I certainly wouldn't like to see Uppsala doing what Santa Barbara is doing, because we can't afford it. What we need is a little pie in the sky - for instance, move one of the nuclear plants that they closed in Malmö to one of the open fields near our community, and throw the switch. It wouldn't take long before we had enough money to try one of those... experiments.

Fred

With no external energy required, how will utilities even generate any cash flow to remain in business?

Utilities in California make money primarily off transmission and distribution, not generation. They are trying to get back into the generation business (which was shed under CA's attempt at deregulation in 1998), so the new system put into place by the CPUC essentially bribes the utilities at levels considered comparable to the profits that would be earned by the utilities through owning new generation to instead invest their efforts into energy efficiency.

So the big four utilties may earn up to $450 million in profit for shareholders if they achieve the savings goals set by the CPUC and then go a bit beyond.

I was heavily involved in the process at the CPUC and think they put in place a system that could have been a lot better. In particular, they could have saved ratepayers a bundle by allowing non-profit 3rd parties to administer the savings programs instead of the utiliites. But as progressive as CA is, the CPUC and other energy agencies are quite deferential to the utilities...

And don't you remember me explaining to you a dozen times or so why nuclear is inherently competitive on a cost basis, and also why those famous subsidies you are always talking about arn't subsidies. Maybe you should take a memory course, Or if you visit Sweden again, arrange to give a talk at one of the local universities with me as a discussant. If you did that I would make sure that you wouldn't want to visit us again. Or maybe some day I'll visit Santa Barbara, in which case I would present my song and dance in the econ department of your local U. And then you could be the discussant.

Fred

Re subsidies for nuclear, here's a pretty good indication that nuclear is not competitive in the US: the 2007 federal energy bill (just passed in December) included $25 billion in loan guarantees for new nukes. This is on top of the $13 billion in subsidies for nukes in the 2005 energy bill. Which is on top of the billions spent on nuclear R&D in the US over the decades.

The nuclear industry in the US lobbied hard for the $25 billion (they actually asked for $50 billion) as a pre-condition for private sector funding for new nukes. Let me remind you that there has not been a single privately financed nuclear plant anywhere in the world? Why? Because the risks are high and the costs are high.

See the recent Keystone report on likely costs of new nukes in the US: 8-11 c/kWh on a levelized basis (assuming 40 year plant life), which is more than wind, geothermal, natural gas, hydro, etc.

Also, the California Energy Commission recent levelized cost analysis of central station technologies supported this analysis, finding that new nukes will likely cost 11.8 c/kWh for merchant (private sector) plants.

If you'd like these reports let me and I'll send them. I also have the detailed Excel spreadsheet that formed the basis for the CEC levelized cost report.

" Tam,

I'm sure Murray will be overjoyed to learn that he is a "nuclear advocate". Try reading his article. He, unlike you, understands amortization of capital costs. With their quests to replace steam generators at DCNPP and SONGS, PG&E and SCE also understand. Between 1999 and 2004, DCNPP and SONGS produced approximately 2.022e+8 Mw-hrs of electric energy. Operating at the average 2006 IOEU total expenses, which include operation, maintenance and fuel expenses, the $differential between DCNPP/SONGS and GT/Small Scale expenses for this production, had both occurred, would have been $ 7.74e+9. Not exactly, as you put it, "chump change". Not too visible, either, in "levelized cost analyses" that include rates based on 30-year operation of plants never commissioned, shut down by referendum or victimized by frivolous delaying litigation. " Let me amend my previous comment that license extensions, COLs & tort reform are going to get you. I think discussion of what fully-costed, future nuclear-generated Kwhs might be by an honest nuclear critic and past performance of IOU generation sources as documented in USDOE EIA's Electric Power Annual will also speed dissolution of your dissimulation. Who knows, it might even encourage some of those private investors who have purchased nuclear utility bonds before. You know, Tam, the folks you think don't exist!

I don't know who is in that economics department now, but I do know one thing - if they have ever had anything to do with energy they dont want to see me waltzing through their door. As for you loving my possible presence in that wonderful town, I'll put it to you the same way that I did to a know-it-all young lady in the UK who questioned my bona fides: you might love it now, but when the discussion was over you would wonder why you didn't stay in bed that morning with the covers up over your face.

