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« Hydrogen From "E. Coli" | Main | FutureGen Scrapped, CCS to be Demonstrated on Multiple Clean Coal Power Plants »

January 31, 2008

Comments

DaveMart

Actually, Cyril, I can imagine that some coal or gas plants are turning out power at $0.02 kwh, so your 80% subsidy rate is about right.
Nuclear costs are still half of the cheapest renewable, wind, so it all depends on how you feel about fried planet.

A link to the $0.02 costs would be nice though- I have more difficulty finding my way around US figures

Cyril R.

Not sure about the Finnish plant. I'm worried about a few new ones in the US.

You see Dave, the fundamental problem is discounting. I suspect favourable discount rates are not available for new nukes in the US, and that this is the main reason they get such high subsidies.

Discounting is arguably the most important variable in levelised cost of new nuclear power if the actual capital costs are known. Also, you have to factor in the indirect subsidies and stuff, which is essentially what the US govt did when they calculated 6 cents per kWh for 2 bucks a Watt reference capital costs nuclear plant. MIT got 6.7 cents per kWh. Note that this is just for the US.

Nuclear plants remind me of big freight ships. Long time to build, big investment unit, risk of failure etc. Not an enticing investment overall, resulting in rather high discount rates. Also, a lot of funds don't wish to invest in fission as it can cause a bad rep with the general public.

Discount rate is extremely important for capital intense projects. The US govt loan guarantees virtually cloak this important variable completely. I'm afraid this will actually end up doing more bad than good for the prospect of more nuclear power in the US.

You can see it here.

Cyril R.

More importantly, like I said, the govt focus should be mostly on the demand side for now. Much more to be had there for the immediate future.

DaveMart

Sorry, correction - nuclear is around half the cost of wind proposals in the UK.
figures for on-land wind power in the US will be cheaper, I don't know by how much.
Proposals to build more standby or upgrade the grid to improve reliability of when you could get the power would add a lot to the costs though, possibly to near the same figure.

DaveMart

We are basically on the same page Cyril, and I am certainly not in favour of giving any energy resource, including nuclear, a blank cheque.

Like you, I think the first and the best thing we can do is conserve energy, and plan in my next post on my blog to look at this important subject.
http://energy-futures.blogspot.com/

If we think that GW is a possibility though, we can't get away from the need to generate energy in a carbon-free way, and the figures for the renewables I have come across so far have been both horrendously expensive and ineffective in reducing CO2.

Here in the EU so much money is targeted at renewables that the costs for nuclear look modest, and I am doing my tiny little best to mitigate this financial disaster.

One little quibble with your link, this says that 80% is guaranteed, not that there is an 80% subsidy, but without any close knowledge of what they are guaranteeing in the US then I am really in the dark as to what the difference is between that and a subsidy.

I am perfectly prepared to accept though that coal and gas are cheaper all the time their emissions are not costed.

If you want to reduce CO2 though then after conservation nuclear is way cheaper than anything else at the moment.

DaveMart

Cyril R said:
'More importantly, like I said, the govt focus should be mostly on the demand side for now. Much more to be had there for the immediate future.'
I completely agree on the desirablity and cost effectiveness of conservation.
Here are a few thoughts on what we could do in the UK, financed by around half of what they are intending to spend on off-shore wind:
http://energy-futures.blogspot.com/
You get a lot more bang for your buck in this way both in terms of carbon emissions and reductions in the use of fuel.

DaveMart

Sorry, link should have read:
http://energy-futures.blogspot.com/2008/02/conservationour-best-route-to-reduce.html

GreyFlcn

==Cyril R: 2 bucks a Watt reference capital costs nuclear plant==

$2000/KW?
Wow, that looks so silly when you look back at it now.

Try $4000-6000/KW according to more recent studies.
greyfalcon.net/costlynuclear

And as for subsidies in general, nuclear sure gets a boatload of em.
greyfalcon.net/h2nuke
greyfalcon.net/nuclearvideo

GreyFlcn

==If storing the higher temperature waste were a great problem you would have a point, but it isn't.==

Good point. That makes a lot more sense now.

It's not how hot it is. It's how "Hot" it is.
As in slang for radioactivity.

Nuclear waste with the U238
And the same Nuclear waste without the U38
There's virtually no difference between the two in terms of radioactivity.

JDT

Kit P - Let me clarify, I did not vouch for the neutrality of nrgxprt.

All I vouched for was a "neutral" (or more correctly "unbiased empiricological") methodology.

I am not following the debate so closely, neither is nuke energy my cup of tea, so I did not mean to pass judgement on any person's comments.

Rod Adams

I am joining the party quite late - I saw this post a couple of days ago but did not have time to comment then.

My answer to the initial question is No, we do not need Yucca Mountain. There is little to no risk in keeping used nuclear materials above ground and the overall cost is far lower than what is projected for moving and storing the materials in Yucca. In my opinion, Yucca Mountain is the right answer to the wrong question.

As Tim points out, the dice are loaded against Yucca ever opening, no matter how much is spent in research. Of course, there are plenty of people who want to keep that research going at great expense - one man's "cost" is another man's "revenue". What he does not point out is WHO loaded the dice in the first place.

As we all should know, the energy business is very large, very powerful and very profitable. That is especially true if the perceived balance between supply and demand is such that there is not quite enough supply to go around. That makes prices go up and allows even companies with year over year drops in production to continue to make enormous sums of money - like Exxon-Mobil's $80+ BILLION over the past 2 years.

One way to keep that supply of BTU's limited is to put as many restrictions as possible on nuclear fission power plants. That increases their costs to the point where cold, calculating studies like the ones that Tim produces conclusively show that nuclear power is more expensive than the alternatives.

