presentation by Colette Lewiner, Global Leader Energy, Utilities & Chemicals Practice, Capgemini, held at the European Nuclear Renaissance Conference in Rome, Italy, April 27-28, 2011

1. Nuclear Global and European Markets status
Colette Lewiner
Global Leader Energy, Utilities & Chemicals
Capgemini

2. Agenda
Fukushima accident and first lessons learned
Impact on General Energy Outlook
• Sustained development
• Security of supply
• Energy mix changes:
LNG market changes
Renewables
Electricity generation costs
Impact on Nuclear plants operations and development
• Existing plants
• New builds
• Plant lifetime extensions/ Decommissioning
Impact on Nuclear operators and vendors
Conclusions
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3. Fukushima accident
Exceptional circumstances: 9.0-magnitude undersea earthquake off
the coast of Japan on March 11, 2011 triggering a tsunami that travelled Highest rating (level 7)
up to 10 km inland. on the International
Fukushima nuclear plant: with 6 boiling water reactors (BWR)
maintained by TEPCO has been hit by the earthquake and tsunami: Nuclear Event Scale.
Reactors 4, 5 and 6 were shut down prior to the earthquake for maintenance. Second level 7 rating
Remaining reactors shut down automatically after the earthquake. Grid in history, following
electricity supply for cooling purposes collapsed and then the tsunami
flooded the plant, knocking out emergency generators. Tchernobyl.
20km radius evacuation around the plant from March 12
Source: http://www.jaif.or.jp/english/ | Energy, Utilities & Chemicals Global Sector
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4. Fukushima accident first safety lessons learned
Out of the 440 nuclear reactors in the world, 20% are situated in a zone
Global warming could trigger more with significant seismic activity
frequent exceptional events
Need to design plant infrastructures
for really exceptional earthquakes and
Tsunamis
Spent fuel pools containment building
Simultaneous Natural Catastrophes
have to be taken into account
Emergency measures to be revisited
Cooling systems redundancy to be re-
assessed
Spent fuel management policy to be
rethought
Radiological permanent assessment
on the site and around
Crisis communication to be re-
designed
Months will be needed to have the full Source: www.guardian.co.uk
details on the accident, urgency
measures and site situation. This
feedback will enrich lessons learned.
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5. Strengthening nuclear safety regulations
Regulators and politicians are revisiting safety
regulations
International Nuclear Events Scale (INES)
• European regulators are defining stress tests to
be applied to existing reactors and new builds
• Politician are calling for international safety rules
and safety body:
• French President Nicolas Sarkozy wants to host a
meeting in Paris of nuclear industry officials from the
G20 nations in May, aimed at coming up with new
global safety standards by year end
• International Atomic Energy Agency (IAEA)
director-general Yukiya Amano has called a major
conference on nuclear safety to be held in Vienna
from 20 to 24 June 2011. He wants the conference to
provide an initial assessment of the Fukushima-Daiichi
accident and its impact and consequences. He also
wants to launch the process of strengthening nuclear
safety and the response to nuclear accidents and
emergencies. He declared on April 4 that “Rigorous
adherence to the most robust international safety
standards and full transparency, in good times and Will there be a new
bad, are vital for restoring and maintaining public
confidence in nuclear power.” international safety body?
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6. Fukushima accident other lesson learned
Media covered extensively the event with a dramatic
and alarming bias
Public opinion
• USA: According to a March 22 survey by the Civil Society
Institute, the Fukushima disaster is having a major impact on U.S.
views about further expanding the use of nuclear power in US:
53% of Americans would now support “a moratorium on new nuclear
reactor construction in the United States,
67% now say they would oppose “the construction of a new nuclear
reactor within 50 miles of their home.”
58% are now “less supportive of expanding nuclear power in the United
States” than they were a month ago
• Germany:
250,000 anti-nuclear protesters gathered in 4 German cities on March 26
Voters backed the anti-nuclear Greens party against Chancellor Angela
Merkel’s coalition in the March 27 state elections in Baden-Wuerttemberg
and Rhineland-Palatinate
Political decisions
• Usually politicians reacted by calling for safety assessment of existing
and new reactors and deciding moratoriums on new projects in order to
draw lesson learned from the accident
• Only Germany has stopped for 3 months its 7 oldest reactors and has
declared a moratorium on its 2010 plant lifetime extensions
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7. Fukushima is triggering a debate on present and
future Energy Mix
Media and some anti-nuclear groups are asking for a
nuclear phase out. Before asking ourselves if it is feasible, Results of nuclear opinion survey in
one needs to ask if it is desirable. An immediate nuclear France (March 2011)
phase out is not possible while keeping the lights on.