There is of course a Norwegian gentleman in that department who won a Nobel prize in economics a few years ago. As a result of his performance on the TV program 'Genius Speaks' he is constantly in my thoughts and conversation - AS A NEGATIVE ROLL MODEL. And as you should have found out by now, THIS forum is the real deal! Comparatively speaking, where the present topic is concerned, the people in that economics department dont have a clue.

About these numbers that you are turning up with these days with regard to nuclear. People like Don Giegler can deal with those much better than I can, but I might be able to offer one thing of interest on the basis of my experiences in the academic wars. You can get people to say AND BELIEVE anything you want when careers are at stake.

Fred

It looks like others here, Joseph Somsel for one, are also dealing with some of the policy mischief Tam helps formulate:

Jan 17 - McClatchy-Tribune Regional News - Bradley J. Fikes North County Times, Escondido, Calif. Bowing to public pressure, the California Energy Commission has removed its proposed mandate for utility-controlled thermostats from its 2008 energy efficiency building code. A hearing on that code is set for Jan. 30. However, the proposal for "Programmable Communicating Thermostats," or PCTs, is not dead. It has been shifted to the commission's "load management" agenda, according to a statement placed on the commission's Web site Tuesday. No hearing date has been set for the thermostat proposal in the new agenda, said Claudia Chandler, assistant executive director of the commission. But she said it will be written to ensure it is completely voluntary. "It is not going to be required," Chandler said of the PCT on Wednesday. "It will always be used in a voluntary mode, if it's used at all." Joseph Somsel, a former utility engineer who opposes the plan, said he was pleased to hear of the official change of heart at the commission. "I'd call this a victory in the first battle since they've shifted venues in strategic retreat -- but a victory nonetheless," said Somsel, who raised awareness of the plan's mandatory nature in the Jan. 4 issue of the American Thinker, an online magazine...

...The thermostats were to be required in new homes, as well as substantially remodeled existing homes, under Title 24 of the 2008 building energy efficiency standards. Commission spokespersons had said last week that utilities would not take control of the thermostats without consent. However, commission documents and a scenario written by a commission consultant confirm the utilities would be able to control thermostats against customers' wishes. Somsel's article, and subsequent reports by blogs, and in the mainstream media, stirred up indignant public responses last week, including on talk shows ...

Tam still doesn't acknowledge the difference between "source of opportunity" power and "reliable power", particularly with regard to their relative utility and value.

Ed

Say PCTs were implemented that are designed to communicate BOTH ways with a utility company. The utility company sends signals out to them when energy curtailment is needed at peak demand times. If a consumer has chosen to program his thermostat to respond by ratcheting up its settings, the thermostat does so and reports back to the utility when queried that it has responded. If the consumer has instead chosen to program them to ignore these signals, their thermostats reply that nothing has changed when queried.

Similarly the utility sends signals out to them to return to normal settings at the end of the peak period, and those that were programmed to respond return to their normal settings, confirming doing so when queried.

The utility then logs all the thermostats that responded at the beginning of the peak period and held their settings until the end of the peak period. These consumers are then rewarded financially by the utility with say a discount or rebate on their rates for participating.

Is this a flawed concept, or perhaps too simple that it was over looked ?

This is a trivial example of how in-home demand response technology could be made totally programmable by the consumer at their discretion, and thus avoid the public relations nightmare presented by the original PCT mandate where the utility can gain control of them whenever THEY choose.

I look forward to Don explaining why Keystone's and CEC's numbers re levelized cost of nuclear power are not accurate. I'll tell you why they're not accurate: they are very likely significant underestimates because of the dramatic increase in the cost of uranium. We've seen 1200% increase in cost over the last 8 years and this is likely to continue. Even with uranium as currently a fairly small part of the total cost of nuclear power, these kind of increases very quickly change that equation.

Tam

http://www.eei.org/industry_issues/electricity_policy/state_and_local_policies/rising_electricity_costs/Rising_Utility_Construction_Costs.pdf.

See Chapter 8 of our county energy blueprint at www.fossilfreeby33.org (link at top right) for a good discussion of these issues.

