xiv cbe - mesa 4 - yves crommelynck - 24 outubro 2012
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International IPP view on main prerequisite issues when considering an investment in nuclear new build
Yves Crommelynck, Vice President Strategy, Partnerships & International
Associations - Nuclear Development Division
Rio, Brazil
October 24, 2012
CONFIDENTIAL
L
XIV Congresso Brasileiro de Energia Elétrica
COPPE
2012 10 24_GDFSUEZ_CBEE_Rio_YC
International IPP view on main
prerequisite issues when
considering an investment in NNB
Rio, Brasil
October 24, 2012
GDF SUEZ profile
and presence in Brazil
Stress Tests and Long Term
Operation of Belgian NPPs
GDF SUEZ landscape for nuclear
investment
Conclusions
TABLE OF CONTENTS
2012 10 24_GDFSUEZ_CBEE_Rio_YC
GDF SUEZ, a world leader in the energy sector
No.1 Independent Power Producer (IPP) in the world
Active across the entire Energy value chain
Answering the great challenges
• responding to energy needs
• fighting against climate change
• maximizing the use of resources
Diversified supply sources
Flexible and highly efficient power generation
Innovative energy solutions to individuals,
cities and businesses
Our History began in 1822
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€90.7 billion in 2011
revenues
218,900 employees
Capacity: 117.3 GW installed
14.8 GW under
construction
Key figures and breakdown of power generation
* Including 100% of the capacity of GDF SUEZ assets
regardless of the actual holding rate, exc. International Power.
** Including pumped storage.
Breakdown by region at December 31, 2011*
Breakdown by fuel at December 31, 2011 (in TWh)*
44.5
Nuclear 59.4
Hydro power**
254.7
Natural gas
73,8
Coal
Biomass
and biogas 2.6
Wind power 7
Other 8.7
464.7
TWh
Europe
Middle East
North
America
Latin
America
Asia
12.3%
11%
41.2%
10.4% 20.1%
Australia
5%
€11 billion in
gross investments
in 2012
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GDF SUEZ is the largest private energy player in Brazil…
… through Tractebel Energia…
…and is well positioned to play a consolidating role
Present in Brazil since 1998
8.630 MW of total installed capacity managed, being 6,908 MW own • 83% hydro or other renewable sources, 22(1) plants in operation all around the country;
2.024 MW under construction
• 3,750 MW Jirau HPP (1,879 MW group’s share) and 145 MW from wind farms 100% own;
(1) 20, being one thermo power plant complex with 3 plants
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GDF SUEZ in Brazil A continental country…
… and a diversified portfolio of assets, with strategic location:
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Estreito hydro power plant
1,087MW hydroelectric power plant at Estreito was inaugurated on
October 17th, 2012 by the President of Brazil, Dilma Rousseff and the
Chairman and CEO of GDF SUEZ, Gerard Mestrallet.
50 years of expertise in nuclear energy mastering the whole nuclear value chain
Stakeholder in Europe first commercial PWRs BR 3 (1962-1987)
Chooz A (1967-1991)
Operator of 7 reactors in Belgium (3 at Tihange and 4 at Doel)
The Group capacities : 6 134 MW Belgium 4 226 MW
France 1 208 MW (Chooz B and Tricastin)
Germany 700 MW (Unterweser, Gundremmingen B&C, Grohnde)
Strengths Independent from suppliers & vendors
Reactors from several vendors (all of PWR design)
Participations in Georges Besse II (Uranium enrichment plant)
Tihange
Doel
Nuclear Safety and Nuclear Security
are our overriding priorities
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Our ambition in nuclear projects
United Kingdom
• Ambition: 3 600 MW – COD 2023
• NuGeneration Ltd - Joint venture GDF SUEZ – Iberdrola
• Option on Moorside, nuclear land adjacent to Sellafield
• Preparing for selection of technology : AP1000 or EPR
Other considered countries
• Europe : Poland, Turkey , The Netherlands,…
• Middle East : Saudi Arabia, UAE
• Asia : Thailand, …
• Americas : Brazil, USA/Canada
GDF SUEZ to develop Nuclear capacities
Based on international IPP developer experience, as co-Owner and co-Operator of highest nuclear safety level nuclear reactors
Nuclear is part of the solution to face Energy challenges
• Energetic independence & Fuel security of supply
• Stable, predictable and competitive generation costs
• Low greenhouse gas emissions
9
2012 10 24_GDFSUEZ_CBEE_Rio_YC
GDF SUEZ profile
and presence in Brazil
Stress Tests and Long Term
Operation of Belgian NPPs
GDF SUEZ landscape for nuclear
investment
Conclusions
TABLE OF CONTENTS
International IPP view on main
prerequisite issues when
considering an investment in NNB
Rio, Brazil
October 24, 2012
2012 10 24_GDFSUEZ_CBEE_Rio_YC
Results of BElgian Stress Tests and main short term improvements on Belgian NPPs
Results have confirmed the robustness of Belgian NPPs thanks to
Double containment
Bunkerised 2nd level of protection including emergency diesels
Ultimate heat sink
Most issues related to oldest NPPs (Doel 1 & 2 and Tihange 1)
Some improvements have already been implemented at NPPs in order to increase the robustness of the installations with regard to extreme scenarios
to guarantee core cooling in case of total Station Black Out
to refill the Spent Fuel Pools in case of total Station Black Out of
long duration
Other improvements are in progress:
to ensure power supply and cooling capacity from dry places in
case of beyond design flooding
to guarantee correct operation in case of beyond design
