Writing in The Toronto Star, Tyler Hamilton reveals that the AECL bid to add two new Advanced CANDU reactors to Ontario’s Darlington nuclear station was approximately $26 billion. That works out to a shocking $10,800 per kilowatt of electricity, compared with the $2,900 per kilowatt reference figure the Ontario Power Authority was using for planning back in 2007. The French firm Areva apparently put in a lower bid – $7,375 per kilowatt – but was unwilling to take on as much risk as AECL. The article also notes the untested nature of the Advanced CANDU design, which is especially worrisome given the failure of AECL to deploy two planned isotope reactors, due to design failures.
If this is the true contemporary cost of nuclear power, it seems plausible that we shouldn’t be bothering with it, given all the other associated risks. For $10,800 per kilowatt, it is quite possible we could get more value by funding energy efficiency, conservation, and renewables. Taking some cost figures from MacKay, we can compare $26 billion for 2,000MW (2GW) of nuclear with other options:
- Onshore wind: $2.8 billion for 2GW
- Offshore wind: $3.0 billion for 2GW
- Concentrating solar in deserts : $31 billion for 2GW
- Solar photovoltaic: $14.5 billion for 2GW
We also wouldn’t be taking on the additional risks associated with proliferation, accidents, wastes, and so forth. Admittedly, MacKay’s figures are approximate and there are other considerations to be made. Even so, the staggering cost of the AECL bid has to give pause to anyone who hopes nuclear could be a cheap and relatively easy solution to climate change. It may be that The Economist will be proved correct in saying: “Since the 1970s, far from being ‘too cheap to meter’—as it proponents once blithely claimed—nuclear power has proved too expensive to matter.”
Solar PV Current Installed Prices per kW in California & Elsewhere
Revised August 28, 2007
by Paul Gipe
To summarize, the average installed cost of solar PV in California is about $8,000 CAD/kW(DC). Systems greater than 100 kW cost about $7,500 CAD/kW (DC). Large systems may be installed for as little as $7,100/kW (DC), costs similar to those in Germany.
New nuclear capital costs rising, but still competitive, MIT study says
An update of the Massachusetts Institute of Technology’s 2003 report on the future of nuclear power released the week ended May 15 shows the estimated cost of building new nuclear units in the US has doubled over the past five years because of rising capital costs, issues with construction schedules and regulatory requirements, and in some cases public opposition to nuclear power.
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It estimated the overnight capital cost of new nuclear units at $4,000 per kilowatt.
While that is double MIT’s 2003 estimated capital cost of $2,000/kW, capital costs for coal generation have also increased from $1,300/kW to $2,300/kW and natural gas generation capital costs have increased from $500/kW to $850/kW, the report said.
This decision-making flowchart for nuclear power seems relevant to the above.
Why Moody’s Thinks New Nukes Are for Losers
By John Geesman on Nuclear Renaissance
While receiving little attention in the popular press, and perhaps even less in Washington, D.C., you can be assured that Moody’s stern admonitions this June about the financial risks posed by new nuclear plants (”a bet the farm risk for most companies”) has been carefully read by every utility CEO and CFO weighing future supply options.
With a world-weariness typically associated with excessive recitation to errant children of broadly understood truths (at least among that subset of Wall Street which follows utility finance), the words used in the 21-page rebuke were unrelenting
The bigger problem is cost. Nuke plants are supposed to be expensive to build but cheap to operate. Unfortunately, they’re turning out to be really, really expensive to build; their cost estimates have quadrupled in less than a decade. Energy guru Amory Lovins has calculated that new nukes will cost nearly three times as much as wind — and that was before their construction costs exploded for a variety of reasons, including the global credit crunch, the atrophying of the nuclear labor force, and a supplier squeeze symbolized by a Japanese company’s worldwide monopoly on steel-forging for reactors. A new reactor in Finland that was supposed to showcase the global renaissance is already way behind schedule and way, way over budget. This is why plans for new plants were recently shelved in Canada and several U.S. states, why Moody’s just warned utilities they’ll risk ratings downgrades if they seek new reactors, and why renewables attracted $71 billion in worldwide private capital in 2007 — while nukes attracted zero.
It’s also why U.S. nuclear utilities are turning to politicians to supplement their existing loan guarantees, tax breaks, direct subsidies, and other cradle-to-grave government goodies with new public largesse. Reactors don’t make much sense to build unless someone else is paying; that’s why the strongest push for nukes is coming from countries where power is publicly funded. For all the talk of sanctions, if the world really wants to cripple the Iranian economy, maybe the mullahs should just be allowed to pursue nuclear energy.
