AREVA

Michael A. McMurphyPresident, AREVA, Inc.

President & CEO, COGEMA, Inc.

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Energy: AREVA's Core Business

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Atoms for Peace

Historic Initiative by President Dwight D. Eisenhower

Make available the humanitarian benefits of nuclear energy

Today, those humanitarian benefits support

“Sustainable Development” AND we address them globally.

Today, those humanitarian benefits supportToday, those humanitarian benefits support

“Sustainable Development” AND we address them globally.“Sustainable Development” AND we address them globally.

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Sustainable Development

Meeting the needs of the Present While Contributing to the Future.

Economic development and environmental protection are inextricably intertwined

Emission-Free generation technologies, including nuclear, are essential to sustainable development

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Massive Electricity Needs

Massive quantities of electricity are needed for economic development

Extremely high rate of growth in China, India, Korea, and other Asian countries

Example: China >9% per year increase in GDP; India ~8%

Reminder:Reminder: Every 80% increase in GDP yields 100% Every 80% increase in GDP yields 100%

increase in per capita electricity consumptionincrease in per capita electricity consumption

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Where’s It Coming From?

Do we just flip a switch??Is there enough…

Oil? Coal? Natural Gas?

Can geothermal satisfy the need? Wind? Solar?

WE NEED THEM ALL…AND WE NEED NUCLEAR!!

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Global Recognition: Need for Emissions-Free, Large Baseload Generation

U.S. is Fortunate: We have a diverse mix of generation

Coal (50%) and Nuclear (20%) are the U.S. Backbone

Natural gas, hydro, geothermal, some small wind/solar projects

Relying on DIVERSITY is the U.S.’s greatest strengthRelying on DIVERSITY is the U.S.’s greatest strengthRelying on DIVERSITY is the U.S.’s greatest strength

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Emissions-Free Sources Can Contribute

HydroHydro::Relies on rainfall, snowfall

Impacts wetlands and raises other environmental issues

Produces 38% of the time

WindWind::Relies on speed and consistency

Requires vast numbers of windmills

Has environmental impacts on “footprint” and bird-life

SolarSolar::Needs a lot of sun, and a lot of land

Inconsistent and expensive

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Myth: Renewables are Better Than Nuclear Energy

TRUTH: Renewables are good. But nuclear energy is more economical, dependable, and uses much less land

TRUTH: Renewables are good. But nuclear energy is more economicaTRUTH: Renewables are good. But nuclear energy is more economical, l, dependable, and uses much less landdependable, and uses much less land

Land required for emissionsLand required for emissions--free generation of 1000 megawattsfree generation of 1000 megawatts

Method Requirement/Description Land Area (sq. miles)

Photovoltaic 100km2 @ 10% efficiency 40

Wind 3,000 Wind Turbines @ 1 MW ea. 40-70

Biogas 60,000,000 pigs or 800,000,000 chickens ??

6,200km2 of sugar beets 2,400

Bioalcohol 7,400 km2 of potatoes 2,800

16,100 km2 of corn 6,200

272,000 km2 of wheat 104,000

Bio-oil 24,000 km2 of rapseed 9,000

Biomass 30,000 km2 of wood 12,000

Nuclear <1km2 1/3

WE NEED TO RECOGNIZE THE LIMITS OF RENEWABLESWE NEED TO RECOGNIZE THE LIMITS OF RENEWABLESWE NEED TO RECOGNIZE THE LIMITS OF RENEWABLES

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Nuclear Generation Will Contribute

Average 90% Capacity Factor

Emission-Free

The MOST economical baseloadEven taking into account the large capital costs

Even without attributing value to the emissions and sustainable development factors

(1 uranium fuel pellet = 17,000 cu ft natural gas or 1,780 lb coal)

Small FootprintGeneration on 500-acre nuclear facility equivalent to generation from 35,000 acre solar panels or 150,000 acre wind farm

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Myth: Nuclear Energy is Bad for the Environment

U.S. nuclear energy plants avoided tons of emissions in 2004

3.43 million tons of sulfur dioxide

1.11 million tons of nitrogen oxide

700 million tons of carbon dioxide

U.S. nuclear energy plants avoided carbon emissions equal to 94% of U.S. auto emissions (138 million cars)

World wide, 440 nuclear energy plants save more than twice the Kyoto Accord carbon targets annually

TRUTH: Nuclear energy is improving the environmentTRUTH: Nuclear energy is improving the environmentTRUTH: Nuclear energy is improving the environment

Nuclear power reduces air pollution and greenhouse gases by displacing other generation

Nuclear power reduces air pollution and greenhouse gases Nuclear power reduces air pollution and greenhouse gases by displacing other generationby displacing other generation

