1

SET-Plan Financing WorkshopBrussels21 June 2011

ESNIIThe European Sustainable Nuclear Industrial Initiative

Financing needs and bottlenecks

Peter BaetenVice-Chairman of the ESNII Task Force

2

Reminder: about ESNII

• Organised under the umbrella of SNETP, the Sustainable Nuclear Energy technology Platform– A task force with 20 members (10 industry, 10 research)– Represents one of the 3 pillars of SNETP’s vision

• An EII launched at the Belgian SET-Plan Conference in November 2010

3

2040: Target for the deployment of Gen-IV Fast Neutron Reactors with Closed Fuel Cycle

The ESNII Roadmap

4

The ESNII Roadmap• Preliminary design phases: partially funded• Next steps: strong need for PPPs (MS - EU - Private funding)

French actors are gettingOrganised (650M€ national loan)

Astrid is open to EU and International cooperation

- Belgian programmefor Myrrha, 60M€ / 5years

- East European support to Allegro

5

ESNII-1: SFRFinancing needs and bottlenecks

6

ESNII-1: the ASTRID prototype• ASTRID (Advanced Sodium Technological Reactor for

Industrial Demonstration) is a prototype sodium cooled fast neutron reactor (SFR)

– SFR is the reference technology in ESNII– Start of operation 2022-2023– Coupled to the grid with 600 MW electrical output

• Financing vehicle: Private-Public Partnership– Long term deployment (2040) and overall technology risks

imply the need for strong public involvement– Industry is however willing to participate (up to 20%) -- and

has already committed resources

• Total cost estimated at 5000 M€– 1 G€ for innovation & component development– 4 G€ for design & construction 2010-2022

7

ESNII-1: the ASTRID prototype• Financing plan

– 1000 M€ (20%) national funding (including research institutes)– 1000 M€ (20%) private funding (industry)– 1385 M€ (28%) EU incentives and grants– 1000 M€ (20%) EIB or Euratom loan– 615 M€ (12%) tax exemption

Equity/Debt ratio of 4

• Revenues: income through power production– 600 MWe, 40-60 year life time, availability factor that should

reach 80% after a progressive evaluation phase– estimated to cover the reimbursement of a loan

corresponding to 20% of the investment, and to cover operation charges and experimental costs

• Risk: availability factor in the first years of operation

8

ESNII-1: the ASTRID prototype• Barriers and needs

– Commercial deployment of future SFR not before 2040– Ambitious goals like Generation IV safety and economy

criteria are associated to overall risks that the industry aloneis not ready to take

Strong need for public incentives, such as:– Direct financial contribution from the SET-Plan– Loan-guarantee and loan criteria adaptation to make such

project eligible if not the case, adaptation of loan condition to specificities of a prototype

– Provision for an adapted tax exemption scheme• E.g. enabling flexible and efficient industry-like management of

procurements

9

ESNII-2: LFRFinancing needs and bottlenecks

10

ESNII-2: MYRRHA• MYRRHA (Multipurpose hYbrid Research Reactor for High-

Tech Applications), an innovative pan-European large research infrastructure

– A hybrid system combining a high energy proton linear accelerator and a lead-alloy cooled fast spectrum irradiation facility

– Unique large facility in the world for demonstration of the accelerator driven system (ADS) R&D in spent fuel partitioning & transmutation

– The only fast spectrum irradiation facility in the EU– Will serve as the Experimental Technology Pilot Plant (ETPP) for LFR– Planned start of operation: 2023

• Financing vehicle: European Research Infrastructure Consortium (ERIC) or ERIC-like– 80-95% of the financing from consortium members (MS & non-

MS, EU incentives and grants)– 5-20% through a loan from EIB, (preferably of RSFF type)

• Total cost estimated at 960 M€2009

11

ESNII-2: MYRRHA• Financing plan

– 40%: Belgium national funding– 15%: European countries national funding– 5%: non-European countries national funding– 30-35%: EU Incentives and grants– 5-20%: EIB loan (RSFF type foreseen for ESFRI-projects)

Equity/Debt ratio of 4

• Revenues: medical radioisotopes, neutron doped silicon– 30 year operation life time– Forecasted commercial revenues: 30-40 M€/year

(exceeding loan reimbursement)•Assumptions for EIB loan reimbursement: 25 years, 5% interest rate

• Risks are low to moderate1. Facility not meeting expected production performance2. Price drop due to excess of worldwide production capacity3. Substitution technology

12

ESNII-2: MYRRHA• Barriers and needs

– Equity: substantial financing contribution from SET-Plan budget will trigger participation of other MS

– Debt: EIB RSFF-type loan very much needed• Inclusive of EIB loan guarantee by EC to alleviate loan guarantee related

costs to be otherwise assumed by host country / other participating MS

• Strong need for public incentives– First-of-a-kind, unique and highly innovative, with some

technological risks– Research facility, taken up in ESFRI, conceived as the first step

for the development of LFR, far from market deploymentHence needs to be financed mainly by public sources

• Belgium has recognized the above elements and provides its own public financial support for up to 40%

• Rest (60%) to be financed through international consortium & loan

– European consortium involves participation at EU and country level only. Therefore, only national & EU funding (such as EU MFF 2014-2020/24) can be considered for financing MYRRHA

13

ESNII-2: ALFRED• ALFRED (Advanced Lead Fast Reactor Demonstrator), a

critical molten-lead cooled fast neutron reactor (LFR)– Projected power of around 120 MWe– A crucial milestone on the path to demonstrate safe, efficient and

economically viable behaviour of the Gen IV Lead Fast Reactor (LFR)– Stems from EU funded projects focused on conceptual development– Start of operation ~2025– Romania is candidate to host

