Guest Post by Chris Uhlik. Dr Uhlik did a BS, MS, and PhD in Electrical Engineering at Stanford 1979–1990. He worked at Toyota in Japan, built robot controllers, cellular telephone systems, internet routers, and now does engineering management at Google. Among his 8 years of projects as an engineering director at Google, he counts engineering recruiting, Toolbar, Software QA, Software Security, GMail, Video, BookSearch, StreetView, AerialImaging, and research activities in Artificial Intelligence and Education. He has directly managed about 500 engineers at Google and indirectly over 2000 employees. His interests include nuclear power, photosynthesis, technology evolution, artificial intelligence, ecosystems, and education.
(Ed Note: Chris is a member of the IFRG [a private integral fast reactor discussion forum] as well as being a strong support of the LFTR reactor design)
An average American directly and indirectly uses about 10.8 kW of primary energy of which about 1.3 kW is electricity. Here I consider the cost of providing this energy as coming from 3 main sources:
1. The fuel costs (coal, oil, uranium, sunlight, wind, etc)
2. The capital costs of the infrastructure required to capture and distribute the energy in usable form (power plants, tanker trucks, etc)
3. The operating costs of the infrastructure (powerline maintenance, plant security, watching the dials, etc)
The average wholesale electricity price across the US is about 5c/kWh, so the all-in costs of providing the electrical component is currently ~$570/person/year or 1.2% of GDP. The electric power industry including all distribution, billing, residential services, etc is $1,120/person/year or 2.4% of GDP. So you can see there is about a factor of two between marginal costs of electricity production (wholesale prices) and retail prices.
The rest of this energy comes from Natural gas, Coal, Petroleum, and Biomass, to the tune of 6.36 kW/person.
I’m going to make the following assumptions to calculate how much it would cost to convert to an all-nuclear powered, fossil-carbon-free future.
Assumptions (*see numbers summary at foot of this post)
- I’ll neglect all renewable sources such as hydro. They amount to only about 20% of electricity and don’t do anything about the larger fuel energy demand, so they won’t affect the answer very much.
- Some energy sources are fuel-price intensive (e.g. natural gas) and some have zero fuel prices, but are capital intensive (e.g. wind). I’ll assume that nuclear is almost all capital intensive with only 35% of the cost coming from O&M and all the rest going to purchase costs plus debt service.
- I’ll use 8% for cost of capital. Many utilities operate with a higher guaranteed return than this (e.g. 10.4%) but the economy historically provides more like 2–5% overall, so 8% seems quite generous.
- I’ll assume 50 year life for nuclear power plants. They seem to be lasting longer than this, but building for more than 50 years seems wasteful as technologies advance and you probably want to replace them with better stuff sooner than that.
- Back in the 1970’s we built nuclear power plants for about $0.80–0.90/watt (2009 dollars). In the 1980’s and 90’s we saw that price inflate to $2.09–3.39/watt (Palo Verde and Catawba) with a worst-case disaster of $15/watt (Shoreham). Current project costs are estimated at about $2.95/watt (Areva EPR). Current projects in China are ~$1.70/watt. If regulatory risks were controlled and incentives were aligned, we could probably build plants today for lower than the 1970’s prices, but I’ll pessimistically assume the current estimates of $3/watt.
- Electricity vs Combustion: In an all nuclear, electricity-intensive, fossil-carbon-free future, many things would be done differently. For example, you won’t heat your house by burning natural gas. Instead you’ll use electricity-powered heat pumps. This will transfer energy away from primary source fuels like natural gas to electricity. Plug-in-hybrid cars will do the same for petroleum. In some cases, the total energy will go down (cars and heat pumps). In some cases, the total energy will go up (synthesizing fuel to run jet transport aircraft). I’ll assume the total energy demand in this future scenario is our current electricity demand plus an unchanged amount of energy in the fuel sector, but provided instead by electricity. I.e. 1.3 kW (today’s electricity) + 6.4 kW (today’s fuels, but provided by electricity with a mix of efficiencies that remains equivalent). This is almost certainly pessimistic, as electricity is often a much more efficient way to deliver energy to a process than combustion. (Ed Note: I discuss similar issues in these two SNE2060 posts).
- Zero GDP growth rate
Result: In this future, we need 7.7 kW per person, provided by $3/watt capitalized sources with 8% cost of capital and 35% surcharge for O&M. The cost of this infrastructure: $2,550/person/year or 5% of GDP.
- Chinese nuclear plant costs of $1.70/watt
- Higher efficiency in an electric future were most processes take about 1/2 as much energy from electricity as they used to take from combustion. 1.3 kW from old electricity demands (unchanged) + 3.2 kW from new electricity demands (half of 6.4 kW). And fuels (where still needed) are produced using nuclear heat-driven synthesis approaches.
Alternative result: $844/person/year or 2% of GDP.
Conclusion: Saving the environment using nuclear power could be cheap and worth doing.
Electricity: 12.68 quads
Non-electricity fuels: 58.25 quads
Natural gas: 16.33 quads
Coal: 1.79 quads
Biomass: 3.46 quads
Petroleum: 36.67 quads
Average retail electricity price: 9.14 c/kwh
Electric power industry: $343B/yr
Electricity transmission industry: $7.8B/yr
Per person statistics:
Electricity: 1.29 kW (average power)
Fuels: 6.36 kW
335 replies on “The cost of ending global warming – a calculation”
Would you please supply a reference to back up these statements.
DV82XL — Conversations with Professsors Anjan Bose and Carl Hauser for the first two sentences. An easily locatable web page regarding pumped hydro for the last two sentences.
Chris Uhlik, on 25 January 2011 at 12:36 PM said:
“The key problem to solve is getting rid of the $12B of regulation costs per project. The Chinese seem to have that part solved. I hope India follows suit and these 3rd world countries embarrass the rest of us into following suit.”
Gene Preston, on 27 January 2011 at 1:28 AM said:
“Pip, the NRC is doing a good job of regulation. The problem with nuclear is that the financing mechanism has been taken away. The government has a loan rate of 11.8%, which kills new nuclear from an economic standpoint. So what we need is a new funding opportunity. ”
I am not sure that new funding is the key, I am sure there is lots of money out there looking for a reasonable rate of return from heavy infrastructure projects (Macquarie Bank for example). But not while it is non-viable in terms of competition, why pay the extra $1,200,000,000 per power station?
The next thing will be to make these NPP Future Climate proof!
Gregory Meyerson, @ 26 January 2011 at 1:42 PM
In that case, why are you and most of the Lefties that blog here so strongly opposed to removing the impediments to low cost nuclear power?
Of course, the first step in doing that would involve identifying them, something you and the others seem strenuously opposed to doing – as if this might open a box you don’t want to see the contents of, yes?
Another question, why are you and your Leftie mates, so strongly opposed to any economically rational solutions? Even opposed to considering them?
This thread has demonstrated, once again, the great extent people with strong beliefs will go to protect and defend them. The arguments upthread to try to demonstrate that raising the cost of electricity will not damage the economy, are absolutely amazing. Even Sir Nicholas Stern, Ross Garnaut and Ken Henry couldn’t deny that. This has been a reminder to me about just how resistant the CAGW Alarmist fraternity is to being objective. This is the impression I am left with, and I expect it is how many others see the arguments being presented by the CAGW Alarmists.
DV82XL, David is correct. I did generation planning in the 70’s. Pumped hyrdo was used to move nightime energy from nuclear plants to peak load periods of the day. But like Fran said, it might be cheaper to just build load following units rather than build energy storage. What a planner does is consider all the different possibilities, simulate them, price them out, and then lay them side by side to compare which plans are lowest in cost and which plans meet reliability requirements.
Pip Willis, on 27 January 2011 at 1:07 PM — The NRC has changed the licensing procedure to a vastly improved model over the old way of doing things. Currently $12 billion is about what
will have to spend to construction two Westinghouse AP-1000s.
12 billion US dollars is the current estimate for two AP 1000s being built at the South Texas Project, a 2700 MW addition.
Gene Preston, on 27 January 2011 at 1:20 PM — Thanks. That’s US$4.44/W.
Using the simplified LCOE calculator from
41 year loan @ 11.6%
Build cost of $4450/kWh
Capacity factor of 92%
O&M of $33/kw-yr
Heat rate of 10000 Btu/kWh (only because that was the initial setting)
Fuel cost of $0.6/MMBtu (?)
gives LCOE= 7.5 cents/kWh
Don’t know if all the values are reasonable.
David, nice calculator!
I think your loan term is too long – try 25 years, and the interest rate is high, try 5 to 10% to give some sensitivity values. I then get 4.9 to 7.1 c/kWh.