I am a bit more passionate and aggressive about technology and about the ability of people to either change or reinterpret the rules so that the numbers support their desired conclusion. Like Tim, I live in a world of studies, but I know I can choose the assumptions to make almost any conclusion look pretty good to a decision maker.

Used nuclear material is a resource, but I hope that I have time to accumulate some of it before too many people catch on and start driving up the price.

Rod Adams

Oops:
In my last post, please replace the word "Tim" with the word "nrgexpert". I forgot that this blog puts the poster's name at the bottom, not the top of the post.
Rod

DaveMart

Greyfln said:

'$2000/KW?
Wow, that looks so silly when you look back at it now.

Try $4000-6000/KW according to more recent studies.
greyfalcon.net/costlynuclear

And as for subsidies in general, nuclear sure gets a boatload of em.'

Nothing in it between the costs you give and the actual build costs of the Finnish reactor, to date:
http://www.iht.com/articles/2007/09/05/bloomberg/bxnuke.php

From the current cost including overruns of $4bn, I've guesstimated $6bn as total costs for a 1.6GW installation, $3.75 million MW, nameplate capacity, $4.16 million actual output based on 90% utilisation, typical of the nuclear industry.

That's an awful lot, but you have to ask, a lot against what?

If you want to burn natural gas, where is it going to come from?

If coal, you are pricing against an industry which has managed to get the right to spew many of it's wastes over the landscape, including large quantities of uranium.
That is always going to be cheaper than having to deal with it as the nuclear industry does.

That is before you come to consider CO2.

Others in this thread have demonstrated pretty conclusively that sequestration, at least in the form the coal industry is proposing it, is a pipe dream.

So called renewables are also vastly expensive, and mostly ineffectual anyway in reducing CO2 - because they need back up, they just lock in a high level of coal or gas burn, as nuclear is too expensive for peaking when it is a new build.

I analysed that using UK Government figures for wind, which is the nearest to being competitive.

http://energy-futures.blogspot.com/2008/02/cost-of-wind-power-in-uk.html

Wind might do OK at some favourable locations in the US, but it is a bit player, very expensive, and I mean against nuclear not gas or coal even without providing storage or a better grid to make it a bigger part of the energy picture.

Solar will probably be OK in some sunny regions like in the South West in a few years for peak load at least, but we don't can't do it yet at any rate, and visions of running everything with it are far-fetched and not based on realistic engineering or costings:
http://energy-futures.blogspot.com/2008/02/solar-energy-for-uk-and-northern-areas.html

Here in the EU mandated measures against CO2 actually make nuclear look cheap! - but crazily, it doesn't count against the renewables undertaking, so we will likely be landed with costs which are at least twice that of nuclear!

So if you can't get gas, and coal chucks out vast quantities of CO2, what are you going to use if not nuclear?

DaveMart

Rod, spot on in my view.
Most of the discussions about nuclear energy concern themselves with re-inventing the wheel.

The French have run the most successful nuclear program in the world for decades, producing most of the countries electricity by that means for decades.

They reprocess to burn fuel more efficiently, and to reduce bulk then store it at the moment.

In my view the best way the nuclear industry could increase public confidence would be to commit to developing reactors to burn up the remaining waste.

Only a couple of reactors in the fleet would have to be designed to do this.

You can't overcome the objections of some, which are religious in their quality rather than based on any rational considerations at all, but hopefully you could chip away at the feeling of vague unease in the rest of the population that gives it political power.

Just another thought on costs, although we know that at the moment at least nuclear costs according to my calculations around $0.045 kwh, using levelised costs over 25years, it carries right on after the 25 years or so generating electricity for fuel costs and maintenance for the rest of its 60year life, at perhaps 1c kwh.

Anyone want to place any bets on what coal or gas will cost per kwh in 35years time or so?

You could certainly finance using older reactors for peak load as well as base, although measures to reduce peak loading would help and are sensible anyway, as I argue here:

http://energy-futures.blogspot.com/2008/02/conservationour-best-route-to-reduce.html

We could live comfortably at reasonable cost with rational measures, but a nasty combination of the naive and big business interests make it very difficult to follow policies which would deal with Global warming and coming shortages of fossil fuel.

We have not got long to adopt better policies without massive dislocation.


Cyril R.

You got it Dave, conservation is key. Some people detest the word, thinking they have to live in cold houses and such nonsense. Rediculous of course, the standard of living can actually be improved with mechanical filters and heat exchanger ventilation, high quality insulation and passive solar design. A small heat pump can take care of any remaining heating and cooling as well. Like you said on your blog, UK ambient temps are often suitable for very efficient air heat pumps. It's actually quite shameful that so many people live in houses with an F energy rating!

Industrial energy use is more difficult to improve although industrial waste heat recovery and combined heat and power interlinking systems approaches show a lot more promise.

Transportation is possibly the most difficult, considering the long lead times of electrification and the limited potential of biofuels combined with the almost complete dependence on oil which isn't exactly the most abundant fossil fuel.

Nuclear levelized cost depends first and foremost on specific capital costs, and for a given capital cost, discounting is very important. I think the US govt estimate of total lifecycle levelized cost of new nuclear power in the US is pretty accurate under the specific capital costs adopted in that study. Greyflcn is correct that capital costs may be substantially higher right now, although the Finnish plant isn't that good a reference case. Also, new coal fired plants are not that cheap, often more than 4 cents/kWh. It's not very useful to analyse amortized plants as you cannot build those! However I think 1 cent/kWh for an amortized nuke is way too low, on this blog I've read that the costs of just running the reactor are 1.8 cents/kWh. Keep in mind that although nuclear powerplants may last a very long time, the odds of heavy (=expensive) maintenance needed for the reactor and equipment get very big. And 60 years lifetime is hypothetical anyway as no plant has lasted that long.