Sluggish Economy Curtails Prospects for Building Nuclear Reactors
By MATTHEW L. WALD
Published: October 10, 2010
WASHINGTON — Just a few years ago, the economic prognosis for new nuclear reactors looked bright. The prospect of growing electricity demand, probable caps on carbon-dioxide emissions and government loan guarantees prompted companies to tell the Nuclear Regulatory Commission that they wanted to build 28 new reactors.
The economic slump, which has driven down demand and the price of competing energy sources, and the failure of Congress to pass climate legislation has changed all that, at least for now.
Constellation Energy’s announcement on Saturday that it had reached an impasse with the federal government over the fee for a loan guarantee on a new reactor in Maryland is a sign of how much the landscape has been transformed.
Essentially, the Energy Department argued that Constellation’s project is so risky that the company must pay a high fee or provide other assurances of repayment if it wants the taxpayers to guarantee its construction loans. Constellation said the government’s demand was “unreasonably burdensome.”
Nuclear power in America
Constellation’s cancellation
America’s nuclear renaissance is mighty slow in coming
Oct 14th 2010 | NEW YORK
NUCLEAR power should be hot. It emits virtually no carbon dioxide. It requires no costly imports of oil from countries that breed terrorists. Even greens don’t hate it as much as they used to. What’s for a politician not to like?
Five years ago, George Bush became the first American president to visit a nuclear-power plant in 30 years. In 2007 Congress voted to fund a federal loan guarantee for the construction of new ones. In January Barack Obama embraced his predecessor’s vision, pledging to build a “new generation of safe, clean nuclear-power plants”. On February 1st he followed that up in his proposed budget for 2011 by tripling to $54 billion the value of loans for new nuclear plants the government is offering to guarantee.
Yet America’s much-predicted nuclear renaissance has yet to occur. On October 8th Constellation Energy, a power company, gave up trying to persuade the government to reduce its proposed fee for a loan guarantee for a planned nuclear plant on Chesapeake Bay. The government’s price “would clearly destroy…the economics of any nuclear project,” grumbled the firm. Experts now predict that the project, a joint venture with EDF, a French state-controlled electricity giant, will die.
The Nuclear Energy Institute (NEI), a trade association, blames the breakdown of negotiations with Constellation on “a ridiculous formulaic approach” by the White House Office of Management and Budget, which considered the Chesapeake Bay plant a very risky project. Despite this, the NEI sees “no evidence of a lack of commitment by the administration”. Others are not so sure. Some suspect that Mr Obama’s earlier nuke-boosting was a ploy to win Republican support (which never materialised) for a climate bill.
TEPCO racing to purify contaminated water before it leaks
ASAHI
Officials of Tokyo Electric Power Co. are racing to install purification equipment for the tons of water contaminated with radiation that have accumulated at the crippled Fukushima No. 1 nuclear power plant over concerns that it will leak out either into groundwater or the ocean.
TEPCO officials want to complete the installation by June 15 and begin purification of the water, which will be stored in tanks and recycled to cool the reactors.
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Once the equipment has been installed, plans call for it to purify a total of 250,000 tons of water by the end of the year.
While there were some initial reports that purifying the contaminated water would cost 20 trillion yen ($249.24 billion), TEPCO officials estimate that the system now being installed will cost a total of 53.1 billion yen to construct and process the 250,000 tons of water. That translates into a cost of 210 yen to purify a liter of contaminated water.
Decommissioning a Nuclear Plant Can Cost $1 Billion and Take Decades
REUTERS
Spent fuel also creates new stockpiles of radioactive waste in need of disposal, with few options available
By Lisa Song, SolveClimate News
When the Zion Nuclear Power Station in Illinois closed its doors in 1998, plant owner Commonwealth Edison, now part of Exelon, thought it would take more than two decades to clean up the site.
At the time, Zion needed repairs that exceeded the value of the 2,080-megawatt plant, and dismantling it was the better financial option, said Craig Nesbit, vice president of communications at Exelon. But when operations ceased, the flow of money from utility ratepayers also stopped, drying up the source of Zion’s decommissioning funds.
The company opted to delay its cleanup plan. Aside from removing the main reactor components, Exelon would not begin the rest of the work until the 2020s, by which time the funds would have accumulated enough interest to cover the full decommissioning process.