Gregory Meyerson, @ 26 January 2011 at 12:59 PM:
Thank you for taken all that trouble to prepare the comment with the statistics from the World Bank. I have to apologise that I haven’t taken the article very seriously. To me this is simply cherry picking data. It doesn’t answer my points in a convincing way at all.
1. the world is getting better in nearly all the UNDP HDI measures as time progresses, over any extended time period
2. The underdeveloped countries are improving faster than the developed countries (as they should)
3. The gap between rich and poor is reducing (you will always be able to pull out a few figures and specific time frames to refute any overall trend)
4. You have picked some short time frames to make a point – that is meaningless – it is equivalent to trying to make a point about global warming over a short time period;
5. Socialism is clearly an anchor on progress. Globalisation and capitalism are what produce the growth and improvement in conditions (overall, not for every individual at every particular point in time)
6. We need incentive, otherwise no forward progress is made. There must be a reward for effort and risk taking, otherwise no one would work hard or take risks. Employees, who have never taken serious financial risks, feel they are being undervalued. Society on the whole doesn’t see it this way and never has. The employees whinge about the entrepreneurs’ wealth (those that succeeded and ignoring all the ones who went broke), but are not game to take financial risks themselves.
7. Free trade, not international aide, is what the underdeveloped and developing countries need. This is equivalent to the difference between giving a person a real job or the dole.
Greg, no point in discussing this any point. We’ve done it to death for a year and a half. You are just wrong, and that is the fact of the matter :)
BTW, I’ve provided the links before, and can’t take this seriously enough to be bothered doing it again.
Excellent point. And this applies to all options analysis, not just for selecting an electricity system.
Hint to others: this is what I’ve been urging we do to properly compare the options for reducing emissions. One of the options to be considered is removing the impediments to low cost nuclear.
Or even non-load-following but higher capacity units since sooner or later this extra capacity will be used.
As always this would be worked out on a case by case basis.
One can imagine though, a variety of reactors in a complex which in toto would rarely be used at full capacity and which could be individually backed off quite slowly but which in aggregate cut output quite quickly.
Thanks David and Gene, missed a zero!
(“what with all the excitement and all”)
Conceivably baseload electrical output could be a lot more than the typical 40% of peak. Excess output could be used to split water by electrolysis and the hydrogen stored in low pressure tanks. When demand was above average fuel cell generators (with surplus heat in winter) could burn the hydrogen.
OK this sounds horrendously inefficient since small scale tests suggest a round trip efficiency of just 7% e.g. the Stewart Island experiment http://www.siei.org/
Ceramic fuel cells with even a few kilowatts of power can cost tens of thousands of dollars I gather. However pumped hydro is near maxed out and batteries can double wholesale electricity costs. I believe fuel cells scale better than batteries. The marginal cost of doing this with nuclear will a lot be less than solar.
Before criticising his ask what if we don’t have load following NP by the time natural gas runs out.
“Load follow: between 60 and 100% nominal output, the EPR™ reactor can adjust it power output at a rate of 5% nominal power per minute at constant temperature, preserving the service life of the components and of the plant.”
AP1000 can also load follow, but I don’t have a reference handy and think it’s not as capable as EPR in this respect.
I am beginning to get the impression that you are interested in identifying and removing the impediments to low cost nuclear power. Perhaps there are other readers here who have yet to appreciate this. Therefore, it is not for me to suggest that you shouldn’t continue repeatedly to hammer home your message on every thread.
I would, however, suggest that those interested in the subject might like to look at a new website: http://deregulatetheatom.wordpress.com
I get the impression this comment by Glenn Sargent on Climate Spectator is a fair indication of where the community is at and is heading on the matter of Catastrophic man-made Global Warming.
The Prime Minister’s announcement today that the government will cancel the “Cash for Clunkers” scheme, subsidies for solar hot water and some other so called climate initiatives, tends to confirm that these are easy targets to chop. They are not supported by the broad community. In fact, the massive waste that has been occurring in the name of fixing the climate is not popular in the electorate.
I suspect the majority of people do want to take appropriate action to reduce GHG emissions. But they definitely do not want to continue to waste large sums of taxpayer money. They want the government waste to stop.
I (that’s little, shy, humble me) believe the way BNC can have its maximum influence is to embrace the economically rational ways to reduce GHG emissions.
Sounds like Arthur Dent . Perhaps the community are all becoming radical communists, in that case.
Well, that really is progress. I am impressed with your comprehension skills. I wasn’t sure that you had received this message. :)
Actually, I am still not convinced. When you, and serious thinkers here start giving consideration (instead of avoiding) this
Nuclear cheaper than coal in Australia. How?
and these serious questions:
then I’ll believe the message is beginning to get through.
I guess someone has to do it …. for the sake of the planet (i.e. provide some rational input and some balance for the overwhelming number of repetitive comments about CAGW that appear on every thread like a mantra). Some one needs to provide some balance to all those people who keep arguing irrational polices which appeal only to their ilk, a small group that vote Greens and Left-Labor. This group makes a lot of noise, but are seen by the majority of voters as “the pixies at the bottom of the garden”.
As long as you, and the others of similar persuasion, continue to deny economically rational policies, and argue the most inane nonsense (like raising the cost of electricity won’t damage the economy), then I suspect the most sensible and rational thing to do is to keep going with coal until we can make some progress on removing the impedimentst to low cost nuclear (or other countries do first and we follow in their wake).
I see you resistance to economically rational policies as the same sort of resistance that has prevented progress for 40 years. You are an example of what a real Denier is.
When you include the externalities of coal, nuclear power will always be the lowest cost way of generating electricity. It contributes a net benefit to the economy. Nuclear power is an economically rational option.
We’ve been over that a dozen times. It is not practicable to internalise all the costs of externalities of all electricity generators and all industries in a fair and balanced way. So why pick on just one externality, just one generator technology and just one industry (electricity)?
We could make more progress if you (and others of similar pure but single issue beliefs) that not everyone shares your concerns about catastrophic or dangerous man made global warming. So either you die in a ditch trying to stay pure to your beliefs, or you compromise and try to find a solution that will bring the majority of voters on board to support a policy that will be robust for the long term.
Given the resistance of the Left (including the CAGW Alarmists) to even considering the option of removing the impediments to low cost nuclear, what are our options for electricity generation? I suggest they are:
There really are no other viable options.
Could readers with more engineering knowledge than I expand a bit further on the pros and cons of load following?
If a nuclear reactor can be designed to load follow, are there any significant economic savings to be made relative to running continuously at full power? Presumably, there may be less fuel consumption , but possibly more wear and tear and more initial capex. It is clear that, barring limited pumped storage, as far as electricity is concerned, you use it or lose it.
It thus seems to me that electricity generators might be more economically efficient if they diversified and didn’t solely strive to match the needs of their customers. I believe that some industrial processes (eg aluminium smelting) need power continuously , but it seems that there might be others that could function with power that was intermittent or liable to fluctuate, albeit less efficiently than if operated at full and continuous power. The question then becomes whether the economic consequences of this inefficiency were less than those of storage or load following.
Clearly, processes that could operate with a discontinuous power source could make use of both nuclear and renewable energy, but it seems likely that the discontinuity would always be less in the case of nuclear. I was wondering whether liquid fuel or fertiliser production companies might be suitable acquisition prospects for electricity generators?
I wasn’t talking about internalising negative externalities. Even if the costs from coal power generation facilities aren’t internalised, the coal power stations still produce bads (so to speak), which inflict a cost on society, resulting in a net loss relative to other (nuclear) energy infrastructure.
The current (higher than they should be) costs of nuclear electricity are a result of politics and years of scare-tactics which have had a deep-seated effect on the way society views it. The only way we’ll ever overcome that is by educating the public. You’re putting the tail firmly before the dog if you think pure economic arguments are going to get enough of society on side for it to ever happen.
I don’t understand what you are talking about with this statement:
I think perhaps you did not understand what I said. All industries have externalities (for example lead in petrol, road deaths, etc). We try to internalise the most significant ones until there is a break even point where it is not worth doing any more.
With electricity generation there are many externalities other than CO2. Google ExternE and read about them and the estimated costs of them.
Now, re-read my last post to you.
You are misrepresenting what I’ve been saying for a very long time or you have not understood. Perhaps you should read the links I’ve provide repeatedly so you can understand. I am not saying we must not educate the population. What I am saying is that will not succeed if nuclear is more costly than coal. Tom, you have not understanding of this, so it really is a waste of time me trying to explain it to you anymore.