• Financing vehicle: European Consortium– To be specified in near future, if possible an ERIC may be envisaged;

other forms may result from evolution of Euratom financing rules– Open to international participation– Public and private financing structure: mix between “Corporate

finance” (endowments from members) &“Project finance” (EIB loan)• 80-90% of the financing from consortium members • 10-20% through a loan from EIB (to be confirmed)

• Total cost estimated at 1000 M€2009

14

ESNII-2: ALFRED• Financing plan (to be confirmed)

– 50%: European countries national funding– 5%: non-European countries (national or private) funding– 30-35%: EU Incentives and grants/ Cohesion funds– 10-20%: EIB loan (RSFF type)

Equity/Debt ratio of 4 (tbc)

• Revenues: electricity production– 30 year operation life time, availability factor > 50%– Forecasted commercial revenues: 30-40 M€/year (exceeding

loan reimbursement

• Risk: availability factor in the first years of operation

15

ESNII-2: ALFRED• Barriers and needs

– Equity: substantial financing contribution from SET-Plan budget will trigger participation of other MS

– Debt: EIB RSFF-type loan very much needed• Inclusive of EIB loan guarantee by EC to alleviate loan guarantee related

costs to be otherwise assumed by host country / other participating MS

• Strong need for public incentives– First-of-a-kind, unique and highly innovative, with some

technological risks– Follows MYRRHA as a milestone for the development of LFR,

still far from market deploymentHence needs to be financed mainly by public sources

16

ESNII-3: GFRFinancing needs and bottlenecks

17

ESNII-3: ALLEGRO• ALLEGRO is the first step towards the development of Gen

IV gas-cooled fast neutron reactors (GFR)– To demonstrate the feasibility of GFR technology at high operating

temperature and qualification of choices selected for the prototype– Low power (~75 MW) critical Helium cooled fast neutron reactor– Pre-conceptual design shared among European partners via EU FP

programmes– MOU signed: Hungary, Slovak Republic, Czech Republic + Agreement

with France

• Financing vehicle: Joint Undertaking or ERIC– Could be applied for approximately 14-15% of the financial support – An EGTC framework could also be taken into consideration

• Total cost estimated at 900 M€ 2009– 300 M€ for technological development & design– 500 M€ for licensing and construction– 100 M€ for siting and owners costs (before operations)

18

ESNII-3: ALLEGRO• Financing plan (to be confirmed)

– 14%: Tax exemptions– 35%: EU Incentives and grants incl. Cohesion Policy Funds

(ALLEGRO will be built in New Member State)– 8%: private investors– 6% EIB Loan– 32% National public research investors– 5% Hosting country public investments

• Revenues: electricity production– 25+ year operation life time, availability factor > 80%

• Barriers and needs– Equity: substantial financing contribution from SET-Plan budget

will trigger participation of other MS

Conclusions• Research Infrastructure/ETPP (MYRRHA), Demo (ALFRED,

ALLEGRO), Proto (ASTRID) aim at a commercial sustainable energy development

• Appropriate legal structure, e.g. ERIC

• Public investment to succeed– ASTRID (650 M€), MYRRHA (60 M€) by host country– EU grants to trigger participation– RSFF loan guaranteed by EU– Tax exemption– Cohesion funds (ALFRED, ALLEGRO)

19

Thank you for your attention

For more information on SNETP:www.SNETP.eu

Contact: SNETP Secretariatsecretariat@snetp.eu

21

Backup slides

22

The ESNII development

• Spring 2010: signature of Memorandum of Understanding by 13 members

• 13 Sept 2010: 1st meeting of the “ESNII Team”– Forum for dialogue between delegation of ESNII Task

Force and European & national stakeholders (EC, EIB, Euratom STC, Member States Ministries…)

– Public support by a number of Member States (BE, CZ, FI, FR, IT, SK, UK…)

• October 2010: publication of the Concept Paper

23

• 15-16 November 2010: Official launch of ESNIIat SET-Plan Conference (Brussels)

– ESNII Implementation Plan published– Launch: Joint Declaration– Speeches by Rorive, Camarcat, Van Walle– Also launch of EERA Nuclear Materials Joint

Programme– Press release

The ESNII development

24

The ESNII development

• 9 Feb 2011: at its 11th meeting, the ESNII Task Force welcomes 7 new members– Industry: Alstom (FR), Iberdrola (ES), Tecnatom (ES)– R&D: JRC (EU), AEKI (HU), KIT (DE), KTH (SE)

• 10-11 March 2011: Seminar of ‘ADRIANA’ on research infrastructures (ESNII-4)

• 18 March 2011: 2nd meeting of the “ESNII Team”

25

ESNII, SNETPand the SET-Plan

ESNII Task Force

ConsortiumConsortia

Consortia

ESNII Team

SET-Plan Steering Group

Implement the MOU

Send delegates,propose decisions for endorsement

Report

SNETP Executive Committee

Report

SNETP Governing Board

Report

SNETP

SET-Plan

26

Reminder: SNETP fromstrategy to implementation• 2007-2010: SNETP published its strategy documents

Strategic Research Agenda

[ June 2009 ]

Deployment Strategy

[ May 2010 ]

Vision Report[ Sept 2007 ]

Education & Training

[ Dec 2010 ]

All documents are available for download on www.snetp.euand prints upon request (secretariat@snetp.eu)