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Market prospects of modular HTR in EEC countries
Nuclear Engineering and Design 136 (1992) 179-185 North-Holland
179
Market prospects of modular HTR in EEC countries F. A l b i s u a, S.F. G a r r i b b a b, J.C. L e f e v r e c, D. L e u c h s d a n d C. V i v a n t e e " Sener, Las Arenas, Spare b Politecnico di Milano, Milan, Baly c Nouatome, Lyon, France d lnteratom-Siemens, Bergisch Gladbach, Germany DG Xll, Commission of the European Communities, Brussels, Belgium
Received l September 1990
The energy outlook for the early 21st century is very uncertain. Low-cost oil and natural gas reserves will become seriously depleted and non-fossil energy resources may be urgently required because of environmental reasons. In this framework, the European Economic Community should be able to rely upon nuclear energy as an economic, safe and readily deployable resource for its future. Small and medium-size nuclear reactors (SMSNRs), particularly modular high-temperature reactor (HTR) would allow extension of uses of nuclear energy while being adopted to produce power and/or steam or heat, where heat can be at low or high temperature. For policy making and planning purposes it appears meaningful to appraise the market potential of modular HTR during the next twenty or thirty years. Thus the paper presents the outcomes of country studies on the subject conducted for a sample of Member nations to the European Economic Community including France, Federal Republic of Germany, Italy and Spain. Amongst the goals of the studies are definition of market segments, identification of the principal obstacles which would affect future adoption of SMSNRs. Opportunities offered by the different contexts and energy end-uses seem promising. Numerous difficulties and constraints emerge however, some of which might be eased by actions that national governments or more often the European Economic Community, may wish to take.
1. Foreword In the course of the next decades the prospects for an intensified and more extended use of nuclear energy may undergo a dramatic change within the European Economic Community (EEC), because of two major pulling forces. There are the growing energy demand, especially in newly industrialized countries and the progressive concentration of spare oil capacity into vulnerable supply areas on one hand. On the other, there are the continuing and emerging pressures to protect the local and global environment. Though the contribution that nuclear energy could make in the future to reduce carbon dioxide and other pollutants should not be overstated, efforts are needed to look at the long-term potential of nuclear energy beyond the current technology of thermal reactors. Small and Correspondence to: Dr. Claudio Vivante, Commission of the European Communities, Nuclear Research & Development, DG XIII, JRG, 2000 rue de la Loi, 1049 Brussels, Belgium.
0029-5493/92/$05.00
medium-sized nuclear reactors (SMSNRs) might offer the type of reliable and flexible solution which would be asked for. In principle, they entail favorable features such as (i) simpler construction, and lower cost minimizing field fabrication, quality checks and time; (ii) simpler operation maximizing availability and reducing the complexity of day-to-day management; (iii) easier maintenance being designed from the ground-up for inspection, diagnosis and replacement. Amongst the SMSNRs, the modular high-temperature gas-cooled reactor ( H T R ) would bring the additional advantage of being designed, developed and finally constructed by nuclear industry from the E E C . An aspect deserving the greatest consideration indeed, consists of the opportunities and challenges stemming from the establishment of a single E u r o p e a n energy market [1]. It can be recalled that after numerous fits and starts including the conclusion of several important treaties (such as the treaty establishing the E u r o p e a n Atomic Energy Community in 1957), the signing of the Single E u r o p e a n Act in 1986 appears to
© 1992 - E l s e v i e r S c i e n c e P u b l i s h e r s B.V. All rights r e s e r v e d
180
F. AIbisu et al. / Market prospects of modular HTR in EEC countries
led the EEC into the final unification. The Single European Act aims at exploiting the possible economic advantages by removing existing internal barriers. Currently the fragmented nature of the European market obstructs increasing returns to scale. The Act hopes to (i) create and give access to an undivided market of 320 millions; (ii) ensure a growing market; (iii) and provide maximum flexibility to the market to allow resources to flow to the areas of greatest economic benefit. Completion of the unified European energy market is not considered to be a goal in itself, nor is its completion by the declared date of 1992. But a unified energy market seems to be viewed by the Commission of the European Communities as necessary for "impro~ing security o f supply, reducing costs and improl,ing economic competitit~eness". Moreover, in unifying the energy market, the Commission aims to conform with the Community's energy objectives which were last defined by the Council of European Ministers in September 1986, as follows: - the efficiency of final energy demand should be improved by at least 20% by 1995; - oil consumption should be kept down to around 40% of energy consumption and net oil exports thus maintained at less than one-third of total energy consumption in the EEC in 1995; - the production of electricity generated from hydrocarbons should be reduced to less than 15% in 1995; - the continued use of natural gas should be based on a policy of secure and diversified supply sources; - the development of renewable energies should be promoted so that they may eventually make a significant contribution to the overall energy supply. 2. Counto' studies To evaluate the technical applications, economic and market potential of the small-size modular HTR, a number of country studies have been promoted by the Commission of the European Communities and accomplished by national interested entities. The outcomes of the preliminary analyses were presented at the First International Seminar on Small and Medium-Sized Nuclear Reactors held in Lausanne, Switzerland, August 24-26, 1987 [2]. Since then investigations have been continued and their scope broadened to comprehend additional uses of modular HTRs. District heating and cogeneration of power and steam were considered in the case of France, Federal Republic of Germany (FRG), Italy and Spain. Smallscale power supply has been explored for Italy and
Spain, cogeneration with production of mid-temperature process heat for France. The referencc plant consisted of the HTR-2 Module concept developed by Interatom-Siemens. In this plant, each one of the twin units has a capacity of 200 MWth when heat is the product, 80 MWe if electricity only is generated. The supply of high-temperature process heat has bccn evaluated for the case of FRG. A peculiar characteristic of the HTR system is to he able to reach output temperatures of about 950°C. Therefore, the high-temperaturc process heat application would becomc a complementary objective creating synergism with more conventional usages. In all country studies a three step approach has been followed by first appraising the technical potential, then economic and market perspectives. The technical potential refers to the number of nuclear plants which could replace ageing installations or meet increasing energy demand. A large part of this appraisal does not depend upon the particular reactor selection. Evaluation of economic potential grounds upon cost competitiveness of the HTR-Module towards alternative energy sources and systems. Key assumptions arc: interest rate on capital investment 5% and 1(1% in real terms, imported crude oil at 2(1 ECU/barrel in 198'? with 1% escalation per annum, price of coal given by the weighted average of domestic production and import when applicable, average increase in electricity selling price 1% per annum due to environmcntal and other factors, nuclear plant construction lime 48 months with a 20 year lifetime. Finally, thc market potential is defined as the result of the numerous institutional, organizational, social and other constraints that might limit full deployment and use of thc nuclear technology. The main results of country studies are in thc chapters which follow. The conclusions outline thc most significant factors and obstacles which can accelerate, conversely delay market penetration of SMSNRs and modular HTR through the EEC. Some actions which may contribute easing recurrent difficulties, are also indicated.
