The economics of nuclear power

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mheslep

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I have been personally involved in three nuclear plant uprates as an engineer. The economic case for that expansion of power was a fraction of the cost of adding new construction of any other fuel or energy source. Similarly license renewal for nuclear plants has been accomplished at a fraction of the cost of building new plants.
Yes, that's as I have heard and read elsewhere.

But we are facing the same kind of situation in power generation as in much of our infrastructure. It is aging and we need to get started on plans for replacement.

So why would FPL be trying to lose money? By your calculation how much will they have to charge customers for power to brek even? Sounds to me like we have a valuable topic for discussion here.
I should have said Progress above, not FPL, though both have new nuclear plans:
West Orlando News said:
The state Public Service Commission finished hearing arguments Wednesday about Progress Energy Florida’s request to pass along about $140 million in costs to customers next year for nuclear projects.
http://westorlandonews.com/2011/08/18/progress-energy-fpl-could-slap-consumers-with-higher-rates/ [Broken]

Are there any details that would help us understand that $20 Billion estimate?
I believe some ~$3B of the total is transmission.

Where did you get the 13 year construction schedule?
Last I looked best to worst new plant development time was 10-15 years, so that's from memory.

Best performers in the nuclear industry produce at costs lower than $30 per MW-hr. Are new plant designs capable of better cost control?
I don't think the operational costs are the problem. The upfront capital costs are the problem.


Edit: a concern I have with the motivations of nuclear plant owners is based on your point about the large revenue stream from a 90% cap. factor plant, about which I entirely agree. IF the operators/owners are somehow allowed to divorce themselves from the development costs (e.g. FPL acquisition of Seabrook), then a nuclear plant is a giant cash cow that runs for decades without impact by fluctuation fossil fuel prices.
 
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... IF the operators/owners are somehow allowed to divorce themselves from the development costs (e.g. FPL acquisition of Seabrook), then a nuclear plant is a giant cash cow that runs for decades without impact by fluctuation fossil fuel prices.
I understand your point, but the Seabrook story isn't the only way the plant owner's can divorce themselves -- another (more palatable?) path is through depreciation tax credits, where the original owner's payback time is shortened by reduced taxes. This is the path most (?) businesses follow, not just the power companies.
 

mheslep

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I understand your point, but the Seabrook story isn't the only way the plant owner's can divorce themselves -- another (more palatable?) path is through depreciation tax credits, where the original owner's payback time is shortened by reduced taxes. This is the path most (?) businesses follow, not just the power companies.
I'm not sure. Tax depreciations on business equipment is usually (at least in my case) a deduction against taxable income, not a credit. One of the problems with big (2GW) nuclear is that the capital costs typically dwarf the revenue of the utility so that, in addition to the large, business killing risk incurred, there is only so much taxable income to write off.
 
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I'm not sure. Tax depreciations on business equipment is usually (at least in my case) a deduction against taxable income, not a credit. One of the problems with big (2GW) nuclear is that the capital costs typically dwarf the revenue of the utility so that, in addition to the large, business killing risk incurred, there is only so much taxable income to write off.
:wink:Take a gander at the economic case for Dounreay and Caithness and if you think that looks bad gen up on the dodo Mox plant at Windscale ,sorry Sellafield:biggrin:
 

mheslep

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:wink:Take a gander at the economic case for Dounreay and Caithness
1950's technology for weapons reactors, right?
and if you think that looks bad gen up on the dodo Mox plant at Windscale ,sorry Sellafield:biggrin:
Same time frame, graphite core air cooled, weapons and reprocessing. There's some safety lessons to be learned here, but I don't see the application to modern commercial reactor economics.
 

NUCENG

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Heads up on what I am finding so far. (Will follow up with references and more numbers)

Progress Energy applied for COL license for 2 Westinghouse AP1000 reactors net production of 2200 MWe. Scheduled start of production is currently 2019 (not 15 years).

Current construction and licensing captial cost extimate is $14B not $20B.

Nuclear Capital costs include waste and decommissioning costs which are not included in other plant capital costs.

Florida has emission goals passed by state legislature.

Florida Fuel cost charges are currently around $44/MWe and will be reduced significantly.

Progress energy relies on purchase power ffor 23% of their electric sales which is vulnerable to cost fluctuations (ala California).