It is really frustrating continually repeating the same message and you and others seem to willfully misrepresent it. Doing so, as you and several others do repeatedly (Fran and Douglas Wise are two others who do so repeatedly) makes me distrust you, distrust your methods, your integrity and by extension the methods and integrity of those of similar views. My distrust is because the Greens seem to have no ethics whatsoever. All they care about is getting their way; for them the end justifies the means. They believe they are correct and everyone else should just agree with them. But anyone with half a brain can see their policies would be disastrous (as similar policies have proven to be in the past, over and over again).
Trying to start another diversion, eh?
I’m rather short on the engineering knowledge, but I did work for a fertilizer manufacturer quite a few years ago. Production of ammonia and products derived from ammonia such as urea and ammonium nitrate is via continuous process which needs some period to reach equilibrium. Indeed shutting these things down, which happens every few years for maintenance is an expensive exercise.
There are some minor batch processes such as producing alum, but most of it, I believe has to run 24/7.
Not only is gas the feedstock, I think it provides the process heat and other energy. In the Urea prill plant, gas turbines were used to drive the compressors. From memory something like 400C and 100 atmospheres which is quite substantial.
Since nuclear fuel costs are small, and will be much smaller still when we start using thorium, the marginal cost of producing electricity from nuclear is nearly zero. One might think that load following isn’t necessary; just give the excess electricity to some industrial consumer. There are two main reasons why that strategy is severely limited. 1. Capital costs for the industrial partner, and 2. Startup/shutdown transient costs. If I build an aluminum smelter and I get to run it only 33% of the time (say 10pm to 6am) then the capital amortization on that plant costs me 3 times as much as a plant running 100% of the time. Since capital costs of almost all industrial facilities is significant, intermittent use is very expensive. This holds true as well for storage tanks, electrolyzes, fuel cells, etc. Then, as quokka pointed out, many processes take hours to reach equilibrium, get tuned up, and producing best output quality or efficiency. Some of these systems could be redesigned to run at variable rates, but they historically have been designed for continuous, maximum-efficiency, lowest-capital-cost operation.
Why are nuclear plants typically base-load. It comes down to the dynamics of fission product burn-out, stability and controllability of the reactor. When a heavy metal atom fissions, it breaks into two parts: a bigger part and a smaller part. Most of these FPs have very short life-times (microseconds to days). Some of them have large neutron absorption cross sections. The big offenders are Xenon and Samarium. The behavior of the reactor (response to control rod movements and power transients) is a function of how much of these FPs are in the fuel. The amount in the fuel is a function of the power history of the reactor. It is much easier to characterize a reactor for a single history of constant power than for all possible power histories, and a reactor design is certified for operation only in well-explored operating regimes. It isn’t that reactors can’t load follow. It’s more a matter of we aren’t absolutely sure exactly how they will behave if they load follow in the pattern demanded on any particular day. It looks like Areva has run the software simulations and experimental verifications to satisfy themselves and their regulators that between 60% and 100% operating power with slew rates under 5%/minute that the reactor is guaranteed to remain well behaved.
LFTR (Liquid Fluoride salt cooled Thorium Reactor) is especially interesting in this regard for two reasons: 1. its liquid fuel allows for the continuous removal of xenon so the reactivity is a much weaker function of power history, and 2. it is an inherently very stable design with lots of stability margin and over temperature margin. This means it is tolerant of larger excursions yet tends to generate smaller excursions, so is likely to work well at a wide range of output powers varied quickly. However, this is all based on first principles. An actual reactors would have to be built and operated to back up these claims.
If the capital cost of the reactor was lower than the capital cost of the industrial loads (aluminum smelter, ammonia producer, etc), then instead of varying the loads, you’d prefer to vary the supply. It may seem crazy to suggest that nuclear capital costs can be low, but the actual reactor components are really small compared to typical industrial equipment. The costs aren’t in the equipment, but rather in the licensing, inspections, siting, etc. These don’t affect the marginal output of the plant very much, so once you’ve got a nuclear industrial park permitted and sited, it is probably cheaper to add reactors than to add smelters.
Chris, a few years ago there were some coal plants here in Texas that just refused to back down at night time so that their total generation within their control area was an excess, i.e. more generation than load. It resulted in inadvertent energy. Other control areas compensated for the rogue utility’s operation by backing down their plants. Someone had to back down on generation otherwise the frequency would have drifted away from 60 hz. The situation was quickly corrected when the responsible utilities that backed down on their generators said they were going to take the excess energy being generated by the coal plants at zero cost, i.e. not pay for the energy. It may not be all that easy to find loads that can increase their load at night time. Possibly a bunch of electric vehicles could take advantage of that situation by increasing their charging rate. But it would take a rather smart grid to make that automatic.
I wonder what capacity the grid would develop to absorb excess energy at night might be if residential rates were dynamically adjusted and broadcast on the internet. Imagine I have two electric meters on my house. The normal one (flat rate) and a new one (discount rate). The discount rate meter is connected to my internet router and the rate varies in real time. I could plug in my electric car (on indeed switch my entire house over) to the dynamic meter. I’d program my car charger and dish washer and thermostat to behave as a function of price. My car would charge only when the price fell to 0.5c/kWh. If the price had not fallen far enough by 3:00am, it might allow for 1.5c/kWh, etc. Every customer could do whatever they want. Apps would spring up to run dishwashers at night, “charge” water heaters at night, vary car charging, etc. I don’t have a good feeling for how much load leveling this might create. My thinking is it is smaller than 20% because residential electricity consumption is not hugely dominant, but it could be an ~10% important component of our future grid.
You are talking about time of use rates. They might help customers shift their energy usage to times of the day when power is lower in cost. However experience shows that most people are to busy with other activities to be concerned with saving a few cents by shifting load. There would be an additional cost for setting up the accounting that allows you to have time of use rates. It could be a big effort and not result in much difference in how the grid operates. You would still need load following generation. There will always need to be load following generation. Otherwise the grid is unstable.
It is unfortunate that discussion of this critically important subject has degenerated into a lot of name-calling ad hominum attacks and shouting with rather less listening.
The key themes which all agree on are:
– some groups are extreme and will not heed any proposals for nuclear. Let’s ignore them.
– many deniers of anthropic climate are extreme in their conviction (mistaken IMHO). They cannot be ignored as they have a loud bully pulpit in media and strong industry support $$. They will support nukes only if it is clear that it will be cheaper.
– attempting to apply externalized costs to existing dirty coal is a mugs game (see above)
– much or most of the cost of nukes is in the regulatory burden of approvals (including the cost of delays due to regulatory burden)
– a mix of fuel reprocessing and thorium are sufficient fuel sources to provide abundant power for everyone on the planet for centuries or millennia (that does not imply that we have the resources nor will to take advantage of it)
– hydrocarbons will be a significant factor for some time even under the most aggressive transition plans. So let’s use clean ones like gas instead of coal (coal’s externalities are easier to measure, even ignoring GHG, due to the immense volumes of toxic waste, water pollution, etc..
A modest proposal:
– a small, easily transported mass produced modular nuke that can gain approvals at the factory construction phase will obviate most of the regulatory cost and delays
– economies of mass production are a powerful tool to ongoing cost reduction and very broad deployment
– small modular nukes (often in multiples) can be easily integrated into existing power infrastructure perhaps even as the thermal source replacing coal in existing power plants
– small modular nukes (often in multiples) can be easily integrated into existing power grid without need for massive power-line build to remote areas for wind, which has huge NIMBY resistance.
While no such modular nuke is currently available, working research prototypes have achieved proof in concept. Of these molten salt thorium reactors (LFTR) are likely candidates due to:
1 their stable, well-modelled operation in long-term tests, including testing in aircraft
2 their inherent nuclear weapon-proliferation resistance (ironically, a factor in research being dropped by nations intent upon nuclear weapons during the cold war (e.g. USA))
3 their inherent load-following capabilities
4 their need for a relatively small load of start-up uranium
4 their capacity to make use of spent fuel for start-up and thorium for long-term operation
The chief obstacles are that nuclear regulators are unfamiliar with this chemical process approach as opposed to mechanical process in current NPP.
Hence we’ll likely see more innovation from India and China. Which means they’ll be reaping the rewards of research and the benefits of low cost power long before the ‘developed’ world. Good for them and their populations! Good for the environment – Coal is filthy whether or not you agree with AGW.
And really if we’re going to make progress to clean things up while enabling progress we all lose if we pin it on climate change. that won’t sell and carries immense resistance.
It has to be easy to sell to the public, easy to justify economically, and lowest possible investment risk, or it won’t happen. And we need to help make it happen, not fight amongst ourselves.