3. France
Two classes of perspectives customers for the HTR-Module have been surveyed, industrial enterprises and district heating networks [3]. The structure of national energy-consuming industry has been defined to determine the technical opportunities for replacing existing energy sources with the HTR-Module.
181
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1 100
placement of existing capacity All this considered, the corresponding cumulative market potential by the year 2010-2020 would hardly surpass 1 to 5 nuclear plants in operation.
Electricity generation i cost (mills ECU/kWhe) I
75
4. Federal Republic of Germany
.
50
25
o
I Heat selling price(ECU/M,Whth)
o
lO
20
30
Fig. 1. Effect of varying the heat selling price for a typical operation scheme.
A twin-unit 2 × 200 MWth nuclear plant generates 2,450,000 MWh with a 70% load factor. This capacity is equivalent to approximately 210,000 toe and appears rather large when compared with the individual demand of single industrial companies and local utilities. Figure 1 exhibits the effect of varying the heat selling price for a typical operation scheme; and for the two users A and B of low (5%) and high (10%) interest rate, respectively. In addition two values of coal cost escalation rate (1% per year and 1,5% per year) are also taken into account for the coal plant. In the case of industry, the technical potential of the HTR-Module would be confined to the sole energy-intensive activities; examples are mining and electrometallurgy, food processing and agriculture, production of cement and chemicals. If low-temperature and mid-temperature heat production are both included, it appears that a number of practical constraints dramatically restrict the technical and economic potential. As a result, in the years 2000-2010 the perspective market would consist of 1 to 3 plants; if plants which might be installed during the period 2010-2020 are added, a cumulative figure would be reached ranging from 6 to 9 nuclear systems. Less promising appears the sector of district heating. Heat networks of France are generally insufficient to accommodate a twin-unit HTR-Module. The only exceptions are Paris and few other major cities. The need for new installations depends on both the growth of district heating demand and on the need for re-
The market potential of the HTR-2 Module for combined low-temperature heat and power production was investigated a few years ago [4]. A new survey has been conducted to explore the application of HTR for high-temperature process heat [5]. The concept and design features of the HTR-Module are the same as those of the steam generating plant with some modifications. They mainly consist of two-zone fuel loading of the reactor core, adjustment of primary pressure to the pressure in the secondary and tertiary loop, increase of core-outlet temperature from 700 to 950°C and parallel decrease of thermal power output from 200 to 170 MWth per module. Amongst industrial processes examined, are coal conversion into substitute natural gas (SNG) as a replacement for natural gas; use of substitute natural gas for the production of ammonia, methanol, oxichemicals and steel; oil refining and ethylene industry; tertiary oil recovery; sinter of iron ore; production of cement and aluminium oxide. An overview of fields of application and economic potential of the HTR-2 Module is on table 1. The economic potential has been assessed Table 1 Estimated future economic potential of HTR-2 Module plants for process heat and energy supply in the FRG [5] Area of application
Annual 1986 production in the FRG (million tons)
SNG from coal
(natural gas supply 38 mtoe) 1.6 0.46 0.90 37 85 4 0.40 33 17 1.3
Ammonia Methanol Oxichemicals Steel Oil refining Ethylene Tertiary oil recovery Cement Sintering of iron ore Aluminium oxide Total
Potential of HTR-2 Module plants (number)
80 7-8 3-4 2 16 12 10 1 6 1-2 1 139-142
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F. Albisu et al. / Market prospects of modular H T R in EEC countries
under the simple assumption that HTR end-products substitute similar commodities used or traded on the German market. Evidently, other opportunities for exploiting nuclear process heat appear feasible, though they are difficult to quantify because of lack of economic data and limited engineering knowledge. Synthesis gas from coal is an energy commodity and an intermediate feed stock for the conversion into other chemicals, such as methanol fertilizers (ammonia), and complex hydrocarbons. The country survey suggests that the HTR-2 Module could base on hydrogasification of hard coal and lignite, or on steam gasificatkin of hard coal. In face of the present cost structure of energy sources, SNG cannot compete with (imported) natural gas. For the future however, if it is admitted that nuclear-generated SNG ought to replace all the demand of natural gas, more than 80 HTR-2 Module hydrogasification plants would be required. Along the same long-term scenario, it can be supposed that SNG is also used to obtain ammonia, methanol, other chemical feedstock and steel. More precisely from 7 to 8 HTR-2 Module plants may be adopted to yield ammonia from hydrogen, as a product of coal gasification; 3-4 HTR-2 Module plants would produce methanol; 2 HTR-2 Module would supply chemicals like PVC; whereas steel production via SNG from coal would require up to 16 twin-unit HTR systems. Nuclear process heat can replace valuable fuel use in oil refineries. If 1986 oil production is taken as the base, refineries would entail the potential of about 12 HTR-2 Module plants. A comparatively large space can be foreseen in the chemical industry to obtain ethylene, which signifies installation of 10 HTR-2 Module plants. The exploitation of residual domestic oil resources asks for tertiary recovery, the corresponding energy need could be matched by one HTR-2 Module. Production of cement demands a very high peak temperature, around 1350°C. But more or less 70% of heat is the range up to 850°C. These temperatures are on the reach of the HTR as well as the electricity which might be necessary. Six HTR-2 Module plants may cover the entire German market. Finally, sintering of iron ore and production of aluminium oxide would offer further opportunities, which an estimated further potential of 2 to 3 twin-unit HTR systems. $. Italy In 1986 the Italian Government adopted a national energy plan designed to substantially increase the use