And of course there are many firm renewables such as geothermal, biomass and small hydro, all of which are cheaper than nuclear on an apples to apples basis.

So: firmed wind, geothermal, biomass and small hydro are all cheaper than new nuclear on an apples to apples basis, at least in California.

Must be a characteristic of good renewable energy law and policy lawyers - a firmed up 0% penetration for any thoughts but their own. "... paid for by a small charge on our utility bills..." are the operative words for Tam. Here on the left coast we find roughly 23% of our electric energy charges are attributable to such progressive thinking. This doesn't count the inflation in electric energy charges fostered by the transparent divorce of generation from T&D aided and abetted, of course, by "... the CPUC essentially bribes the utilities at levels considered comparable to the profits...". A stellar example, I suppose, of economy management where the market decides. That is, Tam's idea of a market.

The Ontario government is heavily subsidizing green electricity generation projects like wind farms, solar, and co-generation plants. This is to encourage commercial investment in them, and together with municipal involvement in co-gen projects, it will eventually steer the provinces electric grid system into a hybrid combination of distributed local generators along with the large big central stations that we have now. The industry market regulations structure is also constantly on the table it seems, experiencing changes every few years.

The big difference in Ontario is that changing the industry structure is considered not enough on its own to solve its problems and the looming crisis in energy others are predicting. Here in Canada the federal government and the Ontario provincial government are incenting the public with tax measures, rebates, and legislation to promote a public culture of energy conservation. There are huge targets from the government placed on the Ontario Power Authority to reduce peak demand by several thousand Megawatts over the next ten years to avoid massive new generation plants that we would need otherwise.

There is much debate as to whether the province's measures will be effective in achieving this culture of conservation, and, along with the grid structural changes, some have said it amounts to a fiasco at best.

Ontario has been and continues to massively spend tax revenues on rebates to consumers who purchase compact florescent light bulbs, appliance timers, or trade in old refrigerators and freezers for newer efficient ones. The utility companies are also funded to offer free programmable communicating "Peak Saver" thermostats and other load shedding devices like pool pump switches to consumers who want them.

Canada's federal government offers large rebates on home energy audits, upgrades to home insulation and windows, and trading in old air conditioners for more energy efficient new models. Similarly they offer tax breaks on hybrid electric-gas vehicles and high fuel economy vehicles, and have recently added heavy tax premiums on the purchase of SUVs.

Provincial legislation has also been enacted to ban incadescent light bulbs over the next five years. Legislation is also forcing all of Ontario's utility companies to install smart meters and Time-Of-Use billing on all 5 million residential consumers by 2010. The TOU billing is intended to as usual help level demand curves, but they are also helping to enable some conservation behaviors. Utility companies are also mandated to feed back consumption data to all consumers over the internet every day for the previous day's usage.

Hydro One, the province's largest utility with nearly 1.5 million customers, has conducted conclusive studies over the last several years with real-time consumption feedback to consumers using real-time in-home energy monitors. Recently the effects of adding TOU billing rates added to the feedback have also been studied, and there is on average 5% to 7% total reduced consumption throughout the population under study.

Studies conducted by some utility companies ten (or more) years ago in the US on consumer conservation measures led to conclusions they were not very effective for the massive dollars spent. But this was long before the current looming oil and energy crisis, and before the increasingly escalating energy prices we see today. It was at a time when the automotive industry was just starting to lull Americans back into large gas-guzzling SUVs that they now have come to love and feel entitled to. Since that time electronics technology has advanced tremendously and dramatically come down in cost, making its widespread deployment throughout the public in smart grids and in-home devices thinkable today. While there will always be affluent consumers with deep pockets who do not care about conservation, many average consumers today are much more sensitized to energy management and making wiser energy use choices.

There are no doubt risks being taken in Ontario, and there is also hope that Ontario's industries will become world leaders in adopting, discovering, and commercializing new conservation technologies, and finding an electric industry physical and market structure that works well and is affordable. Alternatively doing nothing has been decidedly rejected as too risky for our economy and our environment. Time will tell if we will win or not.

Bob Amorosi, Resident of Ontario Canada

One of the biggest undiscussed issues with the US studies you mention is that they were time-limited studies, not permanent changes which were then studied. Most customers would not be expected to make major investments or significant lifestyle changes for a 1-2 year study.

