Sustainability of the use of Helium for the Pebble Bed Modular Reactor Arcus Gibb

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Sustainability of the use of Helium for the Pebble Bed Modular Reactor Arcus Gibb 16 January 2008 1732ES 1732ES Sustainability Report

QM Issue/revision Issue 1 Revision 1 Revision 2 Revision 3 Remarks Sustainability Report Date January 2008 Prepared by Brian van Aswegen Signature Checked by Grant von Mayer Signature Authorised by Grant von Mayer Signature Project number File reference 1732ES 1732ES WSP Environmental Block B, Bryanston Place 199 Bryanston Drive Bryanston Johannesburg 2157 Tel: +27(0) 11 361 1380 Fax: +27(0) 11 361 1381 http://www.wspgroup.co.za

Contents EXECUTIVE SUMMARY 1 1 Introduction 2 2 Scope of Work 2 3 Methodology 2 4 Findings and Discussion 2 4.1 Helium Production Technologies 2 4.2 Helium Sources 2 4.3 Helium Supply and Demand 4 4.4 Helium Costs and Estimated Cost for PBMR 4 4.5 Constraints and Limitations 5 5 Conclusions and Recommendations 5 6 References 6 List of Figures Figure 4-1: Natural Gas fields containing helium (Peterson 1999)...3 Figure 4-2: Distribution of helium sources in the world, billion cubic meters, in 2005 (Bowe 2004)...4

Executive Summary ARCUS GIBB has been appointed by Eskom to undertake an Environmental Impact Assessment for the proposed construction of a 400MW(t) Pebble Bed Modular Reactor Demonstration Power Plant (PBMR DPP). For normal operations, approximately 7 290 kg of helium gas is required per day. Helium loss per day has been estimated to be 0.1% of this amount but this can only be verified during operation. Given the importance and hence need for helium in the PBMR DPP, WSP Environmental has been appointed by ARCUS GIBB to do an investigation on helium and more specifically to address issues pertaining to the cost and availability of helium gas and whether or not either the cost or availability, or both, will prohibit the development of the PBMR as an electricity generation technology beyond the proposed PBMR DPP. The findings of the investigation suggest that the short term supply of Helium poses little threat to the PBMR DPP as helium is readily available from local suppliers for the life of the PBMR DPP. However, the future of helium supply is under pressure and global supplies will need to be enhanced by exploitation of new fields and technological development. It is therefore recommended that the development of these fields and technology be investigated for the role out of future plants. The estimated costs involved are indicative and presently insufficient information is at hand to calculate costs with a large degree of certainty. The scope of this project limited the assessment solely to Helium and as such these costs cannot be interpreted with respect to the demonstration project as a whole or to alternative technologies. Therefore, no judgement was made in relation to the cost of the PBMR DPP and therefore no recommendations are made pertaining to the project. 1732ES 1732ES 1

1 Introduction ARCUS GIBB has been appointed by Eskom to undertake an Environmental Impact Assessment for the proposed construction of a 400MW(t) Pebble Bed Modular Reactor Demonstration Power Plant (PBMR DPP) The nuclear reaction that takes place in the reactor is cooled by helium gas, which enters the top of the vessel at approximately 500 Degrees Celcius, flows down between the spheres and leaves the bottom of the vessel having been heated to 900 Degrees Celcius. This heated gas then passes through a gas turbine that drives an electricity generator. Helium is therefore not just a coolant but also the medium of energy transfer. This is one of the advantages of the PBMR DPP design. For normal operations, approximately 7 290 kg of helium gas is required per day. Helium loss per day has been estimated to be 0.1% of this amount but this can only be verified during operation. 2 Scope of Work Given the importance and hence need for helium in the PBMR DPP, WSP Environmental has been appointed by ARCUS GIBB to do an investigation on helium and more specifically to address issues pertaining to the cost and availability of helium gas and whether or not either the cost or availability, or both, will prohibit the development of the PBMR as an electricity generation technology beyond the proposed PBMR DPP. 3 Methodology A desktop investigation using the internet was undertaken as well as contacting local helium suppliers to obtain a rough price estimate of the supply and transport of helium to the power plant where the PBMR DPP will be located. 4 Findings and Discussion 4.1 HELIUM PRODUCTION TECHNOLOGIES There are two main types of technologies used to produce helium from natural gas. The processing of helium from natural gas can generally be considered to occur in two distinct processes, which may take place at the same physical location. Helium is extracted from natural gas, which contains up to 7% helium, through fractional distillation. This results in a crude helium gas (i.e. 50 to 80 percent by volume) which can be refined to Grade helium (99.995 percent by volume), the details of which are not important as it is assumed at this stage that only crude helium will be used for the PBMR DPP. 4.2 HELIUM SOURCES Nearly all helium is a result of radioactive decay, the product being mainly found in uranium and thorium which emit alpha particles consisting of helium nuclei (He 2+ ) to which electrons rapidly combine. Approximately 3.4 litres of helium is generated per year for every cubic kilometre of earth crust. Helium is also found in small amounts in mineral springs, volcanic gas, and meteoric iron. The greatest concentrations, however, are in natural gas from which most commercial helium is derived. There are two key characteristics of helium resources. Firstly, helium exists in various useful forms. Although small amounts of helium are generated by the reactions in nuclear power plants and research reactors, it is important to stress that helium is a natural material, the atmosphere forming a 3.8 Billion ton source (Brown, 1998). As of today, 2 1732ES 1732ES