of coal and nuclear power in electricity generation and to continue to increase the role of natural gas in other sectors. But as a result of the Chernobyl accident in April 1986, and rising public concerns about the environment, the plan's goals regarding nuclear and coal led to an almost immediate reassessment by the Government and the public. This resulted in an immediate halt on the nuclear programme. A National Energy Conference held in February 1987 discussed the possible energy options but came not to any final conclusions. In November 1987, there were national referenda on several questions tied to the development of nuclear power and siting of major power plants. By a large majority, the public rejected propositions which favored nuclear power or facilitated the siting of electricity generating units. In response to these events, the Government decided to revise its energy policy. The new National Energy Plan (PEN) was agreed by the Government in August 1988 and submitted to the Parliament for debate in the course of 1989. The referenda, although they did not explicitly require the abandonment of nuclear power, werc interpreted as a clear decision against nuclear energy. One of the results is that the new PEN calls for a five-year moratorium on the construction of nuclear power installations and the conversion of the BWR nuclear plant under construction at Montalto di Castro to a non-nuclear, multi-fuel plant. Another nuclear Magnox reactor at Latina, south of Rome, will be decommissioned. The only functioning nuclear BWR plant at Caorso and the PWR plant at Trino Vercellese have been closed, but arc prepared to produce electricity again, if the national electric utility is so instructed by the Italian Government. The Italian Government has yet to make a final judgmenl. Based on the electricity demand trend from 1983 to 1988, electricity consumption could continue to rise by 4.0% per annum or more. As a consequence, the result would be a restructuring of generating capacity, including a large coal and natural gas-based capacity increase to meet growing demand and to stabilise or reduce electricity imports. At the same time, expectations arc for a modest decline in the quantity of oil uscd to produce electricity (although oil's share of total electricity inputs would decline from 44% to 23%). These trends may prepare a comeback of nuclear energy in the longer term. Private and state-owned industry, large municipal utilities could mount pressures while Italy is moving towards the single European energy market. It is possible that public scepticism about nuclear energy is so great that even visible changes in the LWR technology would have little ira-
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Table 2 Estimated cumulative potential of twin-unit 2x200 MWth HTR in a sample of member countries to EEC for the years 2010-2020 (E and M stands for economic potential and market potential, respectively)
6-9 1-5
E E
Federal Republic of Germany cogeneration 5-6 district heating 5-6 power heat 140
M M E
decades. The unique safety characteristics of the H T R - M o d u l e seem to offer leverage and the possibility of installing nuclear plants without too much restrictions regarding site selection. Decisions favoring the nuclear energy option could be influenced by imitative effects stemming from H T R projects and construction programmes implemented elsewhere. District heating, combined heat and power production, and electricity generation are possible areas of application for twinunit 2 x 100 MWth H T R , or similar SMSNR. In spite of present uncertainties, a scenario may be envisioned by the year 2020 or so, where the cumulative market potential Is ranging from 3 to 7 nuclear units [6].
M
6. Spain
M M
With regard to district heating, the climatic conditions which are generally found over the Country did not create any positive edge for the commissioning of large centralized networks. Amongst the large cities, Madrid is the only location where winter could be harsh enough because of the continental weather. Would the construction of a district heating network be considered, the initiative could represent a substantial departure from past and present practice. The adoption of the H T R - M o d u l e may find increasing support if the air quality benefits of nuclear energy are emphasized. Benefits should be gauged against the
No. of HTR-2 Module Potential France cogeneration district heating
Italy cogeneration (Twin-unit 2 x 100 MWth HTR) 1-3 district heating (Twin-unit 2 x 100 MWth HTR) 2-3 power 0-1 Spain cogeneration district heating power
2 2 1
E E E
pact. Vice-versa, a completely different approach based upon H T R - M o d u l e or next-generation nuclear systems might meet public acceptance, especially if demand for power and energy peaks up over the next couple of
Table 3 Country-specific factors affecting market potential of SMSNRs in selected EEC Member countries. Subjective importance rating ranges from low (L), to medium (M) and high (H). Principal factor (i) presence of municipal/local electric utilities (ii) existence of district heating networks (iii) presence of "independent" electric systems (e.g. islands) (iv) large industrial users of heat and/or electricity (v) buy-back contracts for cogeneration (vi) Availability of nuclear infrastructure (e.g. fuel cycle facilities, long nuclear operation records) (vii) support by public opinion
France
Germany
Italy
Spain
L
H
M
L
M
H
L
L
M
L
M
H
M
H
L
L
L
M
M
H
H
H
L
M
H
L
L
M
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F. Albisu et al. / Market prospects of modular HTR in EEC countries
multitude of individual fossil-fueled heat supply systems that would be replaced. Certainly along with environmentalism, issues like plant economics, safety and security, will affect general orientation and give additional arguments to nuclear district heating [7]. Concerning combined heat and power plants, it can be assumed that several initiatives of this type will be planned and developed during the next few years, given the new legislation which is rather attractive for the owners of cogeneration units. Nevertheless, there are in Spain few cases where the 50 MWe size is exceeded and a nuclear plant can be accommodated. A thoroughly similar situation would occur for the sole production of steam. As a consequence, prospects for the HTR-2 Module appear limited. Lastly, regarding electricity generation, It has been suggested that nuclear plants based on the HTR-2 Module might represent a viable solution for the Canary and Balearic Islands, especially in conjunction with water desalination. Again, economic judgment aside any decision seems critically dependent upon Government policy, which is in turn influenced by public opinion. Despite trend of declining support, the public's overall attitude toward nuclear energy can be best described as ambivalent with varying degree of acceptance.