Also, most did not involve real-time pricing, but rather TOU rates; and, frequently, the price reductions offered to customers were far smaller than the operating cost savings which would have resulted.

Efficiency investments are durable; demand shifting behavior may be durable, if real-time prices are permanent. Conservation, on the other hand, has proven not to be durable. Relatively few of US down here are still keeping our thermostats at 66F during the winter and wearing our "Jimmy Carter" cardigans around the house. (Our thermostat is still at 66F; no cardigans, however.)

Now if you make it finacially gainful to consumers to continue to practice conservation, many will. Maybe not 100% of the time of course, I mean once and a while your cardigans are just not enough comfort if you have the flu and you have to ratchet up the thermostat back to 72F. Another key is to make the financial incentives permanent and not one shot deals, and another key is to continuously remind consumers about their energy habits so awareness plays a big part of keeping them motivated.

I am not suggesting all consumers would sustainably practice conservation, but who cares, even a part-time effect is significant as long as there are long term consumption reductions. To say conservation is not worth pursuing because it is simply not durable though implies that we can all continue to increase consumption as much as we want as long as the industry structure and efficiencies are pursued instead. My point is they all have limits on what is achievable I think, so why not pursue all of them.

The town of Woodstock Ontario has for years been using an old British smart meter system based on prepaid billing that includes monitoring devices in the home that tell you how much energy you have left at any given time.. The consumer must top it up periodically at their discretion by buying energy they haven't used yet, like filling your car's gas tank. Awareness of what they are using in advance plays a big role, and the town has data to prove overall sustained conservation has been the result.

Our greatest incentive to conserve comes in the mail each month. It's called a utility bill. Our utility is kind enough to itemize electric energy charges. A recent summary indicated generation, transmission and distribution charges came to about $ 0.124/Kwh. This in itself was alarming and certainly caused me to think about breaking up the responsibilities for generation, transmission and distribution. "Restructuring", I believe is what establishing the additional profit center was called. The idea, as I understood it, was that this government mandated change would stimulate competition and lower generation and T&D charges. It didn't happen. Just to pour a little salt in the wound, there among charges for "...government intervention to change the public's energy management..." is a Competition Transition Charge. When all charges of this nature are summed, the total electric energy charge liability reaches about $0.174/Kwh. Now Tam would have us believe this is "...a perfect carrot and stick approach to achieving real change on the ground...". The most polite term I can think of for it is "mischief". Certainly, it is not what Fred Banks means by, "What we believe in is a mixed economy with an intelligent and responsible government doing things that the market cannot or will not do."

Your description of what's going on in Ontario is interesting, despite the fact I'd have answered no to your query about wanting it. I find it devoid of information on what "...government intervention to change the public's energy management..." is costing the Ontario ratepayer or taxpayer, whichever the case may be. However, it does contain enough pie-in-the-sky hopes to stimulate folks like Tam. $0.224/Kwh, here we come!

Re the Public Goods Charge fund in California, this is a 1-3% fee of each ratepayer's bill (exempting very low income ratepayers) which is reinvested in energy efficiency programs. This is a highly cost-effective re-investment b/c each kWh saved by the utilities under these programs must be cost-effective, based on two different economic tests (the Total Resource Cost test and the Program Administrator Cost test). If you'd like more info on these programs let me know as I've been heavily involved at the CPUC over the last couple of years in R.06-04-010, the proceeding that governs these programs.

Here are the links to the reports I previously mentioned.

Keystone report:

http://www.keystone.org/spp/documents/FinalReport_NuclearFactFinding6_2007(2).pdf

CA Energy Commission report:

http://energy.ca.gov/2007publications/CEC-200-2007-011/CEC-200-2007-011-SF.PDF

Conservation savings last only as long as people care enough to continue the change in behavior.

And as Mr Montoya might have said, I don't need any stinking links. The bottom line is that nuclear is less expensive than any alternative, regardless of what you and the other 'Swift Boat Captains' think.

Listen to me, Tam. Listen to me and learn something. Behind that anti-nuclear craziness is careers and salaries. Enjoy it while you can.

