Nuclear Power Plant & Systems David Downing / Kenneth Green. WSP Parsons Brinckerhoff / Sargent & Lundy TUESDAY, 6 OCTOBER 2015

Transcription

1 Nuclear Power Plant & Systems David Downing / Kenneth Green WSP Parsons Brinckerhoff / Sargent & Lundy TUESDAY, 6 OCTOBER 2015

2 The Brief To develop whole-of-life cost estimates for the development of nuclear power generation facilities in South Australia Generation III or later Commercially available by 2030 Large-scale or small modular reactors Infrastructure requirements: road; rail; water supply; electricity transmission South Australian context To develop business cases Cost and revenue streams Levelised cost of electricity Required commercial returns Developmental risk assessment Requirements for project investment

3 Evolutionary Generation III Designs Net capacities 700 1,600MWe General Electric-Hitachi ABWR KEPCO APR-1400 AREVA EPR Enhanced CANDU 6 (EC6)

4 Advanced Generation III+ Designs Net capacities 1,100-1,600MWe Westinghouse AP1000 General Electric-Hitachi ESBWR Advanced CANDU (ACR-1000)

5 Small Modular Reactors Net capacities MWe per reactor NuScale SMART SMR-160 mpower

6 The Brief - Modelling To develop whole-of-life cost estimates for the development of nuclear power generation facilities in South Australia Generation III or later Commercially available by 2030 Large-scale or small modular reactors Infrastructure requirements: road; rail; water supply; electricity transmission South Australian context

7 Economic Modelling Inputs Economic assumptions Capital cost Operating costs Technical assumptions Schedules Outputs Levelised cost of electricity, LCOE Levelised price of electricity, LPOE Inputs to CGE modelling by others

8 Economic Assumptions Macro-economic assumptions Escalation = 0.95% real (AETA, 2012) Foreign exchange rates AU$1.00 = US$0.73 (interim assumption) Economic assumptions specific to NPP Weighted average cost of capital, WACC Assumed NPP business model Revenue assumptions - wholesale electricity pricing forecast using EY electricity market model considers changes to mix of generation technologies considers international and Australian climate change obligations

9 Weighted Average Cost of Capital Basis of estimation Experience of recent energy/infrastructure financing in Australia Review of recent international NPP financing Not market-tested Long-term revenue certainty required Governmental support required (e.g.) Loan guarantees Tariff guarantees Real pre-tax WACC = 10.47% Consistent with other nuclear power study real pre-tax WACC assumptions Imperial College study Cost estimates for nuclear power in the UK - 11% AREVA: liberalised markets would require 11% WACC Assumptions Long term capital structure: Debt 50% Equity 50% Cost of equity Risk free rate (Rf) 4.9% Market risk premium (Rm-Rf) 6.0% Asset beta (ß) 0.5 Alpha factor ( ) 3.0% Cost of debt Risk free rate 4.9% Swap margin 0.5% Margin above swap 2.5% Other assumptions Tax rate 30% Franking credit utilisation 0.0% Inflation rate 2.5% Weighted average cost of capital Nominal post-tax 9.27% Nominal pre-tax 13.24% Real post-tax 6.60% Real pre-tax 10.47%

10 Existing NPP Capital Cost Data Westinghouse PWR AP1000 Representative PWR design Two US projects under construction Vogtle in service June 2019 & June 2020 VC Summer in service Sept 2019 & June 2020 Headline cost information is available and reliable Total project costs are publically reported Contract and delay costs are reported separately US construction costs more indicative of Australian costs than those of other projects (China, UAE, Korea)

11 Existing NPP Capital Cost Data BWR Comparisons of historical BWR vs. PWR capital costs show no material differences PHWR Historical CANDU experience is higher cost than US LWRs Reports of proposed Cernavodă EC6 cost > AP1000 CANDU (EC6 or ACR-1000) costs estimated to be > AP1000

12 SMR Cost Assumptions SMR No commercially available SMRs have yet been built SMR developers projecting LW SMR technologies ~ US$5,000/kWe Poorly defined scopes of supply and cost dates Design and regulatory/licensing processes underway SMART estimates US$9,000-US$10,000/kWe UK Small Modular Reactors Feasibility Study, 2014 Estimates between US$6,400-US$8,900/kWe Costs need to compete with large-scale reactors Cost projections are expected to be slightly greater than PWR

13 Assumptions NPP Capital Cost NPP Capital Costs PWR/BWR based on Vogtle/Summer costs with adjustments HWR higher than PWR/BWR historical CANDU experience SMRs slightly higher to be competitive with PWR/BWR Sensitivity to lower and higher costs to be studied PWR BWR Large PHWR Small PHWR Large SMR Small SMR Project Development Regulatory / Licensing Construction (to be distributed across categories) Mid-Life Refit (in years 29 & 30) AU$m 200 US$m 150 US$m 67 US$/kW 5,700 6,300 6, US$m 6,413 8,978 7,560 4,662 2,160 1,881 US$m 0 1,450 0

14 Infrastructure Requirements Generic brownfield and greenfield locations Brownfield Location supported by nearby existing infrastructure Short local connections Greenfield No nearby existing infrastructure 50km connection assets to existing infrastructure Road, rail, water supply, electricity transmission