7. Conclusions The country studies of France, FRG, Italy and Spain detail opportunities as well as difficulties and constraints facing future market deployment of SMSNRs, particularly HTR-Module, through the European Economic Community. Focus is on the next twenty or thirty years. The HTR-Module for combined heat and power production, for small-scale power generation and mid- to high-temperature heat supply appears to have significant technical and economic potential. Market potential however, would be substantially lower, because of recurrent obstacles that limit use of nuclear energy beyond the power sector (table 2). Some of these obstacles are country-specific, others seem shared under the different national circumstances. Table 3 present a summary of the main countryspecific factors that may enhance or depress market potential of SMSNRs. Quite often these factors convcrt into obstacles having a structural or inherent nature. Thus, in case these factors are insufficient or absent, they would not be easily replaced by government action with few exceptions. For instance, governmcnts may change regulation of electric utilities and
give support to cogeneration, promote regional planning for electric power and district heating capacity, certify nuclear plant operators and contractors, revise the institutional management of nuclear energy if necessary. It would be more complicated for governments to address concerns of the critics and the action may take more time. Critics of nuclear energy usc fecl that fundamental issues have been ignored or down-sized while countries plunged ahead to build morc nuclear reactors. Bridging this mistrust will be difficult at best. However, opposition to nuclear energy is not monolithic. Many critics have well-defined concerns over nuclear technology and its implementation. Thesc critics tend to be technically knowledgeable and respected in the environmental and anti-nuclear communities. Further more, some in nuclear industry are aware of these concerns and appear willing to engage in a useful discussion. On the contrary, there are policy measures that could fall under the general responsibility of the European Economic Community and the Commission. Some of these measures are generic and would favor an increased use of nuclear energy. Other measures would specifically ease and accelerate market deployment of SMSNRs if the European Economic Community wishes that HTR-Module and SMSNRs arc accepted, become a widely adopted and viable energy option contributing to the achievement of long-term energy security goals. Generic measures refer to the establishment of the single energy market in the European Economic Community. The single market would help counter protectionist behaviors that may prevent potential nuclear vendors having free access to design and construction opportunities wherever they arise. In addition, the single economic and energy market would assure adequate economies of scale to the companies that are willing to invest and build new capacity, particularly the development and demonstration costs would bc better absorbed and shared. Second, are common safety standards and goals. The introduction of stable and uniform safety standards might be an essential element in favoring a more extended adoption of nuclear energy, particularly in the non-power sector. Similarity of safety standards and goals could facilitate intercomparison of construction and operation experiences, as a consequence learning process wold become more effective. This aim, special R & D programmes may advocated and promoted to demonstrate the safety characteristics of the new reactor systems while referring to selected sites and applications. No theoretical assessment will uncover all potential problems and weak elements, but
F. Albisu et aL / Market prospects of modular HTR in EEC countries
in-depth probability safety analysis concerning realistic sites and applications could identify design or operating flows before they cause inconveniences. Finally there is the availability of service companies that can take care of the operation of nuclear reactors on one side, and of the connected financial aspects on the other. Service companies seem a key element to the success of SMSNRs. Subjects such as municipal utilities, Industrial companies may not have the highly specialised skills required to manage and operate the nuclear plants. It is readily apparent that nuclear plants may be hostage to the weakest subject because an accident, or even poor performance, reflects on all. A solution would be offered by a third party having technical resources and skills as appropriate, and providing all the service support which might be necessary. This solution would reassure many of the critics of extended application of nuclear energy, as well as investors, utility commissions and board members, and the public. A n o t h e r essential third-party action may consist of credit enhancement, more or less innovative arrangements such as joint ventures, tenancy-in-common lending structures, financial guarantees. The establishment of S M S N R s u s e r s / s u p p l i e r s club can be proposed to offer encouragement along this direction. The concept of the u s e r s / s u p p l i e r s club or the alike could also be advocated to gather financial means and share information resulting from the construction of the first plant based on the H T R - M o d u l e . The imitative effect and learning which will ensure would eventually disclose other immediate opportunities and accelerate their exploitation.
185
References [1] The Internal Energy Market; Report COM (88) 238. Commission of the European Communities, Luxembourg (1988). [2] R. Candeli, S.F. Garribba, U. Hansen, J.C. Lef~vre, D. Leuchs, R. Sch6n, C. Vivante, Market potential of small and medium-size nuclear reactors as combined heat and power plants in Europe, Nucl. Engng. Des., 109 (September/october 1988) 373-380. [3] J.C. Lef~vre, The market potential of HTR-Modular reactor as combined heat and power plants in France, Final Report, Novatome, France (July 1988); EUR 12382 En, Commission of the European Communities, Luxembourg (1989). [4] The market potential of modular high temperature reactors as combined heat and power plants in the Federal Republic of Germany, Final Report prepared by Interatom, EST, Universit~it Essen, EUR 10431/EN, Commission of the European Communities, Luxembourg (1986). [5] The market potential of HTR modular reactor as a heat source for high-temperature processes in the Federal Republic of Germany, Final Report prepared by Interatom, EST, Universit~it Essen; EUR 11635/EN, Commission of the European Communities, Luxembourg (1988). [6] S.F. Garribba, The market potential of small and medium-sized nuclear reactors as combined heat and power plants in Italy, Final Report, Politecnico di Milano, Italy (July 1988). [7] The market potential of modular HTRs as heat and power sources in Spain, Advance Abstract, Sener, Spain (May 1989).
