ShoreEnergys Renewable Energy Conference: Fueling the Nuclear Renaissance

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ShoreEnergys Renewable Energy
ConferenceFueling the Nuclear Renaissance
Russell B. Starkey Jr. Vice President,
Operations USEC Inc.

• November 29, 2007
• Salisbury, Md.

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Outline

• Energy Demand Growth
• USEC Who We Are What We Do
• The Nuclear Fuel Cycle USECs Role in the
  Industry
• Fueling the Nuclear Renaissance USECs American
  Centrifuge

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I. Energy Demand Is Growing Rapidly

• U.S. electricity demand isprojected to grow by
  30 between 2005 2030
• Energy Information Administration / Annual
  Energy Outlook 2007
• Worldwide electricity demand is projected to grow
  by 50 between 2004 2030 Energy
  Information Administration / International Energy
  Outlook 2007

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Nuclear Plays Key Role in Power Generation Today
World (including U.S.) At present 439 nuclear
reactors, 371,671 MWe1
U.S. 104 nuclear reactors, 100,322 MWe3
Sources 1 NEI, http//www.nei.org/documents/Wor
ld_Nuclear_Generation_and_Capacity.pdf
2 EIA International Energy Annual,
2003 (published 2005),  http//www.eia.doe.gov/em
eu/international/electricitygeneration.html
3 EIA Annual Energy Outlook 2007,
www.eia.doe.gov/oiaf/aeo/electricity.html
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Benefits of Nuclear Power

• Only reliable, baseload energy source --24 hours
  a day, 365 days a year -- that does not emit
  greenhouse gases

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U.S. Nuclear Power Generation Is Cost Efficient
Comparative Generation Fuel Costs, 2005
8.09
7.51
1.72
2.21
About 10 enrichment
Preliminary figures for 2006 indicate a further
decline in nuclear production costs to 1.66
cents/kWh Source NEI/Energy Velocity/EUCG
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Nuclear Power Generation is Growing
New Reactors Under Construction or Planned by
Country as of October 2007
Operating Reactors 439 Long-term shutdown 5 Under
Construction 33 Planned/Approved 94
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• There are 127 reactors worldwide either under
  construction or planned/ approved and another 222
  have been proposed.
• The International Atomic Energy Agency
  anticipates at least 60 new plants by 2020 with a
  total capacity of 430 GWe - 16 more capacity
  than operating in 2006.

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Sources World Nuclear Association, IAEA
Includes 2 laid-up Bruce A reactors under
construction 21 applications for 32 new plants
are expected between 2007 2009
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• II. Who We Are What We Do Paducah Gaseous
  Diffusion Plant

• 3,400-acre federal reservation
• 4 enrichment process buildings
• 76 acres under roof
• Produces 5 million SWU annually
• Built in 1951 1954 by theU.S. Atomic Energy
  Commissionfor national defense
• Leased from DOE

The only operating uranium enrichment facility in
the United States
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Megatons to Megawatts

• Historic 20-year nonproliferation treaty between
  U.S. and Russia signed in 1993 converts nuclear
  warheads to commercial nuclear fuel
• The equivalent of 12,000 Soviet-era nuclear
  warheads have been eliminated and converted into
  nuclear fuel purchased by USEC for transport and
  sale to nuclear utilities
• The Megatons to Megawatts program provides 50 of
  the U.S. nuclear fuel supply
• The Russian government has stated it does not
  expect to extend agreement beyond 2013

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American Centrifuge PlantPiketon, Ohio
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III. Nuclear Fuel Cycle
Uranium Mines Mills Cameco, Denison, Areva,
Rio Tinto
U308 Conversion to UF6 ConverDyn, Cameco, Areva
Enrichment of U235 (as gaseous UF6) USEC, Urenco,
Areva, Tenex
Conversion to UO2 and Fabrication of Fuel
Assemblies GE, Areva, Toshiba/Westinghouse
Spent Fuel Storage
Commercial Nuclear Power Plants
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Enrichment is a Key Element of the Fuel Cycle
2006 Share of Worldwide Deliveries
2006 Front-End Nuclear Fuel Market Costs
Front-End Nuclear Fuel Industry 16 Billion
Enrichment Industry 41 MMSWU or 5 Billion
Sources USEC Marketing, NAC FuelTrac, TradeTech,
Ux Consulting Based on 2006 average market term
prices and assumes 4.0 enriched, 0.28 tails
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The Industry Standard Measurement
Whats a SWU? A Separative Work Unit (SWU) is the
standard measure of uranium enrichment. A SWU
represents the effort required to transform
natural uranium into two streams one being
enriched in the U235 isotope and one that is
being depleted of U235
A nuclear fuel assembly
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IV. How A Centrifuge Works
Depleted Stream

• A rotor containing UF6 gas spins at high speed
  insidea vacuum casing
• Centrifugal force concentrates the heavier U-238
  isotopes at the outer wall and the lighter U-235
  isotopes toward rotor center
• Gas circulation carries product and tails to
  opposite ends of the machine
• Enrichment levels and capacity are increased by
  connecting centrifuges in series and in parallel,
  called a cascade

Feed Stream
Enriched Stream
Product (Enriched Uranium, 4.95)
All UF6
Illustrative Cascade Configuration
Feed (Natural Uranium, .711)
Tails (Depleted Uranium, 0.3)
Individual Centrifuge
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USECs American Centrifuge

• Lower-cost Production
• Uses approximately 95 less electricity than
  current gaseous diffusion technology
• Higher Efficiency
• Target 320 SWU/machine/year
• Recent tests 350 SWU/machine/year
• More productive than competition
• Modular Expansion
• Production can begin incrementally as machines
  are installed
• Allows for potential future expansion beyond
  expected initial 3.8 million SWU
• Security of Supply
• Enhances long-term nuclear fuel supply
• Supports national energy security
• Develops an essential U.S. technology and
  related manufacturing capacity

American Centrifuge machine being assembled in
Piketon, Ohio (January 2007)
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Competitor Centrifuges

• Russian (Tenex)( 4 to 8 SWU/yr)

• European (TC-12)
• ( 40 to 45 SWU/yr)

Approximate Scale
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Undergraduate GraduateEnrollment Nuclear
Engineering
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American Council on Global Nuclear Competitiveness

• Helping strengthen Americas nuclear industrial
  base
• USEC is a member of ACGNC

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Conclusion

• Nuclear power is undergoing a resurgence as one
  of the leading choices for environmentally
  responsible power generation
• As the only U.S. supplier of enriched uranium
  fuel for commercial nuclear power plants, USEC is
  strategically important to Americas energy
  security
• USEC is investing in the American Centrifuge
  Plant to help fuel the nuclear renaissance