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Barry Brook
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Karma: 103 |  | Talking turkey on nuclear $$ costs
« Thread Started on Aug 16, 2012, 12:27pm » | ![[Quote]](http://images.proboards.com/buttons/quote.gif "[Quote]") |
A new post has been published on BraveNewClimate. Link here: http://bravenewclimate.com/talking-turkey-on-nuclear-costs
This article appeared in the final article in the SA Mines & Energy Journal series on nuclear energy (issue 24, pg 34), about the economic bottom line for nuclear. It was co-authored by Ben Heard. Let's talk turkey on economics of nuclear and it's low-carbon alternatives!
This BNC Discussion Forum thread is for the comments related to this BNC post.
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There's no 'silver bullet' for solving the climate and energy crises. The bullets are made of depleted uranium and thorium... |
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jagdish
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« Reply #1 on Aug 16, 2012, 11:24pm » | |
Besides the obvious choice-the nuclear power, two more points become clear.
1. The costs vary with location and the building agency. The location is Australia, unless you buy floating power plants from Russia. The lowest quotations come from Asia-S. Korea, China and India.
2. Up front costs are high. It may be best to start with the small Indian 220MW PHWR, which will cost well under half a Billion dollars. As the confidence in nuclear builds up, you could go to higher sizes. Natural uranium fuel will also be cheaper, even if it is a small part of the power cost.
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Gregory Meyerson
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| | Re: Talking turkey on nuclear $$ costs
« Reply #2 on Aug 17, 2012, 12:11am » | |
Aug 16, 2012, 12:27pm, Barry Brook wrote:A new post has been published on BraveNewClimate. Link here: http://bravenewclimate.com/talking-turkey-on-nuclear-costs
This article appeared in the final article in the SA Mines & Energy Journal series on nuclear energy (issue 24, pg 34), about the economic bottom line for nuclear. It was co-authored by Ben Heard. Let's talk turkey on economics of nuclear and it's low-carbon alternatives!
This BNC Discussion Forum thread is for the comments related to this BNC post. |
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barry: on your wind example, what amount of baseload would this farm with "backup" provide?
and how calcuate? in your critique of jacobson a long time ago, you calculated a baseload number (following Jacobson's assumptions) for a large number of dispersed windfarms with overall 35 % cf as about 11 %. With 120 MWe of "backup," how much baseload would be produced? (what percentage of the 600 MWe would this system afford?) How much above 120 MWe would we get?
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davidm
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« Reply #3 on Aug 17, 2012, 12:45am » | |
I found this part of the link particularly interesting. It is a commentary on the fast buck character of homo sapiens, perhaps embedded in our nature.
Quote:So where does that leave us? Real-world experience tells us that nuclear can provide well-priced and reliable electricity. In capital terms, nuclear is the best-value form of zero-carbon generation, with miles of daylight to the competition. That may be a surprise, but this industry has learned. New designs are predominantly more standardised in design, and more reliant on passive, rather than engineered safety systems, and come in a range of sizes. All of this brings cost down.
That means the hurdle is up-front capital. Economist Tony Owen is clear about this situation, saying this:
"If the CEO of, say, Origin Energy said to the board “I’ve got a great idea. Let’s spend $5bn of the company’s money, for which we will not start seeing a return for at least 5 years” he would be laughed at. In fact he would probably be sacked."
Tony’s point is a deadly serious one. He is not saying it’s difficult for fully private investments in nuclear, or other multi-billion dollar energy technologies for that matter. He’s saying it’s impossible. |
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If one were to use President Kennedy's rocket to the moon example one needs a critical mass of folks who believe in nuclear power, particularly of the self-sustaining kind, as the principal transformation to a sort of blessed future. Well we've had a 60 year run at it. Does that give us such confidence?
It's a long shot but who knows.
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Tom Blees
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Karma: 1 | | Re: Talking turkey on nuclear $$ costs
« Reply #4 on Aug 17, 2012, 3:13am » | |
There's a major consideration that you neglected to mention in this post, Barry: How long various energy installations can be expected to last. We know that nuclear can last at least 60 years, even the ones built in the beginning of the nuclear age. With the experience we have now, new plants are expected to last 80 years or more. How long will a wind turbine last? How about solar panels? Even among the windies and sunnies you usually get estimates of 20-25 years, and I can tell you from the experience of a wind turbine owner I know that even that is a bit of a stretch. He says he has to replace gear boxes (at $250,000 a pop) at a rate of about 10% of his turbines per year. So let's be exceedingly generous, even well beyond the estimates of wind and solar advocates themselves, and say they'll last 40 years. That means that the capital cost calculations for wind and solar should be about doubled (that could be argued both ways: Future prices higher—likely, based on past industrial experience—or lower, figuring advances in fabrication and mass production). That's a considerable difference from comparing initial cost with no thought of longevity.
