There's a new report out on the cost of nuclear power by Craig A. Severance that is causing a bit of a stir. Here's part of the Executive summary:
"With global warming concerns now taking traditional coal plants off the table, U.S. utilities are risk averse to rely solely on natural gas for new generation. Many U.S. utilities are diversifying through a combination of aggressive load reduction incentives to customers, better grid management, and a mixture of renewable energy sources supplying zero-fuel-cost kWh’s, backed by the KW capacity of natural gas turbines where needed.
Some U.S. utilities, primarily in the South, often have less aggressive load reduction programs, and view their region as deficient in renewable energy resources. These utilities are now exploring new nuclear power.
Estimates for new nuclear power place these facilities among the costliest private projects ever undertaken. Utilities promoting new nuclear power assert it is their least costly option.
However, independent studies have concluded new nuclear power is not economically competitive. Given this discrepancy, nuclear’s history of cost overruns, and the fact new generation designs have never been constructed any where, there is a major business risk nuclear power will be more costly than projected.
Recent construction cost estimates imply capital costs/kWh (not counting operation or fuel costs) from 17-22 cents/kWh when the nuclear facilities come on-line. Another major business risk is nuclear’s history of construction delays. Delays would run costs higher, risking funding shortfalls. The strain on cash flow is expected to degrade credit ratings.
Generation costs/kWh for new nuclear (including fuel & O&M but not distribution to customers)are likely to be from 25 - 30 cents/kWh. This high cost may destroy the very demand the plant was built to serve. High electric rates may seriously impact utility customers and make nuclear utilities’ service areas noncompetitive with other regions of the U.S. which are developing lower-cost electricity."
On page twenty eight of the report, the author lists these costs:
"MOST LIKELY" SCENARIO
Projected Total Generation Cost/kWh of New Nuclear Power
(In Nominal Dollars in Projected 2018 First Year of Full Operation)
.
CAPITAL COST $0.22
OPERATION & MAINTENANCE W/O FUEL $0.01
PROPERTY TAXES $0.02
DECOMMISSIONING & WASTE COSTS RESERVE $0.02
FUEL CYCLE COSTS $0.03
TOTAL DOLLARS/KWH $0.30
Now, most folks probably don't remember, but just eight years ago, when deregulation came to the electric industry, consumers were forced to give utilities billions of dollars in an odd regulatory leap of sophistry that said that since these existing nuclear power plants are uncompetitive and thus stranded investments, we should therefore pay them off because we are getting ready to save so much money in this Enron led deregulation.
That promise, like most Enron representations, has not been realized.
In Texas, after 8 years of deregulation, rates in regulated areas, (public power) are still around a 10 cents/KWh and they are around15 cents/KWh in the deregulated areas. Ironically, the nuclear plants that have been paid for are looking pretty good. Of course this changes overnight as the price of natural gas changes.
Meanwhile, large scale solar energy plants, both thermal and solid state, are pushing the 10 cents/KWh threshold. Even distributed solar installed on our rooftops beats these projections for the real cost of nuclear power. And there is every reason to believe that these solar costs will be achieved in the near future.
Any investment in nuclear energy at these prices,
as my German painter friend says, is totally stupid.
If we want a carbonfree and a stupid free economy,
We need to move to a solid state photonic energy web.
And we can put a lot of folks to work while we're at it.
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Craig A. Severance, CPA is co-author of TheEconomics of Nuclear and Coal Power (Praeger1976), and former Assistant to the Chairman and toCommerce Counsel, Iowa State CommerceCommission.
"With global warming concerns now taking traditional coal plants off the table, U.S. utilities are risk averse to rely solely on natural gas for new generation. Many U.S. utilities are diversifying through a combination of aggressive load reduction incentives to customers, better grid management, and a mixture of renewable energy sources supplying zero-fuel-cost kWh’s, backed by the KW capacity of natural gas turbines where needed.
Some U.S. utilities, primarily in the South, often have less aggressive load reduction programs, and view their region as deficient in renewable energy resources. These utilities are now exploring new nuclear power.
Estimates for new nuclear power place these facilities among the costliest private projects ever undertaken. Utilities promoting new nuclear power assert it is their least costly option.