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Diversity of Generation Sources

Underpins Energy Security

Foundation of Environmental Responsibility

Cushions Global Development

Pursue CleanCoal

Pursue CleanCoal

Must:Develop geothermal,

hydro, wind onglobal basis

Develop geothermal,hydro, wind onglobal basis

Must:Have growth

of large baseload nuclear generation

Have growthof large baseload nuclear generation

Must:

IT IS NOT A QUESTION OF WHETHER NUCLEAR CAN CONTRIBUTE:

NUCLEAR MUST CONTRIBUTE

IT IS NOT A QUESTION OF WHETHER NUCLEAR CAN IT IS NOT A QUESTION OF WHETHER NUCLEAR CAN CONTRIBUTE:CONTRIBUTE:

NUCLEAR MUST CONTRIBUTENUCLEAR MUST CONTRIBUTE

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Into The Future

Hydrogen EconomySubstituting for gasoline/diesel is effective ONLY if hydrogen is produced by using a source that does not emit CO2!

Advanced Reactors: Best source for hydrogen economy

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Prominent Environmentalists Support Nuclear Energy (1)

“By the mid-1980’s, … I became aware of the emerging concept of sustainable development: balancing environmental, social and economic priorities…. Since then, I have worked under the banner of Greenspirit to develop an environmental policy platform based on science, logic, and the recognition that more than six billion people need to survive and prosper every day of the year…. Renewable energies, such as wind, geothermal and hydro are part of the solution. Nuclear energy is the only nongreenhouse gas-emitting power source that can effectively replace fossil fuels and satisfy global demand.”

---- Patrick Moore, leading ecologist and environmentalist, founder of Greenpeace, Chair and Chief Scientist of GreenspiritThe Miami HeraldJanuary 30, 2005

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Prominent Environmentalists Support Nuclear Energy (2)

“Now we come to the most profound environmental problem of all…global climate change. Its effect on natural systems and oncivilization will be a universal permanent disaster….So everything must be done to increase energy efficiency and decarbonize energy production. Kyoto accords, radical conservation in energy transmission and use, wind energy, solar energy, passive solar, hydroelectric energy, biomass, the whole gamut. But add them all up and it’s still only a fraction of enough…The only technology ready to fill the gap and stop the carbon dioxide loading of the atmosphere is nuclear power…It also has advantages besides the overwhelming one of being atmospherically clean. The industry is mature, with a half-century of experience and ever improved engineering behind it….Nuclear power plants are very high yield, with low-cost fuel. Finally, they offer the best avenue to a ‘hydrogen economy’, combining high energy and high heat in one place for optimal hydrogen generation.”

---Steward Brand, noted environmentalist and founder, publisher, and editor of The Whole Earth Catalog

“Environmental Heresies”Technology Review (MIT)

May 2005

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We Built 30% of the World’s NuclearGenerating Capacity

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Plants: Evolutionary Reactor TechnologyEPR: A competitive, safe, advanced 1600 MWe class

PWR

Containmentdesigned towithstandhydrogendeflagration

Spreading AreaProtection of the Basemat

Prevention of highpressure core melt bydepressurisationmeans

Containment HeatRemoval System

In Containment Refueling Water Storage Tank (IRWST)

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Olkiluoto 3

Location- Olkiluoto, Finland

Reactor supplier- AREVA-FANP

Reactor type- Pressurized water reactor, PWR

Turbine supplier- Siemens AG, Germany

Electric output- approx. 1,600 MW

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Utilities Have Publicly Announced Consideration of New Reactors

Constellation EnergyTeamed with AREVA in UniStar Nuclear

Visit website at www.unistarnuclear.com

Duke PowerEntergy NuclearExelonProgressSCANA Corp.Southern Co.TVA

AND…MORE TO COMEAND…MORE TO COMEAND…MORE TO COME

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Reactors

Gen III Reactor Designs

EPRAREVA PWR, 1600 Mwe

The only one currently being built

Others exist on paper

AP1000W PWR, 1000 Mwe, Based on AP600

US Design Certification approved

ESBWRGE BWR, 1500 Mwe

First of a kind cost co-funded by DOE

US Design Certification submitted

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High Temperature Gas Reactor

Electrical Generation Plant

Hydrogen Generation Plant

Heat Exchanger

Nuclear Unit

2005 R&D Heat exchangerParticle fuelComputer analysis programsVesselsHigh temperature materials

Other major investmentsHigh temperature test loop

AREVA invested >$25M in 2005

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*Energy Affiliates (AREVA, Framatome ANP, Inc., COGEMA, Inc. Canberra and T&D)