One more thing: You talk about a wind farm with biomass generation as backup. That might be feasible when you're talking about a 120MWe facility like the one cited here, but wind and solar advocates (like, most notoriously, Mark Jacobson, though there are many others) talk about getting ALL our energy from renewables. Given the laughably poor capacity factor of wind and solar, the amount of biomass needed as "backup" (in reality, "backup" in this sense means "main") would be staggering. Where on earth would we obtain that much biomass? How much would that cost, not just in terms of land area but harvest, trucking, generation facilities and other contingencies? Is it even possible at that scale?
Of course we know just how well that's working out in real life now. Biomass is used in a very few demonstration projects. Gas is actually the main power supply of nearly every wind and solar facility.
Bottom line: Barry, you're being too kind to wind and solar by at least half in this article. But even at that, and even citing the worst example (Olkiluoto) for nuclear, nuclear STILL comes out as being the best option.
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Janne M. Korhonen
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Karma: 3 | | Re: Talking turkey on nuclear $$ costs
« Reply #5 on Aug 17, 2012, 5:09am » | |
Aug 16, 2012, 11:24pm, jagdish wrote:Besides the obvious choice-the nuclear power, two more points become clear.
1. The costs vary with location and the building agency. The location is Australia, unless you buy floating power plants from Russia. The lowest quotations come from Asia-S. Korea, China and India.
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If you're referring to labour costs, it should perhaps be noted that the Olkiluoto plant relies heavily on cheap, chiefly Polish labour. There has already been a scandal of sorts when it turned out that many are paid far less than the Finnish labour laws would allow, 5-10 €/h (minimum wage should be about 13 €/h):
http://yle.fi/uutiset/unions_plan_action_against_nuclear_utility/6170889
Can't find the source but there were allegations that some were paid as little as 3 €/h.
I.e. Olkiluoto 3 is built using labour that probably costs, on average, about the same than average South Korean labour (mean hourly compensation in South Korea, ca. $ 16, see http://www.bls.gov/opub/mlr/2010/06/art3full.pdf).
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proteos
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Karma: 4 | | Re: Talking turkey on nuclear $$ costs
« Reply #6 on Aug 17, 2012, 7:24am » | |
I have to take issue with the point that no private company would build a nuclear power plant because it takes too long to come online. While this is a real issue, it is not completely true: some companies are willing to build some, if they have experience running nuclear plants. Think of EDf, Vattenfall, etc. That's part a problem of company size, part a problem of business case. If the government offers a guaranteed yield for those who build wind turbines, you can be sure some will be built: this is a low risk opportunity! For nuclear power, what is needed is something similar: some kind of price guarantee in the long run, be it long term contracts (as opposed to sourcing on the spot market) or regulated prices for domestic consumers. And this is true of all electricity facilities that need a big investment upfront and have low marginal operating cost, and as you remark, that means pretty much all the low carbon sources we have now. Nuclear is interesting if you can sign long term contracts, as you can lock in a price for a very long time.
Experience also matters: where ever it's been a long time since the last nuclear plant has been built, you see delays because of the learning effect. You must have public works companies that can pour good concrete, devise ways of working with regulators, etc. Experience is what makes it possible to have a nuclear power plant built in 5 years in China, Korea, etc.
The replacement time of facilities should also count as said by Tom Blees (but with a discount for the future costs: it's harder to make people cough up money now!). However it's taken into account in the LCoE of any tech. What's not taken into account is the true cost of making a tech 'baseload'. Either backup or storage costs ... and CO2 emissions where applicable: if you use gas 2/3 of the time to supplement wind it should be taken into account.
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David B. Benson
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Anon
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« Reply #8 on Aug 17, 2012, 11:01am » | |
Aug 17, 2012, 12:45am, davidm wrote:I found this part of the link particularly interesting. It is a commentary on the fast buck character of homo sapiens, perhaps embedded in our nature.
"If the CEO of, say, Origin Energy said to the board “I’ve got a great idea. Let’s spend $5bn of the company’s money, for which we will not start seeing a return for at least 5 years” he would be laughed at. In fact he would probably be sacked." |
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The real problem isn't that it might take five years before you start to earn back the money you spend, it's that you might never be allowed to start the power plant up after you've built it. Private industry is quite capable of spending billions with decade long returns if they are convinced that they won't have the laws change to make what they're building illegal in the meantime.
