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March 04, 2008

Comments

Bob Wallace

"American are demanding changes in energy production and the utilities are listening - there are 31 new nuclear power plants on the drawing board to be built over the next 15 to 20 years. Three of those are proposed for Florida. . . ."

And it's now looking like those Floridians who expect to enjoy the benefits of additional nuclear plants will get to put their money where there expectations are.

Current plan is to crank up the cost of electricity for Florida consumers and use that extra money to build the new plants.

And consumers will have to pay even if the plants never come on line.

Bet that's going to be popular....

---

BTW, more breakthroughs in cheap solar announced.

Going to be interesting times ahead.

Kit P

Cyril wrote,

“Thorium is rather a non-starter though, because there is too much uranium for it to be justified on economic grounds.”

Good point.


Bob wrote,
“And consumers will have to pay even if the plants never come on line.”

Sounds fair to me. Regulated utilities are limited to amount of profit they can make. The risk of building natural gas fired power plants is low to investors because they can be built fast and the cost of fuel is past on to consumers. Since both utilities in Florida that are planning on building nukes already run nukes, the PUC is most likely allowing some of the huge profits from the existing nukes to be rolled into new nukes.

Bob Wallace

If their profits are limited how could they be "huge"?

If their profits are huge then why would they need to tap their customers for construction funding of future plants?


Kit P

Bob, I do not live in Florida but I suspect you do not either. I will try to explain it to you but would be nice if someone from Florida would jump in.

Generally speaking, well run utilities with multiple nukes can make base load electricity as low as $12.20/MWhr while the cost with natural gas comes in at $70-200/MWhr. This represents about $4 billion in profit which is shared between investors paid as dividends and Florida customers in the form of lower rates.

Florida utilities have another choice they can make for investors. They can take their skill at building and operating nuke plants to another state where customers are paying twice as much for electricity. Those other states want the jobs, property taxes, and cheaper electricity.

A state near where I live has waged a nasty battle with their utilities. The unregulated part of one company that has plans to build several nukes in several states started discussing with the NRC changing the order of reviewing the COL application so that their first new nuke would be built some where else. The state and the utility reached an agreement this week.

Ugly court battles are only good for the billing of law firms.

Cyril R.

Where'd you get the $12.20 per MWh figure? The lowest I've seen is $18 per MWh once the plant is paid off, but that's unfair - paid off PV plants, when well run and operated like Springerville, can cost even less per MWh.

More relevant is to include the payments regarding front loaded capital costs, that's what the investors want to know. Modern natural gas combined cycles running at high capacity factors can be pretty attractive then, even with high gas prices, and they can be built really fast with generally little public resistance. Those are some of the reasons why NG has gotten so popular.

One way to increase the economical attractiveness of power plants with high front loaded costs (nuclear, solar, wind etc.) is to treat the capital (equipment) as 'fuel' in fiscal and financial terms. The gov't could also give more insurance on loans, so that if a plant gets cancelled the investors get their money back. ITC is another helpful avenue here.

Doubling the PTC for nukes would also help a lot. And let's fix the rate for at least a decade so investors and utilities know what they're up against.

There is so much more we can do without directly subsidizing plant builds themselves, and with a large degree of equity between alternative technologies.

Bob Wallace

Having the government insure the loans is just another way of shoving some of the construction price of new nuclear onto us, the taxpayers.

Clearly nuclear plants aren't hugely profitable. If they were they wouldn't be looking for handouts from the government or trying to pick the pockets of current consumers.

Hugely profitable would mean that investors would be lining up to provide financing for new plants. And dreaming of the wealth to come.

I'd like to see a site where the costs of all electricity generation methods are presented fairly and accurately. Those figures should include not only construction costs, fuel, maintenance, shutdown/cleanup, but also the cost of financing.

(Including the cost of providing total liability coverage for nuclear, which is now assumed by the US taxpayer.)

Based on the limited information that I now have I can't see an economical advantage for nuclear.

Wind, solar PV, and solar thermal seem to require the same or less amount of money as nuclear to bring on line. And all of them can ramp up much faster, thus bring quicker relief to our pollution problems.

As well, they don't suffer the same political opposition that hampers nuclear.

I suspect that new nuclear is facing a huge challenge from the rapidly dropping cost of solar PV. Our needs are for daytime power, especially hot, sunny daytime power. PV is perfect for boosting the grid when air conditioners are cranked up high. And it matters little that they don't perform when the sun is down because we have ample off-peak power.