Barry Brook, on 27 January 2011 at 1:53 PM — Currently in the US CCGTs with a design life of 40 years have 30 year financing; wind turb ines with a 20 year design life have 15 year financing. A Gen III NPP has a 60 year design life. I suspect5 that the utility cannot pay its $6 billion cost in so sshort a time as 25 years, not having the cash flow. I now think I should have used 45 years for the length of financing.
Gene Preston mentioned something about 11.8% but in the simplified LCOE calculator I should have added more to simulate risk insurance and deprecation.
Also, my O&M cost was way to low. I should use 8766 h/yr x $0.031/Kwh = $271.746/kW-yr.
Again using the simplified LCOE in
45 year finacing @ 12.5%
Capital cost $4450/kW
Capacity factor 92%
Heat rate 10000 Btu/kWh
Fuel cost $0.2/MMBtu
Simple LCOE = 10.5 cents/KWh
Yup, those are the standard numbers. But when was the last time you were offered a 12.5% ROI for 45 years? I want some of that! Also, the Chinese are offering plants at $1700/kW, so why do you want to buy the ones offered at 2.6x the price?
Here are numbers a nuclear optimist might use:
30 year finacing @ 5%
Capital cost $1200/kW (no pressure vessel, factory built, close containment)
Capacity factor 75% (load following)
O&M $100/kW-yr (highly automated)
Heat rate 10000 Btu/kWh
Fuel cost $0.002/MMBtu (thorium)
Simple LCOE = 2.8 cents/KWh
A government that cared could engineer a regulatory regime and R&D and financing structures to make this a reality. That government is going to be very competitive.
Economics Is Not the Right Language for Addressing Climate Change
Stephen J. DeCanio, Emeritus Professor of Economics, University of California
Gene, I’m not talking about time of use billing. I’m talking about dynamic pricing. On a night when a big powerplant is offline, the prices would be higher than on a night when the winds are blowing strong. Making decisions every day about what to buy or not buy and when is how markets shift resources to cheap suppliers. A monopoly where the rates change between day and night is not the same thing at all.
You spoilt an otherwise excellent post by displaying bias with this statement:
Of course, a few words could be changed to say the opposite of what this biased statement says. The reversed statement would be equally valid, and equally unhelpful.
Chris Uhlik, on 28 January 2011 at 11:38 AM — Unfortunately, the Chinese may not be allowed to vend the CPR-1000 outside the PRC. Even if allowed, US NRC is most unlikely to approve the type.
This entire small town, Pullman, and a satellite village up the road are starting to have the local utility company’s Pullman Smart Grid Demonstration Project put in place, a five year effort. Everybody will have a new electric meter (and gas meter for the 9/13ths of the buildings which also have natgas). These new meters will, each five minutes, transmit to receivers on the ultility poles and thence eventually to a fiber-optic link ~100 km to the computers @ the utility headquarters. Customers will be able to view their usage, in 5 minute chunks, starting 24 hours after use, over the internet.
Ten percent of customers will receive computers inside their building, with connections to major electricity using appliances such as clothes dryer and hot water heater.
No mention of variable billing rates at this time.
jess or anyone:
what is the proliferation resistant feature of the thorium modular reactor?
if this has been discussed before, I can’t remember where.
I think you’ll like this:
Climate benefits of Natural Gas my be overstated
read the article here: http://www.propublica.org/article/natural-gas-and-coal-pollution-gap-in-doubt
My bomb making skills are a little rusty, but with nuclear weapons, H-bomb, A-bomb, Neutrino/Dirty Bomb all use very heavy elements, Uranium/ Plutonium, which are not used, apart from (I believe) starter amounts, which are very very small, in the Thorium reactors (LFTR). So, no risk of some extremist making a fissile bomb.
I look forward to being corrected!
PS Peter, you know I’m your biggest fan, but your post, ‘Nuclear cheaper than coal, how?’ asks for many stars to align does it not? God forbid, but whacking a price on emissions would be the easy way to make nuclear power cheaper than coal, yes? But I suppose there would be significant downsides in the extra cost of everything. But, its going to happen, Canberra will follow London et al in Europe on this “how green is my valley” competition.
The proliferation resistance is
1. in the uranium blend of the end product (waste) from the thorium reactor. The mix includes isotopes which ‘poison’ the enrichment process and are very difficult to separate from the isotopes which can be enriched.
2. the start-up mix can be done with low-enriched uranium, with only thorium required as ongoing fuel. Or, it can be started with nuclear waste from old style NPP. i.e. it can be used to re-cycle previous waste into clean power leaving a much less hazardous waste (below)
3. any diversion of fissiles form the reactor has an immediate and measurable impact on power so can be easily monitored.
A further advantage of the LFTR is that the nuclear waste has a very short half-life compared to the waste from ‘traditional’ NPP. It needs to be safeguarded for a few centuries instead of several millennia.
These 3 links lead to some interesting material:
3 http://energyfromthorium.com/ Here’s a quote from EnergyFromThorium
” Before describing the characteristics of liquid-fuel reactors we review briefly in this paragraph the situation with PWRs. In a conventional PWR the fuel pellets contain UO2 with fissile U-235 content expensively enriched to 3.5% or more, the remainder being U-238. After about 5 years the fuel must be removed because the fissile material is depleted and neutron-absorbing fission products build up. By that time the fuel has given up less than 1% of the potential energy of the mined uranium, and the fuel rods have become stressed by internal temperature differences, by radiation damage that breaks covalent UO2 bonds, and by fission products that disturb the solid lattice structure (Figure 1). As the rods swell and distort, their zirconium cladding must continue to contain the fuel and fission products while in the reactor and for centuries thereafter in a waste storage repository.
Solid fuel rods are stressed by fission products, radiation, and heat.
In contrast, fluid fuels are not subjected to the structural stresses of solid fuels: liquid-fuel reactors can operate at atmospheric pressure, obviating the need for containment vessels able to withstand high-pressure steam explosions. Gaseous fission products like xenon bubble out while some fission products precipitate out and so do not absorb neutrons from the chain reaction. Like PWRs, liquid-fuel reactors can be configured to breed more fuel, but in ways that make them more proliferation resistant than the waste generated by conventional PWRs. Spent PWR fuel contains transuranic nuclides such as Pu-239, bred by neutron absorption in U-238, and it is such long-lived transuranics that are a core issue in waste storage concerns. In contrast, liquid-fuel reactors have the potential to reduce storage concerns to a few hundred years as they would produce far fewer transuranic nuclides than a PWR”
Peter Lang interesting article on natgas. Critics often allude to fugitive CH4 emissions from pipes adding to that from mines, swamps, tundras and possibly warming seas. There are also delayed NO2 emissions (GWP of 310) from the breakdown of fertilisers made from natgas.
However all that may seem irrelevant to the business lobby. My more immediate question for Martin Ferguson MP is how is Australia going to replace a million barrels (143,000 tonnes) a day of mostly imported oil? That is for both fuel and chemical feedstock. Gas is too good to burn in power stations when there are alternatives.
No. I don’t agree. Could I urge you to read these four comments (and it is important to read the links provided within each). I suspect a lot of the misunderstanding/misrepresentation about what I’ve been saying is because the lead article and the comments linked here have not been fully understood.
Why electricity cheaper than coal is important
Which first? Carbon price or remove impediments to low-cost nuclear?
Once a carbon price is introduced
Suggested Terms of Reference for a “Productivity Commission” Investigation into the impediments to low-cost nuclear
Could I also urge you to read the lead article on the “Alternative to CPRS” thread and the comments listed here:
Lastly, if you would like to discuss this most important of all issues (IMO) could you please post your comments/questions on the “Alternative to CPRS” thread so we can keep all the discussion together. I expect this will be an important issue and it has proved near impossible in the past to come back later and find comments that are scattered over many threads.
Pip, if you want to see the latest comments on all threads, look at the list at the top right of each BNC page. I usually look here to see what has been posted since I last looked.
This wikipedia article on Uranium-232 does a pretty good job of explaining the gamma radioactivity of the uranium produced in a LFTR.
While I agree that the uranium produced in a LFTR isn’t going to be used for weapons production, like all nuclear reactors (fusion included) they are a copious source of neutrons. There are basically two routes to nuclear weapons: enrichment of natural uranium to HEU with >>20% U235, and neutron irradiation of natural uranium (mostly U238) to make Plutonium 239. Historically, everyone with bombs seems to have started with enrichment and then proceeded to lightly toasting uranium to make plutonium. Basically all the big powers who want bombs have them. The radical smaller countries will get their bombs by enriching uranium or by buying them. That’s why the US is so exercised over Iran’s nuclear fuel enrichment efforts. Iran wants to make fuel for their reactors in order to decouple themselves from the potentially uncooperative United States which has a history of imposing economic embargoes against them. But with enrichment capability comes U235 bomb-grade material production capability — just keep running some of the uranium through the enrichment facility over and over again.