Regarding the US plants, the Technology Review link made it pretty clear though:

Many observers credit the Energy Policy Act of 2005. NRG Energy says that the law's loan guarantees and tax incentives could cover up to 80 percent of the cost of its $5.4 to $6.8 billion project.

There's a very decent article on Wikipedia regarding the difficulties in determining the cost of new nuclear powerplants.

Good luck with your blog Dave!

DaveMart

Cyril R said:
'UK ambient temps are often suitable for very efficient air heat pumps. '
It's a shame that in much of the US you would need the far more expensive geothermal heat pumps due to your less clement weather.
perhaps they might be financed by the equivalent of some of the schemes I have seen for PV panels, where the installer takes the savings for a number of years, then it reverts to the property owner.

DaveMart

Cyril R said:
'Industrial energy use is more difficult to improve although industrial waste heat recovery and combined heat and power interlinking systems approaches show a lot more promise.'
I steered clear of the issue, as it is far removed form anything I would have the knowledge to sensibly comment on, but my understanding is that once industry or commerce decides to do something about it, and takes it onboard, then often substantial savings can be made as they have access to a high level of expertise to action policies.
Cost is key, of course, and areas for savings are not difficult to identify, when office lights are typically left on all night in many places!

DaveMart

Cyril R said:
'I think the US govt estimate of total lifecycle levelized cost of new nuclear power in the US is pretty accurate under the specific capital costs adopted in that study.'

Have you got a reference for that study? I would like to read it - as I said, I am not so good at poking around for US sources, as I am not so familiar with who is who - that is why I stuck to British studies, as I know what my sources are.

DaveMart

Cyril R said:
'However I think 1 cent/kWh for an amortized nuke is way too low, on this blog I've read that the costs of just running the reactor are 1.8 cents/kWh.'

Yeah, it was just a guesstimate, not an estimate.

DaveMart

Cyril R said:
'And 60 years lifetime is hypothetical anyway as no plant has lasted that long.'

My understanding is that Areva is being a bit disingenuous in estimating the life of their plant at 60 years as an improvement, when their old plants were estimated at 40 years, but in practise are likely to be extended on a case by case basis to around 60 years.

I thought we were close enough to that age for the older plants for them to be able to give good estimates of longevity, for those and future plants.

As an aside, we do at least know this about the costs of nuclear, that it is cheap enough that you can generate most of your electric from it and not noticeably suffer - which is more than we know about renewables.

It is interesting that however they have financed them electric rates in France are some of the lowest in Europe, whilst those in Denmark and Germany with their emphasis on renewables are some of the highest.

DaveMart

Cyril R said:
'Good luck with your blog Dave!'

I am hoping to get my friendly computer guy to have a look at it, and set it up as a discussion forum.

The Oil Drum has some interesting articles, but the discussion often degenerates into mere statements of attitude, or assumptions without anything to back them up, typically rather millenialist.

If we are all doomed, I would at least like to know what we are going to run out of, why that is a show-stopper and if we can do anything about it.

If I get it off the ground I would hope that you would be a contributor and moderator - I think you have a firm enough hand to keep order, Cyril! :-)

Cyril R.

Have you got a reference for that study?

It's link # 29 in the article. It's a big fat PDF, with lots of substance but also lots of assumptions. What you would expect from the US govt :)

It is interesting that however they have financed them electric rates in France are some of the lowest in Europe, whilst those in Denmark and Germany with their emphasis on renewables are some of the highest.

Over the last two decades the levelized cost of wind has come down a lot, but Denmark had to pay the price of being an early adopter. Managing the intermittency issues on a scale no other country had done before and getting other technical problems fixed as well. And Denmark still has many of the older, more costly windfarms left to pay for, some windfarms are being torn down entirely which is also expensive.

Ecological and energy taxes are also important as they differ in various European countries (maybe the EU will put an end to that though).

If we are all doomed, I would at least like to know what we are going to run out of, why that is a show-stopper and if we can do anything about it.

We can do a lot, but I think that a lot of the pessimism on TOD derives from the notion that we probably won't, or at least not untill it's too late. Of course such thinking, if pervasive, might be self-fulfilling, but it's scary that so many intelligent TOD commenters are doomers.

GreyFlcn

==So called renewables are also vastly expensive, and mostly ineffectual anyway in reducing CO2 - because they need back up,==

Thats where Solar Thermal with Heat Storage comes into play.
http://greyfalcon.net/solarthermal

(And Geothermal, and Marine Current Turbines, where you can get it)

UK is actually a pretty ideal place for Marine Current Turbines. (Basically, underwater windmills that run 24/7)

_

Or worst comes to worst, you have an hybrid power plant. Where you have a combined cycle turbine being run by solar heated liquid in the day, and that same turbine is heated by natural gas when the sun isn't out. (No need for separate facilities)

DaveMart

Cyril R said:
'Denmark had to pay the price of being an early adopter.'

They've also got a pretty lousy wind resource, with much of the country having low average wind speeds.

I'd like to get hold of some figures for the US, really solid figures that is, as if it is going to be economical anywhere it would be there.

I don't have too many doubts that they can do some relatively low rates of penetration, say under 10%, pretty economically in Texas and so on.

It's the wild-eyed schemes that frighten me - just because you can get a little energy from the wind it doesn't mean that you can afford loads of storage, giant grids and so forth.

Of course, there might be breakthroughs, but there might be breakthroughs in other technologies as well.

My personal favourite is high altitude wind, where you can get your power most places pretty well all the time at much higher efficiencies, and with 95% of the structure thrown away.

It shouldn't be beyond the wit of man to exploit it.

I always try to keep actual options on a very conservative basis though - you can't bet on things breaking the right way for you.

Thanks for the link.

Sounds a bit like some of the stuff I have for the UK.

You can pretty well guess the figures before you look at them by whether they incline to the coal industry or the nuclear.