Luckily for Exelon, though, another option presented itself when EnergySolutions, a nuclear waste managment company based in Salt Lake City, offered to take over the decommissioning plan. The company acquired the Zion plant in September 2010. According to EnergySolutions CEO Val Christensen, full decommissioning will cost about $1 billion dollars over the next 10 years.
EnergySolutions can expedite the cleanup because of its technical capacity, said Christensen. His company is currently decommissioning 18 reactors in England. They also own a low-level nuclear waste storage facility in Clive, Utah, which will speed up the waste disposal process.
“THROW yourself into a nuclear reactor and die!” one investor shouted. Japanese shareholders are usually more polite, but this was the annual meeting of TEPCO, the Japanese power company that owns the Fukushima nuclear plant. Since an earthquake in March caused a meltdown, TEPCO faces unlimited demands for compensation. Its shares have fallen by nearly 90% (see chart). A man at the meeting on June 28th suggested that the board take responsibility by committing seppuku, or ritual suicide.
Not everything went wrong for TEPCO. A shareholder motion to close all its nuclear plants was defeated. But apart from that, things look grim. TEPCO faces claims for compensation that, in a worst-case scenario, could exceed its assets of ¥15 trillion ($186 billion). No one knows how much it will have to pay. (Oddly, it is the education ministry’s job to issue guidelines for nuclear compensation.) Estimates of TEPCO’s liabilities range between ¥4 trillion and ¥25 trillion. The firm also owes ¥7.8 trillion to bondholders and bank creditors. If TEPCO goes bust, these people take precedence over those affected by the disaster, a fact that is politically radioactive.
Four months ago, TEPCO was the cornerstone of corporate Japan. Some 750,000 people, many of them elderly, still own its shares. The company, which accounts for a hefty 8% of Japan’s total domestic debt market, had its bond rating cut to junk by Moody’s on June 20th, following a similar downgrade by Standard & Poor’s in May.
Only the government can save TEPCO from bankruptcy. A bill submitted on June 14th to the Diet, Japan’s parliament, aims to enable the firm to pay compensation without going under. It would establish a mechanism for the government to channel truckloads of money to TEPCO, which the firm would then pass on to the victims. This would be repaid from TEPCO’s earnings, with help from other nuclear operators. The new entity could purchase TEPCO assets. One insider thinks this will lead to partial nationalisation. Another reckons that the new entity might buy fresh bonds that TEPCO could issue to meet its obligations.
Ottawa says it will spend $1.28 billion over 10 years to clean up low-level radioactive waste in the Port Hope area east of Toronto.
The waste came from radium and uranium refining operations of the former Crown corporation Eldorado Nuclear and its private sector predecessors from 1933 to 1988.
The federal government says about 1.7 million cubic metres of the waste is located at sites in Port Hope and Clarington, about 100 kilometres east of Toronto.
WILLING around murky ponds in the oldest part of Sellafield, a nuclear research and reprocessing centre in Cumbria, is a soupy, radioactive sludge. For years boffins working on Britain’s first military and civil nuclear programmes abandoned spent fuel and other nastiness into the pools and tanks, which now grow decrepit. Though perhaps not the “slow-motion Chernobyl” which some environmental campaigners make out, the site is subject to one of the most complex nuclear clean-ups in the world.
Sellafield is the trickiest of several challenges facing the Nuclear Decommissioning Authority (NDA), a government body that manages the contractors who swab out Britain’s defunct facilities. Their projects swallow up about two-thirds of the budget of the Department of Energy and Climate Change; Sellafield alone costs £1.7 billion ($2.8 billion) a year, almost as much as the roughly £2 billion spent subsidising renewable energy in 2013. On March 31st NDA awarded a £7 billion contract to decommission 12 more of Britain’s oldest reactor sites over 14 years to a consortium including Babcock, a British engineering firm, and Fluor, an American one.
Mismanagement has probably made a tough job more difficult. In 2009 bosses thought Sellafield would cost £46.6 billion to make safe; the latest estimate is £70 billion, and rising. In February MPs on the public accounts committee slammed the performance of Nuclear Management Partners, the private consortium currently contracted to detoxify it. They questioned NDA’s decision, in October, to award it a second five-year contract, and said taxpayers bore most of the risks.