179
Market prospects of modular HTR in EEC countries F. A l b i s u a, S.F. G a r r i b b a b, J.C. L e f e v r e c, D. L e u c h s d a n d C. V i v a n t e e " Sener, Las Arenas, Spare b Politecnico di Milano, Milan, Baly c Nouatome, Lyon, France d lnteratom-Siemens, Bergisch Gladbach, Germany DG Xll, Commission of the European Communities, Brussels, Belgium
Received l September 1990
The energy outlook for the early 21st century is very uncertain. Low-cost oil and natural gas reserves will become seriously depleted and non-fossil energy resources may be urgently required because of environmental reasons. In this framework, the European Economic Community should be able to rely upon nuclear energy as an economic, safe and readily deployable resource for its future. Small and medium-size nuclear reactors (SMSNRs), particularly modular high-temperature reactor (HTR) would allow extension of uses of nuclear energy while being adopted to produce power and/or steam or heat, where heat can be at low or high temperature. For policy making and planning purposes it appears meaningful to appraise the market potential of modular HTR during the next twenty or thirty years. Thus the paper presents the outcomes of country studies on the subject conducted for a sample of Member nations to the European Economic Community including France, Federal Republic of Germany, Italy and Spain. Amongst the goals of the studies are definition of market segments, identification of the principal obstacles which would affect future adoption of SMSNRs. Opportunities offered by the different contexts and energy end-uses seem promising. Numerous difficulties and constraints emerge however, some of which might be eased by actions that national governments or more often the European Economic Community, may wish to take.
1. Foreword In the course of the next decades the prospects for an intensified and more extended use of nuclear energy may undergo a dramatic change within the European Economic Community (EEC), because of two major pulling forces. There are the growing energy demand, especially in newly industrialized countries and the progressive concentration of spare oil capacity into vulnerable supply areas on one hand. On the other, there are the continuing and emerging pressures to protect the local and global environment. Though the contribution that nuclear energy could make in the future to reduce carbon dioxide and other pollutants should not be overstated, efforts are needed to look at the long-term potential of nuclear energy beyond the current technology of thermal reactors. Small and Correspondence to: Dr. Claudio Vivante, Commission of the European Communities, Nuclear Research & Development, DG XIII, JRG, 2000 rue de la Loi, 1049 Brussels, Belgium.
0029-5493/92/$05.00
medium-sized nuclear reactors (SMSNRs) might offer the type of reliable and flexible solution which would be asked for. In principle, they entail favorable features such as (i) simpler construction, and lower cost minimizing field fabrication, quality checks and time; (ii) simpler operation maximizing availability and reducing the complexity of day-to-day management; (iii) easier maintenance being designed from the ground-up for inspection, diagnosis and replacement. Amongst the SMSNRs, the modular high-temperature gas-cooled reactor ( H T R ) would bring the additional advantage of being designed, developed and finally constructed by nuclear industry from the E E C . An aspect deserving the greatest consideration indeed, consists of the opportunities and challenges stemming from the establishment of a single E u r o p e a n energy market [1]. It can be recalled that after numerous fits and starts including the conclusion of several important treaties (such as the treaty establishing the E u r o p e a n Atomic Energy Community in 1957), the signing of the Single E u r o p e a n Act in 1986 appears to
© 1992 - E l s e v i e r S c i e n c e P u b l i s h e r s B.V. All rights r e s e r v e d
180
F. AIbisu et al. / Market prospects of modular HTR in EEC countries
led the EEC into the final unification. The Single European Act aims at exploiting the possible economic advantages by removing existing internal barriers. Currently the fragmented nature of the European market obstructs increasing returns to scale. The Act hopes to (i) create and give access to an undivided market of 320 millions; (ii) ensure a growing market; (iii) and provide maximum flexibility to the market to allow resources to flow to the areas of greatest economic benefit. Completion of the unified European energy market is not considered to be a goal in itself, nor is its completion by the declared date of 1992. But a unified energy market seems to be viewed by the Commission of the European Communities as necessary for "impro~ing security o f supply, reducing costs and improl,ing economic competitit~eness". Moreover, in unifying the energy market, the Commission aims to conform with the Community's energy objectives which were last defined by the Council of European Ministers in September 1986, as follows: - the efficiency of final energy demand should be improved by at least 20% by 1995; - oil consumption should be kept down to around 40% of energy consumption and net oil exports thus maintained at less than one-third of total energy consumption in the EEC in 1995; - the production of electricity generated from hydrocarbons should be reduced to less than 15% in 1995; - the continued use of natural gas should be based on a policy of secure and diversified supply sources; - the development of renewable energies should be promoted so that they may eventually make a significant contribution to the overall energy supply. 2. Counto' studies To evaluate the technical applications, economic and market potential of the small-size modular HTR, a number of country studies have been promoted by the Commission of the European Communities and accomplished by national interested entities. The outcomes of the preliminary analyses were presented at the First International Seminar on Small and Medium-Sized Nuclear Reactors held in Lausanne, Switzerland, August 24-26, 1987 [2]. Since then investigations have been continued and their scope broadened to comprehend additional uses of modular HTRs. District heating and cogeneration of power and steam were considered in the case of France, Federal Republic of Germany (FRG), Italy and Spain. Smallscale power supply has been explored for Italy and
Spain, cogeneration with production of mid-temperature process heat for France. The referencc plant consisted of the HTR-2 Module concept developed by Interatom-Siemens. In this plant, each one of the twin units has a capacity of 200 MWth when heat is the product, 80 MWe if electricity only is generated. The supply of high-temperature process heat has bccn evaluated for the case of FRG. A peculiar characteristic of the HTR system is to he able to reach output temperatures of about 950°C. Therefore, the high-temperaturc process heat application would becomc a complementary objective creating synergism with more conventional usages. In all country studies a three step approach has been followed by first appraising the technical potential, then economic and market perspectives. The technical potential refers to the number of nuclear plants which could replace ageing installations or meet increasing energy demand. A large part of this appraisal does not depend upon the particular reactor selection. Evaluation of economic potential grounds upon cost competitiveness of the HTR-Module towards alternative energy sources and systems. Key assumptions arc: interest rate on capital investment 5% and 1(1% in real terms, imported crude oil at 2(1 ECU/barrel in 198'? with 1% escalation per annum, price of coal given by the weighted average of domestic production and import when applicable, average increase in electricity selling price 1% per annum due to environmcntal and other factors, nuclear plant construction lime 48 months with a 20 year lifetime. Finally, thc market potential is defined as the result of the numerous institutional, organizational, social and other constraints that might limit full deployment and use of thc nuclear technology. The main results of country studies are in thc chapters which follow. The conclusions outline thc most significant factors and obstacles which can accelerate, conversely delay market penetration of SMSNRs and modular HTR through the EEC. Some actions which may contribute easing recurrent difficulties, are also indicated.