DaveMart

Greyflcn,
Like you I am an enthusiast for solar thermal, a much better play at the moment than PV. and the plans of Ausra are very very exciting too.

I am pretty cautious though in evaluating technologies, and at the moment we haven't got solar power that is competitive even for peak power in the best locations, or if it is that is recent.

For load following in the South West, and perhaps even some power storage for a couple of hours I am very hopeful.

That is the stage at which I would re-evaluate and see what might be practical for the far more challenging task of providing power day and night winter and summer, and that only in the South-West.

I reckon to do that you would need to have around twice the needed summer output as in the winter you only get around 25% of the sun, so although needs are lower, I have allowed a factor of two, you would still need to oversupply as storage would obviously be impractical for months at a time.

At the moment it is not even cheaper to supply the summers needs once over, without thinking about twice, so we really have a very long way to go.

Geothermal and ocean turbines are also interesting, and in the case of hot rock geothermal represent a vast resource:
http://anz.theoildrum.com/node/3215

Both are in the early stages of development, and both sound expensive to me,

What gets me is that we don't implement the things we do know how to do, like insulation and heat pumps, and both would show a far better ROI than most of the more challenging ideas.

At the end of the day, that is what I like about nuclear power - we know how to do it, and it already takes care of most of France's electricity needs.

It might not be cheap, but I have a strong preference for tested systems.

Kit P

Cyril R could you explain what you mean by subsidies? I would argue that the nuclear industry is not being subsidized at all. Clearly, the 104 operating nukes are paying much more in taxes than they are getting back. At least 85% of these 104 plants will operate for 60 years. That is 20 years of taxes that was not expected 10 years ago.

DaveMart

Reducing the comparative cost of nuclear power:
Looks like the governments of the world have chosen a simple and masterly means:
Increase the cost of everything else!
http://europe.theoildrum.com/node/3584#more

To my mind, the 'industry standard' price projections of gas are simply unrealistic - if you are not actively looking for more, and supplies are already tight and traditional sources are depleting, where do you go but higher prices?

This is aside from considerations of peak oil and gas - it seems to me that effectively we are already under peak-like conditions, as the cost of finding per barrel of oil of cubic meter of gas the needed resources has greatly escalated, and finance is now available in quantity for non-conventional sources like oil sands, which rely on prices over $60 per barrel to become economic, so many at least have confidence that this will be the case for many years.

I realise of course that this will not substantially affect the price of coal,- I was joking in my lead-in.

Just the same, the situation for coal in the US can lead to a misapprehension as to it's price level around the world, as the resources there and in Australia are better than almost anywhere else.

Costs are substantially higher inn Europe, for instance.

DaveMart

Kit, the maze of subsides in the energy industry and the variety of assumptions are so great that I have more or less given up on working out to any close order what is going on for many resources.

Just the same, in the particular case of the proposals to develop 33GW of off-shore wind in the UK, Government figures show it to be so staggeringly expensive, and it is so inefficient at it's aim of reducing carbon emissions, that the case is altered, as you can make the most generous assumptions possible and it is still insane.

You might like to check out the costings:
http://energy-futures.blogspot.com/2008/02/cost-of-wind-power-in-uk.html

You have a very good wind resource in the States, and it is on-shore which is much cheaper, but still, one wonders at the economics judging from these mind-bogglingly bad figures....

Cyril R.

It's not the older nukes that are heavily subsidized - that's why I'm in favor of keeping them online as long as possible, perhaps uprate them with eg MIT's new fuel geometry if that works. Even if the entire reactor has to be replaced, I'd reckon that's still a lot cheaper than new builds so may make a lot of sense. And probably less public resistance too.

But that sentence that the loan guarantees could cover up to 80% of the project cost of some new nukes made me flabbergasted. Of the actual project cost itself, that's what it says, literally. Essentially it looks like they've got as little as 20% of project cost from bank loans etc. and as much as 80% from the government! I think that includes paying for cost overruns, but even then it's a high percentage of subsidies. Also, nuclear gets the same PTC as wind and solar if I'm not mistaken, and that's definately a direct subsidy.

Let's just hope that future builds are mostly privately funded.

Cyril R.

It's interesting to note that the spent fuel from LWRs still has plenty of U-235 left for HWRs such as the CANDU.

How about building such HWR's next to older LWR spent fuel stockpiles (eg adjacent to older LWR plants with on site storage)?

They could receive most if not all of their fuel from the LWR spent fuel accumulated over the years. No chemical reprocessing would be required, no new enrichment facilities and it would involve proven technology such as the CANDU. Very little new fuel would be needed for decades, and reducing the amount of U-235 would reduce radiotoxicity in the spent fuel.

DaveMart

I've always liked the CANDU reactor, Cyril, and incidentally that has good prospects of burning far-more abundant thorium.

My understanding though is that the reason that LWRs are much more common than the CANDU system is due to costs, which were even more heavily front-loaded in that system. Heavy water is expensive, but the latest designs don't use it as a coolant, just as a moderator, which should reduce costs.

I know you will be up to speed on it Cyril, but for others who may be curious:
http://www.nuclearfaq.ca/brat_fuel.htm

Unfortunately, although it is one of four designs under consideration in the UK I don't think it will be chosen, as we only want one design for our small fleet and such experience as we still have is not in heavy water reactors.

I understand, although this may be wrong, that build costs could also be bit higher.

In the US which would need a much bigger fleet if it decides on more nuclear build then the CANDU option should be more practical.

Cyril R.

It's often claimed that CANDUs have higher capital costs, but if you look at some of the LWRs being constructed now, it can't be all that much more expensive can it now?!

CANDUs could also potentially scale up much faster than LWRs, not needing big welded reactor vessels. You're right that this is more relevant in the US where the scale of the problems is, shall we say, not small!
The new ACR-700 looks like a good design.