earthquake
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Long Term Operation of Belgian nuclear power plants
December 23, 2011
In parallel to the Stress Tests, Electrabel
submitted its Long Term Operation
reports
July 4, 2012
Belgium Government decided
o To phase out Doel 1 & 2 units in 2015 and to shutdown all units by 2025
o To allow Tihange 1 to operate for 10 more years
o To force Electrabel to sell the electricity generated by Tihange 1 to the market
at cost (including safety improvements) with a reasonable margin
o To slightly reduce the existing nuclear tax
July 3, 2012
The FANC concluded that Long Term
Operation of 3 oldest units
(Doel 1 & 2 and Tihange 1) beyond 2015
was technically feasible if appropriate
identified investments would be carried out
in order to manage ageing and upgrade
safety level
Further negotiations are on-going
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Overview of the checks in progress at Doel 3 and Tihange 2
The facts
In addition to regulatory inspections, Electrabel and AFCN agreed to subject 7 active reactors to specific
additional inspections during ten-year review process
These additional checks carried out on the full thickness of the wall and the entire surface of the vessel
Inspections in Doel 3 and Tihange 2 revealed indications in the material of the reactor vessel
apparently “hydrogen-related defects” (HRD),
• Flake-type indications
• Said to occur during manufacture of the vessel
• In the metallic mass in the inner 120 mm of the wall (itself 200 mm thick)
Guaranteed safety
HRD not source of any radioactive release
Reactors Doel 3 and Tihange 2 shut down
Fuel removed from reactor
Next steps
Analysis process on-going, in close collaboration with Authorities,
international experts and experts from the Group (Laborelec, Tractebel Engineering, ECNSD)
Edition of justification file
Review of the justification file by FANC and its external experts.
2012 10 24_GDFSUEZ_CBEE_Rio_YC
GDF SUEZ profile
and presence in Brazil
Stress Tests and Long Term Operation of
Belgian NPPs
GDF SUEZ landscape for
nuclear investment
Conclusions
TABLE OF CONTENTS
International IPP view on main
prerequisite issues when
considering an investment in NNB
Rio, Brazil
October 24, 2012
2012 10 24_GDFSUEZ_CBEE_Rio_YC
Business Model and Partnership
Based on international IPP developer experience,
Focus on large, complex projects to create value in
Development & Operation
Co-Owner & Co-Operator for highest safety level PWR
technology (not designer-constructor)
Through sustainable partnerships to share risks
and costs
• to increase competition and reduce costs
• to meet clients requests/demands
• with adequate industrial scheme coping with local
situation
– At equity level : Utilities and/or giant Consumers
– At political level : local incumbent Utilities
– At contractual level : Suppliers
Through Plant delivery contractual schemes with
affordable risks
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GDF SUEZ landscape for nuclear investment
Further to Partnership approach and General Nuclear requirements
Main prerequisite issues when considering an investment in a specific country are :
Stable long term political commitment
Clear and predictable long term legal and regulatory environment
A suitable electricity market and a reliable High Voltage grid
Site assessment
Technology assessment
Fuel cycle and radwaste management solutions
Economics & Financing
Local acceptance
Reinforcement of local nuclear competences
Risk mitigation measures
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General Nuclear Requirements
Nuclear operator = unique counter-part of the Safety Authorities
during the licensing process, the operation, the decommissioning
Knowledge acquisition of targeted designs to facilitate build-up of the
“intelligent” Nuclear Operator
Pre-licensing phase before the signature of the main contract
Part of the detailed design before the signing of the main contract
master the construction schedule
minimize risk of delay
serious basis for the pre-licensing process
60 years 10 -15 years
1 century
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AP1000 Westinghouse EPR Areva ATMEA1TM Areva-Mitsubishi
Internationally recognized Generation III Reactors
Characterized by high level of nuclear safety, more than ever after Fukushima
Pressurized Water Reactors (widespread worldwide & 50 year expertise)
Actions Build-up expertise and experience feedback
Assess competitiveness of the models (on technical and industrial point of view)
Compare nuclear technologies to select the most suitable to the project, the country and Utilities’ needs
Keep open position versus other technologies
Technology : Highest safety level reactors
18 2012 10 24_GDFSUEZ_CBEE_Rio_YC
Financing Nuclear Projects
Financing issues different and more challenging
than for conventional thermal plants
Nuclear projects highly capital intensive: 2 to 4 times the cost of thermal plants
Construction period 2 to 4 times longer than thermal plants
Technical life time 2 to 3 times longer than thermal plants
High fixed costs and low variable costs make electricity price very sensitive to plant availability
and ability to operate in base load
Capex are more front loaded
Specific risks linked to nuclear : licensing, waste management, civil nuclear liability
Will a contractor accept a lumpsum, fixed price EPC contract ?