most commercial use helium is obtained from natural gas fields. Figure 1 shows significant natural gas fields around the world that are known to contain helium in quantities that are potentially viable as commercial sources. The solid arrows point to fields or plants that are already producing helium. The hollow arrows point to fields that are known to contain helium but which are not currently productive for one reason or another. If the fields have not been exploited for their natural gas content, it is not feasible to exploit them for helium alone. Other fields have high concentrations of constituents such as carbon dioxide and methane gas, the disposal of which creates environmental concerns, or they are remote from the principal helium markets. Of the 17 identified natural gas fields which contain Helium, only 4 are currently regarded as helium producing natural gas fields, 7 are not producing any helium at all and the remaining 6 are producing helium but not to their maximum potential. Therefore at this stage it can be assumed that the potential global supply of helium far exceeds the present global helium supply, however, if the reasons for not exploiting the seven gas fields or maximizing production of the 4 gas fields mentioned above are not addressed and reverted, helium supply may not be adequate to meet global demand in the long term. Figure 4-1: Natural Gas fields containing helium (Peterson 1999) Although many exploratory projects are underway across the world to develop new sources of helium supply, the best prospects appear to be in the Middle East and North Africa. This area has many very large, helium-rich (up to 0.5 percent) natural gas fields that are already producing natural gas for export, either as a gas by pipeline to Europe or as liquefied natural gas (LNG) by ship. It is estimated, for example, that the amount of helium in the natural gas that Algeria produces today exceeds 100 million m 3 per year (Smith et al. 2003). In other words, Algeria alone has the capability of fulfilling nearly 70 percent of today s worldwide helium demand. However, the industry currently is recovering only 17 million m 3 per year of this helium. The vast majority is lost forever as a waste stream from LNG production, or when industrial and domestic consumers burn the natural gas. Secondly, the distribution of helium resources is significantly uneven in the world. Figure 2 shows the total world helium resources which were estimated to be 39.6 billion cubic meters in 2005. Apart from the US, these resources are mainly located in Algeria, Russia and Qatar. In addition a small proportion of helium resources are located in China and Poland (Clarke et al., 2006). South African helium suppliers import their helium from the U.S. therefore supply to the PBMR DPP, owing to the large production of helium in the U.S., should result in a consistent source of helium for the PBMR DPP. 1732ES 1732ES 3

