Other initiatives to promote the renewal of competencies are on-going in different fields: nuclear safety courses organized by the Network of Excellence for Severe Accident Research (SARNET), winter and summer schools in the field of actinide science organized by the ACTINET Network of Excellence, the Frederic Joliot and Otto Hahn Summer School on Nuclear Reactors, and the Latin American Network for Education and Training in Nuclear Technology (LANENT), currently in the process of creation, are examples of such initiatives.

Especially active are the European Nuclear Engineering Network (ENEN) and the Asian Network for Education in Nuclear Technology

(anent).

Maintenance of good chemistry of reactor system fluids is essential for minimizing corrosion of reactor system components and generation of acti­vation products that can give rise to high radiation fields on piping and equipment, resulting in increased radiation exposure of plant personnel. Reactor coolant and moderator water chemistry is generally maintained by circulating a part of the coolant flow through ion exchange resin beds. At times neutron poisons such as boron are added to the coolant in the form of boric acid to suppress excess reactivity. In this case the resins used need to be saturated with boron to prevent unwarranted boron removal that can give rise to reactivity gain. For the same reason dilution of borated water in the reactor system by inadvertent addition of unborated water must be prevented. Conversely, boron removal to gain reactivity in a controlled manner can be done by passing the coolant through ion exchange resins that have not been saturated in boron. The moderator system is normally vented to an inert cover gas such as helium in heavy water moderated reac­tors. Build-up of deuterium can take place in the moderator cover gas due to radiolytic decomposition of heavy water. This has to be kept within pre­scribed limits to prevent the concentration reaching explosive limits. For this purpose the cover gas has to be purified by passing over a catalytic recombiner. Similarly, in light water reactors hydrogen build-up in the reactor coolant is vented to catalytic recombiners. From time to time activa­tion products that have deposited on the inner surfaces of system piping need to be removed to bring down radiation fields on piping. This is done by dilute chemical decontamination of the system, ensuring that base metal of the piping and other system components including cladding of fuel assemblies in the core are not subjected to any significant corrosion.

Chemistry of the secondary coolant of the reactor also has to be main­tained within proper limits to ensure good health of the secondary system components such as the steam generators and the steam turbine. Appropriate chemicals are added to the system and the condensate is subjected to pol­ishing by ion exchange resins before being pumped back into the feed water system. Deaeration of feed water is done to maintain dissolved oxygen content at very low values to minimize corrosion of secondary system inner surfaces.

It may be noted that chemistry control of reactor systems plays a vital role in minimizing corrosion and thereby helps in trouble-free operation of the NPP over long periods of time. It also helps in minimizing build-up of radiation fields on system piping and components thereby reducing radia­tion exposures of personnel. Proper maintenance of system chemistry is also necessary from a reactivity safety point of view. A well-trained and competent reactor chemistry group is therefore essential for safe and effi­cient long-term operation of the NPP. The technical competence of this group should be continually enhanced by in-house research as also by keeping abreast with the latest developments in this field worldwide. The chemistry group should also maintain close contact with academic and other relevant institutions in the country having expertise in specific areas such as corrosion and seek their assistance whenever necessary.

Various organizations, including design organizations, utilities, universities, national laboratories, and research institutes, are involved in the develop­ment of advanced nuclear plants. The IAEA ARIS database (IAEA, 2010) summarizes global trends in advanced reactor designs and technology and provides balanced and objective information about all available designs.

Since this chapter focuses on the technology options that are available for newcomer countries, it will concentrate on the evolutionary reactor designs, as these are the most likely candidate technologies for most coun­tries’ first nuclear power plant, particularly in the near to middle term. For completeness, however, there will also be included a brief discussion exam­ining future trends for the development of nuclear reactors in the long term.

Evolutionary reactor designs have concentrated on improving the eco­nomics and the performance of existing nuclear reactors. At the same time, these designs meet even more demanding nuclear safety requirements than those currently in operation. While efforts have also been made in optimiz­ing the use of fissionable materials and minimizing the production of used fuel and nuclear waste, it is expected that the closure of the nuclear fuel cycle will only be achieved once innovative reactor designs come online.