The other way to make bombs is by producing Pu239 with neutron irradiation. All reactors can do this, but some are particularly well designed for it. Pressurized water reactors are pretty bad at it because you have to take them apart to refuel and you need frequent (~weeks) refueling cycles to generate bomb quality Pu239. This really messes up their utility for civilian power production while the bomb making activity is going on. And it takes several cycles to make enough for one bomb. Something like this was done once by the UK as a demonstration of feasibility, but they used a Magnox not a PWR. Some reactors like CANDU with online refueling capability are especially good for Pu239 production. These are sort of dual purpose reactors: civilian power and military plutonium production. I think the Russians have some dual purpose reactor designs as well.
LFTR doesn’t actually exist. LFTR variants could be designed to make dual purpose relatively difficult or relatively easy. There are good reasons to make it easy in the first reactors. Basically, the right LFTR design can convert any fissile into very clean burning U233 for starting up other LFTRs. Those second generation LFTRs would be very nice because they would generate very little actinide waste and their U233 would be contaminated with U232 and Thalium-208, so very bad for bomb making. But if you can irradiate Th232 to make U233 and ship it off to another reactor, you can probably also figure out how to irradiate U238 and make Pu239 and ship it off to your bomb factory. I don’t subscribe to the theory that LFTR is especially proliferation proof. That’s arguing from a failure of imagination. But I do think that all civilian power reactors are essentially innocent of being used in bomb making. All of the world’s nuclear bombs (and there are tens of thousands of them) were made in specially constructed bomb making facilities. Worrying about civilian reactors being used to make bombs seems missplaced. Lots of countries have made bombs and none of them did it that way. There are easier, more efficient ways to make bombs.
I’d also be in favor of a vigorous inspection regime imposed on all countries operating nuclear power plants or enriching or processing fissile fuels. The US should participate in being inspected by randomly selected teams of international inspectors just like all other nuclear countries. I think even Iran might agree to something like this if the US did too. That’s a fair and I believe effective way to make sure nobody misappropriates highly enriched fissile material for military purposes.
Thanks to Quokka, Chris Uhlik and Gene Preston for the informative reponses to my load following questions.
I think the comments by Jess on 28th Jan at 8.06am summarised things very well.
I also think that the contrasting and contiguous LCOE calculations of David Benson and Chris Uhlik (28th Jan at 11.02 and 11.38am respectively) crystallised the the subject of nuclear costs magnificently and succinctly.
David that 11.8% should not be used in your calculations. It was an ad hoc number created by the US energy czar Carol Browner who was just fired from her job. http://online.wsj.com/article/SB10001424052748703555804576102810159169324.html
I see you used an even higher interest rate in the next posting. Let me ask you this David, can you make an investment that will give you a guaranteed 12% return on your money today? The answer is no. Can the millions of people who want to see nuclear power get a 12% return? – No. So if those millions of people pooled their money and bought a nuclear plant, they might even consider a 0% interest rate appropriate. I would. If you use 0% interest you will get about a 3.6 cents per kWh energy cost for the nuclear plant. To me this better represents the future value of nuclear power.
Chris you are talking about unit commitment. In todays systems we will not be taking off line large coal plant or nuclear plants if the wind is blowing. We will take off line gas plants and if we have to, back down on coal plants. Texas doesnt have enough nuclear power to ever have to back it down. I understand that France cycles nuclear plants routinely, but I’m sure they never have to take them down because they sell the excess power to other countries.
David, you are correct about utilities not offering TOU rates through their smart meters. They put the meters in to advantage their own operation without thinking much about what the customer actually wants. Lets see if we can change that. I’ll be sending testimony today to my local PUC asking for them to allow residential customers an opportunity to own off site generation. That should bring out a lot of utility opposition.
Pip, my estimated cost for nuclear power is only 3.6 cents per kWh. Isn’t that lower in cost than coal? At 5000 $/kw, buy one kW and run it for 40 years. Divide that cost by the energy produced and you get 1.6 cent per kwh. Add 2 cents per kWh for fuel and O&M and that gives you the 3.6 cents per kwh. Currently I am earning 0% interest on my other long term investments so 0% is appropriate from my perspective.
thanks chris and jess.
I get your point, chris, about the concept of “proliferation proof” as failure of imagination. but I think to some extent to notion of “proliferation proof” was to be understood in the context of some “terrorist” scenario.
so that with respect to the terrorist scenario, reactors like IFR and LFTR were “proliferation proof.”
I’ve come to think (from all I’ve read here) that the issue is mostly bogus, for reasons you outline here:
But I do think that all civilian power reactors are essentially innocent of being used in bomb making. All of the world’s nuclear bombs (and there are tens of thousands of them) were made in specially constructed bomb making facilities. Worrying about civilian reactors being used to make bombs seems missplaced. Lots of countries have made bombs and none of them did it that way. There are easier, more efficient ways to make bombs.
Gene Preston, on 28 January 2011 at 9:35 PM — The 12.5% “interest” was set artificially high to cover risk insurance and depreciation, neither of which is directly included in that Simple LCOE calculator. The number I have for interest is 10.5% so I simply added 2% to cover the other factors.
Variable rates in the State of Washington are not yet available because the state utility commision has not yet approved any such plan. I suspect that once enough of those so-called samrt meters are installed then variable rate pricing will become available.
Amen to that. Let the matter of nuclear proliferation from electricity generation rest in peace. It is not the main issue we have to contend with.
The key issues (two) we have to contend with are:
1. educating the public about the advantages of nuclear power compared with what we have now, and
2. how can we get nuclear implemented so that electricity from nuclear costs less than coal, without raising the cost of electricity (which an Carbon Tax or ETS would do)?
Thanks for your post, I absorbed what I could! Essentially, most people posting agree nuclear can be cheap, clean and safe.
The issue, particularly in Australia, where there is a moratorium on nuclear power, is political.
The current energy ‘market’ displays the tinkering from Governments performing political stunts to woo a noisy minorities.
You suggest that the coalition will not proceed first with a nuclear power policy, as it will be electoral suicide. It would be hard therefore to see why the ALP would decide it wouldn’t be. The key to breaking this dead-lock would be for The Greens to accept consideration of nuclear power.
It seems to me that at the heart of The Greens mantra, there is a great hypocrisy, they are the most strident about dangerous climate forcing and yet in denial about the only realistic mitigation.
Yet this logic seems out-dated. It surely must be time to realise that an absence of nuclear power consideration in a political manifesto is a glaring weakness. I am not convinced that a consideration of nuclear power is electoral suicide.
Or of course, become a noisy minority. I suspect the ban on nuclear was a conspiracy from big coal!
So, back to Hugh Jackman on Oprah, saying, “I only use nuclear power to cook my breakfast cereal!”
Gene, I loved Texas. Great roads. Yes, nuclear can be cheap, but is it too much to think the Government will allow it to be? (They’d be thinking “there’s a good buck for us here, we could buy those new stealth fighters!”
Pip Willis, on 29 January 2011 at 11:53 AM — Unfortunately, I don’t see anything on the near horizon which provides inexpensive electric power generation; the wholesale price of electricity is going to go up.
SInce there are no LFTRs or IFRs yet, I’m not ready to take optimistic projections about their LCOE.
Right now in the USA the least expensive approach is energy conservation/efficiency, by far. Then, in order of increasing price,
(1) CCGTs (less than the next)
(2) wind power
(4) solar power (much higher than NPPs)
and I haven’t attempted to study the cost of advanced coal burners because there are none in planning stages.
Yes, well, I’m afraid your right. The key word is ‘can’ be cheap, not ‘is’. What is stopping nuclear power being cheap?
BTW, Peter, Chris or Fran or anyone with superior engineering skills, why can’t NPP use pumped hydro in reverse tidal locations for load following? NPPs can be coastal, desal, population considerations, etc, why not some tidal storage. What would be the tidal movement at say Galverston Tx?
Interestingly, I used to live close to a medieval tidal mill on the Teign river in Devon UK. No idea like an old idea!
“The key to breaking this dead-lock would be for The Greens to accept consideration of nuclear power.”
I shan’t expect nuclear power ever then, in that case.
