atw - International Journal for Nuclear Power | 06/07.2019

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atw Vol. 64 (2019) | Issue 6/7 ı June/July SERIAL | MAJOR TRENDS IN ENERGY POLICY AND NUCLEAR POWER 348 Targeting Innovation at Cost Drivers – How the UK Can Deliver Low Cost, Low Carbon, Commercially Investable Power Benjamin Todd When it comes to creating affordable, reliable, low carbon energy, the UK consortium led by Rolls-Royce, is bringing a modern, holistic approach to small nuclear power station design. The design concept is driven by improving the economics and market requirements of nuclear power; targeting cost drivers such as schedule uncertainty; and focusing innovation efforts to reduce or remove those cost drivers entirely. The result is a compelling, commercially investible design for a whole power station, not just a small modular reactor, that can help the world meet its low carbon energy challenges. Why now? Satisfying the growing global demand for electricity generation is about achieving more with less. With more people leading more electricitydependent lives, the global energy sector is under pressure to produce more power in more places with more certainty over availability, cost, capacity and flexibility. At the same time, there also has to be less – less capital investment, less environmental impact, less time spent in build, less pressure on infrastructure and less challenging delivery and commissioning phases. The solution to bridging that energy gap lies in a re-examination of existing means of generation; innovative thinking with the power to repackage the best of what is already proven in a new innovative way, so that more really can be delivered with less. The UK consortium’s powers station offers a convincing alternative to reduce the complexity of financing and constructing large scale reactors around the world. How is cost measured? The metric of levelised cost of electricity (LCoE) in £/MWehr is a key driver for the power station design ( Figure 1). It’s also the metric by which all current electricity costs are measured and offers a single point of competitiveness for new concepts, such as the small modular reactor power station design. In the case of this power station design, the consortium has assessed Regulatory/Safety Proliferation Resistant Market Timing Code Compliance Reduce capital: Manage Investment: Reduce O&M: • commoditised • reduce overnight financing • minimise maintenance / outages • standardised • maximise return on investment • standardised parts • factory built • transportable • ease of assembly / reassembly • minimise manning each factor driving the cost of LCoE and targeted its innovation at those areas, avoiding innovation for innovation’s sake. Creating certainty to reduce cost Creating certainty in order to encourage cheaper financing is the dominant consideration of the case for this power station design, looking across the entire nuclear and nonnuclear elements of the power station (Figure 2). Financing cost comprises capital cost, perceived risk profile and construction time, so the design targets its innovation at each of those areas. The factors considered in the economics of the utility case are dominated by the degree of certainty that can be achieved, because that can bring cheaper financing. Each of these costs drivers has a different level of sensitivity to overall LCoE. For example, the highest impact on LCoE on nuclear power station projects is the weighted average cost of capital Capital Cost * Cost of Electricity (£/MWhr) (capital + total O&M + decom + fuel costs + financing cost) Power generating potential x Capacity factor Cost of Borrowing Perceived Risk Profile Construcon Time Maximise power: Maximise power/ Reduce Fuel cost: • max power density reliability: • maximise fuel life • max output • high reliability • minimise refuel time • maximise generating life • enable rapid • simplify fuel/waste handling, maintenance / refuel. • use existing infrastructure and capability -20 % -10 % 0 % +10 % +20 % WACC (+/-2%) -18 % 20 % Construcon delay (+ 2 years) 10 % Compatibility with Support Infrastructure and Sites Public Perception Utility Familiarisation / Selection of Technology Global Market Delivery Partnership Potential Capital (+/- 10%) -7 % 6 % Impact on LCOE | | Fig. 1. Factors driving levelised cost of electricity (LCoE). | | Fig. 2. reating certainty to reduce cost. Serial | Major Trends in Energy Policy and Nuclear Power Targeting Innovation at Cost Drivers – How the UK Can Deliver Low Cost, Low Carbon, Commercially Investable Power ı Benjamin Todd