Decommissioning Nuclear Plants Costing Far More Than Expected
“This article takes a look at cost estimates of nuclear power plant decommissioning from the 1980s, and how widely inaccurate they turned out to be. This is a pretty fascinating look at past articles in the Bulletin of the Atomic Scientists that consistently downplayed the costs of decommissioning, for example: ‘The Yankee Nuclear Power Station in Rowe, Massachusetts, took 15 years to decommission—or five times longer than was needed to build it. And decommissioning the plant—constructed early in the 1960s for $39 million—cost $608 million. The plant’s spent fuel rods are still stored in a facility on-site, because there is no permanent disposal repository to put them in. To monitor them and make sure the material does not fall into the hands of terrorists or spill into the nearby river costs $8 million per year.'”
San Onofre nuclear power plant dismantling will cost $4.4 billion, take 20 years
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Plan unveiled to dismantle San Onofre
Nuclear costs remain competitive, says IEA/NEA report
The cost of nuclear power is in line with other baseload energy technologies, but new nuclear power plants can generate more electricity and more cheaply over their full lifetime if financing costs are low. This is the conclusion of a recent joint study by the OECD Nuclear Energy Agency (NEA) and the International Energy Agency (IEA).
Projected Costs of Generating Electricity: 2015 Edition is the eighth edition of the IEA and NEA’s joint study of the levelised lifetime costs of generating electricity for a broad set of generation technologies. The 2015 study focuses on the expected costs of technologies being built now and commissioned by 2020. The study has been published at varying intervals since 1981, with the last edition dated 2010.
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Flamanville EPR timetable and costs revised
French utility EDF has put back the start-up date of the EPR unit under construction at Flamanville by about one year while the cost of the project has now tripled from its original estimate.
The 3512 MWe Darlington plant supplies about 20% of Ontario’s electricity. Darlington 1 and 2 generated their first power in 1990, followed by unit 3 in 1992 and unit 4 in 1993, all with planned 30-year operating lives. Refurbishment will enable the units to continue to operate for a further 30 years.
OPG has already put in years of work towards the refurbishment: scoping work was carried out in an initiation phase lasting from 2007 to 2009, while detailed planning commenced in 2010 and was completed in 2015, incorporating lessons learned from other major projects. A state-of-the-art full-scale reactor mock-up has been built to test specialized tools and train workers.
The project will now move into the execution phase, scheduled to take 10 years to complete. One at a time, the units will be taken out of service, defueled, and drained of their heavy water coolant and moderator before work begins to restore or replace reactor components. This will involve replacing 480 fuel channel assemblies and 960 inlet and outlet feeders per reactor.
Most of the turbine generator systems and auxiliary systems will be disassembled and rebuilt or replaced. OPG has concluded that the steam generators will remain fit for service for the extended life of the reactors and will not need to be replaced, although the steam generator tubes and parts will be inspected, inspection nozzles will be installed and the steam generators will be cleaned to improved heat transfer.
http://www.world-nuclear-news.org/C-OPG-gets-go-ahead-for-Darlington-refurbishment-1201167.html
EDF faces €100 billion reactor upgrade bill, says audit office
Why America abandoned nuclear power (and what we can learn from South Korea)
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But the most interesting story is South Korea, which has seen nuclear costs decline sharply since the 1970s:
South Korea had an advantage in that it didn’t start entirely from scratch. The country imported proven US, French, and Canadian designs in the 1970s and learned from other countries’ experiences before developing its own domestic reactors in 1989. It developed stable regulations, had a single utility overseeing construction, and built reactors in pairs at single sites.
The results were remarkable: overnight construction costs fell 50 percent between 1971 and 2008 as South Korea built 28 reactors in all.
In fact, the Energy Policy paper notes, the decline in South Korean nuclear power costs is comparable to the decline in solar power costs in Germany over the same time period. (Though solar has kept getting cheaper past 2008.) Analysts have marveled at how solar panel costs come down as companies get better at manufacturing them — a process known as “learning by doing.” South Korea’s experience suggests similar reductions are possible for nuclear.
A case in point is OPG’s refurbishment of the Darlington nuclear plant. OPG – its reputation still dinged from the nearly $500 million, or 50 per cent, cost overrun on its Niagara tunnel project – says it can refurbish the entire plant at a cost of $12.8 billion – or about 7.9 cents per kilowatt hour (kWh).
Unfortunately, the track record of cost overruns on nuclear projects is extensive and well-documented, with every single one in Ontario going significantly over budget (on average more than double). OPG has added a 15 per cent – or $1.7 billion – “contingency” amount in the $12.8 billion cost estimate. But a more realistic figure would be anywhere between a 50 per cent contingency fund of $5.5 billion, or even a 100 per cent contingency fund of $11.1 billion.
