Next Generation Nuclear Plant Business Models for Industrial Process Heat Applications

Transcription

1 Next Generation Nuclear Plant Business Models for Industrial Process Heat Applications Dr. Michael G. McKellar Technical and Economic Assessment of Non-Electric Applications of Nuclear, NEA/IAEA Expert Workshop Paris, France, April 6, 2013

2 Outline Objectives Advantages of HTGR Process Heat HTGR Characteristics and Economics Economic Model & Assumptions Examples Power Generation Gas to Liquid via Methanol Steam Assisted Gravity Drainage (Oil Sands) Conclusions 1

3 Objectives The Next Generation Nuclear Plant (NGNP) Project, led by Idaho National Laboratory, is part of a nationwide effort under the direction of the U.S. Department of Energy to address a national strategic need identified in the Energy Policy Act of 2005 to promote the use of nuclear energy and establish a technology for hydrogen and electricity production that is free of greenhouse gas (GHG) emissions. This presentation is a summary of analyses performed by the NGNP project to determine whether it is technically and economically feasible to integrate high temperature gas-cooled reactor (HTGR) technology into industrial processes. 2

4 Advantages of HTGR High-Temperature Process Heat Reducing CO 2 emissions by replacing the heat derived from burning fossil fuels, as practiced by a wide range of chemical and petrochemical processes, and co-generating electricity, steam, and hydrogen. Generating electricity at higher efficiencies than are possible with current nuclear power generation technology Providing a secure long-term domestic energy supply and reducing reliance on offshore energy sources Producing synthetic transportation fuels with lower life cycle, well-towheel (WTW) greenhouse gas (GHG) emissions than fuels derived from conventional synthetic fuel production processes and similar or lower WTW GHG emissions than fuels refined from crude oil 3

5 Advantages of HTGR High-Temperature Process Heat Producing energy at a stable long-term cost that is relatively unaffected by volatile fossil fuel prices and a potential carbon tax, a price set on GHG emissions Extending the availability of natural resources for uses other than a source of heat, such as a petrochemical feedstock Providing benefits to the national economy such as more near-term jobs to build multiple plants, more long-term jobs to operate the plants, and a reinvigorated heavy manufacturing sector. 4

6 HTGR Integration Characteristics Plant Rating 2,400 MWt to 6,000 MWt Modular Nuclear Heat Supply System Modules 350 MWt to 625 MWt Provides flexibility in meeting needs of electric grid and industrial process energy needs and deployment schedule Connection to Regional Grid Benign Safety Basis to permit collocation with industrial facility or population centers Provides flexibility in siting to maximize applicability 5

7 HTGR Economics Development Approach What forms of energy can the HTGR supply What does the market need Identify specific process applications & their characteristics Develop integrated plant designs using the HTGR, where appropriate, to supply required energy Establish the costs of the integrated plant including the process and the HTGR Determine economics & establish the competitiveness of the HTGR integration with the market 6

8 High Temperature Gas-cooled Reactors Application Beyond Electricity Reactor Temperature Range Covering Applications Evaluated To-date Up to 850 C High Temperature Reactors can provide energy production that supports wide spectrum of industrial applications including the petrochemical and petroleum industries

9 The Potential Market (INL/EXT , R1, August 2011*) Co-generation Petrochemical, Refinery, Fertilizer/Ammonia plants and others 75 GWt ( MWt modules) Oil Sands / Oil Shale Steam, electricity, hydrogen & water treatment 60 GWt (~ MWt modules) Hydrogen Merchant Market 36 GWt ( MWt modules) Synthetic Fuels & Feedstock Steam, electricity, high temperature fluids, hydrogen 249 GWt ( MWt modules) IPP Supply of Electricity 110 GWt (~ MWt modules) 10% of the nuclear electrical supply increase required to achieve pending Government objectives for emissions reductions by 2050 The Opportunity Integrating Nuclear High Temperature Process Heat with Industrial Applications Existing Plants Assuming 50% Penetration of Likely Combined Heat & Power Market quads* Fertilizers/Ammonia (23 plants in U.S. NH3 production) Hydrogen Production tpd plants Petrochemical (170 plants in U.S.) Coal-to-Liquids (24 100,000 bpd plants ) Petroleum Refining (137 plants in U.S.) Growing and New Markets Potential for 13.6 quads of HTGR Process Heat & Power & Electricity Generation Electricity Generation 40 GWe capacity Oil Sands/Shale 60-56,000 bpd plants * Quad = 1x10 15 Btu (293 x 10 6 MW th ) annual energy consumption * References can be retrieved from the NGNP web site - 8