Extensive risk mitigation and allocation is necessary
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Lenders :
• Are unlikely to assume licensing, development &
construction risk
– Governments and regulatory bodies to set adequate legal
framework
– Developers, Utilities and Contractors to assume construction
risks (delays, cost overruns)
• May take limited amount of market risk if coverage
ratios are robust
– Governments to offer clear environmental policy (Kyoto, CO2
allocation)
– Developers to opt for the most secure possible environment
(PPAs, regulated market, capacity fees, ...)
• Will require significant insurance before assuming
liability and safety risk
– National Energy Policies, International Conventions and National
Acts and Laws
• Unlikely to assume waste disposal costs and
decommissioning risk
– Government to commit to solutions for waste disposal
– Sharing of risk by industry players and/or Government
Financing Nuclear Projects : Risk allocation
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The challenge of local acceptance
Nuclear energy image has been deeply damaged
More than ever, communication to the public is of paramount importance
and nuclear industry needs to improve communication
Need to meet public expectations : Main concerns: safety + proliferation + long-lived nuclear waste
Aim : reassure & explain
Tone : transparent, factual
Our Objectives More than ever proactively assume an educational mission
Promote nuclear energy as an acceptable and legitimate way of meeting energy
needs
Build up GDF SUEZ image as an legitimate stakeholder in nuclear energy
Examples of actions carried out in Belgium “Belgian Nuclear Forum” campaigns (2009, 2010, 2011)
Surveys, barometers (SCK-CEN, BNF,…)
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Reason Feelings
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NUCLEAR ENERGY.
ARE YOU FOR, ARE YOU AGAINST,
OR DON’T YOU USE ELECTRICITY?
2009: no image campaign, but an invitation to
think about nuclear energy
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2010: Rock festival Werchter
• raise awareness
• invite to participate to the debate
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2011: Transparency campaign after Fukushima
Invite public to ask questions
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Reinforce local nuclear competences
Mobilization of local graduated and specialized people
Set up of local manpower competency
Concrete associations with research centres and Universities
Bilateral support agreements with other nuclear countries
Training programs
Typical staffing curve (COD 2023)
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The Human Resources action plan
26
5.300 people with skills and
know-how in the nuclear energy
2013
Now Future
On the long term, we need:
> 2.000 people (460 engineers
500 technicians – 1.000 workers) for the on-going business
Nuclear Training Programs
NTP-J Nuclear Trainees Program for young engineers (J=Junior)
NTP-M Nuclear Trainees Program for experienced engineers (M=Major)
NTP-S Nuclear Trainees Program for support services (S=Support)
NTP-G Nuclear Trainees Program for generation key staff (G=Generation)
NTP-T Nuclear Trainees Program for technicians (T=Technicians)
Action plan: Recruitment+Training+Dévelopment
2012 10 24_GDFSUEZ_CBEE_Rio_YC
GDF SUEZ profile
and presence in Brazil
Stress Tests and Long Term Operation of
Belgian NPPs
GDF SUEZ landscape for nuclear
investment
Conclusion
TABLE OF CONTENTS
International IPP view on main
prerequisite issues when
considering an investment in NNB
Rio, Brazil
October 24, 2012
2012 10 24_GDFSUEZ_CBEE_Rio_YC
Conclusion
GDF SUEZ to pursue operation of existing NPPs and to develop new Nuclear capacities
as co-Owner and co-Operator of highest nuclear safety level nuclear reactors
in key strategic countries, including Brazil
based on :
international IPP developer experience,
50 years expertise as Owner and Operator of NPPs
through :
developing sustainable partnerships to share risks and costs
opting for plant delivery contractual schemes with affordable risks
choosing the most secure possible environment (PPAs, regulated, capacity fees, etc.)
relying on Pressurized Water Reactors with the highest level of safety
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We definitely believe Brazil will take advantage of the long term experience of international classic investors-operators, like GDF SUEZ, in partnership, in bankable schemes.
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