Using realistic figures, the real cost of the Darlington refurbishment could be $16.7 billion or $22.2 billion (3 per cent of the province’s entire GDP).
Breaking those figures down into rates means the real cost to electricity customers will be 11.85 cents to 15.8 cents per kWh for power from a refurbished Darlington – nearly triple the cost of power from the province’s fleet of natural gas plants, which currently operate below their generating capacity.
http://www.nationalpost.com/m/wp/news/blog.html?b=business.financialpost.com/fp-comment/a-new-debt-retirement-charge-for-ontario-electricity-customers&pubdate=2016-04-27
True or false? A new nuclear power station in the south-west of the UK will be the most expensive object on Earth. That’s the claim about the proposed plant at Hinkley Point in Somerset – but has anything else ever cost so much to build?
“Hinkley is set to be the most expensive object on Earth… best guesses say Hinkley could pass £24bn ($35bn),” said the environmental charity Greenpeace last month as it launched a petition against the project.
This figure includes an estimate for paying interest on borrowed money, but the financing arrangements for Hinkley C are so opaque that it is impossible to calculate exactly what the final cost will be.
Even if you stick with the expense of construction alone, though, the price is still high – the main contractor, EDF, puts it at £18bn ($26bn).
For that sum you could build a small forest of Burj Khalifas – the world’s tallest building, in Dubai, cost a piffling £1bn ($1.5bn). You could also knock up more than 70 miles of particle accelerator. The 17-mile-long Large Hadron Collider, built under the border between France and Switzerland to unlock the secrets of the universe, cost a mere £4bn ($5.8bn).
http://www.bbc.com/news/magazine-36160368
“Nuclear power plants are the most complicated piece of equipment we make,” says Steve Thomas, emeritus professor of energy policy at Greenwich University.
“Cost of nuclear power plants has tended to go up throughout history as accidents happen and we design measures to deal with the risk.”
In comparison, the UK’s newest nuclear power station, Sizewell B, which was completed in 1995, only cost £2.3bn ($3.4bn), or £4.1bn ($6bn) at today’s prices.
No nuclear power plants have been completed in Europe this century – those that have been built in recent years are in countries such as China or India, and Thomas believes figures for these, where they exist, are not reliable.
http://www.washingtonmonthly.com/features/2009/0901.blake.html
These marks are the last remaining hints of the problems that have plagued this thick outer shell, the last line of defense in case of a meltdown. The steel liner was hand forged using outdated plans by a Polish subcontractor, which had no prior nuclear experience. As a result, the holes for piping were cut in the wrong spots, and the gaps along the weld joints were too wide. Entire sections had to be ripped apart and rebuilt. And the containment liner is not unique. Virtually every stage of the construction process has been dogged by similar woes, from the nine-foot-thick foundation slab (the concrete was mixed with too much water, making it weaker than had been called for in the plans) to the stainless steel pipes that feed water through the reactor core (they had to be recast because the metal was the wrong consistency). To date, more than 2,200 “quality deficiencies” have been detected, according to the Finnish nuclear authority, STUK. Largely as a result, the project, which was supposed to be completed in 2009, is three years behind schedule and is expected to cost $6.2 billion, 50 percent more than the original estimate. And the numbers could keep climbing. “There are still some very challenging phases ahead,” says Petteri Tiippana, STUK’s assistant director for projects and operational safety. “Things will have to go extremely well if those responsible for building the project are to hit the new targets.”
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By the mid-1970s, more than 100 nuclear power stations were being planned or built. But the manic enthusiasm was fading as reactor projects ran aground amid soaring inflation, shrinking energy demand, bungled construction, and regulatory delays. Perhaps the most infamous boondoggle was the Shoreham Nuclear Power Plant on the Long Island Sound. The Long Island Lighting Company spent twenty-five years and $6 billion—eighty times the original estimate—trying to get it up and running. But it was never licensed to operate. The debacle saddled Long Island residents with some of the nation’s highest electricity rates and pushed the regional economy to the brink of ruin.
As problems piled up, the market for new reactors collapsed. Between 1973 and 1978 the number of annual orders dwindled from thirty-eight to two. Some utilities began canceling reactor plans or abandoning half-built projects. In the mid-1980s, the Washington Public Power Supply System walked away from two unfinished reactors and $2.25 billion in bonds, the largest municipal bond default on the books. Another major utility was forced into bankruptcy. In 1985, Forbes magazine surveyed the wreckage of the nuclear power industry and described it as “the greatest managerial disaster in business history.”
