U.S. Department of Energy ProgramsSupporting Nuclear Power Deployment

French American Foundationin cooperation with

French Section of the American Nuclear Society Paris, France

October 22, 2010

Dr. Peter LyonsOffice of Nuclear Energy

U.S. Department of Energy

2

Global Energy Distribution

as indicated by nighttime electricity use

3

population of over 6 billion people is below 0.8

on the U.N. Human Development Index (HDI)

Source: United Nations Development Program; McFarlane 2006

4,000 8,000 12,000

India

China

Pakistan

RussiaG ermany

Australia

Canada

F rance Japan

U .S.

Annual Electricity Use (kWh/Capita)16,000

Prosperity

Education

Life span

Niger

Papua New Guinea

Ethiopia

Angola

1.0

0.8

0.6

0.4

Indonesia

U K

C A

Iran

Access to energy is essential to quality of life

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Nuclear power in the U.S. today

104 Nuclear plants provide about 20% of U.S. electricity generationHigh capacity factors above 90%. They have become much more efficient.

Columbia (1)

DiabloCanyon (2)

San Onofre(2) Palo Verde

(3)

Monticello (1)

Prairie Island (2)

Ft. Calhoun (1)

Cooper (1)

Wolf Creek (1)

Duane Arnold (1)

Callaway(1)

ANO (2)

Comanche Peak (2)

South Texas (2)

River Bend(1)

TurkeyPoint (2)

St. Lucie(2)

Farley(2)

Hatch (2)

Sequoyah (2)

Catawba (2)H. B. Robinson (1)

Summer (1)

Harris(1)

Brunswick (2)

Surry (2)

Calvert Cliffs (2)

Hope Creek (1)Salem (2)Oyster Creek (1)

Millstone (2)Pilgrim (1)Seabrook (1)

Vermont Yankee (1)FitzPatrick

(1)Nine Mile Point (2)

Ginna (1)

La Salle (2)

Kewaunee (1)

Point Beach (2)

Palisades (1)

Fermi (1)

Davis-Besse (1)

Perry(1)

Three Mile Island (1)

Limerick (2)Indian Point (2)

Quad-Cities (2) Braidwood

(2)

CrystalRiver(1)

Grand Gulf

(1)

BrownsFerry (3)

Watts Bar (1)

NorthAnna(2)

Oconee(3)

Waterford (1)

Dresden (2)

McGuire(2)

BeaverValley

(2)

Peach Bottom (2)

Susquehanna(2)

Byron (2)

Clinton (1)

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Biomass5%

Wind3%

Solar0%

Geothermal1% Hydro

21%

Nuclear70%

Source: Energy Information Administration

Net Non-emitting Sources of Electricity

Nuclear power is clean, reliable base load energy source

Provides about 20% of U.S. electricity generation mixProvides about 70% of U.S. emission-free electricityAvoids about 700 MMTCO2 each yearHelps reduces overall NOx and SOx levels

U.S. electricity demand projected to increase ~24% by 2030100 GWe nuclear capacity - 104 operating plants

Fleet maintaining approximate 90% average capacity factorsMost expected to renew license for 60 years of operation

U.S. Electricity Net Generation

Source: Energy Information Administration

Nuclear19%

2007

Total4,160 BkWh

807 BkWh

Nuclear Energy Plays an Important Role in US Energy Supply

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Nuclear Energy in the Obama Administration

production, more efficiency, more incentives. And that means building a new generation of safe, clean nuclear power plants in

President Obama from the State of the Union January 27, 2010

Secretary of Energy Steven Chu November 16, 2009

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U.S. Strategic Goal

Reduce U.S. CO2 emissions by 80% by 2050Very ambitious goal

Requires accurate picture of Current energy sourcesCurrent energy utilizationCO2 emissions for each economic sector

8

Estimated U.S. Energy Use in 2008:~99.2 Quads

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Estimated U.S. Carbon Dioxide Emissions in 2007: ~5,991 Million Metric Tons

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The EPRI PRISM ANALYSIS

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The primary mission of the Office of Nuclear Energy is to advance nuclear power as a resource capable of making major contributions

environmental and energy security needs by resolving technical, cost, safety, security and regulatory issues through research, development and demonstration.

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Nuclear Energy Objectives

1) Develop technologies and other solutions that can improve the reliability, sustain the safety, and extend the life of current reactors.

2) Develop improvements in the affordability of new reactors to

security and climate change goals.

3) Develop sustainable fuel cycles.

4) Understanding and minimizing the risks of nuclear proliferation and terrorism.