Outsourcing CANDUs, why not? The US has to be big friends with Canada anyway. Not just for the sake of being neighbours, but also considering the large uranium reserves and other resources of Canada. Although, CANDU's in the US wouldn't need a lot of fresh uranium - just run them on the current LWR spent fuel inventory. The same would apply to the UK.

HWR's could postpone the need for both chemical reprocessing as well as big permanent storage schemes like Yucca Mountain. Which is probably a good thing, it's better to wait for nice stuff like more advanced reprocessing and molten fluoride reactors to come along. If they don't, the waste can be safely stored in dry casks as mentioned above, untill in the distant future we might reconsider reprocessing and Yucca mountain again.

I'm off to work. CU

Kit P

Cyril R here is the list of major incentives for new nuclear which will help you be more accurate in the future and you will not have to dance around answering my question.

Form the 2005 Energy bill, the first incentive which is not a subsidy is a production tax credit of 1.8 cents per kwh (same as wind an other renewable energy projects). With a PTC the government does not pay anything. To encourage beginning the very expensive licensing process, the first 6000 MWe of new nuclear generation will get a lower tax rate (assuming the company is making a profit) for the first few years for the electricity they produce. Say you heat your house with natural gas. Increased nuclear generation will benefit you with lower natural gas bills. So you see it is government policy that benefits many. All Americans and many in the world who rely on LNG will benefit from this policy.

So, what say you Cyril R, good or bad policy?

The second incentive to encourage investment in an 80% (?) loan guarantee if the project is delayed due to something like new government regulation. Again, the government does not pay anything unless it creates the delay. I watched Bill Clinton try to destroy the US nuclear and coal industry using the power of government lawyers because we had cheap natural gas at the time. Electricity generators have already invested hundred of millions but before they invest billions they want some assurance that the government is not going to play games to get votes. Electricity generators build power plants because we need them not to loose money by getting half done.

So, what say you Cyril R, good or bad policy?

The third type of incentives to encourage investment locally is being provided by states and local government. One county is offering a $300,000,000 incentives package by cutting the property tax rate 50 % for the first few years. I attended a public where the dishonest types like Nrgxprt claimed the $300,000,000 was coming out of the pockets of tax payers and the county supervisors were taking money from the big energy companies. One of the county supervisors stood up and said that he ran unopposed and took no money from anyone. He said that 30 years ago the county was one of the poorest in the state with the lowest tax base. After 30 years of having two large nuke plants, the community had the best roads, best hospitals, best schools, and home owner paid only token property taxes. He said that easiest he ever made was adding $300,000,000 to the tax base for a few years and then doubling it ensuring the tax base would stay the same for 60 years as the older plants closed at the end of their useful life.

So Cyril R, I would again argue that the nuclear industry is not being subsidized at all. Clearly, the 104 operating nukes are paying much more in taxes than they are getting back. At least 85% of these 104 plants will operate for 60 years. That is 20 years of taxes that was not expected 10 years ago.

Cyril R.

Form the 2005 Energy bill, the first incentive which is not a subsidy is a production tax credit of 1.8 cents per kwh (same as wind an other renewable energy projects). With a PTC the government does not pay anything.

Germany's PV "incentives" do not cost the German govt much because it's paid from a tax on fossil power. Does that mean that the German government isn't subsidizing PV? Come on now Kit. A PTC similar to what renewables get is fair, but it's very much a subsidy.

Increased nuclear generation will benefit you with lower natural gas bills. So you see it is government policy that benefits many. All Americans and many in the world who rely on LNG will benefit from this policy

And yet the govt picking winners so strongly is a dangerous business. All I'm saying, is don't give any power source a near carte blanche like this. It's unfair competition, disrupts the market and actually rewards uncompetence by paying for cost overruns. Let's hope this is just to get the industry expanding again.

So Cyril R, I would again argue that the nuclear industry is not being subsidized at all. Clearly, the 104 operating nukes are paying much more in taxes than they are getting back. At least 85% of these 104 plants will operate for 60 years. That is 20 years of taxes that was not expected 10 years ago.

As I said, it's not the existing ones that are suspicious.

Paul Dietz

Heavy water is expensive, but the latest designs don't use it as a coolant, just as a moderator, which should reduce costs.

Also, the canadians have a new heavy water production technology, using hydrogen-water exchange (CECE and CIRCE), that reduces the monetary and energy cost of heavy water production.

Engineer-Poet
Let's hope this is just to get the industry expanding again.
The loan guarantees are only for the first few units.  It's a jump-start, to assist the industry over the learning-to-walk-again phase.
Nrgxprt

It's clear to me that responding to Kit's dishonest gibberish is non-productive. So here's some general comments about why nuclear power is by far and away the most expensive power available to the ratepayers and taxpayers here in the WECC:

The Diablo Canyon nuclear plant was initially projected to cost about $500 million to build. It actually cost more than $10 billion, which was financed at the worst possible time, making it by far the most expensive power plant per KW in California. Now PG&E wants to spend another $700 million to replace its leaky steam generators so it can continue to operate to the end of its license, as it has amortized the lifetime costs to the last second of the license period. And it will likely have to spend another $1 billion to retrofit its cooling system as it will soon no longer be allowed to use once-through-cooling. (Edison is in the same boat for the San Onofre plant.) There's also the expense of seismic upgrading at Diablo, as three fault lines were discovered in an area that was initially thought to be inactive. In other words, the cost of Diablo Canyon power continues to go up, with no end in sight. Add in all the costs of the high-tech disposal methods mentioned above, and you've put the last nail in the (U.S.) nuclear coffin, until and unless the laws change.

Its proponents made exaggerated claims that nuclear power will be "too cheap to meter." As we all know now, those projections were way off. Now we have all sorts of new projections about what nuclear power will cost in the US, even though the waste disposal problem has yet to be resolved.