10 HTGR Capital Costs 75% of Capital Cost Covered by 10 Components Reactor Building Reactor Vessel Reactor Initial Core Reactor Metallic Internals Reactor Graphite Internals Reactor Cavity Cooling System Core Refueling Equipment Heat Rejection System Heat Transport System Power Conversion System Indirect Costs 46% of Direct Costs Construction Services (20%) Home Office & Engineering Services (16%) Field Office & Engineering Services (10%) Owners Costs Contingency 12% of Direct Costs 20% of Direct + Indirect Costs 9

11 Plant Capital Costs Correlations Developed (INL TEV- 1196) Phase, Demo, FOAK, NOAK Module Rating Plant Rating, number of modules Operating Temperature Type of Heat Transport System Type and number of Power Conversion Systems 10

12 Project Model General HTGR plant a separate business entity from industrial plant(s) Long term energy supply arrangement/contract(s) Potential multiple industrial plants Potential electricity supply to the grid Normal operations / supply of excess energy HTGR Potentially owned or partially owned by Industrial plant owner Operated by an experienced nuclear plant operator Financing arrangements affect energy pricing / return Requires long term near full capacity contract / demand Industrial Plant Owner Price supports return What is, if any, value of long term stability in price and security of supply? What is, if any, value of insulation from future governmental policies on carbon?

13 Project Model Interfacing HTGR & Process economic models are used to evaluate specific applications 12

14 HTGR Economic Model (INL/EXT , Jan 2012) Prepared by INL and used for establishing the economic viability of integrating HTGR in industrial processes and for generation of electricity The industrial process and the HTGR plant are modeled; the project can be evaluated in two ways that either separates the economics of the process from that of the HTGR or integrates the process and HTGR economics as follows: The HTGR supplies energy to the process at a calculated price and the process economics are evaluated at that price, or The HTGR is fully integrated into the process and the economics are evaluated by comparing the calculated product pricing with the market Structure, methods, financial modeling factors recommended by and results reviewed by: NGNP Industry Alliance, Ltd. Senior Advisor Group Entergy Technology Insights Several potential end users including petro-chemical companies, oil sands producers, ammonia producers Personnel associated with the structuring of financing packages for nuclear power plants and SMRs Personnel from the U.S. DOE loan guarantee office 13

15 HTGR Economic Model Methodology Discounted cash flow analysis from project initiation through decommissioning of the plant. Costs* Design, licensing, construction and commissioning of the modules using a phased approach with varying construction and startup times Debt and interest on debt during construction Operating costs including debt payments, continuing capital expenditures & outage costs including refueling Tax and decommissioning costs, including escrow of D&D costs Capacity factor considers module construction & commissioning phasing, refueling, planned outages and un-planned outages Revenues* from sale of the commodities based on plant capacity factor Calculation returns: Internal Rate of Return on Equity, Net Present Value, Net Income and simple pay back period *Inflation and escalation factors can be applied to each cost and revenue element

16 Assumptions: Economic Analyses Plant economic life: 30 years (excludes construction time) Construction period Fossil plant: Three years HTGR plant: Three years per reactor with 6 months stagger between reactor Start-up assumptions for nth-of-a-kind HTGR Operating costs: 120% of estimated operating costs Revenues: 65% of estimated revenue Plant availability: 90% Internal rate of return (IRR): 12% Inflation rate: 3% Interest rate on debt: 8% Repayment term: 15 years Reactor capital cost assumptions for HTGR modules: $2,000/kW(t) for plants with one or two modules $1,400/kW(t) for plants with three or more modules 15

17 Assumptions: Economic Analyses Tax basis assumptions Effective U.S. income tax rate: 38.9% U.S. state tax: 6% U.S. federal tax: 35% MACRS depreciation: 15-year plant life Simplified business model in which a single entity owns and operates the industrial and associated HTGR plants 16

18 Economics of Application Comparison with Natural Gas Note: A $10/MT tax on CO 2 emissions is equivalent to an increase of $0.50/MMBtu natural gas price. 17

19 Electricity Generation High Temperatures provide several options for power conversion systems (INL-TEV-988) Subcritical, Super-Critical and Super-Super-Critical Rankine Direct and Indirect Brayton Brayton Combined Cycle One and Two-Stage Super-Critical CO 2 Combined Cycle Net Efficiencies up to ~ 49% are Projected Example Subcritical Rankine MWt Modules 750 C Reactor Outlet Temperature 17 MPA, 540 C Steam Conditions ~42% Net Efficiency 18