Kit P

“but that's unfair”

Yes, Cyril your response was unfair. What part of word 'Florida' confused you?

Since Cyril does not live in the US, I will explain it to him slowly. Each state in the US is regulated differently. Cyril am I going too fast for you? Wait I am being unfair to Cyril. What he said is fine as far as generalities go for the federal government and national energy policy. Each state needs to determine what the best policy is for the state.

Bob Wallace

I'm afraid that I don't understand why Cyril's post was "unfair".

He asked a valid question about the true cost of nuclear.

He questioned your "$12.20/MWhr" price for nuclear while pointing out that even if that price were to be accurate, it most likely does not include recovery of construction/financing costs.

Cyril R.

Having the government insure the loans is just another way of shoving some of the construction price of new nuclear onto us, the taxpayers.

Not if the projects actually get built.

If Kit P doesn't understand why comparing amortized levelised costs of energy technologies is misleading and unfair, then he is indeed a troll.

Bob Wallace

"Not if the projects actually get built."

But that is the risk. And why there is a reluctance for private money to make itself available.

And don't forget that even "getting built" isn't enough.

Rancho Seco and Humboldt Bay reactors (to name a couple) were built and placed into service. But they failed to produce enough income to repay their construction costs.

Add to that the fact that the energy world is rapidly changing.

Start the process of building a new nuclear plant today and you have to take the gamble that solar/wind/tide/wave costs won't continue to decrease to the point where you won't be able to compete when you bring that plant on line in a decade or so.

Clearly deep pocket people aren't seeing new nuclear as a good investment.

Bill Hannahan

" I'd like to see a site where the costs of all electricity generation methods are presented fairly and accurately. Those figures should include not only construction costs, fuel, maintenance, shutdown/cleanup, but also the cost of financing.
"

Try this;

http://www.uic.com.au/nip08.htm

For nuclear power plants any cost figures normally include spent fuel management, plant decommissioning and final waste disposal. These costs, while usually external for other technologies, are internal for nuclear power.
Decommissioning costs are about 9-15% of the initial capital cost of a nuclear power plant. But when discounted, they contribute only a few percent to the investment cost and even less to the generation cost. In the USA they account for 0.1-0.2 cent/kWh, which is no more than 5% of the cost of the electricity produced.
The back-end of the fuel cycle, including spent fuel storage or disposal in a waste repository, contributes up to another 10% to the overall costs per kWh, - less if there is direct disposal of spent fuel rather than reprocessing. The $26 billion US spent fuel program is funded by a 0.1 cent/kWh levy.

Kit P

Cyril, FPL is planning building new nukes AND new wind farms AND new solar. In Florida, the PUC did not give them much choice since Florida has ruled out new coal plants.

I am not debating 'amortized levelised costs of energy technologies' you and Bob are. I explained why the State of Florid through the PUC is doing what they are doing. If you do not think it is fair, argue with them not me. The are lots of regulations that the electricity generating industry must follow, fairness is not one of them.

Bob, Humbolt Bay was a small demonstration reactor. Rancho Seco was shut down for political reasons. At the time nuclear industry leaders tried to buy the plant. Plants of similar design have O&M cost of $12.20/MWhr and will run for 60 years (maybe 80). In today's Calif

Kit P

In today's California market, Rancho Seco would pay its construction cost of $300 million every six months.

Bob Wallace

I used to live downwind of Rancho Seco. It was a piece of crap which had continued problems and never was able to produce anywhere close to its potential output.

People in the area finally got fed up with the incompetence of the Rancho crew and decided that the risk wasn't worth the return.

--

Every time I now drive to town I pass by the defunct Humboldt Bay reactor.

Humboldt Bay was a functioning commercial reactor. It suffered a number of problems, including a cracked containment dome.

There were a number of radiation leaks which were covered up by plant operators. The plant was permanently closed when it was discovered that the site was over an active earthquake fault.

HumBay continues to be a problem. Last year they were unable to locate one of the fuel rods which are still stored in the containment tank.

To the best of my knowledge they have yet to locate the missing fuel. There is speculation that the fuel might have been shipped to another site and not inventoried, that it might be lurking in the bottom of the tank (didn't turn up in multiple searches) or maybe ....?

---

The point is, investing in nuclear plants carries a high risk which is obviously not outweighed by potential gain. Otherwise those who wish to build new reactors wouldn't be looking for handouts.

It's too bad that the pro-nuclear crowd doesn't talk in terms of 'amortized levelised costs of energy technologies'. One can't discuss actual costs of various types of energy solutions unless all factors are included.

