 So, everybody hear me? Okay, I'll go over to my second presentation on the cost structure of nuclear power and comparison with the cost of other energy sources. So, first I'll tell something about cost structure of power generation in general and then focus on the nuclear cost structure. Then I'll compare these nuclear power costs with other energy sources and discuss some factors influencing competitiveness. Then I'll go into the various uncertainties on the cost of nuclear energy. Then I'll look to the market, the various market conditions and how they would influence cost. And then I'll address the hidden cost and what that is. So, first about the power generation cost structure. So, some basics about economic performance. I will discuss here two main economic cost parameters. First, the absolute investment cost. It is in billions or millions of euros or dollars or other currency. So, this is a measure for the financial risk. It's a figure in absolute figure of money. And then we have the cost per kilowatt hour generated that we call at the levelized cost of electricity or life cycle cost. They are averaged over the plant lifetime. So, absolute cost are consisting of direct cost. That's really the engineering and the various components of what do they cost and what do all these people cost putting the things together. And there's the indirect cost that they're including the financing, the interest, paying interest. You have to license the plant. So, that's more the paperwork. Life cycle cost will depend on, among others, and most important, the absolute cost, of course, and the power level and the absolute cost. Of course, if you go to small modular reactors, for instance, it will be lower because such a small plant is, of course, cheaper than a large plant. But the power level is higher. It depends also on the power level because you just get less kilowatt hours from small plants than from a large plant. That's what we call economy of scale. So, these effects are contrary to each other. The one working in favor of the smaller plants and the other one making in favor of the larger plants. So, for power generation technologies, at the end, I've just made some illustrative electricity cost distributions. So, this is about a kilowatt hour cost. So, if you look at these installations that don't use fuel, but just have some installation, like the hydro dams, but also wind farms or PV panels, that they have a large amount of capital costs, that's the blue area, and they have a certain amount of operation and maintenance costs that people are to clean these solar panels or repair the windmill or do something in the hydro plant. So, this is an illustrative, way to put it, but it's generally the idea. If you go to the fossil plant, this is a relatively simple installation. So, the capital cost share is limited. There's a lot to do in this plant. Operation and maintenance is usually a lot of work. But the largest bill is the fuel bill, especially with gas plants. Yeah, gas is kind of usually in the most parts of the world, more expensive. So, for the kilowatt hour cost, the largest share is made up of fuel. So, that's how it generally looks like with fossil. The pie on the right side is for the nuclear plant. Nuclear plants have high capital costs. It's a complex installation, leading to comply with high quality standards. So, capital costs are the largest share. Then, operation and maintenance and fuel is definitely a smaller share. So, here you also have then your problem if you've come with the reactor types that is very fuel efficient, they're very nice. They're very good, of course, but your capital costs are still the largest share of the cost. And there's an extra little component, what's usually indicated explicitly, that's the decommissioning cost. And this is very small, not because it's so cheap to decommissioning a nuclear plant, but because it's far in the future, and we can save money and, well, make this money go to work by putting it into investments to increase itself. So, at the end of the plant lifetime, we'll have collected enough money to decommission the plant, yes. Well, this is just illustrative. So, this is the radioactive waste management during the decommissioning phase. So, it's tearing down the plant and then also taking care of the waste. But the operational waste, that's more in the orange part of operation and maintenance. But this is just to indicate the general difference between the three types of electricity generation and their cost distribution. So, there is a real example. Yes, go back, yes. Yeah, this is just, well, of course, you have to put decommissioning everywhere. And decommissioning of, especially PV panels with all their highly toxic chemical components, there's not that much known about it yet. What happened at the moment, well, most of these solar panels are still on the roof. They're still, I don't know, operation or they're not an operation anymore, but yeah, not properly decommissioned yet. What I've also heard of is that, yeah, these solar panels simply have been stored somewhere, not really taken apart, but stored somewhere. Yeah, that's also, of course, not properly decommissioned. It doesn't cost anything. So, the real cost of decommissioning solar panels in the sense of taking it apart and well, processing all these chemicals properly, it still has to show. We don't know yet, therefore, it doesn't show here. Okay, so this is our new cost example from the UK, comparing when they had to decide, well, would we go for a new nuclear program or not? They had to share of the cost components of capital, operational maintenance, and the fuel and the back end. And then we see the same picture, compared to gas, this is the combined cycle gas turbine. The capital of the gas plant is one-third of the nuclear plant, but the fuel is like time-saving. So that's what made the nuclear, well, what helped to make the nuclear choice for the UK. That coming with this high capital share in nuclear energy cost. The construction time takes a long time. The average time when you look at the past, it was seven years, it takes into account lengthy procedures like licensing, contracting, financing, life-side preparation. And because this is such high capital cost, you also have to take into account long payback periods. If you go into normal industry, and if you have a chemical industry with a plant producing hydrogen, for instance, they will design such a plant