15 Infrastructure Road & Rail Road & rail Independent of capacity of nuclear power plant Greenfield - 50km spur road/rail to NPP, connections/junctions to existing infrastructure, refurbishment of existing infrastructure Brownfield - 1-2km spur to NPP, connections/junctions to existing infrastructure, Refurbishment of existing infrastructure Road Two-lane highway to SA/national standards Rail Single line access and 2km loop to SA/national standards Greenfield Brownfield Roads AU$m 42 4 Rail AU$m 112 6

16 Infrastructure - Water Large-scale plant (1,200 MW) Cooling water Once-through cooling - 200,000 tonnes/hour (4,800 megalitres/day) Cooling tower make-up - 8,600 tonnes/hour (206 megalitres/day) Steam cycle make-up 60 tonnes/hour (1.4 megalitres/day) Small modular reactor (300 MW) Cooling Once-through cooling - 50,000 tonnes/hour (1,200 megalitres/day) Cooling tower make-up - 2,150 tonnes/hour (52 megalitres/day) Steam cycle make-up 15 tonnes/hour (0.4 megalitres/day) Low-volume raw water requirements: Service water Potable water

17 Infrastructure - Water Greenfield Intake structure and pumping station 50km pipeline to NPP Brownfield 2km spur connection to existing raw water supply infrastructure All water treatment plant included in cost of NPP PWR BWR Large PHWR Small PHWR Large SMR Small SMR Greenfield AU$m Once-through system included in NPP capital cost Brownfield AU$m 10 10

18 Electricity Transmission Electranet information Network 2035 Vision Transmission Annual Planning Report AEMO building block costs 100 Per Cent Renewables Study - Electricity Transmission Cost Assumptions, 2012 Small Modular Reactors (~300 MW total) Greenfield 50km 275kV line & substations Brownfield 275kV substation Large-scale reactors Greenfield 50km 500kV line & substations Brownfield 500kV substation PWR BWR Large PHWR Small PHWR Large SMR Small SMR Greenfield AU$m Brownfield AU$m

19 Electricity Transmission additional costs 500kV AC New 800km backbone including series compensation Building block costs for 1600MW, 1200MW, 700MW lines & substations 275kV AC Building block costs for 400MW lines & substations 500kV/275kV substations Building block costs for 1600MW, 1200MW, 700MW substations HVDC Building block costs for 1600MW, 1200MW, 700MW, 400MW HVDC links including bipolar lines & converter stations

20 Operating Costs Fixed O&M Fixed O&M as $/MW net/yr US Nuclear Energy Institute reference data US /kwhe adjusted to S/MW/yr Mix of onshore and offshore costs Insurance as $/MW net/annum Historically 2.5%-3% of capex per annum Decommissioning Funding of decommissioning reserve account as fixed O&M cost PWR BWR Large PHWR Small PHWR Large SMR Small SMR Fixed O&M US$m/yr AU$m/yr Insurance US$m/yr Decomm g fund target US$m

21 Operating Costs Fuel & non-fuel variable Fuel cost as $/MWh net US Nuclear Energy Institute reference data enriched fuel US$7.6/MWh, 2014 HWR fuel unenriched, higher volume/fabrication costs SMRs enriched fuel, but lower efficiency higher cost Fuel has limited life - effectively fixed cost Spent fuel cost as $/MWh net Wet storage included in NPP Fixed O&M Dry storage levy to fund off-site long-term waste storage facility Non-fuel variable O&M as $/MWh net Non-material in relation to capital, fixed O&M and fuel cost elements Infrastructure cost as $/yr Transmission connection and use of system (TUoS) PWR BWR Large PHWR Small PHWR Large SMR Small SMR Fuel Spent Fuel US$/MWh US$m/yr US$/MWh US$m/yr Transmission AU$m/yr

22 Technical assumptions Net Power Output Representative examples of technologies PWR, BWR, Large PHWR, Small PHWR, Large SMR, Small SMR

23 Assumptions Capacity Factor Baseload operation with allowance for forced & planned outages, refits/life extension Mature well-known technologies by 2030 Baseload capacity factors % without refueling Base case lifetime average capacity factor ~ 90% Sensitivity range from 85% to 95% lifetime average

24 Assumptions - Schedule Commencement of operation in 2030 Sensitivity to variation in pre-construction and construction durations to be studied

25 Modelling Outputs Levelised cost of electricity, LCOE Ratio of NPV of whole-of-life NPP costs to NPV of whole-of-life electricity production Breakdown of LCOE constituents Levelised price of electricity, LPOE Ratio of NPV of whole-of-life NPP electricity sales to NPV of whole-oflife electricity production Determination of return on investment NPV costs of infrastructure building blocks Inputs to CGE modelling by others Aggregated categorised real costs over life of NPP

26 Detailed business case Modelling outputs to inform detailed business case Cost and revenue streams Levelised cost of electricity Sensitivity to variables including: Pre-construction and construction duration and costs Decommissioning reserve requirement Infrastructure costs Operating costs Fuel and spent fuel costs Generation average capacity factors Economic assumptions Assessment of IRR vs required commercial expectations Identification of funding gaps Developmental risk assessment Requirements for project investment

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