I’d hazard a guess that once there’s a carbon price in place (and let’s face it, there probably will end up being one), the ALP will face increasing pressure to replace the nation’s ageing fossil fuel fleet with a reliable, cost-effective technology. And there will be only once place left to look.
I do not believe there is any chance that the Greens Party will change policy to support nuclear. They would lose most of their support base. It won’t happen, IMO.
Labor will dump its anti-nuclear policy at its National Convention in December this year. Anna Bligh, ALP National President, made the announcement on 23 December 2010. All the other key players had been aligned before hand so they all made the right sort of noises, immediately after Anna Bligh’s announcement. NSW Labor Party has moved its Policy Convention forward in time so it can pass resolutions to support the policy change at the National Convention. It is inevitable Labor will dump its anti nuclear policy in December.
The real risk we face is about what Labor will change its policy to. Will it endorse polices and wording that lock us in to a high-cost nuclear regime (like USA, Canada, UK and Europe) or into a low-cost nuclear regime? If Labor says words to the effect “we’ll allow nuclear but we’ll ensure it will be the safest in the world and it must be world’s best practice” and all that sort of spin, then nuclear in Australia is doomed for at least another decade.
Somehow, an environmental NGO will be persuaded (bribed) to come on board and support Labor’s policy. Bit by bit, one or two others will change their policy too. That is all that is needed. The Greens and the rest can sing themselves to sleep or get overstressed and have a heart attack. Either way, they will become irrelevant, except they may seriously damage us by forcing us to go down the high cost route. This is what they want, and this is what a Carbon Tax or ETS will ensure happens.
Pip Willis, on 29 January 2011 at 12:34 PM — In the US I opine a less severe perception on the part of investors regarding risk; that would lower interest rates. Also, better construction management: the South Koreans can build their AP-1400s for $3.8/W but the best estimates for the Westinghouse AP-1000 in the US are about $4.45/W.
Of course, if the Chinese are going to be allowed to exprt their Gen II+ CPR-1000, those are built for $1.5/W in China.
It is electoral suicide for the Coalition to lead on nuclear. It is far too easy for Labor to run an anti-nuclear scare campaign. They have done this at every election since 1990. Even if Labor supported nuclear, it would be easy for them to say, “the Coalition stands for low cost and you cannot trust them to provide adequates safety”. The safety issue, if raised in an election campaign, is what will send us, irreversably, down the high cost route. We will not be able to undo that for a decades or more. We will be committed to the high cost nuclear option, which means it will be implemented only very slowly.
Only Labor can take the initiative. What enlightened voters should be doing now, IMO, is doing all we can to persuade the media, population and key players in the Labor party that there is a really big difference between allowing nuclear versus allowing and advocating low-cost nuclear. We must help them to understand the difference and go for the latter option: allow and advocate low cost nuclear
In short, because it is not economic.
Dinorwick pumped hydro station in Wales is 1.8GW and has storage for about 10 h generation at full power (from memory). The power, storage area and storage volumes in the upper and lower reservoir depend on the head differnece between the upper and lower reservoir. In fact it is the minimum head difference because the owner has to be able to guarantee the name plate power can be generated with 95% probability at all times.
I have answered your question previously on another thread (in reply to questions by Douglas Wise I think) and I suspect it is most likely on the Pumed Hydro thread:
You may find this thread interesting.
I’m not sure that that (“only Labour can take the initiative”) is the only perspective Peter.
I hear what you are saying, but what the sensible political thing would be to say is “We support consideration of nuclear power and want to set up a Clean Energy Tribunal to report back to government with the best way forward.” I think DV82XL made a comment somewhere about the Civil Aviation Authority being a regulatory body that appears aligned to the industry not against it, which I thought was good. Such a ‘Tribunal’ would invite industry advocates, government and academics, I would hope.
Again, where this nuclear debate needs to happen is in the pages of the tabloids and mainstream media. Perceptions need to change. The ‘waste’ issue needs to be met. The Greens need to be seen on this issue as the cave man nay-saying cooking fires, because they are in fact the same as bushfires, etc etc, what is Huge Jackman doing ont his issue! Ha!
When I said “only Labor can take the initiative” I was referring to the political level. I agree that we need to do all the selling.
Yes, that and more, with a different title, is what I proposed in the “Alternative to a CPRS” thread. Did you read the lead article on that thread?
But Coalition cannot lead (read the “Alternative to a CPRS” thread). Greens won’t lead. Only Labor can lead on this. They need to put it forward. They have to change their policy first, otherwise they are committed to opposing it and running an anti-nuclear scare campaign. They always have and always will until they change their policy. Then the most critical issues is what will they change their policy to? Will their policy commit us to high cost or allow us to introduce low cost nuclear? This is what we need to focus our efforts at. But, unfortunately, we are all over the shop on what we should be focusing on. Most people on BNC want a carbon price. For them, this symbolic gesture, is the goal. This is exactly what the gas industry wants and they have worked their way onto all the important bodies that are guiding the decision making, including the Business Council of Australia. I understand they also funded the “Beyond Zero Emissions” “Zero Carbon Emissions by 2020 plan”.
Yes, of course. That is what we want. That is what we need to aim for. But this is just one of many things that need to be implemented under the umbrella of “we want low-cost nuclear, not high-cost nuclear”
If we do not make this clear distinction between what is needed to get low cost nuclear, and what will happen if we do not make this distinction, then we will get high cost nuclear. Just look at the political interferences that has occurred in Australia’s Civil Aviation Safety Authority (CASA) to realise the mess and incompetence in our regulatory authorities. If we adopt this sort of regulatory agency, the default if we don’t raise the issue of we need to remove the impediments to low cost nuclear then we will get high cost nuclear, which means coal and gas and no nuclear for a very long time. Also, the closer we are to the US NRC the higher will be the cost of nuclear in Australia.
I don’t know wheter you read this in the links I provided, but I think it is worth posting it again here for those following this thread but not reading the links.
Yeah, I read most of it, but it was links on links, and you’d have me trolling the internet all my Saturday!
Someone made a good point above, just swap the word ‘renewables’ for ‘clean’ in your list and you’re there.
But as I say, this debate needs to be popularised, particularly in NSW where energy debarcles are all over the media right now. I think Abbot should spruik ‘a new look at nuclear’.
I think just about everyone on BNC agrees we need to popularise the debate. And everyone is doing the best they can using their own skills. And an enormous amount is being done. Did you look at the new thread just posted today. If you look through the comments it gives a clue to what people have been doing for quite some time.
The Coalition cannot lead this. Every time they do it leads to a negative campaign from Labor. The Liberals have been making comments that Labor needs to take another look at nuclear, and do it properly, but they cannot say any more than that or they get branded as pro-nuclear, and “would you want one in your back yard?”. Labor is the government, they are the ones with the anti-nuke policy and they are the ones that have opposed it for 40 years of more. It has to be Labor that leads off.
If you look back at some of the other links there is a lot about this on BNC already, but I am not going to try to find them now. I want to watch Aussie Kim win the tennis for Australia.
Yes, changing “renewables’ for ‘clean’ is what I proiposed in the lead article to “Alternative to the CPRS”. Please have a read of that lead article and the comments I linked to, otherwise I have to just keep repeating stuff. And, as I said in a previous comment, I’d suggest we should hold this discussion on the “Alternative to CPRS” thread.
A problem that has not been discussed adequately with funding nuclear is why the funding interest rate is so high. When I first saw the 11.8% interest rate being charged by the US government for financing nuclear plants here in the US I thought the US had a hidden agenda against nuclear. However I have had second thoughts about what has happened. In my paper to the Texas PUC posted at
Click to access 35792_103_691245.PDF
I argue that as an individual buying a piece of a nuclear plant that I would be interested financing it with my own money and a 0% interest rate is appropriate. However what if I were asked to just buy into a nuclear plant by purchasing a bond and receive money in the future rather than energy as the payback for my investment. Then surely I would want more than 0% interest rate. I would begin thinking about the financial risk and I would become worried so I would raise that interest rate I would want to a rather high level, say 10% per year. But then I would see the project cost rise because of the higher interest rates and that would worry me even more so I would raise my interest rate again to maybe 12%. Do you see the death sprial we have gotten ourselves into with this line fo thought? The monetary system itself has failed. I think this line of reasoning is why the 11.8% interest rate was set by the US government . The US had no confidence the nuclear projects will succeed so they made the lending interest rate high, which leads to the project failure and self serves the arguments against nuclear power. A country having a high level of confidence nuclear projects such as France, will have low interest financing for nuclear and the belief is self fulfilling. The setting of interest rates can determine the success or failure of nuclear. Its a instability in our monetary system that needs to be appreciated.