More to come.
 

mheslep

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Heads up on what I am finding so far. (Will follow up with references and more numbers)

Progress Energy applied for COL license for 2 Westinghouse AP1000 reactors net production of 2200 MWe. Scheduled start of production is currently 2019 (not 15 years).
That is as you note the scheduled start date. What's the industry record on that score? In any case, Progress started work on the COL process back "pbadupws.nrc.gov/docs/ML0604/ML060460250.pdf" [Broken] so they're at least 14 years from first money-spent to kWh-sold by their own schedule. I believe it is important to include this pre-ground breaking design and NRC haggling period because it too appears to be expensive. I would not be surprised if Progress has already spent $500 million in design, development and compliance fees, though not a shovel is yet in the ground, all of which is at risk of total loss should the NRC deny the COL because of design concerns or political shenanigans from the NRC's Jaczko.

NUCENG said:
Current construction and licensing captial cost extimate is $14B not $20B. ...
<shrug>
Powerg Mag said:
The company [Progress] told regulators that the Levy nuclear project could cost between $17.2 billion and $22.5 billion, including land, transmission lines, fuel, and financing costs.
As I mentioned in an earlier post, transmission is supposedly $3B of the total. I'd further argue that transmission cost is not a total wash across any kind of power source, but somewhat intrinsic to large nuclear because of the large and centralized but remote model, with access to a big water resource, requiring something like a 765 kV line. Smaller distributed plants closer to the load don't have the same demands.

Again, I don't claim that these costs are necessarily intrinsic to nuclear power; indeed the Chinese seem to be building for a fraction of the Progress/Levy projected cost. I argue rather that problem lies with entrenched interests and the NRC.
 
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NUCENG

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That is as you note the scheduled start date. What's the industry record on that score? In any case, Progress started work on the COL process back "pbadupws.nrc.gov/docs/ML0604/ML060460250.pdf" [Broken] so they're at least 14 years from first money-spent to kWh-sold by their own schedule. I believe it is important to include this pre-ground breaking design and NRC haggling period because it too appears to be expensive. I would not be surprised if Progress has already spent $500 million in design, development and compliance fees, though not a shovel is yet in the ground.


<shrug>

I am getting there . So far though the expenditures have been much less than the $1.5B / year you assumed in the levelized 15 year time frame, and they are currently recovering some of those costs from rate payers, so their debt load hasn't really increased significantly. Your estimate of $500M may be a little high as they asked for $63M this year and $147M last year, but I am trying to get a complete rundown. Note that the timeline was extended by 20 months because NRC denied permission to start excavation and site prep during COL review. So your concern about NRC delays may prove correct.


The current plants will be the first plants to receive COLs a one step approval process that replaced separate construction and operation licensing processes, so we'll see if promised reductions in NRC review times are realized.

There is a $3B cost for improved transmission capacity that would be required whether or not the baseload built was nuclear. That should not be included as a nuclear plant cost.

I see your shrug and raise a "But wait there's more!" The construction contract with Westinghouse and Shaw is for $7.65B. Additional costs including reviews approvals and debt service raise the current estimate to $14B. I am trying to figure out whether those costs are in comparable estimates of coal and natural gas plants. It is trying to figure out the apples and oranges.

If you have additional information on the costs, feel free to post.

I guess you edited your post and added recognition about the tranmission lines. One of the problems of building major generation facilities is NIMBY. I wonder if that influenced the location decision. It is close to the Crystal River plants isn't it? I uderstand PEF is trying to perform power uprates there and this new transmission capacity may be synergistic with that effort.
 
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mheslep

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I see your shrug and raise a "But wait there's more!"
Yes by that shrug I don't mean that I know Progress's costs for a fact, only what some media sources report, according to the company.

The construction contract with Westinghouse and Shaw is for $7.65B. Additional costs including reviews approvals and debt service raise the current estimate to $14B. I am trying to figure out whether those costs are in comparable estimates of coal and natural gas plants. It is trying to figure out the apples and oranges.

If you have additional information on the costs, feel free to post. ...
Well I know that nuclear is not comparable in any way to the capital cost for natural gas plants. Looking it up this time, I see $0.6/W is typical for NG plants (table 1). No other source even comes close on up front capital costs. Construction time is 24 months, so the cost of finance is not a major factor. Fuel costs are of course another matter. This explains why, perhaps, natural gas plants provide the largest share of US electric capacity at 400GW or 39% (not production, that's still coal).
 