He highlighted the EC’s latest Nuclear Illustrative Program (PINC), which was published last month and according to which investment of between €350 billion ($399 billion) and €450 billion will be required over the next 35 years to maintain the European Union’s nuclear generating capacity at between 95 and 105 GWe. There are currently 129 nuclear power reactors in operation in the EU, with a combined generating capacity of 120 GWe, that together provide 27% of the bloc’s electricity. However, the EC forecasts that there will be a decline in EU nuclear capacity up to 2025 due to ageing reactors being retired and some member states ending or reducing their reliance on nuclear energy.
http://www.world-nuclear-news.org/EE-Markets-and-the-future-of-nuclear-power-19051601.html
THE list of candidates for the most beleaguered part of Europe’s nuclear-power industry is long. But since last year Sweden, which generates about 40% of its electricity through nuclear energy, has been a strong contender. A tax increased to punitive levels in 2015 by the anti-nuclear Green Party hit its operators so hard that they threatened to close all ten of the country’s plants unless it was scrapped. On June 10th the government, including the Greens, caved in and threw them a lifeline. It has promised to phase out the tax from next year and will allowed operators to replace ageing reactors with new ones.
This was a rare piece of good news for an industry that looks like it is on its last legs in much of western Europe. Germany is decommissioning all of its reactors and France is cutting the share of nuclear in the energy mix to half, from 75%, by 2025. The country’s main power provider, Electricité de France (EDF), is under fire for the shortcomings of the as-yet-unfinished European Pressurised Reactors (EPRs) under construction in Finland and France. Its proposed EPR scheme at Hinkley Point in Britain has become a political embarrassment on both sides of the Channel. Unsurprisingly no one trumpeted the news from Sweden more loudly than Jean-Bernard Lévy, EDF’s chairman. It will not pull the nuclear industry out the mire, however.
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Whether it actually leads to the construction of new power plants is another matter. The agreement to support the nuclear operators included a pledge to generate all electricity from renewable sources (which excludes nuclear) by 2040. That may have helped win over the Greens, but it is unlikely to generate enthusiasm for building new plants, not least because renewables will continue to be subsidised and the bigger their role in the energy mix, the more they suppress wholesale prices.
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It may be different in the developing world. This month India reaffirmed a decision, taken in 2013, to buy six nuclear-power plants from Westinghouse, owned by Japan’s Toshiba, after talks between India’s prime minister, Narendra Modi, and Barack Obama. But in reality the deal remains stuck, as long as it remains unclear whether Westinghouse (or any other supplier) would have to accept liability in case of a nuclear accident. Nowhere is nuclear a particularly cheap and easy option.
Nuclear more competitive than fossil fuels: report
“Nuclear power generation technologies are now cost competitive with fossil fuels and innovation is gathering pace across the sector,” British consultancy Lloyd’s Register says in a report published today. The report, titled Technology Radar – a Nuclear Perspective, is based on the “insights and opinions of leaders across the sector”, as well as the views of almost 600 professionals and experts from utilities, distributors, operators and equipment manufacturers.
THERE are few more storied innovators than Westinghouse. Founded in 1886, it is the company that brought electricity to the masses. When you plug in your toaster or flip your light switch, you have George Westinghouse’s alternating-current system to thank. In the 21st century the firm seemed poised to unleash a new revolution in nuclear energy. Its AP1000 pressurised water reactor was supposed to make nuclear plants simpler and cheaper to build, helping to jump-start projects in America and around the world.
But those nuclear ambitions have gone awry. On March 29th the firm filed for Chapter 11 bankruptcy in New York. Its troubles have been a running sore at Toshiba, its Japanese parent, a headache for its creditors, and the latest bad tidings for a nuclear industry beset with problems.
Toshiba was triumphant in 2006 when it paid $5.4bn for Westinghouse after a bidding war, beating out General Electric (founded by George Westinghouse’s archrival, Thomas Edison). Around the same time, Southern and SCANA, two big utilities based in Georgia and South Carolina, respectively, chose the AP1000 design for new nuclear plants.
But these American projects soon faced the problems that have long plagued nuclear construction. In Westinghouse’s bankruptcy filing, the company explains a dismal chain reaction. Unexpected new safety and other requirements from American regulators caused delays and additional costs. That sparked a fight between the utilities, Westinghouse and its construction contractor, a subsidiary of Chicago Bridge & Iron (CB&I), about who should bear them. The brawl exacerbated delays.