atw Vol. 64 (2019) | Issue 6/7 ı June/July LCOE sensivity assessment WACC (+/-2 %) Construcon delay (+ 2 years) Capital (+/- 10 %) Power Output (+10 %) Ulisaon (+/- 5 %) Op cost (+/- 10 %) Development Budget (-20 % / +20 %) -20% 0% 20% 40% -18 % 20 % -7 % 6 % -9 % -5 % 5 % -4 % 3 % -2 % 2 % | | Fig. 3. LCoE sensitivity assessment. 10 % (WACC), so something that has nothing to do with physical elements of building a nuclear power station (Figure 3). Capital costs for the power station elements are approximately 20 % on the nuclear elements, referred to as the nuclear island; 40 % on civil structures such as foundations, piling and building fabric; and 40 % on the non-nuclear systems and turbine island. While the physical size and power output of this small modular reactorbased power station is much smaller than a large-scale plant (440 MWe v 1200 to 1600 MWe), there are opportunities for economies of volume, as opposed to scale. When considered as a fleet of power stations, with the application of advanced manufacturing technologies, factory modular construction of the whole power plant reduces construction costs, risk and schedule overruns. For example, optimising, simplifying and standardising production processes and logistics; maximising off-site build and assembly, the use of digital design processes and the optimisation of logistics through the supply chain all the way to site. The use of digital technologies in manufacturing, construction and operation are also an important part of the power station concept, such as creating a digital twin at the design stage to support prototyping, to reducing manufacturing time, improving construction sequencing, all the way through to digitally connected facilities so operations are optimised and maintenance periods reduced. The application of digital technologies touch every part of the concept and operation and each can contribute to greater certainty. Other forms of uncertainty could include regulatory approvals, which could have an impact on investor confidence, schedule certainty and development costs, so from the outset this has been built into the design, with an expectation that it matures in line with the regulatory process initially in the UK, but also to international standards also. Modularisation’s impact on certainty The term modularisation is often used as a solution but the view of the consortium is that it’s a solution to a specific set of cost driver challenges, not a design in itself. (Figure 4) Just like digital technologies, modularisation as a principle flows through the whole concept of this power station design including factory manufactured road-transportable modules ready for assembly on site. It then extends to site construction elements from the installation of steel structures, concrete components and the use of standardised interfaces, advanced joining techniques and overall a reduction in the level of activity required on site. In addition, the overall footprint of the plant is small, with a reduced weight and shallower ground preparation required. And the use of | | Fig. 4. Some artist´s views of the power station design. Fact box – the UK SMR in a nutshell pp 400 to 450 MWe three-loop pressurised water reactor pp Standard uranium fuel pp Modular settle containment pp Prefabricated structures pp Compatible with existing infrastructure pp Designed for road transport pp Passive safety systems pp Simplified maintenance and operations access excavated material on site is planned into the design of the power station. Even controlling the weather Another cornerstone of creating certainty and reducing cost is controlling the conditions in which those civil and assembly activities take place, which is where the site assembly facility helps greatly. Analysis of previous nuclear projects puts construction delays, often due to inclement weather, as the second largest contributor to cost overruns. So, the site assembly facility, a large covered arena over the entire site, creates perfect weather 24 hours a day in which to perform all assembly activity. This gives certainty on a baseline plan that feeds in to lower premiums on the cost of borrowing and ultimately lower LCoE. It also creates a far safer and more productive working environment for workers. The reduction in capital and risk resulting in substantially reduced financing costs, opens up a broader customer base including potentially non-state backed utility companies and beyond, for example companies operating large-scale industrial sites. A fleet approach SMRs should not be considered as single power plants, rather they are designed and intended to operate as part of a broader fleet. This fleet deployment order book provides confidence to the supply chain, allowing companies in the sector to make longer term strategic investment in capability and capacity. A key role for Government is to enable this fleet approach through enhanced energy policy. Fleet deployment enables the level of investment required in the civil engineering and construction sectors to affordably realise modular design benefits (Figure 5). Further, the infrastructure required by SMRs in the civil and construction industry are likely to have significant additional benefits SERIAL | MAJOR TRENDS IN ENERGY POLICY AND NUCLEAR POWER 349 Serial | Major Trends in Energy Policy and Nuclear Power Targeting Innovation at Cost Drivers – How the UK Can Deliver Low Cost, Low Carbon, Commercially Investable Power ı Benjamin Todd
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atw - International Journal for Nuclear Power | 06/07.2019

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