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davidm
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« Reply #9 on Aug 17, 2012, 12:15pm » | |
Aug 17, 2012, 11:01am, Anon wrote:| Private industry is quite capable of spending billions with decade long returns if they are convinced that they won't have the laws change to make what they're building illegal in the meantime. |
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Are you saying there are companies who will invest billions of private dollars for a decade without any return, given little government interference? Any examples?
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Tom Blees
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« Reply #10 on Aug 17, 2012, 2:50pm » | |
Proteos writes: "...some companies are willing to build some, if they have experience running nuclear plants. Think of EDf, Vattenfall, etc. EDF is still mostly owned by the French government, and Vattenfall is wholly owned by the Swedish government. So again, government money/guarantees are most definitely in play.
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Janne M. Korhonen
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« Reply #11 on Aug 17, 2012, 3:55pm » | |
All other options than fossil fuel status quo require government interventions anyway.
But some options require smaller interventions than others. Here in Finland, the thing that makes nuclear attractive is chiefly a legal precedent dating from the early 1960s, allowing energy companies to pay dividends to their shareholders in form of letting them to buy electricity at cost. By doing so, the energy company avoids profit taxes, i.e. the shareholders get cheap electricity.
Thus, small municipal utilities are investing in TVO (the firm that bought the Olkiluoto 3 plant) and Fennovoima (which received a permit for a reactor in Pyhäjoki) is largely owned by large metal manufacturers and other energy-intensive businesses. So rather small incentives can get private businesses to invest in nuclear!
The loss of tax revenue is peanuts compared to the benefits - originally the so-called Mankala principle was used to harness hydropower, now it makes all capital intensive energy generation investments more attractive. I'm personally a small-time shareholder in a company that owns a single wind turbine and is planning a second (and buys back-up from a small hydro plant, so my electricity is technically carbon free). Local greens have of course filed a complaint against the validity of the principle, but it may still hold in the court. (If it's repealed, I think that my zero-carbon electricity may become just a bit too expensive.)
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singletonengineer
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« Reply #12 on Aug 17, 2012, 5:12pm » | |
This thread is developing into a very strong, compact resource. Many thanks, Barry and Ben.
Ii is interesting that some don't understand that the French government still effectively owns EDF and the confusion which persists elsewhere regarding the meaning of LCOE, despite extensive discussion of LCOE on BNC over the past several years. This demonstrates the value of threads such as this, which refresh the community understanding and, hopefully, leads to broader and deeper understanding of the real issues involved in transitioning to low carbon energy options.
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proteos
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« Reply #13 on Aug 17, 2012, 5:37pm » | |
Aug 17, 2012, 12:15pm, davidm wrote:
Are you saying there are companies who will invest billions of private dollars for a decade without any return, given little government interference? Any examples? |
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A decade maybe not. But paying huge sums upfront and having to wait years until the first product comes out is pretty much the business model of major oil companies. And here, there is quite a lot of government interference!
So companies like Exxon Mobil, for all their woes, look like good examples of "paying first, reaping benefits over the long term".
Aug 17, 2012, 3:55pm, Janne M. Korhonen wrote:| But some options require smaller interventions than others. Here in Finland, the thing that makes nuclear attractive is chiefly a legal precedent dating from the early 1960s, allowing energy companies to pay dividends to their shareholders in form of letting them to buy electricity at cost. By doing so, the energy company avoids profit taxes, i.e. the shareholders get cheap electricity. |
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Lately, in France, big electricity users said in a parliamentary hearing that theywould be ready to pay part of the renovation of the GenII nuclear park for a similar arrangement: a locked in price. The price guarantee and the possibility of running the plant at all times is appealing to many customers.
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davidm
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« Reply #14 on Aug 17, 2012, 6:02pm » | |
The Mankala principle appears to be one interesting species of rewarding good. Would that we could wisely manifest the principle of rewarding good and punishing bad in all things. We could come pretty close to that if we adhered to the idea of real cost pricing of products and services from cradle to grave. Call it "getting rid of welfare" and it might get a good jump start in the USA. 
A nice fat fossil fuel tax whose revenues were devoted to sustainable alternative energy generation(Include negawatt efficiencies), capturing carbon and family planning would be a good start.
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Anon
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« Reply #15 on Aug 17, 2012, 7:07pm » | |
Aug 17, 2012, 6:02pm, davidm wrote:| The Mankala principle appears to be one interesting species of rewarding good. Would that we could wisely manifest the principle of rewarding good and punishing bad in all things. |
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That would be nice.