Figure 4-2: Distribution of helium sources in the world, billion cubic meters, in 2005 (Bowe 2004) 4.3 HELIUM SUPPLY AND DEMAND According to Richard Clarke of the United Kingdom Atomic Energy Authority (UKAEA), because Helium is inextricably tied with natural gas reserves it seems inevitable that these reserves will eventually be depleted (Tnk-BP 2006). In recent decades a number of plants producing liquid helium have emerged around the world, almost all of them built with US involvement. These include: In 1993 production was launched in Orenburg (OAO KRIOR) with a capacity of between 7 and 8 million litres of liquid helium per year, equivalent to between 5 and 5.5 million m 3 ). In 1994/5, a plant was constructed in Algeria (producing 15 million m 3 of liquid helium per year) and in 2005, Another plant was commissioned in Qatar (producing 6 7 million m 3 per year, with plans to double the volume by 2010). In 2006, Algeria launched its second plant producing 7 million m 3 per year, and with plans to double this volume within three years (Other projects are under review in Australia, Papua New Guinea, and Oman). Worldwide demand for Helium is growing dramatically as high tech industries develop new applications dependent on Helium. On current estimates, experts predict that global consumption of approximately 75 tons per day may only be possible for a few decades (Hannon 2007). Global consumption of the gas today stands at around 140 million cubic meters per year, and demand is growing by between 4 and 6% annually (Cai et al. 2006). The largest producer and consumer of helium is the US (over half of the total), with the European Union in second place accounting for 20%, and Asia Pacific in third place with 15%. As a result of the dynamic development of the hi-tech industries in the Asian Pacific region consumption of helium is growing rapidly. In China alone consumption grew by around 25% in 2005. It is forecast that by 2030 helium global demand will increase to between 220 and 300 million m 3. The US s share will drop to 45% (extraction of helium in North America is falling by between 5 and 6% per year due to field depletion), Europe s to 15% and Asia Pacific will account for over 30%. Simultaneously with changes in the structure of demand the structure of supply is also undergoing a transformation. In the light of falling production in the US and the growing demand from the Asia Pacific countries it is predicted that unless new fields are brought on line there could be a helium shortage of around 166 million cubic meters per year by 2030. 4.4 HELIUM COSTS AND ESTIMATED COST FOR PBMR The PBMR DPP will require 7290kg of Helium initially. It estimated that there will be a loss of 0.1% per day, approximately 7.92 kg per day. Therefore the total amount of Helium required for the project over the 40 year lifespan is estimated to be 123552kg. Air Products South Africa gave a price estimation of R650/kg 1, including transport to the power plant where the PBMR DPP will be located. It must be reiterated that the following calculations are based on the assumptions that only crude helium will be required as well as that according to current price information, the price of helium will increase by approximately 5 % per annum. Taking into consideration the above assumptions, the following calculations determine, firstly the initial cost for 7290 kg 1 It should be noted that the costs are indicative only, and may bear no resemblance to the actual cost that the gas may be acquired at, at a later stage. 4 1732ES 1732ES

helium and secondly, the annual cost based on 0.1% loss of Helium per day and lastly the estimated cost for the PBMR DPP over a 40 year period. Initial Cost: Helium = R 650 per kg Therefore initial cost = 7920 kg x R 650 Annual Cost: = R 4 738 500 A 0.1 % loss of helium per day means that Eskom will need a daily input of helium of 7.29 kg which equates to R4738.50 per day. Therefore annual cost of helium = R 4738.50 x 365 days = R 1 729 552.50 Total estimated cost of Helium over 40 year period: At a cost of R 1 729 552.50 per year, the price for helium over 40 years is: R 1 729 552.50 x 40 years (taking into consideration an annual 5% increase) = R 208 929 552 4.5 CONSTRAINTS AND LIMITATIONS These costs are indicative and presently insufficient information is at hand to calculate costs with a large degree of certainty. The scope of this project has limited the assessment solely to Helium and as such these costs cannot be interpreted with respect to the demonstration project as a whole or to alternative technologies. 5 Conclusions and Recommendations In terms of supply and availability of helium, the short term poses little threat to the PBMR DPP as helium is readily available from local suppliers for the life of the PBMR DPP. However, it has been shown here that the future of helium supply is under pressure and global supplies will need to be enhanced by exploitation of new fields and technological development. It is therefore recommended that Eskom continue to monitor what developments are made in making these new fields that are available for helium extraction. No judgement can be made in relation to the cost of the PBMR DPP and therefore no recommendations are made pertaining to the project. 1732ES 1732ES 5

6 References Bowe, D.J. 2004. Helium Recovery and Recycling Makes Good Business Sense. Air Products and Chemicals Inc. Brown, R. H. (1998) Unique Enigmatic Helium. Origins 25(2), 55-73. Cai, Z., Clarke, R., Ward, N., Nuttall, W.J. and Glowacki, B.A. 2007. Modelling Helium markets. Judge Buiness School, University of Cambridge. Clarke, R. H., Ward, N., Cai, Z., Glowacki, B.A., Nuttall, W.J..A Three Party Global Helium Resource Study. CryoPrague. Hannon, D. 2007. Helium Shortage Leads to Price Increase. [Online] Available: http://www.purchasing.com/article/ca6511198.htm. Peterson, J. 1999. Helium. U.S. Geological Survey Minerals Year Book. Smith, D.M., Goodwin, T.W. and Schillinger, J.A. 2003. Challenges to the Worldwide Supply of Helium in the Next Decade. Air Products and Chemicals Inc. TNK-BP. 2006. Lighter than Air. [Online] Available: http://www.tnkbp.com/press/media/2006/6/1795/ 6 1732ES 1732ES