A research partnership between

Boise State University,

Idaho National

Laboratory, Idaho

State University and University of Idaho.

Center for Advanced Energy Studies

A Decision Framework for the Deployment of Small Modular Reactors

Geoffrey Black, PhD Department of Economics & Energy Policy Institute, Boise State University gblack@boisestate.edu Presentation to the Platts SMR Conference, Washington DC May 30, 2013

OUTLINE

v Background v A Changing Global Energy System v  Implications for Small Modular Reactors v SMR Market Analysis

v Necessary Conditions v Market Analysis

v Results: v Rankings v Overall Findings v Comparative Findings

Idaho National Laboratory (INL) has several research divisions, including:

•  Center for Advanced Modeling and Simulation

•  Institute for Nuclear Energy Science and Technology

•  Advanced Test Reactor National Scientific Test Facility

•  Center for Space Nuclear Research

A research and education partner of INL is the Center for Advanced Energy Studies (CAES)

•  Energy Policy Institute §  Ongoing SMR initiative

CAES and the Energy Policy Institute

There are major changes underway in both

the demand for energy and sources of energy production.

A Changing Global Energy System

Changes in Energy Demand: •  Global energy demand will grow - rising incomes and

population growth in developing economies §  World energy consumption will rise between 34 – 53% by

2035 §  Most of this increase from non-OECD countries §  OECD countries:

•  Demand barely rises (growth < 5% to 2035)

U.S. Energy Information Agency, International Energy Agency, International Atomic Energy Agency, World Bank, etc.

A Changing Global Energy System

Changes in Installed Energy Capacity: •  New additions in part to meet growing demand •  Much to replace retiring plants.

Sources of New Capacity Additions: •  Shift away from oil and coal

§  China and India account for more than 75% of increased coal-fired generation.

•  Large increase from renewables and natural gas •  Nuclear share 12% of global capacity by 2035

A Changing Global Energy System

The Majority of Increasing Energy Demand Is from Developing Economies.

Implications for Small Modular Reactors

Globally, these changes bode well for SMRs.

A Changing Global Energy System

Projected Increase in Role of SMRs

1.  Increasing role of renewables §  Largest source of increased global capacity §  Load following capability of SMRs blends well with renewables

2.  Lower capital costs, reduced construction times §  Reduces capital requirements and risk for large and small utilities

3.  Scalability §  Operational flexibility - Can supply incremental increases in

capacity needs.

Implications for Small Modular Reactors

3.  Modularity Yields Further Cost Advantages §  Additional cost savings due to modular design, reduced on-

site construction, standardized supply chain.

4.  Improved Design Features §  Passive Safety, Enhanced Security §  Reduced proliferation risks

Implications for Small Modular Reactors

Developing Nations Especially Well Suited to SMRs: §  Smaller & scalable yields better match for grids with

limited capacity, distributed energy markets. §  Large projected increase from renewables mainly from

developing nations - Pairs well with SMRs. §  Cogeneration, process heat, opportunities. §  Prime energy source for desalination.

§  Currently 16,000 plants worldwide, 66.5 million m3/day (17 million gals)

Implications for Small Modular Reactors

Market Analysis for SMRs •  Geoffrey Black

EPI, CAES, BSU •  Meredith Black

International Business, BSU •  David Solan

EPI, CAES, BSU •  David Shropshire

IAEA

SMR Market Analysis

Overview: •  Constructed Database with Economic, Infrastructure,

Governmental Characteristics for 214 Countries. •  Determined 5 Necessary Conditions for Countries to

be Viable SMR Markets. §  Economic and Infrastructure

•  Used 15 Criteria in 3 Major Categories to Rank Countries for SMR Potential. §  Financial & Economic §  Technology & Infrastructure §  Government Policy