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NUCENG

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Yes by that shrug I don't mean that I know Progress's costs for a fact, only what some media sources report, according to the company.

Well I know that nuclear is not comparable in any way to the capital cost for natural gas plants. Looking it up this time, I see $0.6/W is typical for NG plants (table 1). No other source even comes close on up front capital costs. Construction time is 24 months, so the cost of finance is not a major factor. Fuel costs are of course another matter. This explains why, perhaps, natural gas plants provide the largest share of US electric capacity at 400GW or 39% (not production, that's still coal).
Agreed. NG construction seems to be a bargain. Not so much though on fuel costs which is O&M not Capital cost. NG price pressure is a future concern and some estimates show depletion as a concern within the next century. Another consideration is aging pipeline safety. (See San bruno NG Pipeline explosion.)
 

NUCENG

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I found information in which Progress Energy and FPL described the technical and economic alternatives to new nuclear. The Environmental Reports sections of the COL applications Chapter 9 includes an assessment of the alternatives and the benefits from nuclear power. I have included the FPL information because it is also based on the economy of Florida.

Links to the information:

http://pbadupws.nrc.gov/docs/ML0928/ML092860751.pdf
http://pbadupws.nrc.gov/docs/ML1036/ML103630175.pdf

Another issue is new EPA regulations couls end up in a need to replace 36 GW of capacity short term:

http://energy.aol.com/2011/12/01/rolling-blackouts-to-come-from-epa-rule-schedule-claim-power-co [Broken]
 
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mheslep

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I found information in which Progress Energy and FPL described the technical and economic alternatives to new nuclear. The Environmental Reports sections of the COL applications Chapter 9 includes an assessment of the alternatives and the benefits from nuclear power. I have included the FPL information because it is also based on the economy of Florida.

Links to the information:

http://pbadupws.nrc.gov/docs/ML0928/ML092860751.pdf
http://pbadupws.nrc.gov/docs/ML1036/ML103630175.pdf
I spend a few minutes going through the report. The alternatives discussion section strikes me as trivial. They discuss some vague generalities using some year 2000 or 2001 data, then without detailed comparison go on to summarize with a non-sequitor each time, saying "Based on the above information, a power generating facility <using some alternative> is non-competitive with a nuclear power generating facility at the LNP site."
 
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I spend a few minutes going through the report. The alternatives discussion section strikes me as trivial. They discuss some vague generalities using some year 2000 or 2001 data, then without detailed comparison go on to summarize with a non-sequitor each time, saying "Based on the above information, a power generating facility <using some alternative> is non-competitive with a nuclear power generating facility at the LNP site."
Yeah, I can see your point in some cases. In other cases, though, the evaluation really should be trivial for Florida (eg, Hydro and geothermal).
 

mheslep

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Yeah, I can see your point in some cases. In other cases, though, the evaluation really should be trivial for Florida (eg, Hydro and geothermal).
If hydro extends to offshore tidal or current then I'm not so sure. The tidal/current resource sweeping around the Fl peninsula from the Gulf and through the keys (for instance) is colossal, if diffuse. And the Fl panhandle has middling geothermal resource. My larger point is that against a normal fossil fuel plant those kinds of alternatives could be justifiably dismissed out of hand, but when the price tag for the nuclear plant is ~$20B then suddenly no alternatives can be dismissed trivially, even those that might not be competitive for ten years as the nuclear plant won't be available prior to that time.
 

NUCENG

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If hydro extends to offshore tidal or current then I'm not so sure. The tidal/current resource sweeping around the Fl peninsula from the Gulf and through the keys (for instance) is colossal, if diffuse. And the Fl panhandle has middling geothermal resource. My larger point is that against a normal fossil fuel plant those kinds of alternatives could be justifiably dismissed out of hand, but when the price tag for the nuclear plant is ~$20B then suddenly no alternatives can be dismissed trivially, even those that might not be competitive for ten years as the nuclear plant won't be available prior to that time.
How large would a tidal power plant have to be to generate 2 GW? Tidal power is dependent on the height and flow of the tide and during that cycle there are periods of slack tide. Is that workable as a replacement for base load generation? The fuel costs would of course be zero, but what would the capital costs be? What impact would the plant have on the ecology? Is such a plant practical in an area with hurricanes?