Fred

The answer is simple - they don't know how much they're using and spending on energy until AFTER they get their bills. If they could track their bills in real time, many will start to curtail their consumption when they see their bills start reaching e.g. $200 after 3 or four weeks into the billing period. This is where a real-time in-home energy monitor comes into play, and when you combine them with real-time pricing incentives from the utility, it's been proven effective to promote some level of conservation beyond than without them.

Clearly, the peer review process is working, considering the excellent comments following all of Tam's efforts. However, certain characteristics are now emerging: there is not much science behind Tam's pronouncements, but there is a lot of faith-based convictions and belief - 'Tam believes, therefore he sees', as opposed to the more rationally scientific - 'Tam sees, therefore he believes.' I will apologise ahead of time for the following rules that appear to characterise Tam's theses:

Tam’s first rule: 'Ignore incovenient data. My facts, are the only facts. Do not confuse me with the other ‘facts’, my mind is made up and nothing, but nothing, will change it.’

Tam’s second rule: ‘I will remain unconvinced and unpersuaded by even the strongest arguments and facts that show that I am wrong. If I cannot refute the opponents’ data or sidetrack or destroy it somehow, I will ignore it, keep denying it, and hope that it will go away.’

Tam’s third rule: ‘I am always right, even when I am clearly wrong. The opponents are always wrong. Deny the inconvenient facts as long as possible. Keep raising straw issues, and keep throwing around various extremist pronouncements and wacko examples that will take a while to refute.’

Tam’s fourth rule: ‘Never let the others’ facts color the issue. Quote supportive but much discredited sources; some-one will even believe them for long enough.’

Tam’s fifth rule: ‘An easily understood and desperately needed popular fabrication is, to my mind, much better than any complicated and inconvenient truth that I do not like.

Keep repeating the above rules.

I don't have any data on the breakdown, but one of the larger cost projects is the 10-10 summer savings program whereby if a consumer reduces their total energy consumption over the July to September period by 10% over the previous year's consumption, your utility gives you an additional 10% rebate on your next bill in the autumn. The 10% rebate is funded entirely by the taxpayer through the Ontario Power Authority to reimburse the utility. Last summer the news media publishes the results, and in Toronto there were over 100,000 (in a city of 700,000) customers that achieved this, and the 10% rebates amounted to 10's of millions of dollars just for Toronto.

As long as regulators can only exhibit such tiny bits of imagination and technical know-how as Ontario is doing, I'll declare their systems failed in advance.

I must admit a yen for the specific motivates me. Frankly, I find your points vacuous, not specific. Citing specious, politically-motivated studies is not specific. Layout the assumptions used, explain the calculations behind what appear to me to be what we used to call "dry-lab" results and, for goodness sake, try to present some supporting data from implementation and operation of those policies dear to your heart. I say heart because I cannot believe that you do not mean well. It's the lack of reason that's bothersome. As an aside, the only concession I can make to you is that you are persistent.

There was a short debate on Swedish TV recently that pitted two professors - one in economics and the other in science - against two know-nothings. Ex-ante, you would have thought that the know-nothings would would have taken terrible beatings, but that is exactly what didn't happen. The reason is that where this topic is concerned, a thick skin and a little ignorance goes a long way.

I suggested to Tam that we should have a public discussion of nuclear matters when a came to Sweden last year. His reply was that he was a lawyer. I was a lawyer too, Tam - a 'latrine lawyer' when I was in the Army. Since we both have legal backgrounds - sort of - I'll renew my offer.

Fred

Petr Beckmann, in the preface to the third edition of his "A History of Pi", probably said it best:

"Meanwhile, a disturbing trend away from science toward the irrational has set in. The aerospace industry has been all but dismantled. College enrollment in the hard sciences and engineering has significantly dropped. The disoriented and gullible flock in droves to Maharajas of Mumbo Jumbo. Ecology, once a respected scientific discipline has become the buzzword of frustrated housewives on messianic ego-trips. Technology has wounded affluent intellectuals with the ultimate insult: They cannot understand it anymore.