Are you in favor of stopping the
A long term phase out is possible but needs to be electricity generation from nuclear
assessed against the following criteria: power plants in France?
• Sustained development: global warming and greenhouse
gas emissions decrease 1% Fully in favor
12% 20%
• Security of supply Rather in favor
• Electricity generation costs Rather opposed
30% Fully opposed
World electricity generation by type (New Policies Scenario)
Don't know
37%
Would you accept an increase in
electricity tariffs so that the France
can stop to generate electricity
from nuclear power plants?
27% No
Yes
72%
Source: IEA: World Energy Outlook 2010 Source: L’express, SIA, Opinion Way, Published April 2011
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8. Agenda
Fukushima accident and first lessons learned
Impact on General Energy Outlook
• Sustained development
• Security of supply
• Energy mix changes:
LNG market changes
Renewables
Electricity generation costs
Impact on Nuclear plants operations and development
• Existing plants
• New builds
• Plant lifetime extensions/ Decommissioning
Impact on Nuclear operators and vendors
Conclusions
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9. Sustained
Development Consumption and CO2 emission evolutions
Source: Eurostat, EEA, BP statistical report of world energy 2009, European Commission – Capgemini estimation, EEMO12
Primary Energy Consumption
EU Energy efficiency objective
In 2009, during the crisis, energy consumption and
GHG emissions dropped
In 2010 ETS sectors emissions projected to
increase by 3,6% compared to 2009 (Deutsche Bank).
Despite this increase the objective could be met.
• However ETS markets are not predictable enough to
stimulate long term CO2 free generation investments. This is
why UK decided to set a carbon price floor. Starting in 2013
at £16 per tonne, the tax-inclusive carbon price in 2030 will be
at £70 per tonne
Energy savings objective will be difficult to meet. This
is why EU Commission adopted the Energy
Efficiency Plan 2011:
• Focused on instruments to trigger renovation in buildings, to
improve energy performance of the appliances and to foster EU Greenhouse gases emissions objective
energy efficiency
• For now only a strategy paper. Legislative proposals with
concrete binding measures to follow.
• Germany’s ETS emissions to strongly increase if
reactors shutdown according to the Deutsche
Bank:
• If 7 oldest reactors permanently shut down while 10 others
continue; Germany’s ETS emissions over 2011-20 would
increase by 250Mt relative to the current forecasts.
• If 7 oldest shut down and other 10 closed in line with the 2002
legislation, ETS emissions to increase by 370Mt.
Phasing out nuclear will have a dramatic effect
on CO2 emissions increase
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10. Security of Supply
Security of supply
Gas imports through pipelines and pipelines projects (2009)
Projects of pipelines Main countries of
Main exporting countries capacity increase destination for new
It is risky to rely too much on imported Total amount of gas Projects of new pipelines
pipelines
99 TWh exported (planned or under
Oil and Gas: Major gas flows
construction) GALSI
Interconnection projects
financially supported by
the European Energy
Built segments of Recovery Plan (EERP)
Arab spring: limiting oil exportations Projects of pipelines
capacity increase
pipelines under
construction
Russia gas dependency: in 2030,
NO FI
Russian gas should provide 50% of 96 bcm SE
(i.e. 1,034 TWh)
EU gas demand
m
RUSSIA
strea
Skanled EE 115 bcm
(i.e. 1,245 TWh)
Nord
LV
IE DK Baltic
pipe LT
UK
12 bcm
BBL
(i.e. 131 TWh)
NL NL
PL
50 bcm BE DE
(i.e. 536 TWh) LU
CZ
FR SK
CH AT HU
SI RO W hite
stream
am
PT s t re
BG uth
ES
IT So
TAP
cco
GALSI GR Nabu
Medgaz TGI
am
ed
nsm
nstre
Tra
Gree
ALGERIA
30 bcm
(i.e. 324 TWh) LIBYA
9 bcm (i.e. 99 TWh)
Source: The West.com.au Source: Eurogas, BP statistical review of world energy 2010 , companies web sites, GIE gte – Capgemini analysis, EEMO12
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11. Gas On the short term gas will increase its market share
Success in unconventional gas production at
cheap cost has allowed the US to become nearly
self sufficient
New gas liquefaction trains have been
commissioned in 2009 and 2010
These factors combined with the economic
crisis, have created a gas bubble and lowered
gas prices
The EU gas market is oversupplied and has an
overhang between 10-30 bcm to make up over
the next few years
However
• Fukushima accident will deprive Japan of at
least 9.7 GW of nuclear capacity
• This capacity should be replaced by gas fired
plants. Gas would be imported by pipelines
from Russia notably but also be provided Gas long term perspective has
through LNG changed as IEA estimates now the
• The range of additional LNG consumption from total gas reserves to 250 years.
