Vendors’ views Atomic Energy of Canada Limited

1 October 1998

The coming decade is a vital one for the nuclear power industry. With many old plants coming to the end of their operating lives, decisions will soon have to be made regarding what form of power generation will replace them. NEI asked the major vending companies to answer questions addressing the issues most likely to effect the industry’s future.

1. Our immediate priorities are clear: to work with our partners to complete major projects involving our 700 MWe class CANDU 6 reactors in Korea, China and Romania. Wolsong unit 4 will start up next year. The two units at the Qinshan Phase III CANDU project are well underway and will start up early in the next decade. And we will continue efforts to finish Cernavoda unit 2, and perhaps further Romanian units, as financing becomes available.

In the near-term, we will be focusing on new opportunities for our CANDU 6 product in Turkey and Hungary. And we will be working on longer-term opportunities in the Asia Pacific and in China.

At the same time, we will be continuing marketing efforts in Korea, following up on the successful feasibility study of our larger 900 MWe class CANDU 9 for possible installation at the Bonggil site adjacent to Wolsong. This larger unit may also meet Chinese needs in some regions.

Apart from CANDU power reactors, we have a major MAPLE reactor project underway at our Chalk River Laboratories in Ontario. Two units dedicated to radioisotope production, and a processing facility, are currently being built for MDS Nordion. They are expected to start up in the year 2000, and to continue Canada’s dominance in the global supply of medical isotopes.

2. The Asia Pacific region stands out. While all major infrastructure projects are slowed down temporarily due to the currency crisis, the need for large-scale electricity will remain a major driving force. Korea and Japan have been forging ahead, and China is clearly a massive market for nuclear power plant vendors, and all types of energy-generating sources. Countries such as Thailand, The Philippines, Indonesia and Vietnam are exploring nuclear energy and are markets for the medium- to long-term future.

And let’s not forget Europe: Turkey is about to make a decision on which nuclear technology to adopt. Hungary will soon be evaluating bids from nuclear and other vendors. And Romania is ahead of the game: Cernavoda Unit 1 is a model CANDU unit. Its capacity factor for its first full year of operation was excellent (87.6%) and it is supplying 10% of Romania’s electricity needs. In the longer-term, Eastern European countries may construct new nuclear units, as they rebuild their economies.

3. The area of largest population growth and greatest demand for energy will be the developing economies of the Asia Pacific.

4. Apart from CANDU reactors, we have a growing research reactor business. In 1995 we supplied our MAPLE technology for the core of the HANARO research reactor in Korea. We are building two dedicated isotope-producing MAPLEs in Ontario, and we are working towards a bid for a MAPLE research reactor to the Australian Nuclear Science and Technology Organization.

We are also having some success with our MACSTOR dry fuel storage technology. We have sold units to Hydro Quebec for their Gentilly 2 CANDU station and we have a contract now under negotiation for a MACSTOR unit to Lithuania.

5. We expect our CANDU reactor business to continue to grow. At the same time, there is an increasing requirement for new research reactors as the majority of existing reactors are now aging. Storage of spent fuel is a growing requirement for utilities, and MACSTOR can accommodate fuel from all types of reactors. And AECL’s Services Business will certainly grow as new plants come on line.

6. It is clear that deregulation will have a profound impact on the nuclear power industry. It is driving vendors to come up with cost-saving designs and utilities to ensure the top performance of their stations.

Financing of new nuclear power plants is another significant issue. There is an urgent need to develop and introduce new and creative project financing models, such as the ‘Build, Own, Operate’ model, which has been often discussed but never carried through to implementation.

We have recently seen, in countries such as the United States, Europe and Canada, the results of poor management of nuclear stations. CANDU, for example, is well recognised as a safe, robust and proven technology. However, earlier mismanagement of Canada’s largest utility, Ontario Hydro has resulted in several units being temporarily laid-up for repairs. A similar situation has occurred in the United States and in Europe.

So this has been a ‘wake-up’ call for all utilities and I don’t see this continuing as an issue into the twenty-first century. As for plant ageing, with the right technologies and practices, there is no reason why CANDU plants cannot continue to operate through their design life and beyond.