My job is to calculate the true cost of power, in some cases adding costs for environmental externalities, and removing subsidies. In the case of nuclear, it's easy. I ask the nuke plant owners in the West what they will charge for selling wholesale power. Guess what, it's higher than any other except photovoltaics. Thanks to access to some of the best wind resources in the world, wind is about a third of the cost here, though as noted it cannot be relied upon, so it requires backup. (It's also recking havoc with our transmission and generation system with all the ebbs and flows, a problem that will get worse as we add more wind to the mix.)

Without subsidies, by far and away demand-side management is the cheapest resource available. Then coal, then combined-cycle gas, then wind, then simple-cycle gas, then nuclear, and then PV. There's only one solar thermal plant running out here, so it is currently difficult to calculate the true cost of solar thermal, but it looks promising, so much so that many companies are apparently prepared to take the risk of building one without assurance of full cost recovery.

Yes, this ranking does not include the cost of any future carbon sequestering programs. If and when those are realized, nuclear may well end up being for more attractive from a cost standpoint. I will revise my calculations and recommendations accordingly if and when that happens, as I will if and when it appears that fossil fuel demand significantly outstrips supply (right now, it appears we have enough coal and gas for at least 75 years of supply in the Western U.S.).

I will note that I just completed a study this morning that among other things looked at the effect on carbon emissions if we retired all the once-through cooling plants in the West, including the two nuclear plants using it. The modeling showed that carbon emissions from the power sector in the Western half of North America (WECC-wide) would increase by about 1 percent, and the criteria emissions (NOx, SOx and Hg) would not change whatsoever. Based on that, I'm not sure adding a carbon tax to the fossil generation would make all that much difference.

Somehow this listing of facts seems to make me dishonest to some (one?), but as I noted up front, I think nuclear power is no more dangerous to the public than coal power because of its mercury emissions. It's all dollars and sense to me.

Finally, the proof is in the pudding. If nuclear power was even remotely as cheap as many here imply, we would have had hundreds of new reactors here in the U.S. in the last 2 decades. Instead, we have none. Many will argue that the reason for no new nukes in this country is because of all sorts of things, but it is really only one: it's too expensive, even with the $3.1 billion in new subsidies and the liability relief provided by the 2005 Energy Policy Act. No company will take the risk of building one unless they get a guarantee of cost recovery up front (which is what the six or so U.S. license applicants, all of whom are in the Southeast, are seeking). Add to that the fact that the price of uranium has already risen 10-fold since 2000 (from $7 a pound then to more than $75/pound now, and $100 coming soon). A typical 1 GW nuclear plant requires around 200 metric tons of natural uranium per year, totaling about 180 million pounds of U use in 2006. If you do the math, you'll see that nuclear's fuel costs alone are no bargain. (A great article on that can be found at: http://www.moneyweek.com/file/25277/seven-reasons-the-uranium-price-will-hit-100-this-year.html)

In fact, that's the best response to those who argue that nuclear power is cheaper than gas or renewables: "If that's true, why hasn't one been built?"

True, at least six are now considering it, but it's obvious to me when reading those applications that many are just keeping their options open, and will build only when it's clearly economical to do so. In fact, many executives of those companies have openly stated that proceeding with the nuclear license applications only makes sense if the subsidies for nuclear power are increased substantially (see, for example, http://www.physicstoday.org/vol-59/iss-2/p19.html).

The expected $150 million in licensing costs for a new reactor is also being subsidized by the taxpayers, to the tune of about 50 percent.

So, I'm afraid it's all too clear that economics alone are likely to prevent much of a rebirth of the nuclear industry here, unless the subsidies are cranked way up.

Turning off the nukes now would cause havoc with our system, but I believe its inevitable the US plants will eventually all be phased out.

Clee

Re: "keep in mind that the technology for nuclear storage is advancing so rapidly"
To DaveMart: Sure, sure, whatever. It just wasn't what I was asking.
To Stephen Boulet: I'm still hoping you'll answer my original question.
To KitP: Thanks, that's the kind of stuff I was looking for. Nice to know that even though they've been doing vitrification for decades, the technology is still advancing... better, faster, cheaper...

Engineer-Poet

Quoth nrgxprt:

If nuclear power was even remotely as cheap as many here imply, we would have had hundreds of new reactors here in the U.S. in the last 2 decades.
Expense comes in many forms.  In addition to engineering difficulties, there are also

  • Regulatory uncertainty.
  • Legal risks.

The utility industry finally got what it wanted about those last two.  IIUC, there is now a one-stop construction/operating license procedure; there is no longer any opportunity for obstructionist groups to halt construction or prevent a completed plant from going into operation.  If the approval is granted and the builder isn't screwing up, they can't be hamstrung.

If the expense was inherently great, we wouldn't be seeing growth in China or the reactor being built in Finland.  The builder of the Finnish reactor obviously expects to build more, and why wouldn't they?  Nuclear is almost a drop-in replacement for baseload coal, without any of the toxic or GHG emissions.  Add a carbon tax and it's a no-brainer.

DaveMart

nrgxpert:
Your cost assessment is broadly in line with what others have found, but as Engineer-Poet pointed out the portion due to regulatory costs and legal risks in the nuclear industry has now been addressed.

Your summary is also very location specific, coal in the US is cheap and your area has good wind resources based on land.

Just the same for a high rate of penetration of wind you also incur significant additional back-up and power-grid costs.
By way of comparison in the UK land based wind power costs around £0.9 million MW ,and you get about 0.27% of the nominal output, bringing the cost per MW up to around £3.3 million per MW of actual average power output, not cheap even before you provide for grid connection and back-up.

Here is an analysis of the cost of expanding the UK grid with off-shore wind by 33GW, as the Government plans:
http://energy-futures.blogspot.com/2008/02/cost-of-wind-power-in-uk.html
Costs must be radically different in your part of the States to make it a cost-effective alternative.