for an operation of 10 years. And depreciation will be even like five years or maybe shorter, or maybe longer, but not longer than the 10 years, of course, because then the plant doesn't operate anymore. So these time frames are only shorter. Nuclear as also for the operation, I'm not even talking about taking care for the long-term waste or something, but during operation, it has what you can see here around the time axis. It's a hundred year project. If you look here at the beginning, you have an industrial, oh, an industrial life cycle cash flow for the nuclear power plant. It starts with the design and construction with a huge cost cash flow. Then there comes the periods where there are revenues for the electricity sales, that the actual revenues will vary with the market conditions and customer makeup, but here it's assumed it's average over 40 years. And then there will be decommissioning periods. And this figure, it's assumed that the plant will be put into safe storage for another 40 years, and then really be decommissioned. In the meantime, there has been discussion on that. Is this the best way or should we decommission the plant right after? Right after taking it out of service, at the advantage of taking it to safe storage is that of course, radiation levels can go down. And when you decommission only after 40 years, then yeah, it's easier because radiation levels are not that high anymore, but yep, the people who built the plant, who operated the plant, they all retired, died, are not there anymore. So you have to set up a completely new project with new people characterizing this plant again. What's in there? Analyzing old documents maybe. But at the end, it was, well in many cases, it was decided no, we'd go to decommissioning right after, or at least in the period of 10 years after the decommission of the taking out of the service of the plant. So then you have in the middle this little spike. That means a major refurbishment, like if you have to replace a steam generator. Of course, it's also expensive, so you have to reserve some costs for that. But that's generally also done to ensure the quality of the plant for serving out the plant lifetime, or even go for an extended lifetime. So here it says only 40 years, but there are many plants that have applied for and got the license for an additional 20 years. And so what you see then, that this green area is suddenly 20 years longer. So then the nuclear plant really becomes a chicken with gold mags, because usually it's already depreciated. So the capital costs are taken care of, and it's just earning money, provided you're allowed to operate the plant, there's no new government with a phase out policy, provided there's no cheap competitor with shale gas that's suddenly dropping the kilowatt hour prices. And there are some conditions, but looking into the past, it's many areas of the world that worked. So because again of the high capital costs share, these costs are sensitive to interest rates and plant construction time. If you look at the weighted average cost of capital, that's calculated for an interest rate of 5% and 10%. 5% is on the left. And what we see this purple bar is the overnight cost, that's really the engineering cost, but then on top of this, there comes the light blue bar, which is the interest during construction for the first five years. If you then have some kind of setbacks that makes your construction taking longer, one year, the yellow bars is added to this. If you then have some more problems and you have four years more, then the red bar comes to this. And presuming that you would not have 5%, but 10% annual interest rates, yeah, then your capital cost could be increasing a lot. And then the left bar becomes the right bar, could increase by 28 to 75%. So how to reduce then the interest during construction? Of course, it's kind of obvious, of course, do everything to shorten the construction period. Of course, if you start a project and you have a certain construction schedule, then you're not going to shorten that one because it's also to maintain the quality standard, but you just try to prevent any construction overrides. Then you obtain the financial resources at the lowest cost. And usually, yeah, you just don't go to a bank and say, okay, can I borrow some money I want to build this nuclear plant? But this is a highly government-involved business. And because it's often overcontroversial nature, it's also often plays a role in the political scene and that parliament decisions have to be taken on whether to go for construction of a plant or not. And of course, also obvious change the debt in equity shares, which means if you can acquire more money of your own as a company, that's the equity, then you need to borrow less and therefore you have less interest to pay. So focusing a little bit more on the interest during construction. We have an example here with the interest rate of 10% per year and a seven year construction period. Then you have a total operation of overnight cost of 5,750 million. Then this gives rise to an interest during construction of 2,780 million. So about to one-third comes on top of this. And if you do not have 10% but 9%, 1% reduction, then it will save you 326 million dollars. If you could reduce the construction period by one year, then you could save 390 million. So this gives just an idea of how much money is at stake and what shares are involved for the overnight cost and the indirect cost that comes on top of it. So now we are comparing the cost of nuclear power with other energy sources and discussing a bit the factors influencing competitiveness. So first looking at the capital cost, these are these cost in billions here in US dollars. This is a chart of 2010, but I'm not gonna change it that much. So what we see here, of course, this is not per kilowatt hour, per kilowatt installed or so. This is also, well, big plants are of course a more expensive than smaller plants. So this large yellow bar for the nuclear, it also gives you more kilowatts for your money because it's just a bigger plant. Then we have the coal on the bottom, which is of course a more simple technology than the nuclear. However, I must say really modern coal stations, they also have a huge chemical factory behind their combustion chambers, taking out the cleaning, the flue gases and everything. So it's not that simple anymore. If you would do on top of that carbon capture and sequestration, then