Near-term potential

The Russian Federal Agency for Atomic Energy (ROSATOM) has started construction of a floating barge-mounted heat and power co-generation nuclear plant based the ship propulsion PWR-type reactor KLT-40C in Severodvinsk. It is planned to put the plant into operation in 2010. The floating NPP can produce up to 70 MW for electric power and about 174 MW of heat for district/process heating. The lifetime of the plant is 40 years; it is designed for a continuous operation period before dockyard refurbishment of 12 years.

Demonstration of this nuclear technology is intended to allow its larger-scale application inside the country and abroad for electricity and heat production.

Another PWR, the SMART integral type reactor, is under development in the Republic of Korea for desalination. It could however also produce industrial process heat.

Application in oil extraction

Atomic Energy Canada Limited (AECL) has studied the feasibility of using CANDU energy in applications beyond traditional electricity generation, such as open pit mining and oil sand extraction.

Alberta’s oil sand deposits are the second largest oil reserves in the world, and have emerged as the fastest growing, soon to be dominant, source of crude oil in Canada. The oil sand industry currently produces more than a third of the nation’s petroleum needs, and has the potential to account for more than sixty percent of Western Canadian crude production by 2010.

Currently, the majority of oil sand production is through open-pit mining, which is suitable for bitumen extraction when the oil sand deposits are close to the surface. The ore, a mixture of bitumen and sand, is removed from the surface by truck and shovel operation. The ore is then mixed with hot water to form a slurry that eventually undergoes a separation process to remove bitumen from the sand.

The thermal energy required for the open-pit mining process is in the form of hot water at a relatively low temperature (around 70°C), and the rest is dry process steam at around 1.0 to 2.0 MPa. The oil extraction facilities require electrical power as well.

To increase production capacity, the industry is looking for new technology to extract bitumen from deep deposits. Among them, Steam-Assisted Gravity Drainage (SAGD), which uses steam to remove bitumen from underground reservoirs, appears to be the most promising approach. Recently, the in-situ recovery process has been put into commercial operation by major oil companies.

Overall, for both extraction methodologies, a significant amount of energy is required to extract bitumen and upgrade it to synthetic crude oil as the feedstock for oil refineries. Currently, the industry uses natural gas as the prime energy source for bitumen extraction and upgrading. As oil sand production continues to expand, the energy required for production becomes a great challenge with regard to economic sustainability, environmental impact and security of supply. With this background, the opportunity for nuclear reactors to provide an economical, reliable and virtually zero-emission source of energy for the oil sands becomes a realistic option.

Further details are given in Annex 3.

4.2.3. Economics

The 2003 IAEA report [2] discussed the industrial process heat market size and features. The industries that are main consumers of heat are:

- food, - paper,

- chemicals and fertilizers,

- petroleum and coal processing, and - primary metal industries.

The breakdown of the total industrial heat varies from country to country, but the chemical and petroleum industries are the major consumers worldwide. These would be key target clients for possible applications of nuclear energy.

With respect to economic competitiveness, many of the features described for electricity generated by nuclear energy for desalination and district heating are valid for process heat applications. There are several important considerations specific for process heat applications, which include:

- The ability to locate the heat source close to the demand, - The relatively small-scale demand,

- The need for high reliability.

The economics of nuclear energy for process heat applications will likely be improved by the development of small, low-cost reactors. Current development trends in many countries have already begun to move in this direction.

The co-generation plants for process heat based on fossil fuels or water-cooled reactors derive much of their revenue from electricity, but add the operational flexibility to adapt to process heat markets.

Specific costs for oil extraction from Canadian oil-sands

In 2003 AECL commissioned an independent study by CERI (Canadian Energy Research Institute) to compare the economics of Advanced CANDU Reactor (ACR)-supplied energy with natural gas. This study provided an evaluation using ACR design data, the assumptions on configurations and economics, and compared equivalent amounts of energy supplied from the nuclear and natural gas options to ensure a proper comparison. The study identified comparable ACR and natural gas-supplied configurations, each delivering steam and electricity. The electricity output was set at 150 MWe (gross) to meet the facility’s demand, and the remaining thermal power of the ACR was delivered as steam to the Steam-Assisted Gravity Drainage (SAGD) plant. A common economic model was also developed, using parameters such as natural gas and electricity costs based on 2003 market value, without attempting to extrapolate or forecast future prices. The natural gas price used was Cnd

$4.25/GJ and the electricity price was Cnd $50/MWh. Based on these numbers, the results show nuclear steam to be 10% cheaper than that generated through natural gas.

The study examined energy price sensitivity to changes in key parameters. The nuclear case is more sensitive to capital cost changes, as might be expected. A 25% increase in capital cost would increase steam cost by 20%. The gas-fired option is extremely sensitive to fuel prices. A 25% increase in the price of natural gas would increase steam cost by nearly 25%. With the current gas price more than 50% higher than in 2003, the economic advantage of nuclear over natural gas becomes significant.

The study also examined the impact of CO₂ emissions on cost. The reference basis for CO₂ costs or credits was $15/tonne. This could add an additional 18% to the cost of natural gas-supplied steam.

All indications are that the nuclear option has a significant advantage in cost over the competition. The nuclear option also provides for cost predictability and stability, which would reduce the risks for a potential oil sand operator.

4.3. Challenges

The market for industrial heat is highly competitive. Heat is produced predominantly from fossil fuels, with which nuclear energy will have to compete. Most of the industries using fossil fuel as a heat source have abundant waste heat available and it is being economically used in various process streams.

Similar to nuclear district heating, the close siting of a nuclear plant to the customer is preferable, as the heat transportation costs grow significantly with distance. This will require specific safety features appropriate to the location and the application. Until now few technical problems in coupling nuclear reactors to various applications have been identified, though some safety-related issues of coupled systems may need more study.

The nuclear process heat supply has to be reliable. As an example, the average adequate steam supply availabilities for chemical processing, oil refineries and primary metals are respectively 98%, 92% and near 100%. Such high levels can be ensured only by the combination of a highly reliable heat source and the availability of reserve capacity.

The supply of industrial heat is more uniform throughout the year than that of district heat, mainly because of the absence of seasonal variation. Accordingly, the average load factors of industrial boilers are relatively high, between 70 to 90%. Nuclear reactors, which are typically run in base load operation, will be quite useful in this context.

Although nuclear industrial process heat applications have significant potential, it has not been realized to a large extent. In fact, presently only the Goesgen reactor in Switzerland and RAPS–2 in India continue to provide industrial process heat while other process heat systems have been discontinued after successful use (see Table 1.2). Among the reasons cited for closure of these units, one is availability of cheaper alternate energy sources, including waste heat near the industrial complexes. The nuclear slow down in many industrialized countries could be another reason.

Studies are being carried out in Canada for oil extraction from its vast oil sand resources. These studies consider using present day and advanced water-cooled reactors as a heat source. Currently natural gas is used for this application. Although these studies have been motivated by a need for an environmentally sound energy option, the ultimate challenge in the utilization of nuclear steam for this application is the economics.

4.4. Solutions

4.4.1. Oil extraction from Canadian oil sands