20 Electricity Generation HTGR & NGCC 19

21 Electricity Generation HTGR, NGCC & IGCC 20

22 Electricity Generation Cost Comparisons HTGR, LWR, NGCC w/ccs and NGCC w/css Plants 21

23 Natural Gas to Gasoline via Methanol: Power and Process Heat Integration N2 Air Air Separation O2 DME Synthesis DME Gasoline Synthesis Steam Crude MeOH Crude MTG Products Natural Gas Sulfur Removal Natural Gas Natural Gas Reforming Syngas Methanol Synthesis Gasoline Purification Gasoline General Plant Support Light Fuel Gas LPG N2 Nuclear Power for ASU and Gas Compression Power Production Water Treatment Cooling Towers General Plant Support Air Air Separation O2 DME Synthesis DME Gasoline Synthesis Power Production Water Treatment Cooling Towers Exhaust Crude MeOH Crude MTG Products Natural Gas Sulfur Removal Natural Gas Natural Gas Reforming Syngas Methanol Synthesis Gasoline Purification Gasoline Nuclear Heat for Reforming (700 C) Steam Nuclear Power for Syngas Compressors Fuel Gas LPG Nuclear Heat Integration Nuclear Power Integration 22

24 Natural Gas to Gasoline via Methanol: Integration Results 23

25 Natural Gas to Gasoline via Methanol: Capital Costs Conventional Total Capital Cost = $1,694,000,000 HTGR Integrated Total Capital Cost = $3,031,000,000 Total Capital Cost (+50% HTGR) = $3,648,000,000 Total Capital Cost (-30% HTGR) = $2,661,000,000 24

26 Natural Gas to Gasoline via Methanol Results: IRR vs. Gasoline Price 25

27 Natural Gas to Gasoline via Methanol Results: Gasoline Price vs. Natural Gas Price 26

28 Natural Gas to Gasoline via Methanol Results: Carbon Tax vs. Gasoline Price 27

29 Natural Gas to Gasoline via Methanol Results: Natural Gas vs. Gasoline Price w Carbon Tax 28

30 Natural Gas to Gasoline via Methanol Results: Sensitivity Analysis 29

31 Steam-Assisted Gravity Drainage: Heat & Power 30

32 Steam-Assisted Gravity Drainage: Results 31

33 Steam-Assisted Gravity Drainage: Total Capital Cost Conventional TCI = $4,800,000,000 HTGR Integrated TCI = $11,300,000,000 32

34 Steam-Assisted Gravity Drainage: After Tax Cash Flow & % TCI Spent Each Year IRR = 12% 33

35 Steam-Assisted Gravity Drainage: Bitumen Price vs. Natural Gas Price 34

36 Steam-Assisted Gravity Drainage: Carbon Tax Low Natural Gas Price = $4.50/MSCF Average Natural Gas Price = $5.50/MSCF High Natural Gas Price = $12.00/MSCF 12% IRR 35

37 Steam-Assisted Gravity Drainage: Sensitivity Analysis 36

38 Hybrid Energy Systems Process Integration Optimized Analysis System Integration Process Modeling, Life-Cycle, and Economic Assessments Shannon SMR-Renewable-Biomass HES Dynamic System Modeling Wind Farm Wind Farm Wind Farm ROT Diana SMR- 1. NuScale LWR 2. GE Prism MSR 3. a Lee Variable Power Generation Electricity Grid RIT GW-hr Battery Storage Tom Hydrogen Production Bob (with Rick) Gas Reforming H2 Gases Energy Systems Dynamics Research & Testing Biomass Drying & Torrefaction ( C) Fast Pyrolysis ( C) Bio-Oils Hyrdotreatment Upgrading Storage

39 HES Example: Nuclear Hybrid System to Offset Fluctuations in Wind or Solar Power Wind energy Nuclear energy heat Steam turbine generators power Reliable base or intermediate power fuel Steam generation steam Methane reforming Methanol synthesis Natural gas carbon Synfuel Hybrid Energy Systems Integrate Energy sources Industrial Processes Via Storage Power Production Process Heat Instrumentation and Control 38

40 Conclusions Integration of HTGRs to Process Heat Applications is economically feasible for some applications (CTL, SAGD) On a cost per power basis, larger reactor units are more economical than small units On a cost per power basis, reactor clusters (2 or more units) are more economical than a single unit Higher reactor temperatures allow for higher power production and potential cost savings The cost of the reactor has the biggest impact on capital cost. The price of the product is not significantly changed whether the heat application and HTGR are owned by a single entity or if owned by separate entities. Carbon taxes economically promotes HTGR-integrated process heat applications Hybrid Energy Systems provides a means to effectively integrate renewable energy, nuclear energy, and process heat applications through storage, process heat, power production, instrumentation and control. 39

41 HTGR Process Heat Integration Team Rick Wood, INL Anastasia Gandrik, INL Larry Demick, NGNP Alliance Eric Robertson, INL Michael McKellar, INL Mike Patterson, INL Lee Nelson, INL 40