you get the brown bar. Then of course there are more costs and let's see you to a mission. I must say at the moment, this is hardly applied anywhere in the world. There are some demonstration projects, but that's it. And while the gas plants, that's the light blue one, that's it's a very simple plant effect. If you don't have that much money and don't care about fuel costs, then go for gas. Hydro, yeah, it all matters about size. There are big dams that are of course very expensive and they're very small running rivers that they also took the effort to put a few hundred kilowatts hydro plant in it. Yeah, windmill of course is not very expensive because it's just one mill. If you have a wind farm of 25 megawatts, that's what we see here. Same thing with biomass. The PV it's even more extreme. Like look at a plant of only one megawatt and the concentrated solar power that's on the top, yeah, that's more expensive installation. Then if we go to the levelized cost of electricity and we have here a figure of dollars of 2013 per megawatt hour at a 70% discount rate, what that is, I'll explain it wrong but it's an assumption here. Also compared for all the various fuels and we see large parts, large parts of uncertainty of various regions. There's regions that have a lot of legislation making plants more expensive and there are regions that are just either less developed or more remote and therefore more relaxed either licensing procedures. As we see here is that the renewable sources that they are on top of them, they have large bars but also are kind of more expensive and nuclear and coal are on the bottom and they're the most cost efficient electricity sources. Hydro can be very cheap but can also be very expensive. So it goes either way. In fact, hydro is the cheap champion but it can also be more expensive. Biomash is generally more expensive but yeah, there are some regions in the world that you don't have much choice so therefore it's still here. So this is all, I must warn with this, this is average all over the world and in fact what is more important is to show this well for the old particular countries in fact, when we're working with countries on their energy demands mapping that's exactly what we do, okay, in your case these and these sources are so and so expensive and therefore an optimization calculation comes out well then it's a specific fuel mix could arise that for another country would be totally different. So now about this discount rate, what is that? It is determining the present value of future costs that's what we call discount rate because if you calculate the cost by adding up the cost of the components and the cost of the man powered to put it all together it's called overnight and it does not take into account of the time which the cost occur. It ignores the effect of the cost escalation and the time value of money and what is that money available today is worth more than in the future due to the capacity of money to earn money by interest or by investment. So money in the future is seen as cheaper. Here we have a comparison for 3% and a 7% discount rate for the various fuels. If we go to nuclear it's quite on the left it's the yellow bar and yeah, if you have a 7% discount rate that means it's just more expensive. Yeah, then it's pretty sensitive to that. Cold less because the installation is cheaper. Gas is not even in here. And yeah, the renewables because they also have pretty expensive installation capital costs. They're also sensitive to the discount rate. Then of course, if by some way before the competing sources like in this case fossil could be made more expensive of course, there's good for nuclear. And in this case, it's if you would add is just a different fuel price assumption if you have a high, medium and low price and of course, the fuel is very cheap for fossils. Yeah, then the nuclear is outpriced then you'd better take if this is the only criterion the fossil fire plant. What you see here is we have the normal coal and we have the coal as coal so carbon capture and sequestration. That's the middle red bar. And of course, that's more expensive. And here it's illustrated what would happen if the fossil fuel prices would rise. And yeah, of course, there will be one point in time that the nuclear plant will be more cost competitive than the fossil power plant. But this is not always the case. If you look into the past in the developed world that developed these nuclear plants and then there was this effect of ever rising fossil fuel prices and therefore, first governments and then utilities pushing for, okay, now we're going for the nuclear plant because the longer run this will be cheaper expecting that fossil fuel prices will be going up and up and up all again, all again. But in reality, yeah, they also went down some time and well, the famous, the famous example of course is the U.S. the Stashill gas in the U.S. That made gas prices really go down and then yeah, nuclear wasn't that competitive anymore. So it's always depends whenever you're planning for nuclear plant, what is at the moment the prices for the various competitive fuels and what's the expectation, what's the estimate, what's the forecast, how these will develop. And you do that the best you can and of course, if there's something unexpected that you can't, I can't predict then it's all just good or bad luck. So there's a fossil fuel prices but there's also, well, you can call it artificial so fossil fuel prices say if there's the Paris agreement with really a CO2 price on it, then you can also add this to the various costs of fossil fuel competitors which could also make nuclear be more competitive. So this is what you hear see here for three parts in the world, the situation in the United States, take care, this is 2013. So this is, this whole shill gas is maybe not really taken into account yet here. Europe where it's more expensive because Europe has to import more and China where it's generally cheaper but still, yeah, also nuclear is cheaper but also the fossils are cheaper. So it still, yeah, depends on the adding up of, well, is there a CO2 price? What is the current fossil fuel price and how is it forecasted to develop? So yeah, this was already talking about uncertainties but there are more uncertainties to take into account. And for, and this is the couple here, construction material can cost something and these costs can increase. A very extreme example that's just