However, independent studies have concluded new nuclear power is not economically competitive. Given this discrepancy, nuclear’s history of cost overruns, and the fact new generation designs have never been constructed any where, there is a major business risk nuclear power will be more costly than projected.
Recent construction cost estimates imply capital costs/kWh (not counting operation or fuel costs) from 17-22 cents/kWh when the nuclear facilities come on-line. Another major business risk is nuclear’s history of construction delays. Delays would run costs higher, risking funding shortfalls. The strain on cash flow is expected to degrade credit ratings.
Generation costs/kWh for new nuclear (including fuel & O&M but not distribution to customers)are likely to be from 25 - 30 cents/kWh. This high cost may destroy the very demand the plant was built to serve. High electric rates may seriously impact utility customers and make nuclear utilities’ service areas noncompetitive with other regions of the U.S. which are developing lower-cost electricity."
On page twenty eight of the report, the author lists these costs:
"MOST LIKELY" SCENARIO
Projected Total Generation Cost/kWh of New Nuclear Power
(In Nominal Dollars in Projected 2018 First Year of Full Operation)
.
CAPITAL COST $0.22
OPERATION & MAINTENANCE W/O FUEL $0.01
PROPERTY TAXES $0.02
DECOMMISSIONING & WASTE COSTS RESERVE $0.02
FUEL CYCLE COSTS $0.03
TOTAL DOLLARS/KWH $0.30
Now, most folks probably don't remember, but just eight years ago, when deregulation came to the electric industry, consumers were forced to give utilities billions of dollars in an odd regulatory leap of sophistry that said that since these existing nuclear power plants are uncompetitive and thus stranded investments, we should therefore pay them off because we are getting ready to save so much money in this Enron led deregulation.
That promise, like most Enron representations, has not been realized.
In Texas, after 8 years of deregulation, rates in regulated areas, (public power) are still around a 10 cents/KWh and they are around15 cents/KWh in the deregulated areas. Ironically, the nuclear plants that have been paid for are looking pretty good. Of course this changes overnight as the price of natural gas changes.
Meanwhile, large scale solar energy plants, both thermal and solid state, are pushing the 10 cents/KWh threshold. Even distributed solar installed on our rooftops beats these projections for the real cost of nuclear power. And there is every reason to believe that these solar costs will be achieved in the near future.
Any investment in nuclear energy at these prices,
as my German painter friend says, is totally stupid.
If we want a carbonfree and a stupid free economy,
We need to move to a solid state photonic energy web.
And we can put a lot of folks to work while we're at it.
HOME
.
Earthfamily Principles
.
Earthfamilyalpha Content IV
Earthfamilyalpha Content III
Earthfamilyalpha Content II
Earthfamilyalpha Content
.
Links
.
LANGUAGE TRANSLATIONS
Craig A. Severance, CPA is co-author of TheEconomics of Nuclear and Coal Power (Praeger1976), and former Assistant to the Chairman and toCommerce Counsel, Iowa State CommerceCommission.
There's another option. We could look for better sources of information.
ReplyDeleteThe article you reference was, like all anti-nuclear polemics, written only to justify the author's preconception. If you read the comments, you'll see that the study depended on false assumptions and distorted analysis. Its main shortcoming, though, is that it doesn't compare nuclear costs with the costs of alternative energy sources. The author responded by saying the comparison was "simply beyond the scope of this paper."
Comparative data show that the cost of alternatives have risen in parallel to nuclear cost and for exactly the same reason.
Misinformation like this can only do harm. The world needs real information to help in making tough decisions, not political propaganda.
Actually Red, I did read the report, and being in the electric industry myself, I found it a little high myself.
ReplyDeleteBased on the numbers I've seen, I think 20 cents is more likely.
Still, totally stupid.
OZ, thanks for responding.
ReplyDeleteCost estimates are always fuzzy because they depend on assumptions. As long as the same assumptions are used in comparative estimates they can give guidance. The prices you're quoting come from totally different assumptions and methodologies, often leaving out some costs and including others, leading to non-equivalent comparisons. Treating them as absolutes leads only to confusion.
