DodD wc2992-4 THE WARREN CENT;II - Nuclear Fuel Cycle ...

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Revised 3 August 2015

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THE WARREN CENT;II

South Australia Nuclear Fuel Cycle Royal Commission Level 5, 50 Grenfell Street Adelaide SA 5000

Dear Sir or Madam,

The Warren Centre for Advanced Engineering is on independent organisation founded in 1983 at the University of Sydney. The Warren Centre fosters excellence and innovation in advanced engineering, helping to create wealth and high quality of life in Austral ia by facilitating relationships among industry, government and academia.

The Warren Centre ITWC) has convened on energy committee for over ten years with a task force considering Small Modular Reactor jSMR) technology since 2011 . The TWC SMR task force has reviewed the Royal Commission's Issues Paper No. 3; its Terms of Reference; Questions 3. 1, 3 .2 and 3.3 applying to SMRs; and measures to facil itate and regulate SMR establishment and operation. This task force has focused on energy production units of <250 MWe. Several land-based SMR designs are under development worldwide. 1 A number of these are potentially su itable for electricity production in remote areas and 'end of the line' applications for the east and west coast transmiss ion grids to assist power flow, voltage and frequency control and to reduce grid instability resulting from increased wind and solar renewables. SMRs are also potentially suitable for off-grid requirements such as remote mine sites.

The application of SMRs to South Australia may be of economic and electrical advantage. However, to the best of our knowledge, there is no publicly available study of SMRs at any on-grid or off-grid location, and thus specific, numerically supported comparative data reports of SMRs have not been prepared to answer Question 3. 1 of the Royal Commission's Issues Paper No. 3. While SMR developers may respond to Question 3.2 and 3.3 with valuable information, such data has not been examined independently in relation to hypothetical sites with data comparing SMRs with other primary electrical energy generation sources.

The Warren Centre's activities over the last two years have aimed at enabling such studies to be undertaken. The detail surrounding this process is provided in the form of an enclosed Appendix, as defined by the Royal Commission Submission Guidelines.

Submitted on behalf of The Warren Centre,

Ashley Brinson Executive Director

The WarTen Centre for Advanced Engineering Ltd School of Information Technologies Building J12 University of Sydney NSW 2006 T: (02) 9351 3752 E: [email protected] W: thewarrencentre.org.ou I'Niner.com/tnewarrencentre focebook.com/thewarrencentre ABN 27 132 821 688

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Appendix

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Response to the South Australia Nuclear Fuel Cycle Royal Commission (NFCRC) with

reference to Electricity Generation, Issues Paper No. 3.

This response specifically addresses Small Modular Nuclear Reactors (SMRs).

We propose an enquiry process to determine comparative economic advantage in

locating selected SMRs in on-grid and off-grid locations in South Australia, as part of a

broader study of the application of SMRs elsewhere in Australia.

Introduction

The Commonwealth has jurisdiction and responsibility for nuclear energy, unlike other

forms of energy which are State matters, by virtue of international nuclear treaties.

Commonwealth policy setting is important to guiding the public debate, to any

potential future applications, to legislation, and to regulation of nuclear energy in

Australia. This Royal Commission will be an important contributor to the

Commonwealth's thinking.

SMRs can produce electricity and heat with relatively low volumes of waste.

The fuel cost component per kWh for nuclear power is potentially of the order of 5 to

1 0 percent compared with 50 to 70 percent for fossil fuels. This factor combined with

long fuel recharge intervals and stable fuel pricing is likely to be an attractive feature

of nuclear power, as a single energy source or a component within a mixed energy

portfolio. Long term kWh pricing of nuclear energy may well show greater price

stability than fossil fuel produced energy, an important matter for industry and

households.2 Nevertheless, public perception is not attuned to recent technology

advances and the long term potential of SMRs.

SMRs are of comparatively simple design, factory manufactured under quality

controlled conditions, speedy to install, incorporate passive safety systems, with a life

of up to 60 years, amenable to decommissioning and relocation, small Environmental

Protection Zones (EPZL i.e. minimum site area for safety, with fuel canister removal

and return to supplier for disposal or reprocessing. 3

SMRs are a potential source of commercially viable base load power in the

decentralised SA power context. They have a small footprint, are being designed with

passive safety features, can be designed as air or water cooled, can be located in

ground and be relocated.

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SA has a broad electrical energy mix including a higher proportion of wind

generation than the other eastern grid connected states, and while it has spare

generating capacity, the SA grid is not overly electrically 'strong', nor is its wind

power availability appropriate to diurnal need. 4

SA is a state with attractive established industrial and natural resources with upside

potential for value adding. As such, a reliable source of price stable base load

power, ideally at lower cost than other States, would prove attractive to both

established SA industries in the formulation of their plans and to prospective

newcomers.