funny to mention in nuclear plants you have always to measure radiation and some detectors for a neutron detectors use helium-3, very special type of helium. And somehow the resources for helium-3 all ran out and it's basically very expensive. So how to get this, of course, it doesn't really matter so much for the construction of the plant but it was a very extreme example of a material cost that suddenly skyrocketed 100 times of the price that it used to be and so on. But anyway, construction material, of course we talked then about what I presented in the presentation before and mostly the concrete, the iron, the copper, aluminum, those things. They all have these market prices and that can also go up and down. Yeah, if you have problems with whatever, sub licenses of even extreme weather, there can be construction delays. So something that can happen, usually the project manager takes this into account with the contingency cost but still construction delays can be a cause. There can be quality concerns of the regulator that's coming more and more. And that's not only the vendor of the plants but also the various subcontractors of the supply chain. There's the knowledge and skilled labor force where you get the people who can do all this work. People are going away because they are finding another job and you have to replace them. So yeah, this is also a source of uncertainty. The regulator can change their policy and also a very small thing so that they are requiring some kind of component to have extra tests or something that can really be delaying and rising costs. And last uncertainty is decontamination and decommissioning. Of course, it's at the end only but still it's an uncertainty. There's not much experience. No, I must say there's of course, there's considerable experience in the meantime but it's all non-standardized plants. They're all quite different, all first-of-kind demonstration plants, generation one plants. So to really compare this and gather some experience that really can be consolidated and say, okay, now because we have decommissioned that plant, we can forecast now for that plant and it will cost them that much. It's still quite difficult. Yes? The IAEA, right before I was asked whether it was decontamination that we need, it is additional cost for even the plant and the operation. What is the IAEA's regulatory change? Yeah, well, that's what I see here as regulatory change because as the IAEA right is the report, the IAEA cannot tell every plant you should do this because they can only tell the national governments and they have to make this as a rule in their regulatory policy and then impose it on nuclear plants in the country. The IAEA cannot do that. It's, they have to leave that to the national government. So that's how it works. And indeed for the existing plants, yeah, it was an additional cost. But it's also, it's not only the cost because sometimes it also brings a benefit that if you have to install an additional pump or with high quality level, then you can also, for instance, have more operating hours because you don't need to take it out of service as soon as you would have in the other case. So it's always a trade-off. But the cost come first. You first have to do the investment and then only can try to gather the revenues later on. Okay, so focusing on the regulatory and the policy risks and the policy uncertainties might provide an explicit course. I just support nuclear or phase it out. You've seen in Germany that it's not, look if I'm not allowed anymore. So no matter how safe the plant, and they may affect nuclear more generally by determining structure of electricity markets. If for instance, they don't do anything about nuclear but they're supporting intermittent renewables in such a way that they're taking away the electricity market on the most convenient time of the day. And then leaving the other share of the market for nuclear and the other plants. That's, they just get less revenues than the cost of nuclear is affected as well. And also future decisions and lifetime extension whether it's possible or not. So these are policies on the government, the various government levels. Then there's the regulatory regime, which is nuclear technical, the safety requirements have direct implications on costs. Well, that's what your question was about. Then we have the requirements that are unclear or regulatory changes that are sudden or frequently lead to delays or higher costs. But we have had this especially in the 80s and early 90s. When of course there was these accidents that happened. There was a societal resistance against nuclear developing. And then regulators got kind of nervous. Well, maybe we should impose this requirement and make that safer and that safer and that safer. And it was totally unreliable and unpredictable. So the plant operators, they just required, let's have a standardized regulatory environment. We will make sure new plants are being standardized for the construction, but also you want to be the regulator more predictable and so the government policies that were actually ensuring this or improving this. So this in many countries has been improved. Independent and the competent regulator is a prerequisite for safe operation of nuclear fleet. What is said, prerequisites is interesting part of course. The Fukushima lessons where it was learned that the regulator and plant operator were not entirely independent there. That the regulator should have imposed, okay now you're having these hydrogenary cobiners or having raised the wall at the beach. And yeah, they just didn't do it. About financial risks. In the early days of nuclear power development, the government simply carry the financial risks. If there was a demonstration plan to be built, of course there was, well the part of risk was carried by the industry, but there was also always the government with this, I say it's net, if you fall in there, then the government will catch you and help you. Now the markets are more deregulated and the government is pulling back, say okay, the market will determine the kilowatt hour price. And so therefore it will be more efficient. Well, which worked partly, because there was some kind of inertia developing in the electricity world, so that we can transfer any cost increases to our customers anyway. So there was really an incentive to work efficiently and reduce, for instance, outage times. And now this is well improved. If you