(You weren't serious with your Rancho Seco construction cost post, were you?)


Bob Wallace

RE: The UIC link.

Thanks. I'm familiar with that one.

Notice a couple of things about that page.

First, it's a product of the Australian Uranium Association.

(Makes one go, "Hummmm", eh?)

Second, take a look at the "Comparison of cost projections" table at the of their report.

Notice how they use the Florida Turkey Point cost per kW based on...

"FPL Turkey Point 2 x 1000 MWe AP1000 $2444 to $3582/kW"

And ignore the earlier data ...

"Florida Power & Light in February 2008 released projected figures for two new AP1000 reactors at its proposed Turkey Point site. These took into account increases of some 50% in material, equipment and labour since 2004. The new figures for overnight capital cost ranged from $2444 to $3582 /kW, or when grossed up to include cooling towers, site works, land costs, transmission costs and risk management, the total cost came to $3108 to $4540 per kilowatt. Adding in finance charges almost doubled the overall figures at $5780 to $8071 /kW."

In other words, seems to me that they are cherry-picking their data to make a stronger case for nuclear being inexpensive. They basically use out of date data.

Clee

Bill Hannahan writes:
For nuclear power plants any cost figures normally include spent fuel management, plant decommissioning and final waste disposal.

If only that were true. The most commonly quoted figure I see is the 1.7 cents/KWH which is the production costs, which include only fuel, operations and maintenance costs and as it says in
http://www.nei.org/resourcesandstats/nuclear_statistics/costs/
"Decommissioning costs are not included in production costs."
Even funnier is Kit P.'s number of $12.2/MWH which includes only operation and maintenance costs, and Kit P. doesn't even claim it includes fuel costs! Indeed, it is close to the 1.26 cents/kWh O&M costs listed in the NEI page. I suspect 1.22 cents/kWh may be the new 2007 numbers for O&M (nor including fuel costs, much less the plant decommissioning costs that you say are normally included.)

Cyril R.

Engineer-Poet was right about Kit P - he contradicts himself even within the same post!

First, Kit says:

I am not debating 'amortized levelised costs of energy technologies' you and Bob are.

Just one paragraph later, he says:

Plants of similar design have O&M cost of $12.20/MWhr and will run for 60 years (maybe 80). In today's Calif

First you aren't debating it, then you are?

Interesting that you should mention CA. You provided a link earlier that clearly stated the levelized cost of advanced nuclear in CA is more than $100/MWh. To which you disclaimed that the cost of doing business in CA is expensive. Anyone who actually knows something about energy financing knows that explanation wasn't nearly sufficient to account for the huge cost difference.

Ignoring capital cost is about as absurd as ignoring capacity factor.

Then there is your claim about 60-80 year life.

Let's see here:

* no nuclear plant in the US has operated that long in the first place.

* If operating for such long periods is possible, then the major O&M requirements would significantly increase your $12.20/MWh claim, which is too low to begin with anyway.

* Private investors do not care about such long term investments even if the plants would last that long - because the investors would be senile or more likely, dead. Most investors want to make money while they're still able to enjoy it.

I will remain sceptic about new light water reactors until actual completed project data proves me wrong.

Cyril R.

Bill H wrote: Decommissioning costs are about 9-15% of the initial capital cost of a nuclear power plant. But when discounted, they contribute only a few percent to the investment cost and even less to the generation cost. In the USA they account for 0.1-0.2 cent/kWh, which is no more than 5% of the cost of the electricity produced.

History shows otherwise. Big Rock Point Nuclear Powerplant is the reactor that operated the longest in the US.

Consumers Energy had previously announced that Big Rock Point's operating license would not be renewed when it expired on May 31, 2000. However, economics proved in January 1997 that it was not feasible to keep Big Rock Point running to the license's expiration date.

The reactor was scrammed for the last time on at 10:33 a.m. EST on August 29, 1997, 35 years to the day after its license has been issued.

Because of its contributions to the nuclear and medical industries, the American Nuclear Society named Big Rock Point a Nuclear Historic Landmark.

Unfortunately, this 'landmark' had a decommissioning price tag of more than $5000/kW. Even with the most favorable discounting, that is still a huge increase in the levelized cost of electricity.

Now, Bill might say, larger reactors have much lower decommissioning costs per KW. That's probably true, but to which extent has not been proven as none of the new plants have been decommissioned.

To reiterate, I will remain sceptic about capital and decommissioning claims of new light water reactors until future project data proves me wrong.

I don't believe in big subsidies, but think that incentives will be necessary, and I do believe in equity of incentives between technologies.