India has developed its own indigenous Pressurized Heavy Water Reactor (PHWR) design that consists of 220 MWe, 540 MWe and 700 MWe units. India is currently operating 16 units of 220 MWe and two units of 540 MWe. Construction of two 700 MWe units is underway. The Indian PHWR was developed from the experience in the operation of earlier units and from indigenous R&D efforts. The important features introduced in these units include two diverse and fast-acting shutdown systems, double containment of the reactor building, water-filled calandria vault, integral calandria end shield assembly, and calandria tube filled and purged with carbon dioxide to monitor pressure tube leak by monitoring the dew point of carbon dioxide. These units also include a valve-less primary heat transport system and a simplified control room concept, as well as advanced control and instrumentation systems that incorporate computer-based systems to match with the advancement in technology.

The regulatory staff is assigned the auditor’s role by the safety standards authority. They review design features, operating procedures, and training to determine the acceptability of the plant for initial and continued opera­tion. They have no role in design or operation. Furthermore, they cannot take any such role without compromising their position as impartial auditor. The auditor’s role involves a great deal of questioning of the operating company and designer/builder on details of design and operation. This role is never a popular one, particularly when approval to proceed with some action is held up, apparently to satisfy curiosity. There is, no doubt, some unnecessary holdup caused by lack of understanding or by personal factors. One the whole, the process is useful to the operating company because this is the only external and independent (not to say hostile) review of propos­als. Internal reviews are valuable but sometimes miss important issues due also to lack of understanding or to personal factors.

One of the most valuable early decisions of the Canadian AECB was to assign staff at each station site. These people get to know a particular plant as well as the operating company supervisory staff, and often much better than the designer/builder or central office staff. They are therefore able to make reasoned judgments of the quality of safety-related aspects of plant operation on a regular basis. Knowing both the equipment and the people, they are better able than are central office staff to evaluate special situa­tions that arise in the field. Central office staff are useful as technical backup, but the site staff must carry the main regulatory responsibility. The operating company has an obligation to report matters of safety interest to the regulatory staff on a regular basis as well as to report any unusual occurrences.

It has been found strongly beneficial to plant operational safety to assign a small staff of regulatory personnel to each operating station. This practice keeps the regulatory agency abreast of the latest technical and managerial information, and provides plant operations staff with immediate feedback of the opinion of the regulator to any continuing or novel situation at the plant. This field staff is, of course, supported by the central technical groups, usually posted to the headquarters of the regulatory agency.

The epistemological basis provided by UNSCEAR and the radiation pro­tection paradigm recommended by ICRP are converted into international radiation safety standards, for NPPs and other practices, under the aegis of the IAEA.

In performing its safety functions, the IAEA is contributing to what has been termed a de facto international radiation safety regime (Gonzalez, 2004b, 2004c), which includes three key elements: [8]

11.7.1 International conventions

The legally binding international undertakings by States are, in legal lan­guage, international conventions. Under the auspices of the IAEA, four major radiation-safety related international conventions have been adopted in recent years, namely:

1. The Convention on Early Notification of a Nuclear Accident (IAEA, 1986b)

2. The Convention on Assistance in the Case of a Nuclear Accident or Radiological Emergency (IAEA, 1986c)

3. The Convention on Nuclear Safety (IAEA, 1994)

4. The Joint Convention on the Safety of Spent Fuel Management and on the Safety of Radioactive Waste Management (the so-called ‘Joint Convention’) (IAEA, 1997).

The obligations undertaken by signatory States of these Conventions apply inter alia to radiation protection of NPPs.

Another relevant undertaking for NPP operation is the Radiation Protection Convention, 1960 (No. 115) of the International Labour Organization (ILO, 1960). This Convention applies to all activities involving exposure of workers to ionizing radiations in the course of their work, including work at NPPs.

Under Article VII of the NPT, it is specifically recognized that a group of States have a right to conclude regional treaties ‘in order to assure the absence of nuclear weapons in their respective territories’. Thus, when a NNWS is giving consideration to building its first nuclear power plant, as part of the decision process they should also consider the impact that any relevant regional treaty will have.

Today, there are a number of regional treaties dealing with nuclear- weapon-free zones, each of which obligates the Parties to conclude a com­prehensive safeguards agreement with the IAEA. Examples of regional treaties with the goal of establishing a nuclear-weapon-free zone include the Treaty for the Prohibition of Nuclear Weapons in Latin America (Tlatelolco Treaty)[14], the African Nuclear-Weapon-Free Zone Treaty (Pelindaba Treaty)[15], the Southeast Asia Nuclear-Weapon-Free Zone Treaty (Treaty of Bangkok)[16], the Central Asian Nuclear-Weapon-Free Zone

Treaty (CANWFZ or Treaty of Semipalatinsk)8 and the South Pacific Nuclear-Free Zone Treaty (Rarotonga Treaty).9

Irrespective of which option is chosen, the first step in the spent fuel man­agement is interim storage. The spent nuclear fuel element is mechanically the same as fresh fuel and can be handled as an intact fuel element. It is, however, highly radioactive and needs shielding and cooling during han­dling. The shielding is mainly for gamma and neutron radiation from the fuel. The spent fuel element is thus, after removal from the reactor vessel, handled and stored under water that can provide adequate shielding and cooling.