SMR Market Analysis

Necessary Conditions: •  GDP (PPP) > $16 billion

§  Armenia with VVER 440 •  Per capita GDP (PPP) > $1,600

§  Bangladesh with Triga, plans for two NPPs •  Total electric grid capacity > 1.5 GW (IAEA) •  Member of IAEA •  Signatory to Non-proliferation treaty (NPT)

SMR Market Analysis

Ranking Criteria Category 1: Financial & Economic

Category 2: Technology & Infrastructure

Category 3: Government Policy

SMR Market Analysis

•  Category 1: Financial & Economic §  GDP (PPP) §  Per capita GDP (PPP) §  Real GDP growth rate §  International Trade as % of GDP §  Doing Business Index (World Bank)

•  10 topics, including the ease of starting a business, obtaining construction permits, protecting investors, obtaining credit, enforcing contracts.

§  Average growth rate of energy consumption

SMR Market Analysis

•  Category 2: Technology & Infrastructure §  Total Electric Grid Capacity §  Percentage of Population in Rural Areas §  Access to Energy

•  Ranked inversely to underlying data §  Oil, Gas, and Coal as a Percent of Total Electricity Capacity §  Infrastructure Ranking (World Economic Forum)

•  Measures a country’s infrastructure on the basis of its transportation, communications, electrical distribution networks

§  Technology Readiness (World Economic Forum)

SMR Market Analysis

•  Category 3: Government Policy §  Corruption Perceptions Index (Transparency International)

•  Ranking inverse to underlying data §  Energy Imports as a Percent of Energy Use §  Per Capita CO2 Emissions

SMR Market Analysis

Overall Ranking: §  For each criterion, countries rank ordered §  Assigned score according to quartile (4 to 1) §  Top score = 60

SMR Market Analysis

Of 214 countries: 117 Failed Necessary Conditions •  Many Economies Insufficient to Support SMR

Development •  Low Income ($1,025 per capita GNI): 34 of 36 failed

–  Kenya, Bangladesh passed •  Lower Middle Income ($1,026-4,035): 22 of 53 failed

•  Many Markets Too Small §  Majority of Upper Middle ( ($4,036 - $12,475) and High Income

(over $12,476) passed, some failed due to small grid size or GDP •  Ex: Botswana, Grenada, Gabon. Antigua, Dominica,

Montenegro, Namibia, Saint Lucia, Seychelles Overall Rankings on following table:

Results: Necessary Conditions

Results: Rankings

•  Countries with Highest Potential to Use SMRs: §  Sufficient economy and market size §  Growing economy §  Relatively dispersed population §  Reliance on high carbon emission sources of

energy §  Policies accommodative to new business

ventures, transparency, low degree of corruption

Results: Overall Findings

•  While Government Policies Considered, Current Political Climate Does Not Affect Ranking §  Ex: Austria, Germany, Japan in top quartile, but current

political climate excludes new NPPs. •  Consideration of IAEA Designation:

§  Several countries in top 2 quartiles are designated by IAEA as Phase 2; 3 countries are good candidates for SMRs

•  Have current nuclear or taking steps to build nuclear §  Ex: United Arab Emirates, Malaysia, Poland, Jordan, Belarus,

Canada, China, S. Korea

Results: Overall Findings

U.S. Dept. of Commerce (2011) Only Previous Study •  27 Countries Were Pre-Selected, 6 Criteria Used:

§  Population density, economic growth, energy consumption •  These similar to present study

§  CO2 emissions. Electricity imports, nuclear capacity •  CO2 not on per-capita basis •  Imports and capacity only binary

§  No governmental policy considerations

The Two Studies are Consistent, but Significant Differences Exist Due to Additional Criteria Used.

Results: Comparative Findings

Countries Designated as IAES Phase 2 and 3 and With Developed NPP Program

Results: Comparative Findings

Thank You

•  For Further Information, Please Contact:

Geoffrey Black, PhD Department of Economics and Energy Policy Institute

Boise State University 1910 University Drive Boise, Idaho 83725

gblack@boisestate.edu (208) 426-1359