see, for instance, in some countries that the node factor of the various nuclear plants, they were only like 60%. That means for 60% of the time the plant was in service and for 40% of the time the plant was not in service. Yeah, that was the service. Outage time and maintenance and so on, whatever. And then this market deregulation came so there was more strain on the really saving cost. And now you see also in these countries the node factors went up to 80 or 90%. So it was not a technical thing, but yeah, something that could be improved. Now if you go to build new nuclear plants, you have to look into the future. And yeah, if you see then these kilowatt hour prices going up and down, you have to invent something to make sure that also the heavy capital cost that you have to pay in advance is somehow secured. So for instance, the case that we had in the UK is they came up with a contract for difference and that's illustrated here on the graph. If you look at the time and you're looking at the hour prices is following the blue line. And then if the price is very good, then the generator pays a difference between the reference price and the so-called strike price that's the red line to the government. But if it's not enough, that's then if it's below the red line, then the generator see the difference from the government between the reference price and see if the strike price, the contract for difference. So that's one way to hedge for financial risk. That you get the power plant bills, nuclear plants. So there are more things, more tools to share or set the financial risk. What they did for instance in Finland was for the new Oakley-Volta plants that is still in construction, unfortunately. They have a multiple owners consortium that there are some heavy industries that put themselves together and say, okay, now you're cooperatively owning this new nuclear plants and therefore sharing the risks. Or their consortium is the vendor constructing the plant and sharing the future project incomes. There's government guarantees to lenders and there's for instance a federal loan guarantee in the US to anyone who applies for the plant, gets the construction license and then you get this kind of financial, yeah, it's a kind of guarantee. You don't get money, but it's just a guarantee. And there's the build-own-operate tool that's now for instance between Turkey and Russia. It means Russia is getting a piece of land. It's not becoming Russia or so, but it still stays Turkey. But on this, they build the plant. They are also owning the plant. They're building the plant according to Turkish licensing procedures. So it's only guaranteed that this is according to the Turkish rules and they operate the plants and they sell the electricity to the Turkish, well, utility. And this is for a limited amount of years and then it's transferred. But the idea is then, yeah, that's in this way, in fact, not Turkey, but Russia is financing this plant. Well, the contract for difference I just explained. And then of course there can be government help for waste contracts, especially when it comes to long-term waste storage, then that the government somehow takes over this burden. Yeah, now if you would go to different reactor designs, until now I just said nuclear power with big plants and that's it, didn't make any difference between vendors or sizes or designs. If you would do that in the future, go to small reactors or generation for reactors or reactors with different coolants or different safety features, will it make a difference? So if you go to these various design features, and for instance, the power level, if you go to a small plant, that's generally a disadvantage. If you just have a certain plant, PDABR for instance, and now you just shrink it to a small PDABR, well, an economic sense of speaking is a disadvantage because you just get less kilowatt hours for this installation of the same complexity. If you do then something to make it less complex that you can say, okay, now I don't need this pump anywhere because I can do this with natural circulation or something like that, then yeah, that's good offset. But generally, if it's only the power level, it's a disadvantage because you can't use the economy skill anymore. If you go to a reactor with, is needing intermediate circuits because it's using for instance, sodium as a primary coolant and still you have to boil water with it to spin the turbine. Yeah, of course, that's extra equipment and it's also going to raise your cost. So it also has to be offset by something. That can be, for instance, the efficiency. If we're talking about sodium cooled reactors, it's usually for the fast reactor that has a very good fuel utilization. So your fuel costs will go down and might offset these extra costs for the intermediate circuits. Also, quite on the bottom of this, there's a reactive coolant, which I mean, sodium, of course, you have to take safety precautions to keep the sodium in its containing material. And this is also costing something, but if the cost of these intermediate circuits and the reactive coolant are offset by the better fuel utilization because uranium has become very expensive, for instance. In fact, that's what they expected to have when the fast reactor was developed. Everybody was going to nuclear and therefore uranium prices would skyrocket. Well, it didn't turn out yet, but if it's going to do that, then, yeah, this could be a cost mechanism that could work. The other efficiency improving, namely the thermal conversion, as you know, most nuclear plants have a thermal conversion efficiency of 33, 35%, and that's it. Most of the heat generators is rejected in sea, river, wherever, but it's not used in a, well, useful way. So if you could rise to thermal conversion, have, for instance, this, the plant on top of it is the supercritical water reactor. It just raised the temperature and the pressure so that the coolant becomes in a special physical condition called supercritical water, and therefore thermal conversion can go up some, well, to 45%, or maybe even like 50. So that's an increase, and therefore you get just more kilowatt hours out of the same installation. The price you have to pay, there's always a trade-off, is that the installation will be even more complex. Will it pay out? You have to see that. In here in safety features, if you go to a high-temperature reactor, for instance, you have this fuel that cannot melt, and you would