ABB Dublin Marketing Plan Overview

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Future of nuclear and of electric energy after
Fukushima. Alessandro Clerici Honorary Chairman
of FAST and WEC Italy
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Global situation

• Over the last 10 years the world nuclear energy
  production has been practically constant at about
  2600 TWh but loosing market shares, with the so
  called nuclear renaissance happening at the
  public perception front, where the major concerns
  after Chernobyl changed little by little from
  large accident to questions around final waste
  disposal / costs / Nimby.
• The impact of the incident at the Fukushima
  Daiichi nuclear power plant, which resulted from
  the devastating earthquake and subsequent tsunami
  on March 11th, 2011 will have wide ranging
  consequences on the global energy mix ,following
  emotional reactions of governments and companies
  consequential to public opinion

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• Clearly we must recognize that a nuclear accident
  has a great impact on people due a radiation you
  do not see, you do not know if it has hit you,
  you do not know if or when it will effect your
  health.
• The Fukushima impact has been larger than that of
  the Chernobyl disaster Japan is in fact
  considered a high-tech country and a very well
  organized one.

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Last 10 years trend for electric energy
production from different sources

• 2001 2010
• Coal 38.7 41.7
• Oil 7.4 64.7 4.2 66.6
• Gas 18.6 20.7
• Nuclear 17.1 13.4
• Hydro 16.5 16.2
• Biomasses 1.1 18.2 1.5 20
• Other Renewables 0.6 2.3
• Elaborations from IEA

• Increase in of electricity from fossil fuels!
• The increase of renewables does not overcome the
  decrease in of nuclear non CO2 sources loose
  market shares!

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• Fossil Fuels

• Based on present proven resources (R) and actual
  production (P)
• oil R/P 40 years
• gas R/P 60 years
• coal R/P 200 years
• But resources for potential unconventional oil
  from
• oil shale (80 in USA)
• natural bitumen (60 in Canada)
• extra heavy oil (95 Venezuela)
• are large and economic for stable oil prices
  above 90 US/bbl.
• The boom of shale gas in North America
  possible global resources 4 times those of
  conventional gas.
• The problem are not the resources but how to burn
  them

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• Fossil fuels contribute worldwide for more than
  80 to the energy needs and 66 to electricity
  production through their combustion they are the
  main cause of GHG emissions, detrimental to the
  future of our planet.
• To reduce both the consumption of the limited
  fossil resources, cumulated in millions of years,
  and the CO2 emissions, there are clearly 2 main
  ways
• rationalization/reduction of energy
  consumptions(a key asset)
• use of carbon free energy sources

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Electric energy production in 2010

• China 4230 TWh
• US 4120 TWh
• Japan 955 TWh
• Russia 907 TWh
• India 720 TWh
• Canada 565 TWh
• France 550 TWh
• Germany 490 TWh

Source WNA
2 countries 40 global production and in great
majority from coal
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The world nuclear situation at March 10, 2011

• 442 reactors in operation in 30 countries for
  375 GW.
• 65 reactors under construction in 16 countries
  (27 in China) for 63 GW with the exclusion of
  the Japanese ABWR, all the others are PWR
  reactors.
• Implementation of life extension up to 50 60
  years for old reactors in operation in many
  countries (cheap kWh, no CO2 emissions).
• A nuclear renaissance was envisaged by many
  stakeholders due to
• Volatile and expected future high prices for
  fossil fuels
• Environmental concerns for CO2 emission and its
  penalization
• Security of supply
• with 158 new reactors planned and 326 proposed in
  47 countries (from WNA)

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The post Fukushima

• Out of the existing 30-plus countries that have
  nuclear energy programs, a few countries appear
  to have experienced the most profound public
  reactions and public policy changes Japan,
  Germany, Italy, and Switzerland. The most
  significant development has been in Germany where
  the government shut down the seven oldest nuclear
  power plants within a few days following the
  Fukushima event in addition to the one plant that
  was temporarily offline due to technical reasons.
  The German government has decided to keep these
  8 facilities closed permanently while it is
  accelerating its plans to phase out all of its
  remaining nuclear power plants stepwise by 2022
  (Germany has 26 electricity from nuclear).

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Notes (1) Assessment of safety installations
(incorporating lessons learned) (2) expected
closure of the five nuclear power plant units
between 2019 and 2034 (after the end of
approximately 50 years of operating time) (3)
immediate shutdown of 8 nuclear installations
following the Fukushima event and phased-out
closure of remaining power plants as fast as
possible, independently from safety aspects (4)
possible partial modification of safety standards
or licensing procedures.
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• In regions and countries that have long held
  ambivalent to negative opinions on nuclear energy
  and its safety, the Fukushima accident will serve
  as an additional example of why to oppose it and
  local, national, and regional politics will
  prevail over the longer-time frame.
• There will also be an increase of not in my
  backyard mentality, with the general public not
  wanting facilities/plants in their immediate
  vicinity or neighbourhood. In particular, these
  will be a larger issue for those living in areas
  vulnerable to natural disasters.
• Possible increased cost of NPPs for increased
  security / safety rules, longer permission times
  and increased costs of risks insurances.