All water-cooled reactors store the spent nuclear fuel in deep water-filled pools. The water depth is typically 10 metres or more to ensure that the water provides adequate shielding (3-4 metres coverage) during all han­dling of the fuel. As the original intention in many cases was to reprocess the fuel, the size of the pools was designed to store a few years’ production only in these pools. In later reactors larger storage capacity has been pro­vided, in some cases corresponding to 30 years’ production or more.

As reprocessing currently is used in only a few programmes, it has been necessary to expand the storage capacity for most reactors. Different methods have been used. In some cases it has been possible to pack the fuel closer in the existing pools by introducing neutron absorbers or by taking into account the fact that the reactivity of spent fuel is lower than that of fresh fuel for which the storage racks in the pools were designed (burn-up credit). In other cases new storage facilities have been built, either at the reactor site or at a central site away from the reactor, to which the fuel can be transferred. In some cases these are also built as deep storage pools, while in other cases the fuel is stored under dry conditions in metal or concrete casks similar to transport casks, or in vaults or silos. Dry storage can be used when the heat release has diminished sufficiently after 5-10 years of storage. Although there are several wet-type storage facilities in operation, the trend at present is to use dry storage facilities for long-term storage. These have the advantage of requiring less long-term maintenance and can also more easily be expanded as the needs arise. The most obvious example of the latter is the dry storage casks, which essentially can be pur­chased as they are needed (Fig. 14.6). A typical modern storage cask can accommodate 20-40 PWR fuel elements or 50 — 100 BWR fuel elements, which means that a large reactor will require only about two to three casks

per year. The casks can be stored in simple warehouses and do not require strong buildings. There are also proposals for multipurpose casks that can be used for storage and transport and possibly even disposal. An overview of existing storage types is given in IAEA (2007c).

There is ample experience of long-term storage, up to 50 years, of spent fuel in water. So far no degradation of the fuel has been seen if the water quality is kept under control. The experience of dry storage is also good, although for a shorter period (less than 30 years). It is expected that the storage times can be extended without problems to at least 100 years, but the proof of such extension will require some further studies, in particular to ensure that the fuel can be removed after such a long period.

The main difference between wet storage and dry storage is the need for continuous cooling and chemical clean-up of the pool water to ensure a low fuel temperature and avoid long-term corrosion of the fuel or the spent fuel pools. Wet storage thus normally requires more staff for operation. Dry storage represents a much higher fuel and fuel cladding temperature, but a more benign environment, normally helium or argon gas. It is, however, important to have a follow-up programme of the fuel to ensure that the fuel can still be removed from the dry storage when the fuel is transferred to the next step. Most storage facilities are built above ground, but like the Swedish CLAB facility they could be built in a rock cavern to provide a better physical protection over long time periods (Fig. 14.7).

Plant construction completion on time and on budget is by far the largest financial risk faced by investors in nuclear power. With a financial exposure of several billion dollars per plant, even small cost overruns or slippages in completion can adversely affect a utility’s equity value. The negative exam­ples of the cost overruns of an estimated 75% and completion delay of three to four years as experienced by the Olkiluoto project in Finland (NW, 2010a; KPMG, 2010) and the 50% over budget and two years behind schedule of the Flamanville-3 plant in France (NW, 2010b) led many financial analysts to conclude that the ‘economics of nuclear say no’ to new nuclear build (CITI, 2009; Moody’s, 2009). Clearly, such cost overruns can only be shoul­dered by the largest utilities such as TVO or EDF. Both entities are special in their ownership structures, which differ greatly from other utilities around the world and have helped avoid otherwise likely economic and financial

troubles. TVO, though a privately held company, sells its electricity exclu­sively to the owners at cost, which eliminates some uncertainties such as demand and market risks and also allows passing through unexpected higher generating costs. EDF is largely government owned (84.5%) and thus better bolstered for events like Flamanville than privately held utilities operating in competitive markets.