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Small Modular Reactors A new approach to nuclear plant deployment

Establish cost-share partnerships with industry for LWR-based SMR designs which can be NRC licensed and deployed by 2020Explore advanced SMR concepts and develop advanced technologies that enable/enhance new SMR designsEmphasis on simplified operation and maintenance, enhanced functionality, and increased proliferation resistance and security Potential benefits of SMRs include:

Lower initial construction costs - can be factory fabricated

Electrical capacity can be added in increments

Flexible siting can support remote areas of grid

Support DOE greenhouse gas reduction goals

mPowerNuScale

IRIS

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Energy Innovation Hubfor Modeling & Simulation A key Secretarial Initiative

Consortium for Advanced Simulation of Light Water Reactors (CASL) selected to manage the Hub on May 28, 2010

-be used by a wide range of practitioners to conduct predictive calculations of the performance of reactors for both normal and off-Dramatically advance modeling and simulation and high

operating reactor.Improve our scientific understanding of reactor systems to increase the pace of innovation and reduce overall costs to deploy and operate.

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Bases for Fuel Cycle Research and Development Program (FCRD)

Dry cask storage is safe, and used nuclear fuel can be stored for many decades.

R&D includes work on long-term storage.The once-through fuel cycle is the baseline.

Options will be evaluated against the baseline.Final choice may include both once-through and reprocessing.

At least one repository will be needed for all options.Blue Ribbon Commission will provide recommendations that will guide FCRD.

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Issues Impacting Choices

Technology readinessSystem life-cycle costAvailability/cost of uraniumRepository issues (public support, capacity, availability, cost, geological media, etc.)Proliferation risksSocial issues (intergenerational equity, resource stewardship, repository siting, etc.)

Contributions to the Costs of Electricityfrom Operating Nuclear Power Plants

Source: Ventyx Velocity Suite; Energy ResourcesInternational via NEI, Inc.

Average cost of operating plants is approximately 2 cents per kilowatt-hour (NEI).Uranium cost will be a smaller fraction of new

plants costs.

Fuel

O&M

FuelUranium

72%

1%2%

4%

9% 12%

28%

Operations and MaintanenceConversion

Fabrication

Waste Fund

Enrichment

Uranium

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Three Potential Fuel Cycle Options

Ore recovery, refining and enrichment

Fuel

Reactor Geologic disposal of used fuel

Electricity, process heat

Once-Through (Open)

Full Recycle (Fully Closed) *

Separation

Ore recovery, refining and enrichment Fuel

Reactor

Electricity, process heat

Geologic disposal of process waste

Modified Open *

Fuel treatment

Geologic disposal of process waste

Ore recovery, refining and enrichment

Fuel

Reactor

Electricity, process heatGeologic disposal of spent

fuel (after at least one reburn)

*A specific fuel cycle strategy may include more than one fuel design, reactor design, or fuel treatment process.

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We are developing fuel cycle options and taking a science-based approach

Once-ThroughNo recycling or conditioning of used fuel

Full RecycleMultiple reprocessing stepsTransmutation of actinides

Modified Open CycleVery limited used fuel conditioning or processing Intermediate uranium utilization

MIT report on back end of the fuel cycle issuedAwaiting the report of the Blue Ribbon Commission

Fuel Cycle Associated Challenges

Low cost uranium availabilityRepository availability

Proliferation risksEnvironmental issuesCost

Limited research completed so farRepository availability, though to a lesser degree than once through

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Uranium from Seawater

Vast potential resource (>4,000 million tons U at 3.3 ppb); world demand ~ 66,000 tons U per year Extraction cost would effectively cap price of uraniumR&D off and on since 1960s in US, India, and Japan

DOE has no active R&D program; work at ORNL 1970s-early 1980s Japan maintains by far the largest effort

High production costs and inefficient recovery are barriers $900/kgU (current) - $250/kgU (projected for current Japanese technique)1

$680/kgU (an earlier approach taken by the Japanese)2

1. Adsorbent technology: Tamada et al., Cost Estimation of Uranium Recovery from Seawater with System of Braid Type Adsorbent, JAEA Transactions, 2006.

2. The process involved a TiO2

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Seawater R&D Activities in Japan60-meter Long Braid Adsorbent design

30 d

Signal for Separation

Standing in sea

Okinawa Marine Experiment 20

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Formation of Blue Ribbon Commission to Study Nuclear Fuel and Nuclear Waste Management

On January 29, Secretary of Energy Steven Chu announced the formation of a 15-person commission to conduct a comprehensive review of policies for managing the back end of the nuclear fuel cycleThe Commission will provide recommendations for developing a safe, long-nuclear fuel and nuclear wasteIt is co-chaired by former Congressman Lee Hamilton and former National Security Advisor Brent ScowcroftThe commission will produce an interim report in 18 months, and a final report no later than 24 months

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2010 MIT StudySeptember 2010

Commercial nuclear technology introduction has a long time constantCall for strong NE RD&D program now: about $1B/yr

DOE 2010 roadmap a good startLWR R&D important

e.g., innovation hub on advanced simulationAbout a third for research infrastructureLarge scale demonstrations in time

(incremental, cost-shared with industry)

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2010 MIT Study: Economics and Storage

Economics: For the next several decades, once through fuel cycle using light water reactors is the preferred economic option for the U.S.

