It is already 10 years since the (European) HTR Technology Network (HTR-TN) launched a programme for the development of HTR Technology, which expanded through 3 successive Euratom Framework Programmes, with many coordinated projects in line with the strategy of the Network. Widely relying in the beginning on the legacy of the former European HTR developments (DRAGON, AVR, THTR...) that it contributed to safeguard, this programme led to advances in HTR/VHTR technologies and produced significant results, which can benefit to the international HTR community through the Euratom involvement in the Generation IV International Forum (GIF). The main achievements of the European programme performed in complement to national efforts in Europe and already taking into consideration the complementarity with contributions of other GIF partners are presented: they concern the validation of computer codes (reactor physics, system transient analysis from normal operation to air ingress accident and fuel performance in normal and accident conditions), materials (metallic materials for the vessel, the direct cycle turbines and the intermediate heat exchanger, graphite...), component development, fuel manufacturing and irradiation behaviour and specific HTR waste management (irradiated fuel and graphite). Key experiments have been performed or are still ongoing, like irradiation of graphite to high fluence, fuel material irradiation (PYCASSO experiment), high burn-up irradiated fuel PIE, safety test and isotopic analysis, IHX mock-up thermo-hydraulic test in helium atmosphere, air ingress experiment for a block type core, etc. Now HTR-TN partners consider that it is time for Europe to go a step forward towards industrial demonstration. In line with the orientations of the “Strategic Energy Technology Plan (SET-Plan)” recently issued by the European Commission, which promotes a strategy for the deployment of low carbon energy technologies and mentions Generation IV nuclear systems as one of the key contributors to this strategy, HTR-TN proposes to launch a programme for extending the contribution of nuclear energy to industrial process heat applications addressing jointly 1) The development of a flexible HTR able to be coupled to many different process heat and cogeneration applications with very versatile requirements 2) The development of coupling technologies with industrial processes 3) The possible adaptations of process heat applications which might be needed for coupling with a HTR and 4) The integration and optimisation of the whole coupled system. As a preliminary step for this ambitious programme, HTR-TN endeavours presently to create a strategic partnership between nuclear industry and R&D and process heat user industries.
To measure the value of a technology investment under uncertainty with standard techniques like net present value (NPV) or return on investment (ROI) will often uncover the difficulty to present convincing business case. Projected cash flows are inefficient or the discount rate chosen to compensate for the risk is so high, that it is disagreeable to the investor’s requirements. Decision making and feasibility studies have to look beyond traditional analysis to reveal the strategic value of a technology investment. Here, a Real Option Analysis (ROA) offers a powerful alternative to standard discounted cash-flow (DCF) methodology by risk-adjusting the cash flow along the decision path rather than risk adjusting the discount rate. Within the GEN IV initiative attention is brought not only towards better sustainability, but also to broader industrial application and improved financing. Especially the HTR design is full of strategic optionalities: The high temperature output facilitates penetration into other non-electricity energy markets like industrial process heat applications and the hydrogen market. The flexibility to switch output in markets with multi-source uncertainties reduces downside risk and creates an additional value of over 50% with regard to the Net Present Value without flexibility. The supplement value of deploying a modular (V)HTR design adds over 100% to the project value using real option evaluation tools. Focus of this paper was to quantify the strategic value that comes along a) with the modular design; a design that offers managerial flexibility adapting a step-by-step investment strategy to the actual market demand and b) with the option to switch between two modes of operation, namely electricity and hydrogen production. We will demonstrate that the effect of uncertain electricity prices can be dampened down with a modular HTR design. By using a real option approach, we view the project as a series of compound options — each option depending on the exercise of those that preceded it. At each end of the design phase, the viability will be reviewed conditional on the operating spread at each time step. We quantify the value of being able to wait with the investment into a next block until market conditions are favourable and to be able to abandon one block if market conditions are disapproving. To derive the intrinsic value of this multi block HTR design, it will be compared with a reference investment of a full commitment light water reactor without any managerial flexibility. In another case, we raise the question to what extent product output diversification is a suitable strategy to cope with long term market uncertainty in electricity price. What is the value of a multi-potent technology that is able to produce output for energy markets others than the electricity market? To investigate this, we concentrate on The Netherlands, a country with an intense industrial demand in electricity and hydrogen.
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