Ignorance, anti-scientific and anti-technology sentiment have always provided the breeding ground for tyrannies in the past. The power of the ancient emperors, the mediaeval Church, the Sun Kings, the State with a capital S, was always rooted in the ignorance of the oppressed. Anti-scientific and anti-technology sentiment is providing a breeding ground for encroaching on the individual's freedoms now. A new tyranny is on the horizon. It masquerades under the meaningless name of 'Society'.

Those who have not learned the lessons of history are destined to relive it.

Must the rest of us relive it, too?"

Despite his flair for the dramatic, Petr had a point.

Also, Toronto was included but not the Brampton (which is under Hydro One) because not all utilities are forced to participate if they don't want to. They each must ask to participate by applying to the OPA for the project funding.

In Toronto Hydro's case, they wanted it for 2007 for two reasons. One, they invented this instrument back in 2006 and pilot tested it, and 2006 was wildly successful for them. Back then they had no idea how well it would work, but apparently in 2007 it worked again just as well. I don't know either what percentage of the 2007 rebates went to the same customers as the ones that got them in 2006.

The other reason Toronto Hydro wanted it again in 2007 is that the Greater Toronto Area is the most critical concentration of loads in the province, and is most prone to local blackouts during summer peak demand.

Are you ready to hear this one now - Toronto Hydro must be so desperate to lower peak demand they have started offering just this month a free complimentary IPOD to any customer who signs on for a free Peak Saver thermostat. (Your blood must surely be boiling to hear this.)

Yeah, many of the instruments are blunt and expensive to the taxpayer. But without smart meters yet and more targeted rate pricing incentives, the Ontario Power Authority appears to be lacking ideas for anything better.

My advice, take a pill and relax until all the smart meters get deployed first by 2010. Then there should be some real opportunities for new instrument ideas.

You all really have some gall. I have repeatedly cited specific figures from respectable and mainstream reports on the likely costs of new nuclear plants. The Keystone and CEC reports are not produced by hacks with a political agenda. Read the reports and you'll see this is the case.

Fred, I have a hard time believing you're an economics professor when you state as a flat and unsupported assertion that nuclear power is the cheapest out there. Would you also tell me the moon is made of cheese and don't question your conclusion because you speak from authority?

Do some homework you three and get updated. Or at least be able to explain cogently, and through an appeal to facts, why you disagree.

Readers of this forum deserve no less.

So, again, the Keystone report found new nuclear plants in the US would probably produce electricity for 8-11 c/kWh. The CEC report found that new nuclear plants in California would cost 11.8 c/kWh for merchant owned plants.

I look forward to your substantive responses as to why these figures are wrong.

What you call "respectable and mainstream" may well be quite the other thing. It's not certain but it could be. What is certain is that the contents of those reports are wrong if they haven't reached the conclusions of yours truly about the cost of nuclear. AND NO, I DONT RECOGNIZE NOR INTEND TO READ, THINK ABOUT OR COME INTO CONTACT WITH ANY REPORT THAT DOESN'T ARRIVE AT THE CONCLUSION THAT MORE NUCLEAR FACILITIES NEED TO BE CONSTRUCTED, BEGINNING NOW. Even the dumbest economics teacher at your local university must know that this is the wrong time to sacrifice the advantages provided by large amounts of reliable electricity.

In that famous debate between you and my good self, I would keep harping on the cost of electricity throughout this wonderful world. As you know, or should know, Sweden ranks at the top along with Norway. That's enough for me to know even better what I already knew about the cost of nuclear. And listen, I'm not just a professor of economics, I'm one of the best teachers of economics in the world - maybe even the best - and so when you stand up at the beginning of that debate, clear your throat, and present your pitiful shreds of pseudo-scientific wisdom you are going to get a bad surprise. Namely, I know how to deal with elegant know-nothings.

Twenty years ago the nutters were shouting for closing the nuclear plants on the Swedish west coast and replacing them with wind and sun. What is happening is that they are being replaced with imported electricity derived from coal, and large amounts of gas are scheduled to be imported. By way of compensation the call is going out for a more efficient/effective use of electricity. PERSONALLY, I'M TOO SMART TO BUY A TRADEOFF BETWEEN PLENTIFUL AMOUNTS OF RELIABLE ELECTRICITY AND SO-CALLED INCREASES IN EFFICIENCY, BECAUSE IF THAT ISN'T HANDLED CORRECTLY - WHICH IS LIKELY - IT MEANS A DECLINE IN MY STANDARD OF LIVING. And counselor, thanks to the large monetary transfers from this country to Brussels and stone age countries in the Third World, I feel that I've given up enough.