Nuclear power generation in SA, in particular SMR based power, is considered to be

a key initiator for laying the foundation for a value adding nuclear industry (Question

3.17). SMR power generation is envisaged as being commercial, and SMRs are of a

size (50 MWe to 250 MWe) which could, perhaps, be privately financed.

Study Procedure Proposed

TWC has scoped a project to assess SMRs and examine the feasibility of the

technology relative to all other existing energy technologies. The project will provide

comparative technical and cost data on SMR sourced power in the context of its

potential suitability for Australian conditions. As part of this project scoping,

discussions were held with potential stakeholders in the project including resource

companies, selected State Governments and utilities. The States covered, in the on-the

ground survey, were Western Australia, South Australia, Victoria, New South Wales

and Queensland. Industrial consumers included principal iron ore and base metal

miners in Western Australia, Queensland, Victoria, and South Australia. (See

Annexure.) A common feature of comment in support of SMRs was the qualification

that, in the absence of Federal Government policy and Community approval, there

seemed little point in pursuing the obviously needed study.

There was acceptance from all major resource companies of the need for

contemporary SMR data for planning purposes. A positive view arising from the Royal

Commission of nuclear's future role in the energy mix is expected to bring financial

support from industry for such a study.

Australia's grid supplied power systems are likely to undergo significant change in

next 30 years from a small number of large dispatchable fossil fuel based,

predominately coastal located generators, to a larger numbers of decentralised, semi

dispatchable dispersed generators comprising some non-dispatchable, other than




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hydroelectricity, renewable sources and gas fired units_ SMRs should be considered for

inclusion in this system, particularly as they are baseload, dispatchable, can follow the

load, have very low emissions, and could support other demand actvities such as

desalination plants at times of low demand.

While SA currently has spare generating capacity, renewables (principally wind) are

constituting an increasing share of the dispatchable energy, themselves being non

dispatchable. In 2013-2014 this amounted to 22 percent of the installed capacity and

31 percent of the dipatchable energy. 5 The SA grid is becoming increasingly less

robust and less attractive for prospective decentralised grid supplied energy intensive

industries.

With reference to the National Electricity Market (NEM), AEMO stated: "Integrating

wind generation into the NEM presents new challenges for power system operation,

particularly in SA where forecast levels of wind generation are highest in comparison

to consumption."6 It is also relevant to note AEMO's revised forecast: "The updated

analysis shows that the peak demand contribution from wind generation has increased

from 8.6 percent to 8.7 percent for summer, and has decreased from 7.9 percent to

6.9 percent for winter."7 The Warren Centre SMR project, which features base load

power in decentralised locations with possible air cooling, could be considered as a

stabilising complement to the current SA electrical energy mix.

A funded study of SMR applicability would be an important component of moving

perception toward broad based understanding of SMRs. The result would be up-to

date, locally relevant information for public review. It would also be of interest to a

number of international nuclear plant manufacturers who have SMRs that are

undergoing prototype testing and progressing to licensing and may also attract financial support.

Australia has a world standard research establishment in ANSTO, which is an

acknowledged global producer of nuclear isotopes for medical use, as well as the

research neutron generating reactor OPAL, providing essential service support to both

industry and academia. ANSTO, together with the re-activated School of Nuclear

Engineering at UNSW, would complement the establishment of locally based nuclear

power technology which is already resulting in a new generation of nuclear engineers.

Given the rapid growth of nuclear power in the Asian region and the interest of

Australian engineering companies in this region, there is an emerging opportunity for

future Australian engineers.

TWC believes there is a need now to address an on-the-ground Australian evaluation

of tailored nuclear power generation for consideration in the future energy mix.


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Proposal

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To address the need for the evaluation described above, TWC proposes that a collaborative study and report (co-funded by government and industry) should be commissioned. This report would independently evaluate alternative electrical energy

sources with a particular focus on the applicability of SMRs as a potential power supply in Australian grid and off-grid remote locations with particular relevance to SA.

Subject to the find ings of the Nuclear Fuel Cycle Royal Commission, forma l

submissions to governments for support and shared fund ing w ith industry for such an investigation and report would be initiated by TWC.

Today's remote isolated uti lities are powered by gas and diesel systems. Power price stability arising from gas sourced power and expensive diesel fuels sources continues to yield adverse impacts on Australian industries and export competitiveness. These

isolated systems are ideally suited to the inclusion of one or more SMR units into the existing energy supply mix, either as a ir cooled or water cooled units, depending on

location. While nuclear energy has a high initial capital cost compared with gas and d iesel, asset life is up to 60 years, and operational costs are low, resulting in stable power prices with competitive levelised cost of energy.8

Possible study sites and study methodology

The program will first review the potential study sites indicated below, plus others that may be identified, to establish the operating requirements for remote area applications

and the broad range of industrial processes that need to be considered. Harsh environmental conditions requiring a ir cooling and transport access wi ll be key physical factors.