I keep coming back to the bottom line. These utilities believe nuclear power is the best alternative and that they can achieve a positive cost benefit solution with nuclear. The Florida Power Commission agreed (unanimously). And the approval process is proceeding. The decisions were made on best current knowledge of the need for power and the potential sources available. Betting on what may be competitive ten years from now seems contradictory to your basic objection that the economics aren't there. That is a tacit admission that the alternatives are not competitive now. Was anything in the EISs incorrect?
 

mheslep

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How large would a tidal power plant have to be to generate 2 GW? Tidal power is dependent on the height and flow of the tide and during that cycle there are periods of slack tide. Is that workable as a replacement for base load generation? The fuel costs would of course be zero, but what would the capital costs be? What impact would the plant have on the ecology? Is such a plant practical in an area with hurricanes?
I don't know. These questions are not adequately addressed in the 'alternatives' section of the COL application linked above. Why weren't they? Again, usually one could dismiss alternatives as too expensive, but with $20B on the line one can take alternatives a long way.

I keep coming back to the bottom line. These utilities believe nuclear power is the best alternative and that they can achieve a positive cost benefit solution with nuclear.
I assume only that utility 'believes' it can make the most money and supply predicted demand for the choice it made. This may or may not be the best choice for Florida.

Betting on what may be competitive ten years from now seems contradictory to your basic objection that the economics aren't there. That is a tacit admission that the alternatives are not competitive now. Was anything in the EISs incorrect?
I claim the report was, in places, ridiculously shallow in examination of alternatives. It has to be made complete first, then an assessment of accuracy follows.
 

NUCENG

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I don't know. These questions are not adequately addressed in the 'alternatives' section of the COL application linked above. Why weren't they? Again, usually one could dismiss alternatives as too expensive, but with $20B on the line one can take alternatives a long way.

I assume only that utility 'believes' it can make the most money and supply predicted demand for the choice it made. This may or may not be the best choice for Florida.

I claim the report was, in places, ridiculously shallow in examination of alternatives. It has to be made complete first, then an assessment of accuracy follows.
OK, first, the current estimate is $14B not $20, please try to be accurate.

Second, Florida is a regulated power market. The EIS and proprietary economic submittals were sufficient to convince the FPC. The COL application and EIS are under review by EPA, NRC, and several other government agencies. The applications were not found to be "inadequate" or "ridiculously shallow."

You now insist that they have the burden to put up another straw dog for you to reject? Nice try at redirection. This is a physics based forum for discussion on a factual basis.
So how about pulling together some facts or analyses that lead to your conclusions?
 

mheslep

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OK, first, the current estimate is $14B not $20, please try to be accurate.
No, you asserted $14B without reference. As I've linked before
https://www.physicsforums.com/showpost.php?p=3639046&postcount=32
This is getting tedious.

Second, Florida is a regulated power market. The EIS and proprietary economic submittals were sufficient to convince the FPC. The COL application and EIS are under review by EPA, NRC, and several other government agencies. The applications were not found to be "inadequate" or "ridiculously shallow."
I commented only on the alternatives section, nothing else, and which I found to be shallow on review, and I explained why above.

You now insist that they have the burden to put up another straw dog for you to reject? Nice try at redirection.
Eh? You asked the same kinds of questions above about tidal and wave. Why are they not answered in the alternatives section?


This is a physics based forum for discussion on a factual basis. ...
Yes it is, so enough with the appeal to authority about this or that agency is "convinced", therefore all questions are answered.
 

mheslep

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NUCENG - Sorry about the tone above. I'll discontinue here.
 

NUCENG

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NUCENG - Sorry about the tone above. I'll discontinue here.
Not necessary, I am not trying to be tedious. You were correct about the fact that I have not provided a citation for the total estimated cost. Here it is:

https://www.progress-energy.com/company/media-room/news-archive/press-release.page?title=Progress+Energy+Florida+signs+contract+for+new%2C+advanced-design+nuclear+plant&pubdate=01-05-2009 [Broken]

I am still trying to decypher the information available on construction costs for alternative forms of energy to make sure we aren't comparing nuclear costs that include regulatory review fees and carrying costs while other alternatives list only the construction costs alone.

