Bob Coward Speaks to Latest Challenges Affecting New Nuclear Plant Development

July 2010

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Alexandria, VA. - In June 2010, Bob Coward, a Principal Officer of MPR Associates, gave a speech titled Competitiveness, Economic and Intangibles of New Nuclear Power Plants- An Implementation Perspective to a conference sponsored by the US Nuclear Infrastructure Council where he highlighted the rising total cost of new nuclear units to be the greatest challenge facing the new nuclear industry. According to Coward’s speech, the nuclear industry has made considerable progress in the reliability of new nuclear units over the past five years. However, utilities and merchant power companies face a growing struggle in how to fund the increasing total cost of large new nuclear units. “The sheer size of the investment is turning in to the biggest challenge, not the cost per kilowatt,” said Coward. With the total cost to build a new nuclear unit estimated between 6 to 8 billion dollars, the total cost is rivaling the market capitalization of several utilities and merchant power companies in the US, essentially turning new nuclear projects into “bet the company” projects. On top of the soaring total cost of new units, cash flow issues and potential diluted earning incurred during construction are presenting further barriers to development of new nuclear units. As Coward stated in his speech, “A company might have to spend as much as 30% of the entire project costs before an NRC license is secured, and those up-front expenditures are especially difficult to finance.” Alternatively, the rising cost of large new nuclear units has increased interest in investing in Small Modular Reactors (SMRs). SMRs can be constructed and brought online faster with a reduced total cost compared to large new nuclear units providing more flexibility in approaching new nuclear implementation. Coward’s speech describes a “Societal Approach” to addressing cost related issues associated with new nuclear unit development. Coward’s “Societal Approach” calls for increased effort to promote energy company collaboration on new unit projects, consideration of additional incentives to ease cash flow and diluted earnings issues even before obtaining government licenses, and for an industry wide review of total cost drivers of new units and proposed ways to reduce total cost of new nuclear implementation. Coward is scheduled to present a speech on the status of the new nuclear renaissance to the 2010 Women in Nuclear Conference in Seattle, Washington at the Westin Hotel on July 18th, 2010.

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