The track records of Olkiluoto and Flamanville are worrisome indeed, but one has to put them into the perspective of a FOAK situation and the lessons learned for future projects. Many potential nuclear power undertak­ings in Europe and North America are likely to encounter some kind of FOAK flavour simply because of lack of recent construction experience. This and the fact that, historically, many nuclear-building utilities suffered downgrades in their credit ratings during the construction phase (Moody’s, 2009), reflecting the risk profile of nuclear power investments, are argu­ments used by finance institutions in their pessimistic outlook on new nuclear build.

One suggested hedge for containing construction cost overruns is phased financing. This approach, already implemented in China and proposed for new plants in the US, involves financing a project in tranches, starting with construction. The cost of capital for each phase will reflect the risks only of that phase, so that the high costs of construction risks are not carried over throughout the project. During construction, the main risk is completion on time and within budget. As construction proceeds and completion risks diminish, the cost of capital can also fall. Once completed, investor risks are essentially reduced to operational and market risks (revenue stream). Different financing phases may also have different capital structures: for example, shareholders would generally be at risk for the construction phase, but non-recourse financing might be introduced with the onset of commer­cial operations. Phased financing is deemed to be especially effective with a phased asset transfer and, where applicable, a phased sell-out of govern­ment interests. Phased financing may thus facilitate government participa­tion in a private sector project, since a government could choose to finance or guarantee only a part of the project and then privatize its share of the plant. The concept of phasing may also help to manage supply bottlenecks and the need for trained personnel, regulators and other project inputs.

The same concept of phasing applies on a broader scale to the start of a nuclear programme. The first unit will carry a higher risk of successful com­pletion — and higher costs — than subsequent units. However, once a few units are built and operating successfully, the financing model can change, with revenue from operating units being used to finance new build.

But it can confidently be expected that, with regained knowledge and build experience, construction schedules will be met and cost overruns minimized as demonstrated elsewhere: neither the limited European construction experience nor the nuclear power history of North America is representative globally. There are numerous nuclear power plants in Asia that have been completed on time and on budget. One can only move down the learning curve with repeated plant construction over short time inter­vals. Construction times of just 48 months or four years have been demon­strated in the Republic of Korea, Japan and China — these three countries alone account for more than 70% of all nuclear power construction activity since 1990.

However, in most industrialized countries new construction of power­generating plants has generally been limited and has lacked technological diversity. In the last decade, the majority of new generating plant con­structed in non-Asian OECD countries has been either gas (especially combined cycle gas turbines) or new renewables, especially onshore wind (NEA and IEA, 2010). So new coal power plants, especially if equipped with CCS, share the issue of construction cost uncertainty with nuclear power.

15.4.2 Market rates

Irrespective of the actual market structure — liberalized or regulated — the cash flow and profitability of a utility depend on its operating efficiency and the price at which it can sell its electricity in the marketplace. The high fixed costs and low operating costs of new nuclear power plants require higher revenue per kWh to break even than most competing alternatives. It is questionable if private sector entities involved in nuclear power projects are willing to take on the price risk. In regulated markets of developing countries, social considerations of delivering affordable electricity to the poor are often enforced upon utilities to sell electricity below costs. Their economic survival then hinges upon government subsidies. In either situa­tion, the price risk serves as a barrier for private sector finance of new nuclear build.

Market risks can be mitigated with long-term power purchase agree­ments with large-scale electricity customers such as electricity-intensive industries and larger communities. It has been argued that with long-term power purchase agreements in place, lending institutions would be satisfied with an expected rate of return of 5% to 10%. The same plant operating in a merchant market with no underpinning contracts would be confronted with rates of 10-12% (Bulleid, 2005) with direct implications for WACC and IDC.

Generally, once operating and with plant completion risks eliminated, the economics of nuclear power plants are viewed favourably by ratings agen­cies and investors alike. The longer-term outlook is even better, when plants are more and more amortized and the capital portion of operating costs approaches zero.

Environmental policy is another uncertain element influencing the market price of electricity. Nuclear power has a small greenhouse gas (GHG) footprint per kWh, thus its competitiveness (along with other low GHG-emitting technologies) would benefit from policies targeted at miti­gating climate change. Electricity demand prospects themselves are a source of uncertainty. The emergence and market penetration of smart grids, including real-time pricing, may flatten the load profile — a positive aspect for the baseload technology nuclear power — but also better integrate inter­mittently available renewables, thus improving their competitiveness against nuclear power. Efficiency improvements at the level of electricity use spurred by government policy could substantially dampen future demand growth while a large-scale advent of electric vehicles might even result in accelerated growth.