3. France
Two classes of perspectives customers for the HTR-Module have been surveyed, industrial enterprises and district heating networks [3]. The structure of national energy-consuming industry has been defined to determine the technical opportunities for replacing existing energy sources with the HTR-Module.
181
F. AIbisu et al. / Market prospects of modular HTR in EEC countries
1 100
placement of existing capacity All this considered, the corresponding cumulative market potential by the year 2010-2020 would hardly surpass 1 to 5 nuclear plants in operation.
Electricity generation i cost (mills ECU/kWhe) I
75
4. Federal Republic of Germany
.
50
25
o
I Heat selling price(ECU/M,Whth)
o
lO
20
30
Fig. 1. Effect of varying the heat selling price for a typical operation scheme.
A twin-unit 2 × 200 MWth nuclear plant generates 2,450,000 MWh with a 70% load factor. This capacity is equivalent to approximately 210,000 toe and appears rather large when compared with the individual demand of single industrial companies and local utilities. Figure 1 exhibits the effect of varying the heat selling price for a typical operation scheme; and for the two users A and B of low (5%) and high (10%) interest rate, respectively. In addition two values of coal cost escalation rate (1% per year and 1,5% per year) are also taken into account for the coal plant. In the case of industry, the technical potential of the HTR-Module would be confined to the sole energy-intensive activities; examples are mining and electrometallurgy, food processing and agriculture, production of cement and chemicals. If low-temperature and mid-temperature heat production are both included, it appears that a number of practical constraints dramatically restrict the technical and economic potential. As a result, in the years 2000-2010 the perspective market would consist of 1 to 3 plants; if plants which might be installed during the period 2010-2020 are added, a cumulative figure would be reached ranging from 6 to 9 nuclear systems. Less promising appears the sector of district heating. Heat networks of France are generally insufficient to accommodate a twin-unit HTR-Module. The only exceptions are Paris and few other major cities. The need for new installations depends on both the growth of district heating demand and on the need for re-
The market potential of the HTR-2 Module for combined low-temperature heat and power production was investigated a few years ago [4]. A new survey has been conducted to explore the application of HTR for high-temperature process heat [5]. The concept and design features of the HTR-Module are the same as those of the steam generating plant with some modifications. They mainly consist of two-zone fuel loading of the reactor core, adjustment of primary pressure to the pressure in the secondary and tertiary loop, increase of core-outlet temperature from 700 to 950°C and parallel decrease of thermal power output from 200 to 170 MWth per module. Amongst industrial processes examined, are coal conversion into substitute natural gas (SNG) as a replacement for natural gas; use of substitute natural gas for the production of ammonia, methanol, oxichemicals and steel; oil refining and ethylene industry; tertiary oil recovery; sinter of iron ore; production of cement and aluminium oxide. An overview of fields of application and economic potential of the HTR-2 Module is on table 1. The economic potential has been assessed Table 1 Estimated future economic potential of HTR-2 Module plants for process heat and energy supply in the FRG [5] Area of application
Annual 1986 production in the FRG (million tons)
SNG from coal
(natural gas supply 38 mtoe) 1.6 0.46 0.90 37 85 4 0.40 33 17 1.3
Ammonia Methanol Oxichemicals Steel Oil refining Ethylene Tertiary oil recovery Cement Sintering of iron ore Aluminium oxide Total
Potential of HTR-2 Module plants (number)
80 7-8 3-4 2 16 12 10 1 6 1-2 1 139-142
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under the simple assumption that HTR end-products substitute similar commodities used or traded on the German market. Evidently, other opportunities for exploiting nuclear process heat appear feasible, though they are difficult to quantify because of lack of economic data and limited engineering knowledge. Synthesis gas from coal is an energy commodity and an intermediate feed stock for the conversion into other chemicals, such as methanol fertilizers (ammonia), and complex hydrocarbons. The country survey suggests that the HTR-2 Module could base on hydrogasification of hard coal and lignite, or on steam gasificatkin of hard coal. In face of the present cost structure of energy sources, SNG cannot compete with (imported) natural gas. For the future however, if it is admitted that nuclear-generated SNG ought to replace all the demand of natural gas, more than 80 HTR-2 Module hydrogasification plants would be required. Along the same long-term scenario, it can be supposed that SNG is also used to obtain ammonia, methanol, other chemical feedstock and steel. More precisely from 7 to 8 HTR-2 Module plants may be adopted to yield ammonia from hydrogen, as a product of coal gasification; 3-4 HTR-2 Module plants would produce methanol; 2 HTR-2 Module would supply chemicals like PVC; whereas steel production via SNG from coal would require up to 16 twin-unit HTR systems. Nuclear process heat can replace valuable fuel use in oil refineries. If 1986 oil production is taken as the base, refineries would entail the potential of about 12 HTR-2 Module plants. A comparatively large space can be foreseen in the chemical industry to obtain ethylene, which signifies installation of 10 HTR-2 Module plants. The exploitation of residual domestic oil resources asks for tertiary recovery, the corresponding energy need could be matched by one HTR-2 Module. Production of cement demands a very high peak temperature, around 1350°C. But more or less 70% of heat is the range up to 850°C. These temperatures are on the reach of the HTR as well as the electricity which might be necessary. Six HTR-2 Module plants may cover the entire German market. Finally, sintering of iron ore and production of aluminium oxide would offer further opportunities, which an estimated further potential of 2 to 3 twin-unit HTR systems. $. Italy In 1986 the Italian Government adopted a national energy plan designed to substantially increase the use
