The monetary cost of nuclear power (not the nuclear industry hype)

[kristopher]

This is a recreation of a post by Bananas from nearly one year ago - such a well formed presentation of the evidence shouldn't be wasted.

THE ECONOMICS OF NUCLEAR REACTORS: RENAISSANCE OR RELAPSE?

<snip>

FINDINGS
Within the past year, estimates of the cost of nuclear power from a new generation of
reactors have ranged from a low of 8.4 cents per kilowatt hour (kWh) to a high of 30 cents. This
paper tackles the debate over the cost of building new nuclear reactors, with the key findings as
follows:
• The initial cost projections put out early in today’s so-called “nuclear renaissance” were about
one-third of what one would have expected, based on the nuclear reactors completed in the
1990s.
• The most recent cost projections for new nuclear reactors are, on average, over four times as
high as the initial “nuclear renaissance” projections.
• There are numerous options available to meet the need for electricity in a carbon-constrained
environment that are superior to building nuclear reactors. Indeed, nuclear reactors are the worst
option from the point of view of the consumer and society.
• The low carbon sources that are less costly than nuclear include efficiency, cogeneration,
biomass, geothermal, wind, solar thermal and natural gas. Solar photovoltaics that are presently
more costly than nuclear reactors are projected to decline dramatically in price in the next
decade. Fossil fuels with carbon capture and storage, which are not presently available, are
projected to be somewhat more costly than nuclear reactors.
• Numerous studies by Wall Street and independent energy analysts estimate efficiency and
renewable costs at an average of 6 cents per kilowatt hour, while the cost of electricity from
nuclear reactors is estimated in the range of 12 to 20 cents per kWh.
• The additional cost of building 100 new nuclear reactors, instead of pursuing a least cost
efficiency-renewable strategy, would be in the range of $1.9-$4.4 trillion over the life the
reactors.
Whether the burden falls on ratepayers (in electricity bills) or taxpayers (in large subsidies),
incurring excess costs of that magnitude would be a substantial burden on the national economy and
add immensely to the cost of electricity and the cost of reducing carbon emissions.

Cooper Report:
http://www.vermontlaw.edu/it/Documents/Cooper%20Report%20on%20Nuclear%20Economics%20FINAL%5B1%5D.pdf

The Severance report from Jan 2009 forecasts nuclear at 25-30 cents/kwh:

The staggering cost of new nuclear power
http://climateprogress.org/wp-content/uploads/2009/01/nuclear-costs-2009.pdf

A new study puts the generation costs for power from new nuclear plants at from 25 to 30 cents per kilowatt-hour — triple current U.S. electricity rates!

This staggering price is far higher than the cost of a variety of carbon-free renewable power sources available today — and ten times the cost of energy efficiency (see “Is 450 ppm possible? Part 5: Old coal’s out, can’t wait for new nukes, so what do we do NOW?“).

The new study, Business Risks and Costs of New Nuclear Power, is one of the most detailed cost analyses publically available on the current generation of nuclear power plants being considered in this country. It is by a leading expert in power plant costs, Craig A. Severance. A practicing CPA, Severance is co-author of The Economics of Nuclear and Coal Power (Praeger 1976), and former Assistant to the Chairman and to Commerce Counsel, Iowa State Commerce Commission.

These studies are being validated in the real world.

Here's a Reuters Business Wire article on the study's relation to reality:

Cooper: Escalating Nuclear Reactor Costs Seen in Major Reversals for Industry on Wall Street and in Texas, Canada
Tue Jul 7, 2009 10:30am EDT
http://www.reuters.com/article/idUS142854+07-Jul-2009+BW20090707

Ratings Warning From Moody`s Followed by Mothballing of New Reactor Plans in
Texas and Ontario; Developments in Line with Cooper Report from June Projecting
Trillions in Excess Costs for Nuclear, Compared to Combination of Renewables and
More Efficiency.
WASHINGTON--(Business Wire)--
Three major developments in the nuclear power industry in late June underscore
the key findings of the "The Economics of Nuclear Reactors," a report released
on June 18, 2009 by economist Dr. Mark Cooper, a senior fellow for economic
analysis at the Institute for Energy and the Environment at Vermont Law School.
The Cooper report finds that it would cost $1.9 trillion to $4.1 trillion more
over the life of 100 new nuclear reactors than it would to generate the same
electricity from a combination of more energy efficiency and renewables.