Total AREVA North America

Employees6000

Lynchburg VA (1,700)

Alpharetta/Atlanta GA (64)

Benicia CA (135)

Charlotte/Huntersville NC (545)

Naperville IL (50)

Fort Worth TX (50)

Hawthorne NY (30)

Denver CO (20)

Mills WY (29)

Woodbury/Dover NJ (71)

Albuquerque NM (191)

Cranberry Township/Charleroi PA (143)

Fremont CA (30)

Tacoma WA (24)

Las Vegas NV (26)

Aiken/Seneca SC (123)

Richland WA (792)

Washington DC (48)

Melville NY (45)

Bellevue WA (300)

Medford OR (75)

Bethlehem PA (85)

Oak Ridge/Erwin TN (43)

Eddystone PA (71)

Idaho Falls ID (3)

St-Leonard (67)

Ontario (22)

Calgary (13)

Vancouver (1)

Burlington (8)

LaPrairie (113)

Quebec (1)

Brossard (23)

Saskatchewan (235)CI

Toronto (25)

AREVA in North America

San Jose CA (50)

Meridian CT (395)

Marlborough MA

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Substantial U.S. Presence:Substantial U.S. Presence:

Nuclear Services and Engineering

Nuclear Fuel

4,500 employees

Headquarters: Lynchburg, VA

Framatome ANP, Inc.

Uranium Products and ServicesNuclear MeasurementEngineering & TechnologySpent Fuel Management~900 employeesHeadquarters: Bethesda, MD

COGEMA, Inc.

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AREVA Market Leader in Dry Storage

Yucca Mountain 1998 missed deadline led to the creation of dry storage market AREVA now: the dry storage market leader

AREVA well positioned for future SNF transportation and handling activities BUT…

Both TN metal cask and NUHOMS® concrete shielded dry storage are market leaders

Advanced designs for high burnup and short cooled fuel

Major Transport Package Provider

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Sustaining the Nuclear Renaissance

We are witnessing the revival of nuclear power

We therefore need to re-examine our used fuel management strategy

Do we have an adequate waste-management strategy to sustain the renaissance?

Does the “throw away” fuel cycle strategy provide a strong enough foundation for the rebirth?

Without an unequivocal “yes,” we must seriously consider a closed-cycle strategy

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The Open Cycle Strategy: 30 Years Later

The open cycle “throw away” strategy was adopted in the US more than a quarter century ago

Primarily as a measure perceived to support nonproliferation objectives

An adequate strategy for a stagnant nuclear power industry of the 1980s and 1990s

Unintended consequence – complicates waste disposal

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Myth: There are Huge Volumes of Nuclear Waste

TRUTH: Used fuel is a small volume, easily managedTRUTH: Used fuel is a small volume, easily managedTRUTH: Used fuel is a small volume, easily managed

You could stack all used fuel from 40 years of operations on a football field about 5 yards deepReprocessing would reduce waste to one end zone

Vastly decreased volume

Converts long-lived isotopes into short-lived ones (10,000 Years → 300 Years)

Extends uranium fuel

Other countries ARE reprocessing

U.S. should reprocess to reduce volume and to reclaim 96% of the fuel that is unburned in our

once-through fuel cycle

U.S. should reprocess to reduce volume and to U.S. should reprocess to reduce volume and to reclaim 96% of the fuel that is unburned in our reclaim 96% of the fuel that is unburned in our

onceonce--through fuel cycle through fuel cycle Dan Keuter, VP, Entergy Nuclear, 2 Dec 05

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Current Used Nuclear Fuel Situation~ 2100 t/year annual fuel discharge from reactor

On-going difficulties

Legal battles DOE-Utilities-States (multi-billion dollar potential liabilities)

YM continuously challenged (incl. Congress investigation)

Funding inadequate to support schedule

Fundamental issues around the design of the current scheme

10,000-year EPA radioprotection standard vacated

YM capacity incompatible with a nuclear renaissance

Increasing call for change

Centralized interim storage (DOE and/or private)

Policymakers considering treatment - Recycling increasingly considered/advocated by Congress and the industry

[NEW] U.S. Administration proposing “advanced recycling” in context of the announced Global Nuclear Energy Policy

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Open vs. Closed Cycles

ConversionEnrichmentFabrication

UOX

UOX

Recycled U

UsedFuel

HLWtransport

TreatmentRecycling

Used UOXTransport

-----------------------------------------------------------------------------------------------

HLW Repository

(High Volume)

HLW Repository

(Low Volume)

MiningConversionEnrichmentFabrication

MOXFuel

Closed Cycle

Open Cycle

Mining

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The Case for Treating-Recycling

Why the renewed interest in Treating-Recycling?

