Nuclear Power:Strategic Overview

A K StottSenior Manager

May 2008

1. Setting the context

2. Nuclear power – strategic considerations

3. Current activities related to nuclear power

Contents of this Presentation

The Context

Forecasts

Long term forecasts - national + foreign

30000

40000

50000

60000

70000

80000

90000

2005 2010 2015 2020 2025

MW

PositionModerate

Additional 40 000MW added to current capacity

56 710MW

77 960MWEskom position based on 4% electricity growth supporting 6% GDP growth

Eskom moderate position 2.3% electricity growth based GDP growth of 4%

• A range of different electricity generation technologies• Base load versus peaking / Dispatchable versus opportunistic

• Diversity of technologies

• Diversity of primary energy requirements

• A reliable supply chain• Primary energy fuels (coal, uranium, liquid fuels, [gas])

• Water (potable, cooling, hydro)

• Transportation systems for fuels, water, [sorbents], other supplies

• Power station performance

• Transmission / distribution networks performance

Security of Supply

Daily Electricity Demand VariationDaily Electricity Demand Variation

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Typical WinterTypical SummerPeak Day

MW in thousands

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Typical WinterTypical SummerPeak Day

MW in thousands9 am 7 pm9 am 7 pm

Week 24: Forecast valid from Sun 17 June 2007 until Sat 23 June 2007

0

5000

10000

15000

20000

25000

30000

35000

1 4 7 10 13 16 19 22 1 4 7 10 13 16 19 22 1 4 7 10 13 16 19 22 1 4 7 10 13 16 19 22 1 4 7 10 13 16 19 22 1 4 7 10 13 16 19 22 1 4 7 10 13 16 19 22

Base load demandCoal and Nuclear

Indicative Base Load and Peaking DemandIndicative Base Load and Peaking Demand

Peak demand: Gas Turbines, Pumped Storage, Hydro

Technological Options

Efficiency

Transmission

Renewables

Nuclear

Coal

Gas turbines

Pumped storage

• South Africa is a relatively big contributor to greenhouse gas emissions

• Electricity generation is a big contributor to South Africa’s carbon dioxide emissions

• Coal accounts for a big percentage (~ 86%) of our generation fleet

• Eskom has made climate change a key priority

• Key responses

• Energy efficiency

• Viable renewables

• Non CO2 emitting base load generation

• Aligned with and in support of the government climate change response strategy and related DME policy

Climate Change / Global Warming

Nuclear PowerStrategic considerations

Current Nuclear Power Generation Worldwide vs Share of Total Electricity GenerationSource: International Energy Agency Key Statistics 2007

World Electricity Generation 2005Other

2%

Coal40%

Nuclear15%

Gas20%

Oil7% Hydro

16%

Nuclear Reactors in Construction Internationally

Source: International Atomic Energy Agency (April 2008)

• One of the most highly regulated industries in the world

• Excellent safety record for Western World reactor designs:• Three mile Island in USA in 1979 result in damage to reactor but no

release of radioactive material into the environment

• Chernobyl in Ukraine, different, less safe design

• Nuclear power reactor design has improved significantly –less engineered, more passive safety

• National Nuclear Regulator standards amongst the most stringent in the world

Nuclear Safety

Characterised internationally into three levels:

• low level radioactive waste (LLW)

• intermediate level radioactive waste (ILW)

• high level radioactive waste (HLW)

Radioactive Waste Management

Low Level drums

Low and Intermediate Level Radioactive Waste

Intermediate level concrete containers

Spent Fuel Management

• The National Radioactive Waste Management Policy and Strategy developed by the Department of Minerals and Energy (DME), identifies two main options:Interim storage of spent fuel at the nuclear power plant and thereafter:

1. eventual disposal of spent fuel (direct geological disposal option)

or

2. Reprocessing the used fuel and recycling the unused uranium

and plutonium (reprocessing, conditioning and recycling option)

• DME is currently drafting legislation to implement the requirements of the Policy