In an attempt to push the projects forward, Westinghouse acquired CB&I’s subsidiary, then became mired in litigation over the terms of the deal. It also signed new contracts with consortia led by Southern and SCANA, agreeing to shoulder unanticipated costs. Those costs mounted. Construction continued swallowing more time and labour than Westinghouse had hoped. In February Toshiba announced a $6.1bn write-down for the two American projects. Stephen Byrd of Morgan Stanley, a bank, anticipates that the total costs of the plants, if completed, would be about twice Westinghouse’s original estimate.
U.S. Nuclear Comeback Stalls as Two Reactors Are Abandoned
In a major blow to the future of nuclear power in the United States, two South Carolina utilities said on Monday that they would abandon two unfinished nuclear reactors in the state, putting an end to a project that was once expected to showcase advanced nuclear technology but has since been plagued by delays and cost overruns.
The two reactors, which have cost the utilities roughly $9 billion, remain less than 40 percent built. The cancellation means there are just two new nuclear units being built in the country — both in Georgia — while more than a dozen older nuclear plants are being retired in the face of low natural gas prices.
Originally scheduled to come online by 2018, the V.C. Summer nuclear project in South Carolina had been plagued by disputes with regulators and numerous construction problems. This year, utility officials estimated that the reactors would not begin generating electricity before 2021 and could cost as much as $25 billion — more than twice the initial $11.5 billion estimate.
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South Carolina Electric & Gas Company To Cease Construction And Will File Plan Of Abandonment Of The New Nuclear Project
CAYCE, S.C., July 31, 2017 /PRNewswire/ — South Carolina Electric & Gas Company (SCE&G), principal subsidiary of SCANA Corporation (SCG) (SCANA) (NYSE: SCG), announced today that it will cease construction of the two new nuclear units (Units) at the V.C. Summer Nuclear Station in Jenkinsville, SC and will promptly file a petition with the Public Service Commission of South Carolina seeking approval of its abandonment plan. This decision was reached by SCE&G after considering the additional costs to complete the Units, the uncertainty regarding the availability of production tax credits for the project, the amount of anticipated guaranty settlement payments from Toshiba Corporation (Toshiba), and other matters associated with continuing construction, including the decision of the co-owner of the project, the South Carolina Public Service Authority (Santee Cooper), the state owned electric utility, to suspend construction of the project. Based on these factors, SCE&G concluded that it would not be in the best interest of its customers and other stakeholders to continue construction of the project.
The South Carolina utilities selected an advanced reactor design from Westinghouse Electric Company, the AP1000, reported to have more safety features than earlier models. The utilities planned to build the two reactors next to an existing nuclear unit at the V.C. Summer plant in Fairfield County.
But pitfalls soon followed. Construction began before Westinghouse, a subsidiary of Toshiba of Japan, had finalized its AP1000 design, and several safety changes had to be made midway through the process. Engineers struggled with the complicated, novel project, as various components needed to be reworked.
“This was a first-of-a-kind project, so it was always going to be hard,” said Rich Powell, executive director of the ClearPath Foundation, a clean-energy group in Washington. “But you can also see this as a symptom of a broader problem. We’ve let our nuclear industry atrophy for 30 years, and we’ve lost the robust supply chains and expertise needed” in building reactors.
Investment in new nuclear declines to five-year low
Global energy investment fell for the third consecutive year in 2017, according to the International Energy Agency (IEA). Investment in nuclear power declined by nearly 45% last year to USD17 billion. Although spending on new reactors reached the lowest level in five years, investment on upgrades of existing units increased.
Viewpoint: Studying the cost of decarbonisation
Since 2012, the OECD Nuclear Energy Agency (OECD-NEA) has produced very useful reports on the cost of electricity generation with the aim of finding the most efficient and least expensive ways of decarbonising the energy system. The Paris-based organisation recently presented the conclusions of its latest report, The Costs of Decarbonisation – System Costs with High Shares of Nuclear and Renewables, which was published on 25 January. Philippe Costes, senior adviser at World Nuclear Association, here presents his review of the document.