not need all these images cooling systems, but high-temperature reactors are usually kind of small because they have a low power density. So this power level at the top it would maybe offset this. Also, there's the question, would you have to pressurize your systems? If you have a metal-cooled reactor, it's only more lead, then it's usually a low-pressure system. It's either totally pressure-less, or it has a pressure of four, 10 bars, but that's it. And so that would save a lot of material costs because you won't need the pressure vessel, you need this pressure containing, well, tubing. But again, yeah, it's all a trade-off. That's on the reactor, on the bottom of this, that's the lead-cooled, fast reactor. Yeah, this is this system with the low pressure. It's a kind of tin can that's holding that. Of course, the head is very heavy, it's very heavy, so it still has to be kind of a strong material. But still, on the right of this, it is the example with not the steam turbine, but the gas turbine. And so that would also raise the thermal conversion efficiency. But yeah, it's new technology and you'll have to see what's coming out of it, how it's realizing. Just have an example here for the small modular reactor in the form of the high-temperature reactor. It's on the construction in China. Operation planned for 2018. The power level is 210 megawatts instead of 1,000. And what I mean with this is that these reactors are not something for the further future. It's no, it's already under construction, it's almost ready. The coolant is here heating gas instead of water. The fuel is shaped pebbles instead of the pins and the fuel elements. So here, the idea is to upset the economy of scale by serious production, it's called the economy of numbers, and factory production. The warning I have to give here is that I heard this even before I did my PhD, which is 30 years ago, well, 25. So this is not really new. And we should ask ourselves the question, why did it work until now? Where was the market and how can we find it? Because this whole idea of economy by numbers that these smaller reactors are fabricated in the factory and then because of mass production reduces the price. Okay, we've seen it with PVM for now, that is reducing the cost, but not yet for the nuclear reactors and how can we make this happen? So now you're going to market conditions which are not always helpful. So first generally, it can greatly influence the competitiveness of nuclear. When comparing the regulated markets on the right, the deregulated or sort of merchant market on the right. The government will assume all risks and costs in the regulated market. The vendors to build on a cost plus contract, the utilities, borrow on balance sheets, and all costs are construction and operations are passed on to the customer. That's how it worked in the past of many countries. And right now we see more and more of these deregulated markets. They have to perceive riskiness of the project. It is a key to determine the cost of capital. So you cannot be certain anymore. And regulatory processes, revenue risk, policy, and certain things affect also the perceived riskiness. So if you look at the regulated markets, the profit market must be just sufficient to cover operations and fuel and investment in the extension of the operating life of the nuclear stations. So we have three bars here. It's competitive on the left. When we have the fuel and operational and fixed costs, we have that below the competitive electricity price. Yeah, we can have depreciated investments, but still being competitive. That's the middle bar. And yeah, it can also be just too bad that we cannot even pay our operational maintenance people anymore. So then we have to shut down the Australian investment. This is an example of a deregulated market in the US with the shale gas competition with nuclear. Technological advances are opened up the vast additional amount of natural gas is accessible at low extraction costs. Also, I must say it's not the technological advances, but also a friendly regulator, because if you try that in other countries, the regulator says, no, no, no, we don't do this because of environmental reasons. Decreasing gas prices lead to an increase in the share of electricity generation, which resulted in lower electricity prices. And in some areas, the average local locational marginal price dropped below $30 per megawatt hour, and then threatening the margins of nuclear power plants. And as a result, some plants have been shutting down there. So the global resource estimates have lost, but uncertainty remains whether the US experience can be replicated or as I just said, sometimes it's just not allowed. So now we go to the integration of variable renewable production. Reliable, intermittent, it's all the same. So what I showed this morning, this is the traditional way of supply and demand connection, central generation, and predictable consumption, but we're moving now in various parts of the world to the more complex situation where we have a policy-encouraged variable energy sources and power consumers become producers. So the power flow is going both ways. Now we see at the right, the traditional, I don't know, we see at the left, the traditional producers, then added with the windpark and the solar farm and on the right, the traditional consumers, but they also have PV panels on their roof or maybe even companies that have these large roofs. And so even more PV production can happen. So this is what we call a merit curve. At the x-axis it has the utilization time. It's just all the hours that are available in a year, 87 hours. And here it's added up, that's the black line at the top, for all power capacity in a certain region. How much use is made for that? So on the left you have the total in the most, for the hours that have most demand, and then in the extreme, you have 90% of your power capacity used. And on the quite right side, you have all these hours in the night, in the holidays, that just a small part of your power capacity is being used. So, and then it's in this way, you can determine where to get the power from. This is a region that has a fairly large amount of nuclear, that's the green bar on the left side. Then we have a certain coal capacity, that's red, that's the red, and we have two types of gas, namely the combined cycle gas turbine, which is a more efficient one and therefore more expensive one. And the open cycle gas