 m

Backfilland Other

Vault Seals

Shaft

Rooms

500 -1000 m

500 -1000 m

Backfilland Other

Vault Seals

Shaft

RoomsIn-Room

Emplacement

BackfillBuffer

Container

In-RoomEmplacement

BackfillBuffer

Container

Nuclear industry accounts for ALL its waste

Total amount of used fuel from all Canadian reactors would fill 5 hockey rinks to height of boards

Used fuel stored on site 7 – 10 years in water, then transferred to dry storage containers

• Dry fuel storage technology - MACSTOR®

– In use in Canada, Korea, Romania– Good for 100+ years before replacing

19

Safety: Three Major Passive Heat Sinks (ACR Model)

1. Moderator Vessel Water

2. Shield TankWater

3. Water from separate Reserve Water Tank fills fuel channels, moderator vessel, and shield tank by gravity

Core damage reduced by factor of 10 plus damaged core contained in reactor vessel.