of coal and nuclear power in electricity generation and to continue to increase the role of natural gas in other sectors. But as a result of the Chernobyl accident in April 1986, and rising public concerns about the environment, the plan's goals regarding nuclear and coal led to an almost immediate reassessment by the Government and the public. This resulted in an immediate halt on the nuclear programme. A National Energy Conference held in February 1987 discussed the possible energy options but came not to any final conclusions. In November 1987, there were national referenda on several questions tied to the development of nuclear power and siting of major power plants. By a large majority, the public rejected propositions which favored nuclear power or facilitated the siting of electricity generating units. In response to these events, the Government decided to revise its energy policy. The new National Energy Plan (PEN) was agreed by the Government in August 1988 and submitted to the Parliament for debate in the course of 1989. The referenda, although they did not explicitly require the abandonment of nuclear power, werc interpreted as a clear decision against nuclear energy. One of the results is that the new PEN calls for a five-year moratorium on the construction of nuclear power installations and the conversion of the BWR nuclear plant under construction at Montalto di Castro to a non-nuclear, multi-fuel plant. Another nuclear Magnox reactor at Latina, south of Rome, will be decommissioned. The only functioning nuclear BWR plant at Caorso and the PWR plant at Trino Vercellese have been closed, but arc prepared to produce electricity again, if the national electric utility is so instructed by the Italian Government. The Italian Government has yet to make a final judgmenl. Based on the electricity demand trend from 1983 to 1988, electricity consumption could continue to rise by 4.0% per annum or more. As a consequence, the result would be a restructuring of generating capacity, including a large coal and natural gas-based capacity increase to meet growing demand and to stabilise or reduce electricity imports. At the same time, expectations arc for a modest decline in the quantity of oil uscd to produce electricity (although oil's share of total electricity inputs would decline from 44% to 23%). These trends may prepare a comeback of nuclear energy in the longer term. Private and state-owned industry, large municipal utilities could mount pressures while Italy is moving towards the single European energy market. It is possible that public scepticism about nuclear energy is so great that even visible changes in the LWR technology would have little ira-
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F. Albisu et al. / Market prospects of modular HTR in EEC countries
Table 2 Estimated cumulative potential of twin-unit 2x200 MWth HTR in a sample of member countries to EEC for the years 2010-2020 (E and M stands for economic potential and market potential, respectively)
6-9 1-5
E E
Federal Republic of Germany cogeneration 5-6 district heating 5-6 power heat 140
M M E
decades. The unique safety characteristics of the H T R - M o d u l e seem to offer leverage and the possibility of installing nuclear plants without too much restrictions regarding site selection. Decisions favoring the nuclear energy option could be influenced by imitative effects stemming from H T R projects and construction programmes implemented elsewhere. District heating, combined heat and power production, and electricity generation are possible areas of application for twinunit 2 x 100 MWth H T R , or similar SMSNR. In spite of present uncertainties, a scenario may be envisioned by the year 2020 or so, where the cumulative market potential Is ranging from 3 to 7 nuclear units [6].
M
6. Spain
M M
With regard to district heating, the climatic conditions which are generally found over the Country did not create any positive edge for the commissioning of large centralized networks. Amongst the large cities, Madrid is the only location where winter could be harsh enough because of the continental weather. Would the construction of a district heating network be considered, the initiative could represent a substantial departure from past and present practice. The adoption of the H T R - M o d u l e may find increasing support if the air quality benefits of nuclear energy are emphasized. Benefits should be gauged against the
No. of HTR-2 Module Potential France cogeneration district heating
Italy cogeneration (Twin-unit 2 x 100 MWth HTR) 1-3 district heating (Twin-unit 2 x 100 MWth HTR) 2-3 power 0-1 Spain cogeneration district heating power
2 2 1
E E E
pact. Vice-versa, a completely different approach based upon H T R - M o d u l e or next-generation nuclear systems might meet public acceptance, especially if demand for power and energy peaks up over the next couple of
Table 3 Country-specific factors affecting market potential of SMSNRs in selected EEC Member countries. Subjective importance rating ranges from low (L), to medium (M) and high (H). Principal factor (i) presence of municipal/local electric utilities (ii) existence of district heating networks (iii) presence of "independent" electric systems (e.g. islands) (iv) large industrial users of heat and/or electricity (v) buy-back contracts for cogeneration (vi) Availability of nuclear infrastructure (e.g. fuel cycle facilities, long nuclear operation records) (vii) support by public opinion
France
Germany
Italy
Spain
L
H
M
L
M
H
L
L
M
L
M
H
M
H
L
L
L
M
M
H
H
H
L
M
H
L
L
M
184
F. Albisu et al. / Market prospects of modular HTR in EEC countries
multitude of individual fossil-fueled heat supply systems that would be replaced. Certainly along with environmentalism, issues like plant economics, safety and security, will affect general orientation and give additional arguments to nuclear district heating [7]. Concerning combined heat and power plants, it can be assumed that several initiatives of this type will be planned and developed during the next few years, given the new legislation which is rather attractive for the owners of cogeneration units. Nevertheless, there are in Spain few cases where the 50 MWe size is exceeded and a nuclear plant can be accommodated. A thoroughly similar situation would occur for the sole production of steam. As a consequence, prospects for the HTR-2 Module appear limited. Lastly, regarding electricity generation, It has been suggested that nuclear plants based on the HTR-2 Module might represent a viable solution for the Canary and Balearic Islands, especially in conjunction with water desalination. Again, economic judgment aside any decision seems critically dependent upon Government policy, which is in turn influenced by public opinion. Despite trend of declining support, the public's overall attitude toward nuclear energy can be best described as ambivalent with varying degree of acceptance.