Truth be told, all energy sources will be much more expensive than what we're used to. For one thing, most of our electricity comes from plants or dams built decades ago. For another, we've been burning fossil fuels because they are the cheapest source of energy. If we give them up then automatically costs will rise.
Objective comparisons, not done to promote a political viewpoint, show nuclear to be cheaper than any of the renewable sources. For more on this, please look at Costs.
Stupid? Is that really the right term to use when facing reality? Is believing in falsehoods intelligent? Your German friend's utility pays 50 cents per KWH solar electricity whenever it's available and sells it for 20 cents per KWH whenever customers want it. How intelligent is that?
Red, I've reviewed your paper promoting nuclear and find it to be well done.You are a good advocate for the industry.
ReplyDeleteWe both know that the costs of building anything is to a large degree based on the costs of energy at the time that it is built. Like giant dams, Nuclear plants have large amounts of embedded energy in them, in the concrete, in the steel, in the enrichment process.
If energy prices are over 100.00 a barrel, you get one price, if under 50.00, quite another. I believe that energy prices during this period of proposed new nuclear construction will be well over 100.00 a barrel as world production continues to decline.
Thin film solar and advanced third generation printed solar materials are, in general, an exception to the rule. And their operational costs are definitely an exception.
As I said, I am a utility executive, and I am looking at adding on to our existing nuclear facility. I am also looking at the costs of advanced thin film processes and beyond, and in my view, the crossing point is on the horizon.
Solar is headed to 10 cents... new nuclear is going to push 20. When you add the real cost of carbon, coal goes double digits. Natural gas at heat rates of 7,000 and at prices well below 10.00 MCF will be the only competitor at that 10 cent point. But it won't be competing, it will be in symbiosis with the renewables.
Given my quick reading of your blog, I see that you are convinced of your position that nuclear is the only practical solution to climate change.
I want humankind to move beyond fire, and into a solid state photonic future.
But as you seem to understand, the conversation between the proponents of these strategies should be grounded in the facts, and respectful in their exchanges.
Thanks for your comments.
OZ, thanks for your thoughtful reply. I think you're quite right that respectful dialog is called for. Tossing out epithets like "totally stupid" goes against that principle.
ReplyDeleteI don't mean to say that nuclear is the sole solution. There clearly is a place for wind, solar, geothermal, and whatever else turns out to be practical.
The essential problem with wind and solar is that they only work part of the time. There is no technology within view that can store energy at the scale needed to overcome this problem. What it means is that if nuclear energy isn't part of the mix then the world will continue to burn fossil fuels.
Come on Red that's not true, solar comes with our load, and our coastal winds do to.
ReplyDeleteWith a unified system of plug ins, and ultra caps, and by reversing the base load, intermediate, peaking mentality of the conventional utility, in combination with a smart grid, we can move to very high concentrations of renewables.
Remember, the current system only runs at a 55% capacity factor.
Why don't you drop your own preconceptions and quit thinking in last century's terms and technologies.
The future can be a lot more exciting and prosperous if we let go of the past and our worn out technologies.
Mumbo jumbo isn't a substitute for energy supply. 55%? Okay, I didn't know that. But what it means is that demand for electricity peaks really high. If your plan is to tell people they have to wait for the wind to blow before they can ride elevators or run their computers, then it's not going to work. Be sure and tell them what your plan is when you tell them renewables are the answer.
ReplyDeleteMy preconceptions aren't the problem. People expect the lights to go on when they flip the switch. We know what happens when the power is out: people fire up their gasoline-powered generators. That's no solution.
You just don't get it Red.
ReplyDeleteAnd given your comments on the climate progress page, what is your profession, and who do you work for?
ReplyDeleteThanks for asking, OZ. I'm a retired mechanical engineer. I did safety analysis on nuclear reactors --thermohydraulics and stress-- until the nuclear hiatus. Then I switched to architectural/engineering work on industrial and commercial buildings.
ReplyDeleteBut you're right. I don't get it. I don't get how "a unified system of plug ins, and ultra caps, and by reversing the base load, intermediate, peaking mentality of the conventional utility, in combination with a smart grid" can power a modern economy. I only can do arithmetic, and all this rhetorical glitter doesn't add up.