Fatal Attractions: Risk in the Nuclear Universe

Transcription

1 Fatal Attractions: Risk in the Nuclear Universe Presented by Ganpat Mani Vice President, Marketing and Sales Presented at WNFM 29th Annual Meeting and International Conference on Nuclear Energy Berlin, Germany June 2-4, 2002

2 The Nuclear Fuel Universe as Viewed by Converters Utilities Conversion Enrichers U Producers

3 The Nuclear Universe as Viewed by a Casual Observer Converters Secondary Sources Fabricators Utilities U Producers Enrichers

4 Get your facts first, and then you can distort them as much as you please. Mark Twain

5 Planet Conversion risks created by other heavenly bodies in our universe are: Utilities demand for fuel - Up or stagnant? Enrichers - When, and where, will new capacity be built? Secondary Supplies - Too much or too little? Will the economic pull and tug of other orbiting bodies allow converters to operate in a sustainable fashion?

6 Risks relating to Planet Conversion as perceived by the star in our universe, the Utilities: (More accurately - What Utilities Should be thinking about concerning Conversion ) Enrichers - When, and where, will new capacity be built? Secondary Supplies - Too much or too little? Planet Conversion is shrinking Significant quantities of secondary supplies controlled by primary producers Predictable costs - critical in a deregulated market

7 Utilities Demand for Fuel - Up or Stagnant?

8 World SWU Requirements by Region WNA Reference Scenario 50 Million SWU SWU Demand Eastern Europe Far East Western Europe Other 10 North America Sources: World Nuclear Association, 2001

9 World SWU Supply 50 Million SWU 40 SWU Demand Primary Sources UF 6 Demand Equiv. 10 Secondary Sources Source: ConverDyn

10 Enrichment UF 6 Feed Requirement 60 Million kgu as UF 6 UF6 Demand Source: ConverDyn

11 Enrichment UF 6 Feed Supply Primaries at Current Rates Million kgu as UF 6 UF 6 Demand Tenex ConverDyn Comurhex Cameco Others 10 BNFL Secondary Sources Source: ConverDyn

12 Enrichment UF 6 Feed Supply Primaries Expanding to Sustainable Levels by Million kgu as UF 6 50 UF 6 Demand Tenex Others 40 ConverDyn 30 Comurhex 20 Cameco 10 BNFL 0 Secondary Sources Source: ConverDyn

13 Planet Conversion s Risk Issue: Utilities demand for fuel - Up Current most-likely demand scenario supports a healthy future for converters. If demand increases, could facilities expand capacity? Star Utilities Risk Issue: Utilities demand for fuel - Up As demand increases, converters unlikely to expand capacity without sustained price incentive

14 Enrichers - When, and where, will new capacity be built?

15 World SWU Supply/Demand Primary enrichers at current rates 50 Million SWU SWU Demand Tenex USEC Other New Economic Capacity Required 20 Urenco Eurodif 10 Secondary Sources Sources: World Nuclear Association, ConverDyn

16 Conversion Imbalance with Planned Enrichment Expansion in Europe Feed Imbalance to Enrichers 30 M kgu as UF NA NA WE WE NA NA WE WE UF 6 Feed Available UF 6 Needed by Enrichers NA - North America WE - Western Europe Sources: ConverDyn Physical Transport Comes of Age

17 Planet Conversion s Risk Issue: Enrichers - When, and where, will new capacity be built? Feed imbalance will give NA conversion more access to Europe Transportation issues» TS-R-1 implementation» increased cost - cylinder shipping requirements may double Star Utilities Risk Issue: Enrichers - When, and where, will new capacity be built? TS-R-1 implementation Longer lead times required for trans-atlantic shipping

18 Secondary Supplies - Too much or too little?

19 Secondary Sources Russian HEU downblending with aggressive nuclear growth plans will Russia be willing to sell this national asset? would require changes in international policies and laws Tails re-enrichment in Russia as Russia moves closer to a free market, how long will this be economically attractive? will Western tails of suitable origin be available?

20 Secondary Sources (cont.) U.S. HEU made available how long before it would actually enter the market? MOX usage will usage increase, and if so, is there enough production capacity? economics vs. uranium only Inventory made available this is not a long term supply source.

21 Star Utilities Risk Issue: Significant quantities of secondary supplies controlled by primary producers Market has appearance of multiple supply sources but key primaries control much of the secondary supply Some suppliers are also becoming competitors

22 Planet Conversion is Shrinking

23 BNFL 6500 mtpy South Africa AEC 1400 mtpy Sequoyah Fuels 10,500 mtpy

24 Predictable Costs - Critical in a Deregulated Market

25 Star Utilities Risk Issue: Predictable costs - critical in a deregulated market Utilities looking to fill spot or near-term requirements may find low cost conversion fully booked Demand spikes from aligned reactor reloads may push prices up

26 How will the economic pull and tug on U 3 O 8 supplies affect converters?

27 Enrichment UF 6 Feed Supply Million kgu as UF 6 UF 6 Demand Primary Sources U 3 O 8 Demand Equiv Secondary Sources Sources: World Nuclear Association, ConverDyn

28 Conversion U 3 O 8 Feed Supply Million lbs U 3 O 8 U 3 O 8 Demand 120 Higher Cost Production? Inventories? Scheduled Primary Production** ** Scheduled Production reduced for CANDU and Magnox reactors Source: ConverDyn

29 Conclusions

30 1 Hink, you DO need primary conversion Reduction in primary conversion capacity has affected supply: diversity flexibility assurance Control of HEU feed by primary converters is this truly secondary supply?

31 2 Primary conversion will be there for ALL OF YOU Converters will produce at sustainable rates for the right incentives BUT you have to plan ahead AND work closely with converters

32 If we don t change our direction, we re likely to end up where we re headed. Chinese proverb