Available online at
http://www.vermontlaw.edu/Academics/Environmental_Law_Center/Institutes_and_Initiatives/Institute_for_Energy_and_the_Environment/New_and_Noteworthy.htm,
the Cooper analysis of over three dozen cost estimates for proposed new nuclear
reactors shows that the projected price tags for the plants have quadrupled
since the start of the industry`s so-called "nuclear renaissance" at the
beginning of this decade - a striking parallel to the eventually seven-fold
increase in reactor costs estimates that doomed the "Great Bandwagon Market" of
the 1960s and 1970s, when half of planned nuclear reactors had to be abandoned
or cancelled due to massive cost overruns.

Cooper said that three late June developments provide new evidence of the
validity of the cost-related concerns documented in his report:

* On June 30, 2009, Exelon cited "economic woes" as a major factor in postponing
for up to 20 years plans to build two nuclear reactors at its site in Victoria,
Texas. (See
http://www.victoriaadvocate.com/news/2009/jun/30/gs_exelon_070109_56587/?business&local-news
for local coverage of the decision.)
* On June 29, 2009, the Government of Ontario announced that it has suspended
the competitive bidding process to procure two replacement nuclear reactors
planned for a Darlington, Ontario site. As the New York Times reported: "Two
years into a $20 billion nuclear upgrade project meant to replace aging reactors
with next-generation technology, the Ontario government postponed the entire
process on Monday, citing excessive cost and uncertainties involving the
ownership status of the sole Canadian bidder … Yesterday`s move is a setback for
the Atomic Energy of Canada Limited, the 57-year-old government-owned
corporation that has built all of Canada`s reactors and could soon be sold off
to a private investor." (See
http://greeninc.blogs.nytimes.com/2009/07/01/ontario-puts-nuclear-expansion-plans-on-ice/.)

* On June 23, 2009, Moody`s Investor Services issued a report titled "New
Nuclear Generation: Ratings Pressure Increasing." The summary to the report
included the following: "Moody's is considering "taking a more negative view for
those issuers seeking to build new nuclear power plants … Rationale is premised
on a material increase in business and operating risk … most utilities now
seeking to build nuclear generation do not appear to be adjusting their
financial policies, a credit negative. First federal approvals are at least two
years away, and economic, political and policy equations could easily change
before then …" Cooper pointed out that even though Moody`s concludes that
reactors might be financially viable once operating, the barriers to actual
permitting and affordable construction may make it impossible to reach the
operational new-plant phase. See the report summary at
http://www.alacrastore.com/storecontent/moodys/PBC_117883 and a related news
story at
http://money.cnn.com/news/newsfeeds/articles/djf500/200906250936DOWJONESDJONLINE000658_FORTUNE5.htm.

Institute for Energy and the Environment at Vermont Law School, South Royalton,
VT.
Ailis Aaron Wolf, [phone]
[e-mail]

Copyright Business Wire 2009

And just today at Climate Progress:

Nuclear Bombshell: $26 Billion cost — $10,800 per kilowatt! — killed Ontario nuclear bid
http://climateprogress.org/2009/07/15/nuclear-power-plant-cost-bombshell-ontario/

We knew new nukes were absurdly expensive (see “Areva has acknowledged that the cost of a new reactor today would be as much as 6 billion euros, or $8 billion, double the price offered to the Finns.”). Now we know they are literally unaffordable.

Our friend and fellow blogger, Tyler Hamilton — who actually has a real job as senior energy reporter for the Toronto Star — published this stunning news in Canada’s largest daily newspaper:

The Ontario government put its nuclear power plans on hold last month because the bid from Atomic Energy of Canada Ltd., the only “compliant” one received, was more than three times higher than what the province expected to pay, the Star has learned.

Sources close to the bidding, one involved directly in one of the bids, said that adding two next-generation Candu reactors at Darlington generating station would have cost around $26 billion.

It means a single project would have wiped out the province’s nuclear-power expansion budget for the next 20 years, leaving no money for at least two more multibillion-dollar refurbishment projects.

“It’s shockingly high,” said Wesley Stevens, an energy analyst at Navigant Consulting in Toronto.


So nuclear bombshells have now been dropped on Canada, Finland, Turkey (see “Turkey’s only bidder for first nuclear plant offers a price of 21 cents per kilowatt-hour“) and this country (see “What do you get when you buy a nuke? You get a lot of delays and rate increases….”).

Now you may be saying, wait a minute, Joe, hasn’t Areva said it would deliver a single plant for $8 billion, so that should work out to a Walmart-style $16 billion price, rather than AECL’s Tiffany-style offer. Hamilton has more juicy details:

<snip>

[applegrove]

1. Don't forget the waste has to be burried FOREVER! What are the costs

of that? I would think that cost would be infinite.

[NNadir]

2. These anti-nuke circle jerk reports clearly prove why France has the lowest electricity rates

of any major country in Europe.

It also explains how the United States went bankrupt forever by producing 104 reactors that have operated for 40 years in a roughly 15 year period.