Better public and government understanding and acceptance of the nuclear power option is still one of the most significant challenges we all face.

Finally, there is the issue of the environment and climate change. I believe this is the issue that can tip the scales for nuclear energy in the next decade. It is one issue that can help us to gain public acceptance.

7. I am very optimistic about the future of the global nuclear power industry. The pressures of population growth, the elemental desire to advance living standards, the growing global energy demand, diminishing fossil fuel resources, and concerns about the environment all indicate that nuclear energy is an essential part of the energy mix. And in North America, I believe that deregulation will bring about a ‘rebirth’.

8. We have developed advanced construction techniques, to bring down capital costs. For example, starting with Qinshan, AECL is using ‘open-top’ construction methods for all its CANDU construction projects. Construction will also be assisted by the use of a very-heavy-lift (VHL) crane, which allows major equipment, such as steam generators, pressurisers, and primary heat pump motors, to be lifted through the open top of the reactor building, rather than being installed horizontally.

Other advances, such as the AECL-developed IntEC automated wiring, also contribute to cost-cutting in the construction phase. And 3-D CADD techniques are employed both for efficient construction and for the planning of complex maintenance projects.

In the near-term, use of the advanced CANFLEX fuel bundle with natural uranium is planned. The next step after this is the use of slightly enriched uranium or, more specifically, recycled uranium (RU) from the spent fuel of LWRs. The use of RU in CANDU is an attractive way of dealing with a waste product, while at the same time extracting additional energy.

In the longer term, other fuel cycles, such as thorium or MOX, are being developed.

9. All vendors, including AECL, are working on advanced reactor designs. For example, in the short-term, CANDU can use recycled uranium from LWRs, as well as other fuel options based on CANDU/LWR synergism. In particular, I should mention the DUPIC cycle – the Direct Use of PWR fuel In CANDU. In this cycle, spent LWR fuel can be used in CANDU without the need to reprocess the spent fuel. Because of CANDU’s neutron efficiency, approximately two-thirds of the fissile content in the spent LWR fuel would be burned up. Thus the maximum economic energy would be extracted from the fuel. This would make reprocessing economically undesirable and allow storage and later disposal.

In the longer-term, the use of thorium makes CANDU a stand-alone ‘near breeder’.

We envisage the ‘Once-Through Thorium’ cycle being employed first by countries having extensive thorium reserves, but lacking indigenous uranium. This could be followed by recycling options that would optimise the cycle.

10. I do think that there is an emerging scientific and political consensus that global warming is a reality. There is, since Kyoto, a willingness to contemplate legally-binding instruments to prevent this ongoing world situation. And a new recognition that current emission targets require a change in technology and patterns of energy use.

Within the industry, nuclear energy is the ‘zero’ option, in that it emits no greenhouse gases. And we know that, if current trends persist, global CO2 emissions will increase by almost 50% by the year 2010 alone. We also know that the need to burn fossil fuels more cleanly, and the associated need for increased government regulation, will drive up their costs. How quickly targets can be put into effect, and how well it will work, remains to be seen.

Each company received the following questions:

1. What activities are likely to be the most important to your business in the next decade? 2. In which parts of the world, if any, do you see expansion of the industry? More particularly, where is there potential for new plant construction? 3. What are the reasons why there is likely to be expansion in these regions and not in others? 4. What other markets are there likely to be for your products and services? 5. In 2010, what proportion of your business is likely to be in construction of new plant, compared with other activities? 6. What issues do you think are likely to be most important in shaping your future business and what do you consider to be the greatest uncertainties? 7. Are you optimistic or pessimistic about the future of the industry? 8. What new technologies and projects are you working on which could help nuclear power to compete in privatised markets? 9. How likely is it that advanced reactor concepts, such as fast reactors, will become competitive? What factors will be important to their development? 10. In 1990 a number of vendors cited increasing environmental concerns, in particular the connection between fossil fuel power and the greenhouse effect, as an important factor in encouraging new reactor orders around the world. Are there signs that this is happening?

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