Cyril R.

So, if nuclear gets big incentives, so should solar and wind. Nno builds should be subsidized directly, and no rewarding incompetence (eg paying for cost overruns).

Here is what I believe are more realistic ballpark estimates:

New fission plant levelized cost: $50-$100/MWh

New fission plant amortized (=future)levelized cost: $15-$25/MWh (= a bit higher than most wind and solar in good locations).

NorCalMatt

OK I've read every single word above and have only learned one thing: Kip is quite possibly the biggest d*ckhead I've ever come across. Congrats!

Here's two _relevant_ questions for the rest of you: 1. When will nuclear power be competitive with efficiency/conservation?

2. Why should we consider investing in ANY type of generating technology when efficiency and conservation measures are so cheap?

tap, tap, tap......

Cyril R.

When will apples be competitive with oranges? I'll take both, as they are a huge improvement over our sickly diet of fossil fuels - we'll need all the vitamins we can get if we want to get over our fossil fuel related headaches fast.

NorCalMatt

Really, Cyril? You too? I thought you were smarter than that. There is no better "apples-to-apples" comparison than negawatts to megawatts. Especially since the negawatts are nearly free, and (as is obvious here) no one agrees what the cost of essentially any new power plant actually will be.

So, I'll put it another way: what's better, constantly building new power plants (fossil or otherwise) because "mankind will always need massive amounts of energy," or realizing there is no truth behind that statement, and not having to build any new power plants at all?

I know it ain't sexy, but efficiency and conservation (and I do NOT mean freezing in the dark) are so obviously the answer to our problems right now that it just amazes me anyone would consider ANYthing else.

The only reason it isn't already the main force behind energy policy is because our energy companies make money by selling energy, not be saving it. The day that all our utilities can make money though their efficiency and conservation programs is the day our energy problems start to fade away. Until then, all else is pointless debate.

Cyril R.

There is no doubt about it, most of the near term potential is in efficiency.

And we should definately do all we can there.

The problem is, at some point the high IRR efficiency improvements are exhausted to the point that adding generation will become cost effective.

This is because even the most radical negawatts campaign can't reduce electricity demand to anywhere close to zero. Far from it, in fact.

And we have also have a lot of old coal fired plants which have to be replaced soon. Maintaining and even uprating the nukes will likely be cost-effective and feasible, but this won't be the case for many coal fired plants.

There are also a few effects such as the take-back principle and 'Economic growth', to use a horrible generalization, which will limit the efficacy of Negawatts further.

Efficiency is not an option - it is a prerequisite for any sane energy policy.

We won't get anywhere without it, but we won't get there on it alone.

Just my 2c: Set much stricter lower bounds on energy use of appliances, devices, homes etc. and increase the lower bounds every year.

Initiate a cap-and-trade emissions system of GhGs, and set a much stricter limit on emissions of heavy metals, sulphurous oxides, nitrous oxides, soot, and other malignant substances and gases, and use market mechanisms to take care of the rest.

It would work much better if it's done globally, but the political difficulties are quite daunting.

Cyril R.

Looking into the issue of decommissioning cost a bit deeper, it appears the total cost of decommissioning the entire UK nuclear fleet are estimated by the Nuclear Decommissioning Authority to be about $12000 per kW.

Even after discounting, the figure given is still greater than $6000 per kW.

ben

fag

James Wittington

As the Democratic Convention wraps up and the hoopla of the Republican Convention heats up Americans are still left with a sense of a lot of hot air of any concrete plans to end the energy crisis in America. Northerners dread the upcoming onset of fall and colder weather wondering how they will be able to afford how to keep their homes and families warm. Southerners have been sweating the high cost of energy raising the thermostat to save on their electric bills. Families everywhere are wondering where else they can cut back to cover the cost of fueling up the family vehicle to get back and forth to work and take care of the necessities of life. There is no money left for relaxation and family fun. The stress level continues to rise. The average electric bill has risen 16% to cover the power companies additional production costs. A gallon of milk is almost as precious as a gallon of gas. The cost of every consumer product has risen sharply. American's are stretched to the limit. Jobs are being lost, foreclosures are increasing at an alarming rate. Seems even the family pets are suffering the high cost of fuel as almost daily a new story is on TV about shelters being forced to euthanize record number of surrendered pets from those forced out of their homes or no longer able to care for them. The energy crisis in our country is far reaching and needs immediate attention. I am hoping whoever gets elected will get their act together and make this their #1 priority.