Clearly what already exists is impossible, because circle jerk anti-nukes repeat themselves over and over and over and over and over and over like those crazy guys on subway platforms.

[kristopher]

3. Comparing aging infrastructure to new?

First let's talk about total cost of going with a technology vs the retail price of electricity:
Of all 132 U.S. nuclear plants built—just over half of the 253 originally ordered—21% were permanently and
prematurely closed due to reliability or cost problems. Another 27% have completely failed for a
year or more at least once. The surviving U.S. nuclear plants have lately averaged ~90% of their
full-load full-time potential—a major improvement31 for which the industry deserves much
credit—but they are still not fully dependable. Even reliably-running nuclear plants must shut
down, on average, for ~39 days every ~17 months for refueling and maintenance. Unexpected
failures occur too, shutting down upwards of a billion watts in milliseconds, often for weeks to
months. Solar cells and windpower don’t fail so ungracefully.
-Lovins, Four Nuclear Myths

Who paid for those failures? I put that out there as an example of the costs involved with nuclear that are not reflected in the retail price of the product of the ones that ARE built. But those costs are very, very real.

THe CBO predicts that the current crop of plants will also have a better than 50% bankruptcy rate; so it seems that is a cost that is going to be there now also.

The nuclear plants in France are aging (they embarked on their program in the 50s) and they are owned by the governmental French electrical provider EDF. EDF hawks the French company Areva's design being used in Finland. As is the norm with nuclear power, the plant is far over budget and well behind schedule. And to show that France isn't alone, "of the 45 reactors being built around the world, 22 have encountered construction delays" according to the NYT. According to company officials, the EDF plant in Finland is now scheduled to come online in 2012, a full three years after the scheduled date. Considering that finance costs are one of the largest line items in the cost of a nuclear plant, who is going to shoulder the burden of that cost?

Then there is the matter of the electricity that Finland was expecting to be getting from the plant today to meet their rising needs. Where is that going to come from, a magic electric genie? The Finns are going to have to either build additional capacity they didn't plan for, or they are going to need to import power. Who pays the difference between the promised price of the electricity from Areva and what they actually have to pay for 3+ years?

When the statistics for reliability and capacity factor are compiled, are you going to the count 3+ years of delay as down time against the operational life of the reactor? Since the alternative technologies do not have that problem with delays, it seems fair that this difference in the underlying reliability be taken into account statistically.

So the people and government are pissed. The FRENCH promised them a reactor for $4.1 billion dollars, now they are up to $7.2 billion and still years away from completion.

I know it makes me a villain in your eyes, but I can't help but think that the contemporary French experience confirms the analysis of independent experts, it doesn't contradict them.

[kristopher]

4. What, no more defense of France?

[kristopher]

5. Kick

[zeaper]

6. The People that read this board do not buy Power Plants

The people that are buying power plants always study the economics around various options (its what you do for justification of a project).

Why is it that the anti-nukes on this board think their cost nonsense will ever make a difference?

Get a clue guys, nuke plants are only built after an exhaustive economic analysis, by banks and engineering firms. If nukes were as expensive as you say there would be no talk of building any, anywhere.

[joshcryer]

7. It's called FUD.

The denialists use it on a regular and continual basis. Anti-nukers use very similar tactics.

[kristopher]

8. Is that really what you believe?

Did you also believe that Goldman Sachs et al were self policing out of self interest? that was the claim that was used to justify deregulation.

I'd suggest that you need to spend more time reading some of the studies being posted - we can lead you to the information you need to be an informed citizen, but we can't make you read it.

For example, do you know that unlike ANY other form of generation, nuclear is never built unless the government is behind it? Those private investors you are depending on are looking at an upside of trillions, and no downside because the risk is assumed by you and me.

Does the term socialized risk, private profits ring a bell?


From the CBO:
Based on current industry practices, CBO expects that any new nuclear construction project
would be financed with 50 percent equity and 50 percent debt. The high equity participation
reflects the current practice of purchasing energy assets using high equity stakes, 100 percent
in some cases, used by companies likely to undertake a new nuclear construction project.
Thus, we assume that the government loan guarantee would cover half the construction cost
of a new plant, or $1.25 billion in 2011.
CBO considers the risk of default on such a loan guarantee to be very high—well above
50 percent. The key factor accounting for this risk is that we expect that the plant would be
uneconomic to operate because of its high construction costs, relative to other electricity
generation sources. In addition, this project would have significant technical risk because
it would be the first of a new generation of nuclear plants, as well as project delay and
interruption risk due to licensing and regulatory proceedings.

[zeaper]

10. So?

An exhaustive economic analysis would certainly include any subsides and risks in the equation. Right or wrong, all power is subsidized and has a risk.