There are currently under review in SA expansions of a number of major resource processing projects. One of these has a requirement for significant quantities of

desalinated water w hich is a potential SMR application at a coastal installation . The Royal Commission provides an opportunity to examine critically the application of one or more SMRs located in selected areas of SA. It is worthwhile to study the positive effect of this technology on catalysing local economies, resource projects, primary land and sea production and the initiation and support of SA technical and service

industries. Project sites to be considered include:

•!• Mixed development site, serving agriculture and fish processing value adding, resource development, port operations, desalination and transport, air and/or water cooled and grid connected.

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•!• Hybrid site/ end-of-line to be integrated w ith current w ind and possible solar pro jects/ ai r cooled and grid connected_

•!• Possible decommissioned fossil fuel plants to take advantage of the existing infrastructure such as switch yards and cool ing faci lities_

Proiect methodology

Working groups w ill be established in three areas: technology/ application and regulation_

• The Technology group w ill evaluate the emerging SMR technologies and their potential for commercial application/ with particular reference to licensing/ commerc ial availability/ supplier pedigree/ safety/ fuel handling/ waste disposal/ transport of reactors/ emergency shut-down/ maintenance/ and tra ining requ irements_ Th is work will be centred predominantly in the USA/ employing specialist engineers from a

leading engineering firm such as WorleyParsons, a firm w ith an established nuclear power track record_ (Question 3 _ 6.)

• The Application group, likewise supported by world leading engineers, will study the real life application of the selected SMRs to Austra lian conditions taking into account

availability of finance for th is class of reactor, estimates of cap ital and leasing expenses, operating costs/ power costs with forecast escalation and insta llation lead times. The capital and operating costs will be projected for SMR sourced power over a 20 to 60 year life span to compare these with conventional technologies. (Question 3. 15.)

• The Regulation group will examine the options for a regu latory framework evaluating safety and environmental expectations with particu lar relevance to new emerging nuclear energy nations. (Question 3.1 0.)

The pro ject will proceed in three phases: data gathering, scenario modelling/testing

and reporting.

The final phase wil l report the outcome to government and stakeholders. A web site will be established to facilitate this process and a number of reports published . The results w ill be presented through seminars and technical sessions and media connections, established at project inception.

Study Team

The project has been provisionally nominated by TWC and w ill be supervised by a steering committee cha ired by TWC appointees.

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Previous discussions have taken place with Australia's leading nuclear technologists with support from the engineering firm WorleyParsons_ These insights will assist in the formulation of a high calibre Advisory Panel that will be integral to the project structure.

Project management services will be provided by WorleyParsons, an Australian listed engineering and project services company and an established international provider of nuclear engineering services. The project will be supported with world-class advice on research, regulatory and safety regimes and innovation in nuclear technology.

References

Ref 1 World Nuclear News 2/07/2015 'Nu Scale licensing schedule outlined'. Ref 2 Australian Energy Technology Assessment, 2012. Ref 3 AEMO SA Electricity Report, August 2014. Ref 4 Small Nuclear Power Reactors at <http://www.world-nuclear.org/info/NuclearFuei-Cycle/Power-Reactors/Smaii-Nuclear-Power-Reactors/>. Ref 5 US Department of Energy, Office of Nuclear Energy at <http://www.energy.gov/ne/nuclear-reactor-technologies/small-modular-nuclearreactors>. Ref 6 Gordon Waddington, "Small Modular Reactors (SMR) Feasibility Study", National Nuclear Laboratory (UK), December 2014, at <www.nnl.co.uk/media/1627 /smr-feasibility-study-december-20 14.pdf> .

Annexure

In Nov 2011 visits were made to Brisbane for discussions with Rio Tinto and Xstrata (now Glencore). These were followed by visits in 2012 to WA, SA, Vic and NSW in 2012. Discussions were held with BHP Billiton, Fortescue Metals Group, CITIC Pacific Mining Management, Roy Hill Project, Minerals & Metals Group, Government of Western Australia, Horizon Energy and Origin Energy regarding the potential for off grid modular nuclear reactors.

Nuclear Fuel Cycle Royal Commission Issues Paper No.3 questions

3.1 Are there suitable areas in South Australia for the establishment of a nuclear reactor for generating electricity? What is the basis for that assessment?

3.2 Are there commercial reactor technologies (or emerging technologies which may be commercially available in the next two decades) that can be installed and connected to the NEM? If so, what are those technologies, and what are the




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characteristics that make them technically suitable? What are the characteristics of the

NEM that determine the suitability of a reactor for connection?

3.3 Are there commercial reactor technologies (or emerging technologies which may

be commercially available in the next two decades) that can be installed and

connected in an off-grid setting? If so, what are those technologies, and what are the

characteristics that make them technically suitable? What are the characteristics of any

particular off-grid setting that determine the suitability of a reactor for connection?

1 Ref 1. 2 Ref 2. 3 Ref 4. 4 Ref 3. 5 Ref 3, Table 5, p 21. 6 Ref 3, p 25. 7 Ref3, p27. 8 Ref 2.


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