turbine, that's the light blue, which is the simpler machine, but with the lower fuel efficiency. So for the base load, that's the lowest part, you're going to use the nuclear because of the highest capital cost that you want to be paying back. Then you add if needed the coal, then you add the combined cycle gas turbine and then the open cycle gas turbine. So if you're in part of the day that there's not so much needed, it could be that you're somewhere in the middle and you have just your nuclear and coal fire stations and no gas. And only then if the demand goes up, then your first gas plant can be switched off. But now imagine or well, see the situation that renewable, intermittent renewables are coming in. And they have to be integrated because they go first. They even go earlier than a nuclear, and not because of cost reasons, not of economic reasons, but just of political reasons that the population wishes through their elected governments that this electricity source is being applied. So that goes first. So what you see then is that this is an assumption that 30% of the electricity is being generated by renewables. And so what you see then that this black line is then pushed to the left and becomes the gray line. And then of course affects the operation of the various plants. And that you see that the nuclear plant is generating less. The coal fire plant is only generating half of the kilowatt hours or even less. And the gas fire plants are almost pushed out of the market. So what you see here to summarize is reductions in the energy electricity produced by the dispatchable power plants that is lower load factors. We see a reduction in the average electricity price on the wholesale power markets. And we see a declining of profitability, especially in the open cycle gas turbines and the closed cycle gas turbines. Nuclear is less affected, but still. And most important, there are no sufficient economical incentive to build new power plants, not only new nuclear power plants, but new power plants just at all. So also not as a reserve to back up for the renewable production, if just in case it's dark or there's no wind. Yeah, sooner or later we have to do something to help these utilities that have to replace their plants, but just are not doing it because they're not earning it in the market. So in the long run, what we see is that when we started with the bar at the left, then it's replaced by the two bars on the right, mainly also the white bar of renewables, a considerable amount of capacity is being built. It doesn't say anything about how good it's used, but there's capacity being built. And therefore the dispatchable production is reduced. So what we see here is the production from the variable renewable energy will change the generation structure. The renewables will displace the base load on more than a one-to-one basis. And the cost for the residual load will rise. This technology is more expensive per megawatt hour are used. So these effects increase substantially with the penetration level. This is in a very sunny country. Well, it's basically in California. So what you see here is, well, what's happening if you really add a large share of renewable, or in this case solar, energy to your generation mix. It shows here the hours of the day. So it's just electricity generation profile of one day. And on the y-axis, there's the amount of megawatts. Okay, it starts with 1100 and it goes up to 2700, I'm sorry, it starts with 11,000 and it goes up to 27,000. So it's not to zero, it's not that bad. But what you see is when the sun comes up, that's here about between seven and eight in the morning, then your production of the dispatchable sources is going down, that's this red line. And so it's minimal around between two to three in a day, and then the sun sets. And at the same time, people switch on their lights and televisions and everything. So we have a huge increase of demand, while the sun is setting. So all these dispatchable sources, they have to switch on very quickly and replacing the capacity that's lost by the solar panels not functioning anymore, and even more because of this demand structure. So, and then if you look then at okay, I have a certain amount of renewable capacity, but now I'm increasing, would it make sense if I would buy more solar panels? Well, what you see then is that these variable renewable energy sources, they displaced the generation and they increased the need of flexible backup. And this reduces the effective contribution to the system. And therefore also its market value is reducing at the increasing penetration level. That's affected graph on the right that really made the calculation of what is this value factor? And if you go then from, well, 0% to like, here it says only 10%, already your value is decreasing. So if you now would see how to integrate various options of variable renewable energy production, how to backup that, you need a flexible generation. Well, what is flexible, of course? That's an insulation, not that only has an on and off, like the usual nuclear plants, but also, well, can variety power level very quickly. Well, if you have hydro plant, then you're lucky because there it's the most easy. The disadvantage of course hydro plants are, yeah, so I have this large capital cost and so, yeah, you would of course, you like to do that with, to like to keep the hydro plant on. Then you have the gas turbine, which is also very useful because it's a simple installation of large fuel costs. So that would be the next best option. And only if you don't have that anymore, then you could go to the coal and the nuclear plant, which are usually larger plants with, well, they have this steam cycle and this steam cycle, you don't just go that very fast. It does not mean it's not possible. So all the nuclear plants, we just were not designed for it, therefore the regulator says you cannot do it, but there are various nuclear plants, especially, for instance, in France, where they have a lot of plants and also in Germany, because they just happen to design for it, that can, from a technical point of view, very well to the load following. And by the way, other options are transmission, of course, you can transport the excess energy away or you can import if it happened not to have any replacement for the renewables. Yeah, the big promise of course, storage and development of large batteries. And yeah, then the lowest one is the demand side