It is not simply and interest rate. It is much more complicated than that.
EPRI, MIT, Chicago Unit, RAE, Frontier
and ACIL-Tasman (amongst others) explain the methods, assumptions and inputs they use.
Click to access Consultant%20Report%20-%20Frontier%20Economics%20-%20Methodology%20and%20Assumptions%20%202nd%20addendum%20-%20Review%20of%20regulated%20retail%20tariffs%20and%20charges%20for%20electricity%202010%20to%202013%20-%20WEBSITE%20DOCUMENT.PDF
Click to access 419-0035.pdf
ACIL Tasman’s inputs for calculating the Weighted Average Cost of Capital (WACC) are given in Table 2.4.2, p21.
Peter I did not see nuclear listed in the first reference and the second link is broken.
thanks for reposting your list of impediments to nuclear.
it is very useful.
can you refer me to some numbers for your items (subsidy, tax advantage, target, investor premium) where numbers are relevant?
Also, when david benson says above (for u.s.) that wind is cheaper than nuclear, I am not sure if he is disagreeing with the dominant analysis of wind on this site put forward by yourself, Barry and others.
what does cheaper mean? if it takes LCOE into account (even accepting u.s. regulatory ratcheting with nuclear), does it do so in hi penetration scenarios?
I don’t see how it could. Let us recall what Trainer says:
… it can be quite misleading to think in terms of the
levelised cost of electricity from specified renewable sources when estimating total system costs. Advocates of renewables typically do this, for instance claiming that the levelised cost of
wind power is comparable to that of coal fired power.
This might be so if lifetime outputs at average capacity are compared, but that overlooks the point stressed above that the crucial task is to
maintain the required level of output. Because there will be times when wind cannot contribute much and resort must be made to redundant plant, the cost of providing that plant needs to be somehow included in the cost of the wind sector. It is an essential
part of the wind sector if that sector is to be able to make its contribution continually, just as an emergency generator must be understood as part of the total energy supply cost of a hospital
(Lenzen, 2009 recognises this in passing).
The dumping issue similarly indirectly increases total system capital cost because it means that some of the generating capacity built supplies energy that is wasted, or stored inefficiently, meaning again that plant constructed has to be greater than the
amount that would meet demand if all its output could be used.
These problems could be reduced to the extent that some processes such as steel, cement and fertilizer production and freezer boosting could be carried out only when surpluses are available. There is some scope for this but the implications for intermittent operation of furnaces etc. are problematic.
You are right on both counts. Sorry, I forgot that the Frontier report succumbed to political correctness and excluded nuclear. However, the methods, assumptions and the inputs used for calculating LCOE are similar to those in other reports and it is clearly explained in the report. I’d commend it to all those wanting to discuss LCOE.
Sorry about the ACIL-Tasman report. I’ll be really dissapointed if AEMO has removed access to that report from their web site. I suspect they may have because they’ve taken the data, changed some of it, removed all reference to nuclear and posted that on their web site. Is this a sign of how powerful is the gas industry in Austrlia?
Here is another good report that explains the methodology very well. This is the EPRI report that was subcontracted to the Ziggy Switkowski Task Force for the “Uranium Mining, Processing and Nuclear Energy” study. I’d also commend this EPRI report. It is very informative for non-specialists and the interested general public.
Click to access EPRI_report.pdf
So, now that you, and hopefully others, can see what you are missing by not going to the links I post, can I urge you to look again at the ones listed below? They explain some other impediments to nuclear not included in the list above and also explain how, by removing the most important impediments, we could get nuclear cheaper than coal in Australia – something Chris Uhlik, DV82XL and others believe is achievable. As DV82XL said in a previous post on this thread (when he was mad as hell with me) nearly all the impediments are caused by government. So they can be removed by government. Please read these links and try to put it together – like I have it all together, correctly, in my head :)
Subsidies that encourage fossil fuel use in Australia.
Click to access CR_2003_paper.pdf
Impediments to low-cost nuclear – Industrial Relations
Sovereign Risk – a major impediment to low cost nuclear
Nuclear cheaper than coal in Australia. How?
Just humour me for a while until I can get my message across, then we can argue about Carbon Price versus removing the impediments to low cost nuclear.
The next link is the “Terms of Reference” for a study I want the government to direct the Productivity Commissions to do as a first step, and BNCers to initiate here to help to get public awareness of the advantages of removing the impediments to low cost nuclear instead of imposing a carbon price.
Suggested Terms of Reference for a “Productivity Commission” Investigation into the impediments to low-cost nuclear
I believe that just going through this exercise would make the public much more aware of all the impediments we have imposed on nuclear and all the benefits of it in comparison with the default option, coal and gas. Just doing this study would help to get out to the public the sort of information that is in DV82XL’s thread and in the Barry Cohen chapter that Chris refers to upthread. Going through this process would be an excellent way to educate the public, in my opinion.
David Benson has been told a dozen times, by just about every BNC regular contributor, that you cannot compare LCOE of wind with LCOE of nuclear and fossil fuels unless you include in the LCOE of wind the extra cost for back up, storage, transmission, grid enhancements and decommissioning so that the LCOE of wind is for power of equivalent quality and equally as responsive to demand as fossil fuels and nuclear. He is being “obstinately innumerate”.
Here is a simple comparison of the costs of wind power and nuclear on a properly comparable basis.
Nuclear = $4,500/kWy/y
Wind with gas back up = $11,800/kWy/y
Wind with pumped hydro storage = $132,300/kWy/y
Greg, I think you have explained it pretty well. However, David B.Benson hasn’t understood it yet, so I doubt he will this time either.
Gregory Meyerson, on 30 January 2011 at 3:53 AM — Regarding solar,
“he who does not learn to store
shall have no power after four.”
Unfortunately, I don’t know a ditty which so cleverly points up the intermittency of wind. But one cannot have a merely windy grid unless you are willing to only have electricity when the wind doth blow; I know of two localities in Africa where that is the case.
Here in the Pacific Northwest we enjoy a massive supply of hydro (my power is 51% hydro generated). Hydro can be ideal for acting as the balancing agent for wind but there are limits. First, BPA (operator of most of the dams) stated that up to 20% (nameplate) wind was acceptable. But then the minimum stream flow requirements during spring runoff were increased to improve fingerling survival rates. This meant that BPA told the wind operators that BPA might shut them off at any time, but typically only during the spring runoff. This was sufficiently financially a disincentive that the next utility to the south, Pacificorp, in whose retail area most of the existing wind farms lie, purchased a 520 MW CCGT to backup the wind farms instead of having BPA do it.
So the next big increment of wind farms will go in even further south and rely on the CCGT for backup.
Oh well, when the wind blowth not at least no natgas is being burned.
Peter Lang, on 30 January 2011 at 11:12 AM — I assure you that I do understand it and I assume that all regulars here do as well.
See my just prior post and stop making assumptions.
thanks david and peter:
I asked the question about wind because it wasn’t entirely clear, david, from your remarks up thread what you thought, and if there was a disagreement, I thought it might be a good idea to confront it.
Peter I handled all those other costs for nuclear by adding on 2 c/kWh O&M. The actual current cost for STP 1 and 2 is 1.6 c/kWh. So my 3.6 cents per kWh for nuclear does contain all the factors which you thought I had left out.
Greg, Peter is correct in that wind must have a backup. Here in Texas it would be wind+gas as a combo must be considered. Using hourly wind output and hourly loads, you could estimate the amount of gas energy that is needed to fill in the gaps when wind is insufficient. ERCOT studies have shown that wind capacity has to be derated down to about 8% to get the effective capacity toward meeting the peak demands. I.e. we have to have enough capacity in the system to meet peak demands, so we have to build gas plants even as we are adding a lot of wind capacity, just to meet the summer time peak demand. You should be able to obtain hourly load data and wind output data each hour from your region. ERCOT posts that kind of data for people like me to use in studies.
The thing that leaps out at me (haven’t read all comments so maybe this is made there) is the assumption that a cost that applies for doing something rarely (in this case, building “Areva EPR”, which apparently has had a doubling of cost announced in the last few days, maybe bad-luck on the blog writing timing) is the same cost that will apply when doing something on a huge scale (big enough to affect markets in steel, concrete, to a lesser extent energy, etc). If the change to nuclear is for the reasons of climate change (not, eg, an individual nations energy security) it needs at the least to be done over most of the world at current world energy use (if not at levels which are equitable energy usage worldwide) and done relatively quickly (say over 40 years). Unless huge numbers of other building projects are cut back whilst this is going on, I would expect a significant rise in the cost of commodities like steel, concrete, etc, rises in wages (due to a shortage of skilled staff), etc. There’ll certainly be some economies of scale and the fact that we’re starting from within a depressed world economy is marginally better than the highs in development of 4/5 years ago in pushing costs downwards,but I wouldn’t expect them to be big enough to significantly counteract these effects.