As for loan defaults, that is also included in an analysis and no one wins with those.

[Statistical]

9. Stop using logic. It is like kryptonite to anti-nukkers.

The funny thing is the first nuclear reactor in 30 years is being built by a NON PROFIT.

That's right a NON PROFIT PUBLIC UTILITY.

Municipal Electric Authority of Georgia (MEAG)

A utility who spent 3 years and nearly 100 million conducting studies both financial and environmental to determine nuclear energy was the best choice for new generation.
http://www.meagpower.org/AboutMEAG/WhyPublicPower/tabid/63/Default.aspx

Another major owner is Oglethorpe Power which is a co-op owned by 39 municipalities in Georgia.
http://www.opc.com/index.htm

Combined they will own 52.7% of the reactor's output.


This is a utility who consistently provides power at lower rate than similarly sized private (for profit utilities).
Yet somehow they are just nuke shills. Nuclear power is massively expensive and they are just looking to break 30 years of positive history and start raping their ratepayers.

Don't think about it too hard. The anti-nuker arguments only work in a world when facts don't matter (and reactor containment is weaker than a garage air compressor :rofl: ).

[kristopher]

11. Nope

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=115x236646

"One of the most curious aspects of Plant Vogtle’s financial viability is that, having secured billions in federal loans and clearance to charge customers for the rest of the construction costs (more on that next week), the company’s own shareholders are unwilling to assume any financial responsibility for the project itself.

“The Commission staff asked Georgia Power whether the Company was willing to assume any responsibility if the actual project costs are substantially higher than the estimated costs,” says energy industry economist Daniel Schlissel in testimony during PSC hearings about Construction Work In Progress (CWIP) tariff. “The Company’s response was ‘No, the Company’s shareholders will not invest capital in the project without a reasonable assurance of cost recovery.’ In other words, the Company will seek to have ratepayers bear the risks of higher project costs.”"

[Statistical]

12. GA power is a minority owner of the Vogtle plant.

The majority of the reactor is owned by nonprofits & co-op.

So why would non-profits choose a form of power they know if the most expensive. They can't benefit from it. They can't use it to hide profits. The only thing that happens is their ratepayers will pay more. MEAG has historically some of the lowest power rates in the country. They have worked hard for that reputation why would they intentionally mess that up? So westinghouse profits at their expense? So the reactor fails and they go bankrupt and bunch of for profit companies buy up the parts?

You have to intentionally ignore the reality of the situation to reach the conclusion that nuclear power costs what you think it does.

[joshcryer]

13. Wow, fascinating.

[Statistical]

16. Even more fascinating is that they sold bonds to investors to finance their portion.

Just to be clear this is for the 20% not covered by the 80% federal loan guarantee.

The auction for $1.2 billion worth of muni-bonds was successful (6.6% taxable) which means investors ARE willing to finance reactors if they know the govt isn't going to stab them in the back (like late 70s).

Also Municipal Electric Authority of Georgia currently generates 43% of its power from nuclear energy and has done for decades now and they have some of the lowest rates in the country.
If nuclear wasn't viable I think they would have figured that out by now.

[kristopher]

17. bonds backed by a legal obligation on ratepayers to continue to pay even if plant doesn't produce

There is no private money at risk - all of it is on the back of the taxpayers and ratepayers.

[joshcryer]

20. I am happy whenever the government invests in clean energy.

[joshcryer]

19. The fact that a non-profit is the majority holder says a lot.

[joshcryer]

14. Fortunately since we are going to be building new nuclear, we will see if this is true.

I suspect it is exaggerated given the disinformation that the OP is often spouting.

[kristopher]

15. The nuclear industry is as trustworthy as the coal industry.

Yet you swear by their data.

In-fucking-credible.

[joshcryer]

18. What? No. I learned how costs accumulated, and I learned how regulatory controls changed.

I learned that overseas nuclear reactors are much cheaper than is claimed by dishonest papers that you like to cite because your integrity is clearly in question.

[kristopher]

21. You've been shilling for the nuclear industry from day one.

That's why you reacted so oddly to Nodell's paper that suggested the use of thermal generation (such as nuclear and coal) was a bigger part of climate change than is thought to be the case.

[joshcryer]

22. No, I reacted that way because the paper was unscientific gibberish.

I have argued with Nads in the past about nuclear.

[kristopher]

23. Riiiiiight...

[joshcryer]

24. An opinion not exclusive to me, but people like Gavin from GISS and many credible climatologists.

People who, yaknow, do this shit for a living.

[kristopher]

25. Your attack was nothing short of psychopathic

or paid...

[joshcryer]

26. What "attack"? The pursuit of truth? I know you're allergic to it.