Japan is 5.4 bcm/y to 11.7 bcm/y and this will
accelerate the EU market re-balance Gas should increase its market share
also on the long term.
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12. Will renewables increase their long term market
share?
EU Renewable energy objective
The RES growth is still behind what is needed
to reach the 20% target in 2020
Due to governments’ austerity plans,
subsidies to renewable energies are being cut
The 2020 EU target will be difficult to meet
China is the biggest investor; in 2010 it spent
30% more than in 2009
Investors ranking in 2009 (in $bn)
Source: Eurostat, EEA, BP statistical report of world energy 2009, European
Commission – Capgemini estimation, EEMO12
Will governments be able to reverse
the trend and increase again their
subsidies to renewables?
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13. Costs
Electricity generation costs
Estimated costs of electricity in France: Regional ranges of levelised costs of electricity for
nuclear, coal, gas and onshore wind power plants
• Nuclear: 45 €/MWh
• Gas fired plants: 50 to 60 €/MWh (with
today relatively low gas prices)
• Hydropower: >50 €/MWh but highly
5% Discount
dependent on sites and construction Rate
conditions
• On-shore wind: 80 to 90 €/MWh
• Off-shore wind 150 to 200 €/MWh
(including grid connection)
• Biomass: 130€/MWh but very variable
according to production conditions.
• Photovoltaic solar electricity from 300
€/MWh (farms) to 600 €/MWh (home
roofs)
Nuclear cost should increase after
Fukushima accident as safety
inspections will result in more
Source: IEA: Projected Costs of Generating Electricity, 2010 Edition
investments and in plants • Assumption: carbon price of USD 30/tCO2
availability decrease • Cost of CC(S) is still in the development stage (IEA study does not consider
costs of transporting and storing the sequestered carbon in final deposits)
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14. Safer Nuclear Energy development is still important
to meet the future sustainability challenges
Worldwide challenges:
Tight global energy demand and supply balance
Long term global energy security of supply
Climate Change issues calling for carbon free energy sources
World energy-related CO2 emissions abatement
Source: IEA, World Energy Outlook 2009
Nuclear with hydropower are the only carbon-free schedulable energy source
able to produce large volume of electricity
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15. Agenda
Fukushima accident and first lessons learned
Impact on General Energy Outlook
• Sustained development
• Security of supply
• Energy mix changes:
LNG market changes
Renewables
Electricity generation costs
Impact on Nuclear plants operations and development
• Existing plants
• New builds
• Plant lifetime extensions/ Decommissioning
Impact on Nuclear operators and vendors
Conclusions
| Energy, Utilities & Chemicals Global Sector
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16. Existing plants: inspections and additional
In Japan, operators of nuclear
investments
power plants have announced a
range of immediate measures Distribution of reactors under operations by age
being taken as protection against
the possibility of their facilities
being struck by a tsunami among 35 32 33
which: 30
Num ber of Units
24
25 21 21 22 22
• Ensuring emergency power sources (e.g. 20 18 19
16
14 13 14 14
using vehicle-mounted power generator). 15
1011 11 10
12
9
• Diversifying and securing cooling function 10 6 6 6 6 7 7
5 4 5 4 4 3 4 5 4 5
5 2 3 2 2 3
1 1
• Build a higher seawall to protect the plant 0
from tsunamis 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43
Restart of reactors stopped for Reactor Age (in years)
maintenance are also postponed
Germany announced the closure of Additional CAPEX and OPEX will push
its 7 oldest plants for 3 month. Nuclear electricity cost up.