I would be interested in seeing your costings.

So, given that wind is not going to generate a substantial proportion of power needs, how do you propose generating power without CO2 emissions?
Or do you simply not accept the idea of Global Warming?

Of your alternatives, gas is in short supply and getting shorter, whilst coal emits vast amounts of CO2, and it's apparent cost advantage is largely due to it's not having to pay for it's emissions.
Or do you argue that you can sequester CO2 cheaply?

Here is an analysis from the Royal Academy of Engineering on comparative costs.
Nuclear is shown as much cheaper than you indicate.

http://www.raeng.org.uk/news/publications/list/reports/Cost_Generation_Commentary.pdf
Cost_Generation_Commentary.pdf

I have not got access to their detailed costings, but would imagine that they are looking at historic costs, and the very low values they give are due to including plants which are fully amortised.

I would therefore base my figures for nuclear construction on actual costings for the plant being built in Finland, where they now estimate $4bn including overuns - the figures I used in analysis allows another $2 in overun costs, giving a total of $6bn for 1.6GW nameplate, perhaps 1.44GW actual using a 90% capacity factor such as is common today.

That's around $4 million MW, $2bn sterling, half of what the wind alternative costs here if off-shore, 2/3rds on-shore.

So it is surprising to me if wind costs less in your area than nuclear even without allowing for back-up and connection to the grid.

However, if you accept that wind is not going to form a large part of the grid at reasonable cost, exactly what are your low-carbon alternatives?

Cyril R.

>>Let's hope this is just to get the industry expanding again.

>The loan guarantees are only for the first few units. It's a jump-start, to assist the industry over the learning-to-walk-again phase.

Engineer-Poet: Like I said, I'm hopeful that this is true. However it is no guarantee. And hope is certainly not a good policy. Don't let your poet side get the upper hand - your first name is, after all, engineer.

Quoting someone you should know well:

[...]I am not against technology. I love technology - especially biotechnology. But I am well aware of the "technology will save us mentality." Technology doesn't always proceed as you think it should, and it doesn't always respond to monetary incentives. If it did, cancer and AIDS would no longer be with us, and 40 years after the moon landing, a manned Mars expedition wouldn't still be a distant dream. [...] Several people have suggested that I am just wrong about biofuels; that technological advances will change everything. All I can say is that hope is a wonderful thing. But you better plan for contingencies in case those visions of algal biodiesel fail to materialize.

A different subject, but it's the same idea. Removing legal constraints makes sense to me. Subsidizing project cost up to 80% does not. Private investors can do whatever they want with their money. But govt subsidies have to be justified as this is taxpayers money. Why subsidize new nuclear builds up to 80% when there's more gains to be had in improving end-use efficiency?

Hell, why does a well developed industry (currently providing one fifth of all US electricity!) need up to 80% of project cost subsidized in the first place? Just to get out of the doldrums? Again, hopeful this is it but there's a good chance that it isn't. I don't think that (for the US at least), building a large number of new LWR's operating in the once-through cycle is the best thing to do anyway.

Cyril R.

If the expense was inherently great, we wouldn't be seeing growth in China

What, +2% nuclear of total electric market by 2020? For now, cutting demand is easier, cheaper, faster, and Beijing knows it.

Cyril R.

And rapid growth of nuclear power is much easier after that.

Engineer-Poet
Hell, why does a well developed industry (currently providing one fifth of all US electricity!) need up to 80% of project cost subsidized in the first place? Just to get out of the doldrums?
You're confusing the nuclear generation industry with the nuclear construction industry.  The latter hasn't built a plant in the US in over 20 years.  What expertise it has been able to retain and build has been courtesy of foreign sales and e.g. rebuilding Brown's Ferry Unit 1 and getting it restarted.
Kit P

Cyril, why do you keep saying this,

“Subsidizing project cost up to 80% does not.”

Cyril R.

EP - I'm not confusing those costs, if my previous post didn't make that clear enough. As I've mentioned above it's not the current nukes that are dubious. I know what your position is but you can't prove it untill the construction subsidies actually stop, which is the reason of my concerns.

Kit - start reading my posts.

Cyril R.

And just because no plant has been built for decades doesn't mean 80% project subsidies are justified.

Is the goal to expand nuclear power in the US in the most rational manner, or is it to revive the US nuclear construction industries?

It seems to me that these are mutually exclusive at the moment.

DaveMart

Cyril, I don't read that as a subsidy of 80% of total cost, just a guarantee against cost increase due to legislative changes and such.

At my rather high estimate of $6br for a 1.6GW reactor, and 89% subsidy would mean you got a reactor for $1.2bn, and I think at that price they would be going up like crazy all over the country!

nrgxprt

So many great posts here. I’ve learned much, and it’s obvious that many of you can make my arguments more eloquently than I. So much so that I’m not sure I have much more to contribute. But I’ll at least answer a few questions presented me.

First off, yes, my perspective and probably 80 percent of my experience is in the Western half of North America: from Alberta and British Columbia in Canada to Baja California in Mexico, and the 14 U.S. states in between (referred to as the “WECC”). I have some experience in Japan, but that was more than 15 years ago. So, I definitely have a regional perspective, and much of what applies here does not apply elsewhere.

Addressing Engineer-Poets post: "Expense comes in many forms. In addition to engineering difficulties, there are also

* Regulatory uncertainty.
* Legal risks."

Agreed. But that applies to every kind of power plant. The regulatory uncertainty in the U.S. is driving all power plant owners crazy, especially concerning the power purchase contracting process in California. The regulations unique to nuclear plants, on the other hand, are not uncertain. They are well known. It’s just that the present industry has not been able to find a way to comply with the LORS (laws, ordinances, regulations and standards) pertaining to waste disposal in a cost-effective manner.