Gregory Meyerson, on 30 January 2011 at 12:45 PM — Around here we now have 1.6 GW nameplate wind with a capacity factor of ~30% giving an average of ~480 MW, about the same as a single CCGT. Over the past decade the population of Washington state grew by 16% and I suppose something comperable in Oregon while 2–3 CCGTs were built; no coal burners were retired.
Generalizing, a grid can accomidate some wind generated power, maybe up to 20% depending. Not that I am particularly in favor of it.
There were one too many negations in my concluding sentence; I’ll try again.
Oh well, when the wind blowth at least no natgas is being burned.
David, the Bonneville Power Authority – where I think you’re located – is particularly flexible for wind, given the high amount of hydro firming that is available there.
I understand the doubling of the cost of EPR is due to engineeering and project management costs which in turn are due to inexperienced regulator, designer, contractors and owner. The escaltion in material costs, such as steel and concrete. is a negligible component of the cost increase, so I understand.
Also, a roll out of nuclear in the developed and major developing countries will take at least half a century and roll out in what are currently the underdeveloped countries will take even longer, I suspect.
Importantly, if we can’t do it with nuclear, what chance would we have of doing it with renewables given renewables require about 10 times more steel and concrete than nuclear to supply the same amount of electricity?
Peter Lang, on 31 January 2011 at 10:39 AM — The “10 times more steel and concrete” is just for wind turbines, yes?
David B Benson,
Surely you have been contributing on BNC long enough to be able to find this sort of information for yourself by now. Go to the ‘Renewable Limits’ tab, scroll down through the TCASE titles until you come to TCASE4 – Energy System Build Rates and Material Inputs
I need to understand this better, though. in order to operate a wind/nat gas system to meet peak demand, wind’s capacity factor must be lowered to 8 %?
I want to make sure I understand what 8% is 8 % of. is this a kind of necessary dumping so that the system will work? or is there a distinction between derating and dumping?
I can see this number is a different number from capacity credit.
david b: I get what you are saying so you appear to be largely in accord with peter/gene/barry, etc.
Peter Lang, on 31 January 2011 at 11:24 AM — Apparently not. Thanks for pointing me to TCASE 4 where I learned that a mere “10 times” doesn’t cut it. I’m not so concerned about the cement consumed, but steel is likely to be a serious limiting factor?
Barry Brook, on 31 January 2011 at 11:51 AM — Yes, but as I’ve already posted BPA’s hydro is less flexible than one might first think. Nonetheless, the relatively small amount of wind power so far does help BPA to attempt to fill up Lake Rosevelt, the major storage reservoir. BPA has been having a ever harder time keeping it nearly full over the summer.
David there is danger in expecting wind with a 30% capacity factor to have that amount of capacity as a reliable source of power. Here in Texas studies have shown that 9000 MW of wind with about 30% CF have an effective capacity of about 8% of nameplate in the LOLP calculations. So we have to be careful in how we use that 480 MW number in your previous posting.
No the wind capacity factor is not 8%. When we are adding up the capacities of all the sources to meet the peak demand here in Texas we can only count on about 8% of wind capacity in summing up those nameplate capacity totals. Its not directly related to capacity factor, only loosely. A power plant supplies two things, energy and capacity. The 8% only applies to the capacity needed to be installed in the system.
Let me clarigy again. Lets supppse we have a 60,000 MW peak load. And lets say that we need a 15% reserve margin so we need 1.15*60,000 MW of gas generation. If we added 10,000 MW of wind, we would be allowed to count only 800 MW of that 10,000 toward meeting the 1.15*60,000 requirement. So 10,000 MW of wind means that the 1.15*60,000 gas generation could be reduced by 800 MW if we installed 10,000 MW of wind. Now that wind would cause less energy of the gas to be needed and that would be consistent with the 30% capacity factor at 10,000 MW wind.
I recently did a wind study in WA state and there is a lot of wind in the load flow data. So yes, the BPA area has a lot of wind being planned or constructed.
hey gene: yeah, I didn’t think it was capacity factor which is why I raised CF, so a distinction could be made.
I still need help though. peak load plus reserve gives us 69,000 MW of gas, and even though wind may be producing at 30% CF or 3000 MW, only 800 of those MW have replacement value for the natural gas. ?
so then there’s excess wind being produced which plays no role in system reliability? what’s the relation between dumping and derating?
Greg, I must apologize, the 8% only applies for west Texas wind with respect to the total Texas grid. The simplest way to explain the low number is that most of the LOLP comes from summer peak load periods and here in Texas the wind tends to become light right at the time of our system peak. For another system it will be different. If there was a system that always peaked when the wind was blowing hardest then nearly all the wind capacity could be counted toward meeting the peak load. So the 8% has little to do with the 30% CF. It would be relatively easy for to do the LOLP calculations for a specific system if I had all the other generation forced outage rate data and the wind hourly profiles and the load hourly profile.
excuse my ignorance, but I’m ignorant so …
during summer peak load periods in w. texas (and different areas face different contingencies), the grid can only use 800 MW of wind, right? during these times, the wind system might be producing more (or potentially producing more) than that but more than that cannot be planned for?
is there dumping of windpower during these periods?
I need to read a primer on how grids work. any ideas?
Use is not the right word. During peak load conditions the 10,000 MW of wind is likely to have an average output of only 800 MW. All of what is generated will be used provided there are no transmission constraints.
okay. easier than I thought. and this is due to the particular summer wind conditions in w. texas.
what defines the summer peak load period? typical dates, times (hours of day/night etc.), duration?
Gregory Meyerson, on 1 February 2011 at 10:41 AM — Similar problem here although the peak load happens during exceptionally cold winter highs (when the wind doesn’t blow).
In Australia, The Energy Market Regulator allows 8% capacity Credit in Victoria and 3% capacity credit in South Australia (or vice versa).
This http://lightbucket.wordpress.com/2009/03/12/the-capacity-credit-of-wind-power/ explains Capacity Credit. Figure 1 shows how it decreases with increasing capacity penetration.
gene: what is the difference between capacity credit and effective capacity (for LOLP calculations)?
my understanding is that capacity credit refers to that portion of wind power in a geographically distributed array of wind farms that can function as base power, that can be relied upon at least 85%(some baseloady number) of the time.
capacity credit was also called firmed power (is that correct?) and the number we have tossed around here for capacity credit is around 12 %.
I take it that this term is different from “effective capacity” which you define as:
Here in Texas studies have shown that 9000 MW of wind with about 30% CF have an effective capacity of about 8% of nameplate in the LOLP calculations [referring to our light w. texas wind during summer peak demand].
You seem to associate this effective capacity with “reliable source of power” in your reply to david.
“Reliable source of power” might sound like power that functions as baseload. but “effective capacity in the LOLP calculations” doesn’t sound like the same thing as capacity credit–thus my question.
thanks for correcting my use of language above. that’s what I want. it’s important to me to understand this stuff.
peter: sorry. I just saw your post (about cc). it might address my question, but I am not quite sure.
I’m not disputing the desirability of doing it, or that it’ll be less expensive than other power schemes with a higher materials per watt basis. All I was saying is
1. IF the reason for doing it is to reduce carbon dioxide emissions to essentially 0 for climate change then it has to be done everywhere with a significant power use over the same time period. Otherwise you haven’t reduced CO2 to effectively zero, you’ve reduced it by the fraction of the world that has converted to nuclear, and I gather that to a first approximation carbon dioxide spreads throughout the globe so its climate change effects still affect nations that have gone nuclear.
2. So a back of the envelope calculation of replacing 13TW of currently non-nuclear power with 1GW nuclear plants over 40 years gives 325 plants being built every single year. Given that, eg, preparing for olympic games are reported to lead to small but significant rises in the price of steel, concrete, etc, and skilled construction workers wages, it seems unlikely to me that building on this scale won’t have effects. The fact that it’s claimed the current cost doubling is because currently employed people in the relatively tiny area of endeavour are inexperienced doesn’t suggest things will get better if the rate increases dramatically.
Personally, I think the conversion _with the goal of reducing net carbon dixoide emissions to zero_ should be done even at a significantly higher cost, but claiming that a cost of “3 dollars/per watt is pessimistic” seems to me to be an unjustified. I’d say it’s at best “3 dollars/watt is optimistic but hopefully acheivable.”