First major modular nuclear project having difficulty retaining backers
The complicated finances of the first major test of small modular nuclear reactors
Sources of Cost Overrun in Nuclear Power Plant Construction Call for a New Approach to Engineering Design: Joule
https://www.cell.com/joule/fulltext/S2542-4351(20)30458-X
Energy security gives climate-friendly nuclear-power plants a new appeal
To make good on it they have to get easier to build
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Over the four years that Hinkley Point c (hpc) has been under construction on the edge of the Bristol Channel in the west of England, it has consistently been held up as an example of the industry’s current problems. Nuclear energy’s long-standing cost and schedule issues used to mean it was hard put to compete with natural gas and coal. Now they make it hard for nuclear to compete with ever-cheapening renewable energy.
When the British government and edf Energy, the plant’s owner, signed the relevant contracts in 2013, hpc was expected to produce a megawatt-hour for £92 (then $145). The same amount of energy from a new offshore wind farm was at the time expected to cost £125. Nine years on, hpc is two years behind schedule and £10bn over budget; so its power will cost more. Offshore-wind producers, for their part, are offering energy at less than £50 (now $60) per megawatt-hour. The cost of electricity from solar panels has fallen yet further. Campaigners who have long seen nuclear as dangerous can now call on economists who say it is just too expensive.
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For all its woes, though, by the standards of Western-designed and -built nuclear plants, hpc is ahead of the curve. The eprs at Olkiluoto in Finland and at the Flamanville c plant in France started construction in 2005 and 2007 respectively. Neither has yet been paid for a watt fed into the grid. The same is true of Vogtle, an American plant designed around two Westinghouse ap1000 reactors which began construction in 2009; by 2017 it had driven Westinghouse into bankruptcy. All three are between two and three times over their original budget and getting on for a decade behind schedule.
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Having consumers pay off interest during construction reduces the size of the principal on which interest must be paid in future, thereby reducing overall costs. For example, for a loan of £8bn with an interest rate of 9%, which is the rate at which edf was able to borrow money for Hinkley, the accumulated interest on the loan is larger than the principal by the time construction is completed. The company reckons that some 60% of hpc’s final cost will be the cost of financing its construction.
As countries choose whether to bet on nuclear power, they ought to look at France, the West’s leader. After the first oil shock in 1973, it built enough reactors to supply about 70% of its power. Yet its experience has been hard. Maintenance problems mean that the fleet has been operating below its theoretical capacity this year, contributing to a Europe-wide spike in power prices. The main company, edf, has accumulated a staggering $350bn of liabilities, is expected to make $19bn of pre-tax losses this year and is about to be fully nationalised. And the supply of new reactors has stalled. Of the six built since 1999 that are of the latest French design—five abroad and one at home—only the two built in China are generating electricity.
France holds lessons for nuclear planners elsewhere. One is the case for continuous investment and innovation. At first France built too many reactors too quickly and then not enough. Many now need maintenance all at once. The lull in orders led to a loss of skills and expertise, as employees retired or left. Costs ballooned and innovation flagged. To fix its plants today, edf is flying in welders from America and Canada. Only now has France opted for a well-spaced programme of three pairs of reactors to be built no more than four years apart.
https://www.economist.com/leaders/2022/12/15/the-french-exception
Not everyone is convinced of the new strategy. “They are making the same mistake again by starting before detailed engineering is completed,” says Mycle Schneider, co-ordinator of the report on the state of the industry. edf has invested more than 1m engineer-hours in the EPR2, but another 19m may be needed to fine-tune the design. Even some government experts have doubts about whether edf can deliver six EPR2s on time and on budget. A leaked internal memo from late 2021 warns that the first pair may not be ready before 2043, not by 2035 as promised, and could cost €21bn in today’s money, rather than €17bn-18.5bn. France’s Court of Audit has calculated that in 2019 a megawatt-hour (mwh) of nuclear power cost nearly €65 to generate (taking into account construction costs). The EPR2 may be able to produce it more cheaply, but certainly not for €15 and €46 that Spaniards and Germans, respectively, already sometimes pay per solar mwh.
But three massive difficulties could dampen the mood. The first is cost. Because their designs are so technical and take years to get approved, nuclear plants are extremely expensive to build. The doe estimates that nuclear reactors need to cost about $3,600 per kilowatt to be built quickly around the country. But first-of-their-kind reactors are costing anywhere from $6,000 to $10,000 per kilowatt. And an era of elevated interest rates will only complicate matters. NuScale, a startup building a small modular reactor on inl’s campus, recently said that the cost of its project would surge by 75%, to $9.3bn, because of inflation and higher interest rates.
https://www.economist.com/united-states/2023/06/25/america-aims-for-nuclear-power-renaissance