1. Repository optimization through HLW waste reduction

2. Energy Security and Resource conservation

3. Economics (Cost effectiveness)

4. Proliferation-resistance imperative

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Yucca Mountain Optimization

The goal is to optimize repository loading

It requires addressing two constraints

Physical volume reduction of waste package, and

Heat load reduction, due to

1. Actinides for the long term (mostly americium)

2. Fission products for the short term (cesium and strontium)

120,000

250,000

600,000

Source: Argonne National Laboratory

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Yucca Mountain Optimization

Goal can be reached through the following strategyEarly uranium+plutonium removal from newly discharged fuel

Avoids build-up of americium from Pu-241 decay (14 years half-life) leading to production of Am-241 in the waste form

Interim storage/cooling of vitrified treatment residuesAllows Cs and Sr heat decay (30-year half-life)

Treatment of low burn-up legacy fuel With low americium content

Providing significant heat load densification factorsEarly treatment only: 5 - 7

Early treatment + legacy used fuel in dilution: 4

A factor of 4 results in an overall savings of 75%of the repository capacity

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Yucca Mountain Optimization

The strategy also facilitates Safety / Radioprotection Demonstration

Early treatment minimizes neptunium build-up in final waste

Pu-241 (14 years half-life) → Am-241 (433 years half-life )

→ Np-237 (2 million years half-life)

Vitrified waste form provides long term durability

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Treatment-Recycling Reduces ToxicityR

elat

ive

Toxi

city

Treatment-Recycling

Once-Through

YEARS

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Energy Security and Cost Effectiveness

Energy SecurityMOX recycling

REPU (Reprocessed Uranium) recycling

Up to 30% Uranium savings

Cost effectiveness“Bridging” plant design approach

Initial design derived from proven technologies & feedback from commercial experience

Continuous improvement / upgrade strategy minimizes implementation risk

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Cost Effectiveness

Within the bounds of reasonable uncertainties, there is little or no difference between the total life cycle costs of an open or a closed fuel cycle based on burning MOX in current and next generation LWRs.

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Nonproliferation

Treatment-Recycling plant characteristicsCurrent operating facilities fully secure and safeguardedCOEX process

No separated plutoniumIntegrated plant

In line fabrication of recycled fuelNo accumulation

Optimized safeguards

Just-in-time MOX recycle in reactors

Pu use in MOXDestroys about 1/3 of the original PuSignificantly degrades isotopic composition of remainder

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An Evolutionary Plant (1)

A recycling plant that can be implemented now

“Early” treatment of newly discharged fuel (~ 3 years)Treatment of low burn-up legacy fuel in dilutionU/Pu recovery and recycle in Gen III/III+ reactors (MOX)REPU recycling Used-MOX saved and interim stored for recycle in Gen IV

Gen III / III+ reactors

Fuel cycle generation aligned with reactors technology

Gen I: Defense facilitiesGen II: La Hague ; Sellafield ; Rokkasho Mura

2020

Gen III: US facility

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An Evolutionary Plant (2)

Plant designAdapted from existing technologies: some potential cooperative developments with US National Labs

Capable of integrating future evolutions through modular design

Why future evolutions?Implement improvements (1) when required and (2) when ready:

Increasing densification factor with Americium separation

Implementing second recycling of used MOX fuel

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Why Start Early ?

Stops the accumulation of used UOX fuel in interim storage

Significantly optimizes Yucca Mountain loading (x4)

Brings a much needed high level of certainty to the US used fuel management program

Provides a sustainable foundation for the impending nuclear renaissance

Other countries will not wait, nuclear renaissance is marching on, worldwide

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In Summary

Treatment-recycling Complements the current repository strategyAddresses nuclear waste acceptability

Volume and toxicity reductionWaste form durabilityLong-term intrinsic proliferation resistanceMinimization of the transfer of responsibility to future generations

Provides a domestic energy sourceEnhances energy security

Promotes concepts at the heart of sustainable developmentSignificantly optimizes repository use and managementRecovers valuable materials through recycling

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Is this the end of the story?

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No, a Parallel Track

To support the introduction of Gen IV systemsEnergy security

Waste Management: further optimization of the repository

Global actinide management

Actinides incineration

Further reducing volume and heat of waste to be disposed of

Nonproliferation

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A Final Thought“In the world of expanded use of nuclear power, the once-through

cycle does not seem workable.”Dr. Burton Richter

Nobel Laureate in Physics (1976)At IAEA General Conference – September 2005

A closed nuclear fuel cycle – not “if”, but when and how?