Spent Fuel Storage Pools at Koeberg

• DME has released for public comment the draft Nuclear Policy and Strategy for South Africa

• Considers both power generation capacity and nuclear fuel (uranium beneficiation) aspects

• DME developing legislation to implement National Radioactive Waste Management Policy

• NERSA currently updating the National Integrated Resource Plan

Government Policy

Nuclear power:Current activities

Nuclear Power Activities

• Existing Koeberg nuclear power plant (1800 MW) – currently in its 24th year of safe operation

• PBMR technology being developed by PBMR (Pty) Ltd

• Eskom Board has approved investigations into new conventional nuclear power

• Nuclear-1 project

Koeberg Nuclear Power Station

• 2 unit Pressurised Water Reactor design

• Commercial operation: Unit 1 in 1984, Unit 2 in 1985

• Design lifetime of 40 years, could be extended, subject to viability (safety, reliability, cost)

• International accredited Operating Training programme

• International peer reviews every 2 years (World Association of Nuclear Operators - WANO) - continuously striving to be better

• Has been operating safely for 24 years

Koeberg Nuclear Power Station 2

•Employs 1 100 people (+ 500 during outages)•Spends over R100m per year on suppliers in WC•Direct injection into WC economy exceeds R300m•One of top 3 ratepayers in Metropole

Photo by Bjorn Rudner

PBMR Demonstration Power Plant• High temperature gas

cooled nuclear reactor• Helium gas

• Pebble fuel

• Passive safety features

• Original reactor and fuel design proven in Germany

• Small reactor (15 MW)

• Did not generate electricity

• Demonstration Power Plant:• Integration of nuclear reactor with

turbine/generator

• DPP design 165 MW

Generator

Turbine

Gea

rbox

Compressor

Intercooler

CBCS

CCS

Recuperator

Rea

ctor

Nuclear-1 project

Eskom Technology Choice and World Trends

• Pressurised Water Reactor (PWR) is the preferred technology

• 73% (25 of the 34) nuclear units currently under construction worldwide are of the PWR technology(ref: IAEA http://www.iaea.org/cgi-bin/db.page.pl/pris.charts.htm )

• Utilities in China, Finland, France, USA have signed memoranda of understanding or have placed orders for PWRs

• The potential vendors of the preferred technology (Pressurised Water Reactor) have been identified

• The processes to obtain regulatory approvals have been or are being initiated

• The commercial processes are in progress – a vendor has not yet been selected

• NO FIRM DECISIONS HAVE AS YET BEEN MADE

• NO AUTHORISATIONS HAVE AS YET BEEN GIVEN

Nuclear-1: proposed Nuclear Power Station

Nuclear-1: proposed Nuclear Power Station 2

Regulatory - Environmental:

• EIA for the proposed power station is in progress

• Separate EIA for proposed transmission integration

Regulatory – Nuclear Licensing:

• Siting studies in progress

• Formal application for a Nuclear Installation Licence once vendor and technology has been selected

Potential Nuclear SitesPotential Nuclear Sites

Port Elizabeth

Other Regulatory Processes

• Applications for authorisations and permits are also required from other Authorities, for example :

• NERSA for an electricity generation licence

• DWAF and Local Authorities with respect to water permits

• Local Authorities with respect to land use zoning

• The Minister of Minerals and Energy with respect to radioactive waste and nuclear energy generation

• Ministers of Public Enterprises and Finance with respect to Public Finance Management Act

• These applications will be made at the appropriate stage during the project

Skills Development Initiatives

Skills development is essential

• Trained staff are required prior to fuel loading• Staff to train as operators have been recruited, training is in progress

• A facility to train new operating staff is being established

• Various levels of other specialist staff will be required

• University / Technicon partnerships for new skills development are being explored

Typical schedule

• Project development and regulatory processes

• Site preparation

• Construction

• Commissioning(excluding commissioning that runs in parallel to construction)

• 36 – 60 months

• 18 – 24 months

• 45 – 60 months

• 9 – 12 months

T0 +5

• Subsequent units commercial operation 6 - 9 months after first unit

Thank you