management. That's a nice word for rationing. That just means that you just cut off some consumers and you can do that already in advance, that you make a contract saying your kilowatt hour is cheaper. But if needed, have one shown so many hours in the year and so on, I can cut you off the grid. So this can be agreed. It's not necessarily as an emergency measure at the time. But yeah, the question of course is how will this develop into the future and what will be still, which freedom will be left to the consumers? Just one picture about the experience of load following by nuclear plants. This is a French pressurized water reactor. On the left, we see the one year fueling cycle. So it's one year and all these dips are the power level that has been driven down because there was at the moment just less demand. And then on the right, we have the 10 day period around Christmas where we can also see various periods of just low power output on purpose. So it is possible. There's experience with that. But because of the large capital cost, it's from an economical point of view, not desirable. So and on the last, that's the hidden cost. Well, that's in two fours. So called key system costs. They result from no noncontinuous power production and the added costs that are passed on to the consumer and so called externalities. They result from damages that are not paid for or internalized and are passed on to the consumer in the form of damage to health or environment. So first, the system costs that they are the total cost above the plant level cost that supply electricity at a given load and given level of security and supply. So the plant level cost, what we've been talking about but the grid level system effects, they come on top of that. That's the connection to the grid. It's the grid extension and reinforcement. That's the short term balancing cost that your frequency has to be. Well, we know part of the world, 50 Hertz but also sometimes 60. And we kept that way. There's the long-term cost for maintaining the adequate backup capacity. And then there's the impact on the other electricity producers. They call that pecuniary externalities. You have pecuniary means has to do with money. You have to pay them. Reduce prices and load factors of conventional plants in the short run and reconfiguration of the electricity system in the long run. And then you have the total system cost. Let's take into account not only the cost but also the benefits of integrating the capacity. The variable cost, fixed cost of new capacity could be displayed. And there are some other externalities as well. Environmental security of supply cost of accidents but they're not taken into account. Well, here's some results of calculations where you compare the various renewable sources. Well, the system costs of renewables are pretty high because you have these variations. So the grid with all the reserve capacity has to back up. It's a grid level system costs are going up to $80 per megawatt hour here. If you compare that to the nuclear and fossils, it goes from zero to $3.5 per megawatt hour. So it's quite a different scale. But the system costs are 10 to 30 times lower than those of variable renewables. And all the time the situation of 10% and 30% renewable system share is compared. So with 30% of course, it's higher. And with 30% here, yeah, that doesn't really make that much difference. So now we go to expansion of variable renewables that can change the profitability of the dispatchable technologies. But as I said, must be the dispatchable sources also nuclear must respond to changes in the load and variable output of the intermittent technologies and operating nuclear power plants base load is considered to be the simplest and the most economical advantage method. So, and on this table, there are the results of a calculation of what difference would it make in the red circle or the red oval is around the nuclear cost if had a large scale deployment of variable renewables will challenge the nuclear plan because it's just going down so much. A certain level of load following is warranted in current nuclear power plants or some of the nuclear power plants affecting however, the profitability of the nuclear plant could be a cost and a revenue impact. That's what you get. There's this interesting table, the various plans, how much time they would need for starting up to 20 minutes, but the nuclear power plants just take longer. And the maximum change in 30 seconds that's the gas turbine is kind of more flexible 20 to 30% it can do 20% per minute. And the nuclear plant can do 5% change in 30 seconds or one to 5% per minute. So it's not impossible, but it's just less convenient. Then the last one, it's about the failure of the markets to deal with external costs. What is that then? Is the environmental and health damages which occur because of the electricity production but are not reflected in the price of electricity. In the liberalized markets, there's no economic value. So it's invisible to investors and government effectors, they can incorporate such externalities. They can decide to put some kind of levy on a kilowatt hour price. And this is because of all these aspects of the external cost like human health and it can be other kind of pollutants in the putting the year, most of bio diversity. There's the crops of the sulfur dioxide that's emitted to human health conventional pollutants. There's the materials, the nitrogen oxide submitted. There's all these colored bars. And then we see that the hard coal with integrated gasification coal mine cycle which is quite from a technical point of view quite a nice plan. But then they still have these high external costs because of this all these additional kinds of pollution and health threats. So changes in market design are being considered. And yeah, to extend schemes that can put a price of carbon emissions or kind of work capacity that contributes to security supply. But at the moment it's not that far yet. So to come to an end to take away messages and nuclear power, there's a number of things that are relatively high capital cost components. Therefore a subject to high upfront cost and financial uncertainties. It needs a firm public policy support and strong regulatory regime. It minimizes system related costs and externalities. And it can compensate for variable renewable energy production but mostly with an economic penalty. And now I wanna thank you for your attention.