Accelerate implementation of first mover incentive programNo shortage of uranium resourcesScientifically sound methods to manage spent nuclear fuel (SNF)Resource extension and waste management benefits of limited recycling (MOX) are minimalFuel cycle transitions take a long time: many LWRs and little difference in total transuranic inventories or uranium needs in this century in standard closed fuel cycle scenarioKey technical point: CR=1 sustainable and has advantages

Example: Could use LEU to startup fast reactor. Saves uranium and lowers enrichment needsStorage: Planning for long term managed storage of SNF for about a century should be integral with fuel cycle design

Can and should preserve options for disposal, reprocessing, recycleWhy? Major uncertainties for informed choices: Societal: NP growth? Nonproliferation norms?...Technical: fast or thermal reactors? Conversion ratio? Waste management benefits? SNF as resource or waste?...Start moving SNF from shut-down reactorsMove to centralized managed storage: not for economics or safety

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2010 MIT Study: Waste Management

Geological disposal needed for any choiceSystematically develop geological disposal, with public processIntegrate waste management with fuel cycle design: waste stream requirements as

Develop risk-informed waste management system: composition not sourceEstablish quasi-government waste management organization with the following attributes that are missing

Site selection in concert with governments/communitiesManagement of fundsNegotiate SNF/waste removal with ownersEngage policy/regulatory bodies on fuel cycle choices and wasteContinuity in management

It Will Be Decades Before We Know If LWR SNF Is a Resource or WasteLWR SNF has a high energy content

LWR SNF could be a wasteAlternative strategies to start fast reactors with sustainable fuel cycles using low-enriched uraniumAlternative strategies may have lower costs

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Support for U.S. Nuclear Power Expansion in the Energy Policy Act of 2005

Nuclear Power 2010 Government/industry cost-shared initiative Focus on technical, regulatory, and institutional barriers to building new U.S. nuclear power plants.

Financial Incentives

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Energy Policy Act of 2005Financial Incentives for First Movers

Loan GuaranteesCovers up to 80% of total project cost for up to 30 yearsPotentially reduces costs of new reactorsAvailable for new nuclear reactors (up to $18.5 billion) and front-end fuel cycle facilities (up to $2 billion)

Standby Support Delay Risk InsuranceCovers cost of certain regulatory and litigation delays, up to $2 billionAvailable for first 6 new nuclear reactors

Production Tax CreditsAllows tax credits for electricity production from advanced nuclear power facilities for an 8-year period

Allocates 1.8¢/kWh with a maximum of $125 million per each 1,000 megawatts allocated per year

National megawatt capacity limitation of 6,000 megawatts

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February 16, 2010: President Obama announces loan guarantee for new nuclear plant construction

"And this is only the beginning. My budget proposes tripling the loan guarantees we provide to help finance safe, clean nuclear facilities and we'll continue to provide financing for clean energy projects in Maryland and across America"

further than the worker and apprentices standing behind me to see the future that's possible when it comes to

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Renewed Nuclear Energy Interest

Early Site Permits: 4 early site permits approved for Clinton, Grand Gulf, North Anna sites, and Vogtle; additional permit applications filed.Construction and Operating License Applications: 18 Construction and Operating License applications for 30 new reactors have been submitted for NRC review. Areva and USEC enrichment licenses filed. Reactor Design Certifications: 2 designs in current applications certified by NRC (ABWR and AP1000); 3 new designs (ESBWR, EPR, APWR) and 1 amendment (AP1000) under NRC review.New Plant Orders: 4 plant construction contracts initiated; 9 power companies have placed large component forging orders.Plant Construction: TVA has resumed construction activities at Watts Bar 2, and reinstated construction permits for Bellefonte 1 and 2. LES enrichment plant operating.Financial Incentives: First DOE conditional loan guarantees approved for Vogtle; 3 other power companies selected for negotiations towards conditional loan guarantees. Loan guarantee ceiling proposed to increase to $54 billion in FY11. Conditional loan guarantee approved for Eagle Rock enrichment plant.

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Summary

Nuclear power remains a key element of U.S. energy strategyNP2010, loan guarantees, and other incentives have been successful in restarting nuclear power deploymentSubstantial barriers remain to the large scale construction of new nuclear power plants

the existing fleet and develop additional nuclear plant concepts

Science DiscoveryInnovation

Lower GHG

Emissions

Clean, Secure Energy

Economic Prosperity

National Security

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Closing Thoughts

energy on behalf of our efforts to combat climate change, and to

around the world to enhance cooperation on nuclear energy. President Obama has called for a new framework for civil nuclear cooperation so that all countries can access peaceful nuclear power without increasing

world-class technology, service, and experience, stand ready to contribute to the growth of civil nuclear power worldwide in a manner