Nuclear plants are being built elsewhere because: they have resolved the legal issues pertaining to waste disposal; they have limited supplies of cheap natural gas and coal; and their governments are heavily subsidizing the costs of nuclear plant permitting, construction and operation. With those subsidies and their limited availability to coal and gas, nuclear plants clearly make economic sense in those countries. The problem is, every time a new one is built it increases the pressure on Uranium supplies and price, making the next one less attractive, and decreasing the likelihood of one being built in the Western U.S. any time soon.

Nuclear plants do incur extra cost because of public opposition, but so does every other major power plant. Just take a look at the organized opposition to the planned off-shore wind farm near Cape Cod. To me, the argument that nuclear power plants have unique costs compared to other resources is not compelling, other than of course those related to waste disposal in the U.S.

Davemart: Yes we probably have some of the best wind resources in the world here in the west, including up in Canada. There’s a small area to the east of Glacier National Park in Montana and Alberta, about the size of Connecticut, that alone could supply both countries’ entire electrical needs, if we could build the transmission needed to distribute it (which would be outrageously expensive). We are also ahead of the game in that we have had wind parks for a long time, and we are seeing tremendous benefits merely by retrofitting the existing parks with newer and much more efficient turbines. The current projected levelized cost of wind power in the WECC is 3.5 cents/kWh according to the Electric Power Research Institute (see http://www.energy.ca.gov/wind/overview.html). That’s only slightly above that of brand new combined cycle gas-fired plants, which are at 3.3 cents/kWh.

The cost of power from future nuclear plants in the U.S. is much harder to calculate. The new designs promise to be much cheaper in construction, replacing many complicated systems such as emergency cooling systems with simpler gravity powered cooling systems. However, the best estimates we’ve seen for actual plant construction shows that initial plant construction would still be more than twice that of combined-cycle gas.

Though fuel costs are lower now for nuclear compared to gas, they are converging and we predict could be the same in the not too distant future, as Uranium prices shoot through the roof. The waste disposal issue is also huge, of course, not only because we have no place to put it at the moment, but also because if and when Yucca opens for business (around 2010 or so), there will already be enough temporarily stored high-level waste to completely fill it. That means that we will be back to square one for any waste produced beyond that date. We will still not have a place to put it. Talk about regulatory uncertainty.

The Department of Energy currently projects the levelized cost of nuclear energy in the U.S. at 6.1 cents/kWh. However, because of steam generator replacement costs at existing plants and other factors, we have calculated a cost considerably higher, very close to 10 cents/kWh. That coincides very well with the present wholesale price of power offered by the two nuke plant owners in California. Other problems exist: Uranium supplies and enrichment capabilities have not been developed to accommodate a rapidly growing nuclear industry. Temporary fuel shortages could result, and shortages of key reactor materials and skilled labor are also likely to drive up costs. However, even though we believe the actual, non-subsidized cost of power is nearly 10 cents/kWh, we use the 6.1 cents/kWh figure for our calculations, which is still more expensive than anything except photovoltaics.

As to the answer to global warming, nuclear is not likely to help much, if only because of how long it takes to plan, permit and construct a new plant. I’ll note that the most recently constructed plant in the U.S. took 24 years to build after it was permitted! Even if all the above problems can be resolved, and even if a carbon tax or whatever other mechanism is used to address warming, nuclear plant construction is not likely to put even a dent in overall carbon emissions.

Demand-side management (efficiency, conservation, load-management/peak shaving, etc.) is by far and away the most cost-effective way to reduce carbon emissions, followed by retrofitting existing plants to the highest efficiency turbines. And rather than seeing a reduction in its effectiveness in the future, the more we look at DSM, the more possibilities we see for cost-effective solutions. Merely asking industrial and commercial customers to come up with their own DSM has reaped tremendous benefits, and we don’t see that stopping any time soon. Until and unless we see decreasing returns on our investment in DSM, I see no reason to pursue any other strategy to address greenhouse gas production. We’re only seeing the tip of the iceberg now.

As to wind: I believe wind currently offers the greatest possibility of reducing our greenhouse emissions from a generation standpoint. It offers many challenges, however. The currently on-line resources must have a backup because the wind cannot be relied upon at any one location. This means we have to have combustion or steam turbines spinning at low levels at all times in order to handle demand when the wind ebbs. However, this issue can effectively be resolved by greatly expanding the geographic diversity of our wind farms. The more that are built and interconnected, the more likely that an ebb in one place will be cancelled by a flow in another. We’re already seeing this to some extent in California. When generation is ebbing in one park, it is often increasing in an another. Our studies have shown you can essentially get a firm resource from wind, requiring little to no backup, if you have sufficient geographical diversity and transmission interconnection.

The other big problem is that wind resources are highest at night, when demand is lowest. Again this is already creating problems in California because of minimum load problems at the baseloaded gas plants. If we were to replace those gas plants with nuclear plants, which have extremely limited ramp-up and ramp-down rates, accommodating the nightly wind surge would be even more difficult. If we really want to make wind a major part of our generating base, we will have to figure out ways to store power more cost-effectively. Still, because of its low cost, wind will continue to be the only viable renewable resource, and there are many ways we can employ it now to reduce total greenhouse emissions. Again, this only applies to the Western U.S.

That’s it for now. Gotta get back to work.

DaveMart

Thanks a lot for your hard work, nrgxprt.

I can't for the life of me figure how the DOE comes out with a levelised cost of 3.5cents, when they estimate build costs now as $1,800MW installed, or $6,000 MW for actual output, assuming 30% capacity which is about the right average.
http://www1.eere.energy.gov/windandhydro/pdfs/41435.pdf
41435.pdf

See page 15 of this report for the prices they give.

I will have to look into their levelised cost figures, but it seems weird, unless they include subsidies.

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