I also am trying to research tidal power potential for the Florida area. The two principle types of generators are barrage plants (i.e. La Rance France) and new tidal turbines similar to upside down wind turbines. I have confirmed that due to tidal variations the capacity over the short term is about 40 percent for true tidal power and variations over the lunar and solar cycle make that capacity as low as 27% over the year. Since peak and ebb tides are not synched to a 24 hour day they also have periods when power generation is not synched to load demand. That really limits the potential to use tidal power as a baseload source.

The Florida current, however, is a different story. This is an ocean current, not truly a tidal flow, and may be able to support a baseload application. However this requires construction of turbines in deeper water (Increasing construction and maintenance costs) and dealing with transmission of power to shore. It is also brand new technology and is only currently under test. One test turbine recently reached its design rating of 1.2 MW, so it would take a large number of turbines to achieve the equivalent of a nuclear plant. If you decide to keep participating I will continue to look at this option.
 
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russ_watters

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If hydro extends to offshore tidal or current then I'm not so sure. The tidal/current resource sweeping around the Fl peninsula from the Gulf and through the keys (for instance) is colossal, if diffuse.
Diffuse compared to what's going through a typica hydro turbine, sure, but immensely dense compared to what's going through a wind turbine. Just for poops and giggles, I looked-up/calculated that at it's maximum speed of about 2.5m/sec (which occurs in the Florida strait), it has a power density of 7.8 kW per square meter. If you could recover half that power in an array of turbines 100m x 2.5 km, you'd equal a nuclear reactor.

I'd really like to see someone at least try to see if it is feasible to harness it by building a small pilot plant.
 

etudiant

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While there are tremendous energies in the ocean, tapping them is an unsolved problem.
Biofouling and the corrosive nature of salt water combine to defeat most mechanisms, not just those exposed to the insanely destructive waves on the surface. Even installations with mostly non moving parts are at risk, as evidenced by the failure of the various Ocean Thermal Energy projects over the past century, most recently under the aegis of Lockheed Martin near Hawaii.
The only working ocean power plant that has been running for a long time afaik is the tidal estuary turbine installation at Rance, in France. It predates France's nuclear push and perhaps helped spur that decision, because it demonstrated so clearly that the price of even ideally positioned ocean power was unaffordable.
 

mheslep

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Diffuse compared to what's going through a typica hydro turbine, sure, but immensely dense compared to what's going through a wind turbine. Just for poops and giggles, I looked-up/calculated that at it's maximum speed of about 2.5m/sec (which occurs in the Florida strait), it has a power density of 7.8 kW per square meter. If you could recover half that power in an array of turbines 100m x 2.5 km, you'd equal a nuclear reactor.

I'd really like to see someone at least try to see if it is feasible to harness it by building a small pilot plant.
This seems to the state of the art at the moment:
HR-SeaGen-installed_x534.jpg

Developed by Marine Current Turbines, based in Bristol, U.K., its prototype device has two 16-meter-diameter rotors and is installed at the narrow inlet of Strangford Lough in Northern Ireland. It generates 1.2 megawatts from a tidal current velocity of 2.4 meters a second, and, MCT claims, it can generate 10 megawatt hours per tide.
 

etudiant

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This seems to the state of the art at the moment:
HR-SeaGen-installed_x534.jpg
At 10 cents/kw hr, the plant will produce $1000 worth of electricity twice a day.
Looking at the scale of the structure and the engineering required for massive spinning blades with apparently variable pitch, the economics seem challenging.
Rance also uses turbines, but adds a tidal barrier to create a race for a longer interval. The barrier is of course an additional cost.
 

NUCENG

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Diffuse compared to what's going through a typica hydro turbine, sure, but immensely dense compared to what's going through a wind turbine. Just for poops and giggles, I looked-up/calculated that at it's maximum speed of about 2.5m/sec (which occurs in the Florida strait), it has a power density of 7.8 kW per square meter. If you could recover half that power in an array of turbines 100m x 2.5 km, you'd equal a nuclear reactor.

I'd really like to see someone at least try to see if it is feasible to harness it by building a small pilot plant.
I agree that the power density is there, and potentially recoverable. But there is no way to estimate the cost of building and maintaining enough turbines to match the nuclear plant, or how long until it could be built. But Progress Energy and FPL are faced with a decision of what to build now.

There are pilot applications being tested in Europe, and I support continuing that research, even though it would probably involve direct Government subsidies and risk of another Solyndra. I just do not believe any utility today could take the bet that this is practical yet.
 

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