Although even then you get the issue of what is good and what is bad.
Aug 17, 2012, 6:02pm, davidm wrote:| We could come pretty close to that if we adhered to the idea of real cost pricing of products and services from cradle to grave. Call it "getting rid of welfare" and it might get a good jump start in the USA. |
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The biggest problem with such real cost pricing is that we really don't know what the costs actually are (and in many cases the costs depend on what you value).
Oh and welfare is quite popular in the US, when it benefits the politically connected.
Aug 17, 2012, 6:02pm, davidm wrote:| A nice fat fossil fuel tax whose revenues were devoted to sustainable alternative energy generation(Include negawatt efficiencies), capturing carbon and family planning would be a good start. |
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I wouldn't put any of the money collected from a carbon tax into energy efficiency or family planning because those are irrelevant to solving global warming (tying reproductive rights to environmental issues is more likely to hinder the cause of family planning).
Actually I'd just give the money collected back to every citizen (though equally spread, that way those who emit less than average end up earning more from the carbon tax than they pay).
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quokka
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« Reply #16 on Aug 17, 2012, 7:10pm » | |
The Guardian has an interesting piece on the hold up of off shore wind in Germany due to concerns about the detrimental effects that installation has on porpoise hearing in the North and Baltic seas.
http://www.guardian.co.uk/environment/20....dfarm-porpoises
The piece suggests that such issues are driving up the cost of offshore wind in Germany to EUR 4.2-4.4 million/MW - higher than in the UK. Aside from the obvious comment that this is very expensive compared to nuclear, it is also a signal that renewables projects can incur cost increases due to concerns over ecological or environmental "safety". Nuclear is not unique in incurring safety costs and renewables are not entirely environmentally benign.
Because of the vast land (or sea) requirements of renewables, it is easy to speculate that such issues may well increase as energy sprawl intensifies with large scale renewable deployment and the most suitable locations already taken.
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BrianH
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« Reply #17 on Aug 17, 2012, 8:01pm » | |
For the next couple of centuries, minimum, nat gas is going to economically eat the lunches of renewables, nuclear, and coal. Already capital is being heavily diverted. That will only accelerate.
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As per BNC Comments Policy, please supply references to back up your statements, otherwise it is only your personal opinion. References/links enable other commenters to check your asssertions and comment appropriately. Thankyou.
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BrianH
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« Reply #18 on Aug 17, 2012, 8:04pm » | |
I see there is a member posting a bit above with the official tag 'Anon'. I dare someone to register as 'On Anon'.
>:)
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Anon
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« Reply #19 on Aug 18, 2012, 3:53pm » | |
Aug 17, 2012, 8:01pm, BrianH wrote:| For the next couple of centuries, minimum, nat gas is going to economically eat the lunches of renewables, nuclear, and coal. Already capital is being heavily diverted. That will only accelerate. |
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Until there's a gas price spike (the companies producing it don't expect it to remain cheap forever).
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jmdesp
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« Reply #20 on Sept 7, 2012, 10:59pm » | |
Barry, you talk about the Olkiluoto EPR fiasco, but I think you should say also that the two new EPR in China are currently being built on time and on cost, and actually some Areva component are taking up to 40% less time to build than was the case at Olkiluoto (no cheap exploited Chinese labor here, they are imported from France).
But it's true that $1.7 billion per GWe for the AP1000 is still very much cheaper.
However I'm seeing that the cost in the US are now reaching about $15 billion for 2 units ? See http://chronicle.augusta.com/news/busine....se-900-milli on
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David B. Benson
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Karma: 6 | | Re: Talking turkey on nuclear $$ costs
« Reply #21 on Sept 8, 2012, 9:12am » | |
jmdesp Vogtle 3&4 are projected to cost about US$6700/kW for everything, including the transmission lines. This is definitely on the very edge of financial feasibility.
There is no decent nor simple way to compare the costs of NPPs in China with those in the USA; just the current exchange rate won't do it.
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quokka
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« Reply #22 on Sept 12, 2012, 2:30pm » | |
EIA has an interesting update to it's 2010 estimate of capital costs of electricity generation. Costs are rising steeply across the board with the only real exception being solar. Cost escalation in nuclear is broadly in line with that in other technologies:
http://www.eia.gov/oiaf/beck_plantcosts/pdf/updatedplantcosts.pdf
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David B. Benson
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« Reply #23 on Sept 13, 2012, 8:24am » | |
quokka --- Useful find, thank you.
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