Do you get the message?

Fred

Fred

You clearly have not been involved in making public policy. If you made such statements in a public forum as you just wrote above, you would be laughed out of the room.

Thanks for the dialogue. I look forward to substantive responses from Don, John, or anyone else who actually believes in the rational public policy process.

Fred

Let the markets do their job without interference from folks such as yourself and you will see the entire planet powered by emissions free nuclear energy.

Fortunately the rest of the world is not listening to you. UK, France,Canada, USA, China, India, Finland , Romania, South Africa, Russia and many other countries are all planning or building new plants. Even Sweden is starting to realise the stupidity of shutting down the Baarsbeck plants near Malmo although I suspect a more precipitous drop in their standard of living will be required before they are fully awake to that reality.....I'll let our wise and wily Professor Banks comment further on that.

I think you are somewhat out of touch with what is currently occurring in the nuclear industry. The market appears to be working admirably well.

As an added bonus and I doubt you are aware of it....China and Canada are participating in a plan to burn used PWR/BWR fuel in a CANDU reactor so the "waste" problem you have been beefing about forever will be solved. No need for Yucca Mountain. And - as a further bonus - the fuel is free, already mined and unlimited (at least a few hundred years worth).

Now let me see free fuel, no emissions, electricity 24 hours a day in large quantities and the only waste is minute amounts and low level that can be stored just about anywhere. I think the "market" would like that very much.

Sanat Barbara would do well to follow the rest of the world and build itself a PWR.

Malcolm

That should be "Santa" which is an apt description for the good work Mr. Gore has done for the nuclear industry. What a wonderful man to be sure :)

Despite the fact that the poor man (I use that term with a very big smile) is mistaken in his belief about global warming/climate change he has provided the greatest single boost to the nuclear business ever and ironically I have to applaud the man for that.

Tam, there are dozens of new nuclear plants under construction and in the planning stage right now so whether you like them or whether you do not like them they are a reality. Expect to see over one thousand plants at least before 2025. There are about 400 now. So far from the nuclear demise you wish for - the reverse is the truth and it is indeed the market at last working very well that is at the root of it all.

Even the UK that fuddled the issue for decades is now realising that you cannot run an industrial economy on windmills and conservation. With the prospect of all its nuclear electricity capacity (20%) reaching the end of design life by 2020 their solution is not conservation (tried it - doen't work) or windmills (tried that - doesn't work) the solution is nuclear. They appear to have realised that a country without electricity on demand is not a very nice place to want to govern. People get very upset when the lights go out for weeks or months on end...VERY upset.

But your narrow views remain a puzzle to me. I am sure that you have consumed Coca Cola or Pepsi or some other soft drink out of an aluminum beverage can at some time in your life and therefore participated in the extraction of the said metal from Bauxite which requires massive (and I mean MASSIVE) amounts of electricity. I do not know how you supply sufficient electricity to an aluminium smelter with windmills or solar panels or conservation. The market apparently agrees with me.

One way the market has decided to obtain the large electricity supplies required is to build an alumium smelter in Iceland and flood one of the worlds most picturesque valleys to build a hydro electric dam to power it (renewable I suppose you'd call it but not much fun for whoever lives or lived there) The plant constructors appear NOT to be building windmills or solar panels or sterling engines or anything else so presumably the market has determined that hydroelectric power is the best solution....who cares about another river valley under water!!!

With nearly one half of the worlds population wanting what we in the West smugly take for granted there is no question that the only power source of sufficient capacity and deployability is nuclear. There will be a smattering of wind and a bit of solar to pacify the clod poles who think that is where the power comes from to run western civilization but the bulk of it will be coal and nuclear. When Mr. Gore gets to phase out coal there will just be us in the nuclear business left. Nice position to be in Tam and Mr. Gore....thank you so much....my ticket to a very comfortable retirement is assured....but I have so much fun doing this I probably never will (retire that is).

Tam you really will just have to get used to the idea. Once you do I am sure you will come to realise that nuclear power plants are by far the best solution to the worlds energy needs.