15.4.3 Operational

Operational risks relate primarily to operational unreliability due to unplanned outage. High fixed costs combined with unit sizes often counted in multiples of fossil and renewable plant capacities make the unavailability of a nuclear generating station a costly affair. In addition to lost revenues, utilities that sold their electricity under long-term power purchase agree­ments may be forced to provide high-cost replacement power from other generators. Operational risks are generally less an issue for utilities with a sufficiently large portfolio of generating capacities.

Plant operating safety is a non-negotiable prerequisite for a profitable nuclear power plant. A plant that is found to be not in compliance with operating safety regulations will be shutdown by the national regulatory authority and a shutdown plant does not earn revenues. Moreover, regula­tory oversight and, if necessary, intervention also protects the utility’s revenue generating asset from potential serious damage and long-term unavailability. An operational risk exists, however, if regulatory interven­tion is politically motivated and not exclusively safety related.

15.4.4 Waste and decommissioning

Private sector investors shy away from unknown or unknowable liabilities. Spent fuel and nuclear waste management, as well as plant decommission­ing at the end of a service life of 60 or more years, are factors with no practi­cal or commercial evidence (except for decommissioning) regarding their eventual costs. It is also unknown under what kind of regulatory environ­ment waste management and decommissioning will take place, e. g., to what level will plant sites have to be decommissioned beyond plant demolition, decontamination and debris removal. In order to cope with long-term liabilities, most jurisdictions assess a levy on nuclear power plant operators for every kWh produced to be paid into an escrow fund (or equivalent) to be used for waste management and decommissioning. Whether or not the escrow funds accumulate funds sufficiently large to cover all post-closure cost remains to be seen but their existence limits the risk exposure of investors.

15.3 Conclusions

Generally, the economic prospects of nuclear power look promising, and generating costs on a life-cycle basis are competitive against alternatives in many markets. But nuclear power is capital intensive with long amortization periods and capital requirements that amount to several billion dollars per unit — overstretching the comfort levels of many investors. Finance, there­fore, is one of the major barriers for nuclear power. In liberalized markets only very large utilities can finance a nuclear power project.

The economics of nuclear power embrace more than the life-cycle gen­erating costs and include energy supply security, reliability and price stabil­ity considerations as well as environmental policy objectives. Nuclear power is a technology with the lowest externalities — as most externalities have already been internalized. Nuclear power is an effective and efficient GHG mitigation technology. Where energy security and protection of the environ­ment are national policy objectives, a quasi-internalization of externalities may warrant some form of financial support or guarantee for private sector investment in new nuclear plants. A level playing field with clear and uniform performance criteria for all generating options reduces overall uncertainty and raises the probability that electricity market prices over the plant’s lifetime will provide an adequate return on investment.

At the minimum, unambiguous and sustained government policy support is required for nuclear power to unfold its economic potential. Such a policy in support of national nuclear power programmes as an integral part of a national energy strategy is paramount for investor and lender confidence and public acceptance of the technology.

Future international GHG reduction schemes may also recognize the mitigation potential of nuclear power and thus increase its attractiveness to investors and lenders, particularly schemes that award emission credits for environmentally benign investments abroad.[100] But even here, economic viability is inescapable; no-one is likely to invest in a financial black hole, nor to build nuclear power plants for environmental reasons, unless they are demonstrably profitable and among the most cost-efficient solutions.

The global financial community is still attributing a deterring risk/reward ratio to nuclear power. International organizations and governments alike need to join hands in enhancing the community’s ability to assess the invest­ment risks involved in nuclear power projects so that it can provide suitable finance packages for such investments, especially for countries currently without active nuclear power programmes. Newcomer countries will depend on the assistance of technology holders in launching their national nuclear programmes. Nuclear infrastructure and human resource development fol­lowed by financing are key in this regard.

The capital costs of nuclear power are expected to further improve as the number of plant orders increase and FOAK conditions decrease. The cost reduction potential for technology learning but also for design standardiza­tion is substantial.

Planning and construction times of nuclear power plants are longer than for most alternatives, excluding nuclear power from quick-fix solutions. Nuclear power is not a quick-fix solution to a country’s energy problems. But as an integral part of a long-term energy strategy, nuclear energy can contribute to a country’s sustainable energy development objectives.