This temporary shutdown led to a By how much?
5.7% spot electricity price increase
Older plants will be especially
scrutinized
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17. Nuclear new build:
Some programs will be cancelled other delayed
Worldwide, 439 reactors are in operation, 62 under construction and 484 planned or proposed
(April 2011, World Nuclear Association)
Overview of existing nuclear plants and project capacities (as of February 2011)
The IEA cut by half their November 2010 projection of additional 360GW of
new nuclear generating capacity by 2035. Nuclear Association
Source: World
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18. Life time extensions will be scrutinized
Overview of the nuclear plants lifetime extension in Europe before the accident
FI
SE: Life extension and uprating for Oskarshamn 3 to 60
years approved in 2010 and expected to be completed in
2013. Planned life extension to 60 years of Oscarshamn 2.
FI: Fortum: 20 year lifetime extension of original 30 years
decided in mid 2007 for 2 units at Loviisa. Operating since
BE: Agreement in Oct. 2009: 10 year life extension
Source: World Nuclear Association, Capgemini Research
1977 and 1981 they will run until 2027 and 2030, subject to
of the 3 oldest nuclear power reactors to 2025 to saf ety evaluations in 2015 and 2023.
guard against energy shortages. NO TVO: Lif tetime xtension to 60 years of the two Olkiluoto
In 2008, government installed a nuclear producer tax reactors operating since 1979 and 1982; subject to safety
of 250M€ per year till end of lifetime. Additional NL: Only plant to be evaluations every 10 years. Closure in 2039 and 2042.
proposed taxes following life extension, have not shut in 2034 after a SE
passed as a law due to the political crisis in Belgium. conditional EE
DE: End 2010, government agreed to a two-tier lifetime
extension in 2006. extension of the German nuclear plants. 17 nuclear
LV
reactors to run 8-14 years longer than the 2020 deadline
UK: Last 4 operating Magnox reactors to beIE shut DK
set by a prior government: Lifetime extension of nuclear
down by end 2012, af ter life extension s of 9 LT
units built before 1980 by 8 years to 40 years and of newer
months to 2 years. units by 14 years to 46 years. Operators to pay a “fuel-
5 year lifetime extension of the Advanced Gas UK
element tax” totaling €2.3 bn/year f or 6 years and a “eco-
Reactors (AGR) Heysham 1 and Hartlepool until NL tax” of about €15bn.
2019. PL
Plant Lifetime Extension (PLEX) program could BE DE
CZ: CEZ started in 2009 its project to extend
enable extended lifetimes for all UK’s AGR LU Dukovany plant lifetime by10 years to 40 years.
plants by 5 years and Sizewell B by 20 years. CZ Further extension to 50 years under
SK consideration.
FR: In July 2009 the Nuclear Safety Authority FR
(ASN) approved EDF's safety case f or 40 year CH AT
HU SK: Upgrade program on Bohunice units 3 & 4,
operation of the 34 existing 900 MWe SI operating since 1984 & 1985 is under way with a
units. Each unit is subject to inspection during CR RO
40-year lifetime extension in view (to 2025).
their 30-year outage. The first, Tricastin-1, got
10-year extension to 2020. ES
PT IT SI/CR: Slovenia shares the NPP Krško 696 MW
BG
reactor with Croatia; connected to the network in
ES: Government granted a 4 year life extension for the HU: In 2005, 20 year lif etime
Santa Maria de Garona plant to 2013. Almarez 1&2 and extension for the 4 reactors of 1981 and designed to run f or 40 years. In 2009,
Vandellos 2 granted 10 year extension. In February 2011, Paks nuclear plant, operating NPP Krško submitted an application for lif etime
Spain’s Congress ratified a law allowing the 8 operating since 1982-87. Reactors to run GR extension of 20 years (to 2043).
nuclear units to run for longer than 40 years until 2032-2037.
Germany decided to suspend 2010 lifetimeEnergy, Utilities & Chemicals Global Sector
| extension decision.
