The economics of nuclear power

aquitaine

So based on this Florida estimates that to build nuclear power stations it will cost $20 billion, but I can't find how many they are planning to build. But it raises an interesting question about the economics of nuclear power in general, in particular what are the major factors behind its costs? How can these costs be lowered without compromising plant integrity and safety? And if the long term cost of building a modern generation III cost is competitive with fossil fuels why aren't we building more nuclear power plants?

QuantumPion

Where in that article does it say it will cost $20 billion to build a new plant? All I see is a critic of FPL criticizing increasing electric rates to pay for maintenance and future projects across the grid. I don't understand how increasing rates to pay for maintenance, upgrades, and expansion is somehow a evil capitalist interest free loan. The article is highly political and one-sided.

QuantumPion

The most significant impediments to new nuclear plants right now are (in reverse order):

3) less electric demand due to poor economy

2) new discoveries of ginormous reserves of natural gas and the technology to extract them

1) the NRC. In the last 10 years the NRC has become a major bottleneck to not only new nuclear plants, but any new nuclear technology or ability to modify/upgrade existing plants. Their bureaucratic nature is just too crippling.

aquitaine

Can you elaborate on point number 1?

QuantumPion

http://blogs.reuters.com/environment...ty-production/

russ_watters

Moreover, many states already require power companies to collect money to subsidize third party energy conservation retrofits and power generation.

Npr is giving a voice and lending credibility to a crackpot here.

aquitaine

I was referring to the other point number one, the one about the NRC. How does it raise construction costs unnecessarily and discourage the construction of new nuclear plants?

Also what effect does public anti nuclear hysteria have on it?

QuantumPion

The NRC, like other government regulatory agencies, is highly risk averse. The consequences of something bad happening that they could have prevented are highly visible. However, the consequences for over-regulating the industry into oblivion are hidden. Therefore, they have an incentive to make it as a difficult as possible to get anything done. There is a similar analogue with the FDA. If the FDA were to allow a harmful drug on to the market, this would be highly visible and extremely damaging to them. However, when the FDA blocks potentially good drugs from being available due to the extreme process required for getting new drugs approved, this effect is hidden. No one knows about drugs that could have been available to them but never made it due to the process. Therefore, they have an inventive to over-regulate even though it most likely does more harm than good.

mheslep

Agreed, especially on 1). Given the low demand conditions brought on by 3)&2), the nuclear industry needs to pivot quickly to small modular to come up with smaller and affordable reactors. The NRC however is not designed to pivot ever, certainly not quickly.

gmax137

You still haven't given a concrete example or instance of obstruction by the NRC. If regulatory antics are the 'number one problem' it seems examples would be well known and numerous.

QuantumPion

The recent issue I am concerned about is license amendment processing. The NRC has recently cut its budget and reduced the amount of license amendments it can handle. Even though the process is 100% funded by the industries doing the amendments, they are cutting back on the ability of plant owners to apply for license amendments. This means only absolutely necessary applications are considered, and even those can have a backlog of 5 years or more. This affects things such as design changes (to improve plant performance & safety), new computer codes, methods, etc.

mheslep

Some NRC holdups:

Byron. License refused in 1984 after 9 years of construction. License eventually granted; the delay no doubt cost a fortune.
http://en.wikipedia.org/wiki/Byron_N...rating_Station

Vogtle 3,4. Still no combined operating license. Southern started the regulatory process in 2004.
http://www.southerncompany.com/nucle...ilestones.aspx

Licensing cost $50-$100 million per site.
http://online.wsj.com/article_email/...DEwNDgyWj.html

Six-seven year review of small-modular designs alone, not including sites.
http://www.nrc.gov/reading-rm/doc-co...f-20110329.pdf slide 21

Astronuc

I believe the Vogtle 3,4 COL has been waiting for the design certification of the AP1000, which was just granted.
http://www.nrc.gov/reading-rm/doc-co...t052-appd.html
http://www.federalregister.gov/artic...tion-amendment
(Final rule was scheduled for Sept 2011)

Plants like Byron and Braidwood were affected by TMI-2 event in 1979, and the screwups at places like Zimmer, Midland, Shoreham, South Texas Project and a few others.

The regulatory cost for new plants is a small part of the overall cost. Capital costs, and really cost of steel, concrete and other commodities have appreciated over the last decade.


Anyone should find the recent statements by John Rowe, CEO of Exelon, who will retire at the end of the year. One of the biggest stumbling blocks for new plants is the lack of a resolution of the used/spent fuel. Another factor is the abundant supply and low price of natural gas - for now.

mheslep

In the case of Byron we are not talking here about hysterical law suits or protests after TMI, we are talking about the delay of the license issued by the NRC.

The regulatory fees for new small modular plants will not be a small part of the overall cost. More generally, one of the major costs for plants is due to the time involved, so that no return can be earned from operation until 10-15 years after money was first spent on development. The NRC is a part of that drawn out extended timeline.

NUCENG

Two words - "Yucca Mountain" NRC is in violation of an act of Congress.

Mr Boom

With the exception of Yucca, I don't see regulation being the major sticking point. Obviously, they are cautious with new designs, which makes me wonder whey companies aren't just applying with legacy designs, but in general I think the regulation issue is more of a hassle than a financial hurdle. It's more of a perceived roadblock than a real one.

Naturally, I separated Yucca in the argument. I think the uncertainty regarding fuel storage definitely scares people away from building new plants. Why accept the liability of spent fuel sitting around on your property for years? I think if there was a clear plan to take this fuel out of their hands, I bet we'd get more utilities investing in nuclear. I would only make sense to diversify your company. What if you operated all coal and gas plants and then carbon-capping hits?

Anyway, I've only ever worked with defense reactors, so I'm probably not qualified to speak on what goes on in the minds of the CEOs.

QuantumPion

What do you mean "cautious with new designs?" They flat out refuse to put the resources in to anything that isn't a standard LWR. The problem is companies ARE just applying legacy designs. The types of new reactors that may be built in the future are limited to the APWR and US-APWR, which are just simple improvements over current PWR's. And by the time these designs are finally licensed and built, probably 10 years from now, they will already be out of date. There is no chance for a pebble bed, traveling-wave, integral fast breeder, etc to be built while the NRC is in its current mode of regulation-to-death.