An interesting site to share...

www.themanhattanprojectof2009.com

Kit P.

"An interesting site to share"

If you find fear mongering for profit, interesting.

Green Energy

Most of the time, you think nothing of it. You just put your French fries in the oven and turn a dial or you sigh as the furnace rattles to life to bring you warmth. You don't realize that you're making use of an amazing energy source that has been piped right into your home. Natural gas is an important part of our lives and a fuel that gives you a lot of bang for your buck. In addition to running stoves and other appliances, natural gas fuels many power plants that provide electricity to your home and the businesses you patronize every day.

cloth shopping

I just came across your blog about ebay deand wanted to drop you a note telling you how impressed I was with the information you have posted here.

hosting

nice and informative.

kelly@EPC Ealing

Nuclear Power is one of the important thing of future energy. this blog provide us helpful info about "Nuclear Power: A Change for the Better". i really like this.

Jack@EPC Ealing

I agree with before comment that SolarThermal/GeoThermal of course rank similar to Nuclear.

However, given their lower capital cost, they have an option Nuclear doesn't

jennifer@EPC Balham

"Energy drives our entire economy." We must protect it. "Let's face it, without energy the whole economy and economic society we have set up would come to a halt.

Sophia@air conditioning inspectors

Nuclear power is one of the options available for alleviating the risk of global climate change

Jasmine@air conditioning inspectors

Nuclear power generation does emit relatively low amounts of carbon dioxide (CO2). The emissions of green house gases and therefore the contribution of nuclear power plants to global warming is therefore relatively little.

komal@air conditioning inspectors

Nuclear Power is the future of energy source. this the big and very powerful way to get energy for our work.

Hsoft@air conditioning inspector 

nuclear power is that it does not produce greenhouses gases. It does, however, produce hazardous waste.

komal@air conditioning survey

Bu my knowledge Nuclear power currently provides 15% of the world’s electricity supply. Once built nuclear power is relatively cheap and safe to produce.Do the advantages outweigh the disadvantages

Jack@air conditioning survey

Everything we do has risk and negative consequences and you have not given any relative reference here, as I understand it other forms of power generation are responsible for much more illness and death on a per Gigawatt basis.

On that basis we can say that Nuclear Power generation will actually result in less illness and save many lives.

angel@armitage shanks

Nuclear power is produced by non-explosive nuclear reactions. Commercial and utility plants currently use nuclear fission reactions to heat water to produce steam, which is then used to generate electricity.

angel@air conditioning survey

Nuclear power is produced by non-explosive nuclear reactions. Commercial and utility plants currently use nuclear fission reactions to heat water to produce steam, which is then used to generate electricity.

angel@air conditioning survey

Nuclear power is energy which is produced with the use of a controlled nuclear reaction. Many nations use nuclear power plants to generate electricity for both civilian and military use, and some nations also utilize nuclear power to run parts of their naval fleets, especially submarines.

kelly@air conditioning survey

all the other sources of power such as solar, hydro-electric, thermal, the nuclear power is the most economical. There are bright career opportunities in Nuclear field.

rini@energy performance certificate

Nuclear power is generated using Uranium, which is a metal mined in various parts of the world.

fenny@SAP report

Nuclear energy originates from the splitting of uranium atoms in a process called fission. At the power plant, the fission process is used to generate heat for producing steam, which is used by a turbine to generate electricity.

Electric Bill

Nuclear waste is a huge concern. Anyone not willing to admit this, is just not being honest!

Hsoft@building design

hsoft@building design
Climate change is widely acknowledged as being one of the most pressing issues for the global community, including for NIRS/WISE and our allies. Climate change affects many aspects of the environment and society, including human health, ecosystems, agriculture and water supplies, local and global economies, sea levels and extreme weather events. However,many in the nuclear industry see climate change as a 'lever' by which to revitalize the fortunes
of nuclear power.

Hsoft@energy efficiency london

hsoft@energy efficiency london
Change" seems to be the operative word this election season. It's on the lips of political contenders and on the minds of the voters. But politics isn't the only arena where change is in the air. Change is happening in the world of energy as well, specifically when it comes to nuclear energy.

Emma@energy efficiency london

Nuclear power and fossil fuels are environmentally polluting and non-renewable sources of energy that produce long-term radioactive wastes and/or greenhouse gas emissions.

kelly@building design

Really took me time to read all the comments, but I really enjoyed the article. It proved to be Very helpful to me and I am sure to all the commenters here! It is always good when you can not only be informed, but also helpful.

The comments to this entry are closed.

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