Buyer beware of the lowball: An estimate of costs that is purposely estimated on the low side in order to lock in monitary commitment from the customer. Let's look at Texas...
While the nuclear crowd are claiming a "new generation" of 'too cheap to meter power'; this is what is really going on...
Two years ago an independent analysts wrote this. The author and the paper were predictably attacked and dismissed with zero, repeat ZERO actual references to the paper.
Assessing Nuclear Plant Capital Costs for the Two Proposed NRG
Reactors at the South Texas Project Site
March 24, 2008
A. Main Findings and Recommendations
NRG, a merchant electricity generating company, proposes to build two new nuclear power reactors, totaling 2,700 megawatts at the South Texas Project site near Bay City, Texas. NRG owns a part of the two units that already exist at that site. CPS Energy, San Antonio’s electricity and gas municipal utility, which owns a 40 percent share of the two existing units proposes to purchase a 40 percent share of the proposed new reactors. This analysis is a preliminary report on the likely capital costs of the two reactors, as best they can be determined at the present time. It also contains some preliminary observations regarding efficiency and distributed renewable energy sources to put the CPS decision that might be made regarding investment in the NRG plant into context.
>Main findings
Careful industry analysis of new nuclear power plant costs indicates that the NRG estimate of $6 billion to $7 billion for the cost of the two new nuclear units proposed to be built at the South Texas Project site is obsolete and likely incomplete. The best currently available analyses indicate that it is a serious underestimate of the capital costs of the project.
An analysis of new nuclear power plant costs filed by Florida Power & Light (FPL) with the Florida Public Service Commission is the most complete and rigorous analysis of new nuclear power plant capital costs publicly available to date. The FPL analysis is based on the same reactors, G.E. Advanced Boiling Water Reactors (ABWRs) as the proposed NRG project. Using this analysis, we find that the all-in total capital cost of the proposed NRG two-reactor project would be in the $12 billion to $17.5 billion range. This range is two to three times the lower NRG value of $6 billion and 1.7 to 2.5 times NRG’s higher estimate of $7 billion. Moody’s October 2007 estimates are within this range, as is the Progress Energy’s March 2008 estimate. Even these estimates do not take into account higher imported component cost risks created by a falling dollar or possible continued real cost escalation due to rising global demand for raw materials and skilled labor.
A 40 percent CPS’ share of the project would make its likely investment in the project in the $4.8 billion to $7 billion range. Even the lower end of this range is considerably higher than the total net value of CPS’s total electric plants of $3.9 billion as of the end of its 2007 fiscal year. The high end would make CPS’s share equal to the high end of the total NRG cost estimate.
As a municipal utility partnering with a merchant generator, the risks to CPS ratepayers and San Antonio taxpayers of a large, long-lead time, capital intensive project in a time of financial turbulence are considerable and need to be carefully evaluated. They should be publicly disclosed and discussed.
CPS completed its own study of the costs of the proposed project and compared it to some alternatives in 2007. This study has not been made public; it is being updated. CPS has made a commendable commitment to the concept that efficiency should be treated on a par with new investments in coal or nuclear plants. However, this commitment is only in the very initial stages of operationalization and is at very low levels of implementation relative to economic potential. The efficiency study of 2004 commissioned by CPS did not cover some technical elements and did not include combined heat and power or distributed renewable energy sources within its scope. It is also in urgent need of a financial update in light of increased costs of new coal and nuclear plants.
An early decision to invest in the nuclear units would pre-empt and possibly even foreclose full operationalization of the concept that efficiency, distributed generation, and distributed renewables should be treated on a par with central station investments. This could result in needless rate increases and financial risk. Additional financial risk may accrue due to NRG’s approach to the project. For instance, NRG filed an incomplete Combined Operating License Application with the Nuclear Regulatory Commission, a fact that has could result in delays in the licensing process.
Download paper here:
http://www.ieer.org/reports/nuclearcosts.pdfWhere the project was in Oct 2009:
http://www.mysanantonio.com/news/Nuclear_cost_estimate_rises.htmlAnd today, Mar 2010
http://www.mysanantonio.com/news/CPS_finalizes_nuclear_settlement.html![](http://i259.photobucket.com/albums/hh285/taos-eddy/Energy/scattergrapholdvnewnuclearovernight.jpg)
Lovins
http://www.rmi.org/rmi/Library/E08-01_NuclearIllusionhttp://www.rmi.org/rmi/Library/E09-01_NuclearPowerClimateFixOrFollyhttp://www.rmi.org/rmi/Library/E77-01_EnergyStrategyRoadNotTakenJacobson
http://www.stanford.edu/group/efmh/jacobson/revsolglobwarmairpol.htmSeverance
http://climateprogress.org/wp-content/uploads/2009/01/nuclear-costs-2009.pdfCooper Report:
http://www.vermontlaw.edu/it/Documents/Cooper%20Report%20on%20Nuclear%20Economics%20FINAL%5B1%5D.pdf