7. Conclusions The country studies of France, FRG, Italy and Spain detail opportunities as well as difficulties and constraints facing future market deployment of SMSNRs, particularly HTR-Module, through the European Economic Community. Focus is on the next twenty or thirty years. The HTR-Module for combined heat and power production, for small-scale power generation and mid- to high-temperature heat supply appears to have significant technical and economic potential. Market potential however, would be substantially lower, because of recurrent obstacles that limit use of nuclear energy beyond the power sector (table 2). Some of these obstacles are country-specific, others seem shared under the different national circumstances. Table 3 present a summary of the main countryspecific factors that may enhance or depress market potential of SMSNRs. Quite often these factors convcrt into obstacles having a structural or inherent nature. Thus, in case these factors are insufficient or absent, they would not be easily replaced by government action with few exceptions. For instance, governmcnts may change regulation of electric utilities and
give support to cogeneration, promote regional planning for electric power and district heating capacity, certify nuclear plant operators and contractors, revise the institutional management of nuclear energy if necessary. It would be more complicated for governments to address concerns of the critics and the action may take more time. Critics of nuclear energy usc fecl that fundamental issues have been ignored or down-sized while countries plunged ahead to build morc nuclear reactors. Bridging this mistrust will be difficult at best. However, opposition to nuclear energy is not monolithic. Many critics have well-defined concerns over nuclear technology and its implementation. Thesc critics tend to be technically knowledgeable and respected in the environmental and anti-nuclear communities. Further more, some in nuclear industry are aware of these concerns and appear willing to engage in a useful discussion. On the contrary, there are policy measures that could fall under the general responsibility of the European Economic Community and the Commission. Some of these measures are generic and would favor an increased use of nuclear energy. Other measures would specifically ease and accelerate market deployment of SMSNRs if the European Economic Community wishes that HTR-Module and SMSNRs arc accepted, become a widely adopted and viable energy option contributing to the achievement of long-term energy security goals. Generic measures refer to the establishment of the single energy market in the European Economic Community. The single market would help counter protectionist behaviors that may prevent potential nuclear vendors having free access to design and construction opportunities wherever they arise. In addition, the single economic and energy market would assure adequate economies of scale to the companies that are willing to invest and build new capacity, particularly the development and demonstration costs would bc better absorbed and shared. Second, are common safety standards and goals. The introduction of stable and uniform safety standards might be an essential element in favoring a more extended adoption of nuclear energy, particularly in the non-power sector. Similarity of safety standards and goals could facilitate intercomparison of construction and operation experiences, as a consequence learning process wold become more effective. This aim, special R & D programmes may advocated and promoted to demonstrate the safety characteristics of the new reactor systems while referring to selected sites and applications. No theoretical assessment will uncover all potential problems and weak elements, but
F. Albisu et aL / Market prospects of modular HTR in EEC countries
in-depth probability safety analysis concerning realistic sites and applications could identify design or operating flows before they cause inconveniences. Finally there is the availability of service companies that can take care of the operation of nuclear reactors on one side, and of the connected financial aspects on the other. Service companies seem a key element to the success of SMSNRs. Subjects such as municipal utilities, Industrial companies may not have the highly specialised skills required to manage and operate the nuclear plants. It is readily apparent that nuclear plants may be hostage to the weakest subject because an accident, or even poor performance, reflects on all. A solution would be offered by a third party having technical resources and skills as appropriate, and providing all the service support which might be necessary. This solution would reassure many of the critics of extended application of nuclear energy, as well as investors, utility commissions and board members, and the public. A n o t h e r essential third-party action may consist of credit enhancement, more or less innovative arrangements such as joint ventures, tenancy-in-common lending structures, financial guarantees. The establishment of S M S N R s u s e r s / s u p p l i e r s club can be proposed to offer encouragement along this direction. The concept of the u s e r s / s u p p l i e r s club or the alike could also be advocated to gather financial means and share information resulting from the construction of the first plant based on the H T R - M o d u l e . The imitative effect and learning which will ensure would eventually disclose other immediate opportunities and accelerate their exploitation.
185
References [1] The Internal Energy Market; Report COM (88) 238. Commission of the European Communities, Luxembourg (1988). [2] R. Candeli, S.F. Garribba, U. Hansen, J.C. Lef~vre, D. Leuchs, R. Sch6n, C. Vivante, Market potential of small and medium-size nuclear reactors as combined heat and power plants in Europe, Nucl. Engng. Des., 109 (September/october 1988) 373-380. [3] J.C. Lef~vre, The market potential of HTR-Modular reactor as combined heat and power plants in France, Final Report, Novatome, France (July 1988); EUR 12382 En, Commission of the European Communities, Luxembourg (1989). [4] The market potential of modular high temperature reactors as combined heat and power plants in the Federal Republic of Germany, Final Report prepared by Interatom, EST, Universit~it Essen, EUR 10431/EN, Commission of the European Communities, Luxembourg (1986). [5] The market potential of HTR modular reactor as a heat source for high-temperature processes in the Federal Republic of Germany, Final Report prepared by Interatom, EST, Universit~it Essen; EUR 11635/EN, Commission of the European Communities, Luxembourg (1988). [6] S.F. Garribba, The market potential of small and medium-sized nuclear reactors as combined heat and power plants in Italy, Final Report, Politecnico di Milano, Italy (July 1988). [7] The market potential of modular HTRs as heat and power sources in Spain, Advance Abstract, Sener, Spain (May 1989).