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• Those in favour of nuclear energy will call for
  improved safety procedures and plans and point
  out that the global community can learn from
  Fukushima this according to the history of
  nuclear power of constant improvement and
  technological development based on lessons
  learned both by vendors and owners that operate
  reactors.
• This has been the inspiration to vendors for the
  so-called Generation III reactors, currently
  being built in several countries. These new
  reactors have typically a 60 year design life, a
  higher than 90 availability, a 12-24 month fuel
  cycle, a 10-7 probability of radiation releases
  with no external effect, a very low occupational
  radiation exposure , capability to withstand
  impact of large airplanes .

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WEC Member Committees Survey

• A WEC member survey shows that most countries
  that have existing nuclear power installations
  believe that their own national nuclear authority
  is independent, resourced, transparent, and
  empowered with enforcement. But most respondents
  also answered with a lot of uncertainty with
  regard to the perception of other countries
  nuclear governance.
• While there seems to be relatively high political
  support for the adoption and convergence of
  international safety regulations, there seems to
  be comparatively lower political support for the
  international enforcement of safety standards.
• The response has been unanimous that the media
  affects the public discourse of nuclear energy
  the most.
• The most pressing barrier for the future of
  nuclear has been identified as public perception,
  followed by lack of policy. Skills shortage was
  not deemed a major barrier.

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• When asked about the potential for substitution
  fuels, gas has emerged as the clear winner
  globally, (and to a less extent coal) with
  biomass being a strong contender. Wind and FV are
  only mentioned in countries with high potential.
• Higher electricity prices have been deemed as the
  most direct implication of nuclear substitution,
  with energy security concerns and higher GHG
  emissions also highlighted by many countries.
• The real looser could be not nuclear but final
  consumers and the environment
• Regional analysis further shows that the
  perception of nuclear safety in developing
  countries has not changed significantly compared
  to developed countries.

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Consequences for shutdown of NPPs

• As an extreme and unrealistic case the shutdown
  of the present 2,600 TWh production worldwide
  from nuclear plants would mean
• additional consumption of 700 MTEP/year of fossil
  fuels ( more than 25 of present global gas
  consumption)
• additional emissions of 2 bt CO2 / per year.

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Governance of nuclear risks

• Risk profiles are reactor dependent and site
  dependent and therefore response capabilities
  will have to be different, which makes
  discussions about minimum safety standards
  problematic.
• National boundaries are irrelevant when
  considering the impact of nuclear incidents and
  there is still room for improvement of
  international governance arrangements.
  Currently, nuclear governance rests with nation
  states, along with a limited level of oversight
  provided by the International Atomic Energy
  Agency (IAEA) and peer review arrangements such
  as WANO (World Association of Nuclear Operators).

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• In all cases the sovereignty of the state
  supersedes that of IAEA who with WANO can operate
  only through peer reviews/ consensus and
  technical support and access to a global library
  of operating experience.
• Under the existing system of nuclear governance
  there is clear need to strengthen global
  regulation of nuclear energy.
• In line with this train of thoughts, the
  following points were highlighted by the WEC
  nuclear task force.

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Recommendations from WEC

• Standards - National Nuclear Safety Agencies must
  adopt the IAEAs minimum safety operation,
  maintenance, and transparency standards,
  including site location parameters, and training
  certification.
• Verification - The IAEA should be empowered to
  work with each enhanced National Nuclear Safety
  Agency to verify adherence to the IAEAs minimum
  safety standards. Such verification should be
  publicly available to enhance transparency.
• Design - The IAEA should produce an international
  accreditation standard for reactor design.
• Finance - Funding mechanisms should be revised to
  ensure compliance.
• Structure At national and international level
  there should be unbundle of responsibilities for
  promotion and safety to reduce the potential for
  conflicts of interest.
• Given their accountability, under the United
  Nations, the International Atomic Energy Agency
  (IAEA) is the most practical organisation to
  achieve the required improvements in global
  governance for the nuclear energy sector.
  Governments, working through the United Nations,
  must therefore empower the IAEA.

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The Pros and Cons still remain

• PROS
• No CO2 emissions
• No volatile cost of kWh and very interesting
  value in medium/long time perspective due to
  expected high costs of fossil fuels and CO2
• Independency from foreign fuels and security of
  supply
• Possible contribution to elimination of nuclear
  weapons
• Wave of innovation fall-out on local industry
  during construction and technological
  qualification of companies
• Volatile renewables need back up capacity and
  programmable production and nuclear is the only
  CO2 free source (nuclear and RES are not in
  competition but complementary)

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The Pros and Cons still remain

• CONS
• Fear of large accidents, with global
  consequences due to human errors, natural
  events, terrorism
• Acceptability and times for authorizations
• Financing of merchant plants without government
  subsidies.
• Deposits of nuclear waste and plant
  decommissioning
• The future is of RES
• Doubts on Uranium actual reserves

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• Key variables that will affect global public
  perception of nuclear energy going forward
• The ability of the Japanese government, the
  nuclear industry, and the Fukushima facility to
  deal with the aftermath.
• The short- and long-term effects on the local
  community.
• Another disaster.

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Thank you for your attention.