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19. More reactors could be closed following the Fukushima
accident
• After the accident Fukushima reactors will be closed (9,7GW)
• Some reactors could be closed after the new safety inspections
• Some more should be closed for political reasons (as in Germany)
• A combination of political and regulatory pressures could also lead to closures
European reactors threatened to be closed
Incremental Global Gas Demand in 2020 from Lower
Nuclear Power Generation
Source: Les Echos, April 14, 2011
According to Eurelectric, if all nuclear plants older than 30 years would be closed in
Europe, the EU 27 would lose 14% of its generation capacity. Gas demand will grow.
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20. Political declarations
Plant provisional New projects delayed or suspended:
Safety inspections closure:
of existing plants: China (assessment); Taiwan assessment, Italy (1
All countries Germany (7 year moratorium); Japan (review plans for new
Emerging nuclear oldest reactors) projects); Switzerland (moratorium); UK (delayed)
countries that
have the most
advanced
programs:
South America:
Chile
Uruguay Finland: 1
Africa & Middle Russia: 10
East:
Egypt Canada: 2
Image Source: Le Figaro; IAEA
Jordan
Kuwait
Morocco
Nigeria France: 1
Slovakia: 2
Saudi Arabia Japan: 2
USA: 1
Tunisia
Turkey Iran: 1 China: 27 South
United Arab Korea: 5
Emirates Pakistan: 1
India: Taiwan: 2
Europe:
Belarus 5
Italy
Poland
Asia
Bangladesh
Indonesia Brazil: 1
Thailand
Vietnam
Number of
reactors under Argentina: 1
construction
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21. Agenda
Fukushima accident and first lessons learned
Impact on General Energy Outlook
• Sustained development
• Security of supply
• Energy mix changes:
LNG market changes
Renewables
Electricity generation costs
Impact on Nuclear plants operations and development
• Existing plants
• New builds
• Plant lifetime extensions/ Decommissioning
Impact on Nuclear operators and vendors
Conclusions
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22. Reactors under construction
AREVA: 4 EPR, Generation 3 (1,600MW): KEPCO (South Korea): APR-1400, (Generation
• Olkiluoto (Finland): 2013 2, 1400 MW):
• Flamanville (France): 2013 • South Korea: 2 reactors / 2013-2014
• Taishan (China / 2 reactors): 2013 & 2015 • Abu Dhabi :2 reactors /2017 for the first
PWR CGNPC (China): CPR-1000, Generation 2, MITSUBISHI HEAVY INDUSTRIES (Japan):
(Pressurized (1,000 MW): PWR Generation 2:
Water Reactor) • China: 18 reactors / 2011-2015 • Japan: 2 reactors / 2011 & 2014
ROSATOM (Russia): Generation 2 & 3 WESTINGHOUSE (US-Japan) AP 1000,
• 20 VVER reactors from 400 to 1200 MW under (Generation 3, 1150 MW)
construction around the world • China: 4 reactors / 2013-2015.
BWR GENERAL ELECTRIC HITACHI (ABWR):
(Boiling Water • Japan and Taiwan: 3 units
Reactor)
Candu/PHWR • AECL: None of the next generation ACR-1000 reactor sold despite $434 Mio investment.
(Pressurised Heavy • Hindustan Construction Company (India): 3 PHWR local technology reactors under construction.
Water Reactor)
Generation 3 safer reactors should increase their market share.
However market size will decrease and China and India could
favor their local vendors.
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23. Agenda
Fukushima accident and first lessons learned
Impact on General Energy Outlook
• Sustained development
• Security of supply
• Energy mix changes:
LNG market changes
Renewables
Electricity generation costs
Impact on Nuclear plants operations and development
• Existing plants
• New builds
• Plant lifetime extensions/ Decommissioning
Impact on Nuclear operators and vendors
Conclusions
| Energy, Utilities & Chemicals Global Sector
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24. Conclusions
Nuclear renaissance stopped or delayed by the
Fukushima accident
Existing plants will be safety tested
Lifetime extensions will be scrutinized
New programs delayed, some cancelled
Safety regulations will become more international
Debates on future energy policy are emerging
Decision on nuclear future will not only be scientific, technical or
economical but also political.
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