Or may be you subscribe to the die off theory that if you don't meet the worlds energy demands most of the population of the planet will die off so you will not have to worry yourself about it....as long as it isn't you or your loved ones doing the dying off - of course.

Wiping out half the worlds population (in the warped minds of some people) is the most elegant conservation measure you can take. No people equals no energy demand....problem solved.

For me - I like people - all races - all colours - all types - and I like to provide them with lots of cheap reliable electricity so they can enjoy their lives and live them out comfortably without having to spend them in drudgery as was the case in years past. My only regret is that I have been unable to persuade people such as yourself the complete impracticality of your proposals from a global and indeed local perspective.

From previous writings it seems to me that you have not a very good grasp of nuclear energy, its present capability and deployment or its future potential. Until that changes it is unlikely that you will ever alter your opinion (closed mind and all that) since the facts seem to serve only to confuse you.

I will spend the remainder of this cold and snowy winters evening assisting my colleagues in churning out thousands of megawatts of cheap emissions free nuclear electricity. I don't like to see people cold...silly old human trait of mine....but hope it serves as a gentle reminder Tam that not all the world has a climate as pleasant as California.

Malcolm

First, I'll ask you the same question I've posed repeatedly (with no response) to your fellow pro-nuclear mafiosos: please explain to me why the recent reports from the Keystone group (2007), the CA Energy Commission (2007) and MIT (way back in 2003) found electricity from new nuclear plants would be rather expensive and more expensive than wind (firmed), geothermal (already firm), biomass (already firm), small hydro, natural gas, and others?

Then please explain to me why the Kammen/Koomey analysis published in 2007, showing that the average cost of nuclear electricity for 99 over the plants in the US have been about 7.2 c/kWh (more expensive than other sources, again), is wrong.

Then please explain to my why, if nuclear power is "cheap," the nuclear industry, in particular its trade group, the Nuclear Energy Institute (with its paid disingenuous shills like ex-Greenpeace founder Patrick Moore), must tout the lower "operational costs" of nuclear power while ignoring the far more significant capital costs of nuclear power plants.

And please don't argue that the capital costs for plants in the US have been paid off. This simply isn't true for many plants and even if it were true, it doesn't eliminate the fact that the levelized cost of electricity from those plants has generally been quite high (again, I'm referring to the Kammen/Koomey analysis of 99 plants in the US).

Then explain to me why even generally quite good analyses like the Kammen/Koomey analysis feel they must use optimistic lifetime estimates for nuclear plants (40 years), when the average lifetime of the many plants already shut down in the US has been only 23 years.

Then explain to me how nuclear is an "emissions free" source of electricity. We must of course consider the lifecycle emissions of each technology, and folks like Smith/van Leeuwen (Netherlands) have found that lifecycle emissions of nukes can be as high as those for natural gas plants as we move toward lower grade ores, which require more electricity to process.

Then explain to me why, if nuclear power is so cheap, it requires $25 billion in loan guarantees in the 2007 energy bill, on top of $13 billion in other subsidies in the 2005 energy bill, on top of the many billions in R&D shelled out over the decades for nuclear power.

Then explain to me why, if nuclear power is so cheap and such a good source of energy, there has not been a single nuclear plant built with private money (that is, non-ratepayer guaranteed) in the world.

There's more, but I'll leave it at that for now. I'll go over the uranium supply issues and uranium cost issues in my next reply.

Let's get this thing straight. Tam is riding the anti-nuclear gravy train, and by the time it reaches the end of the line, he will have enjoyed a sweet ride. I know about these things. I was on one of them in Hong Kong a few years ago. Of course, he rides first-class, while my arrogance and egotism kept me from being as far forward as I think that I should have been, but it was wonderful while it lasted. In addition, I was opposing the curse of electric deregulation, and this is something that I would have been glad to do if it meant that I had to shovel coal into the boiler to pay for my trip.

Now, at one point during that trip, during a stop at the Hong Kong Institution of Engineers, a young lad from Australia decided to serve up a load of nonsense of the kind that Tam specializes in. My notice to him was brief and to the point: if he couldn't get his facts straight I would make him feel so inferior that he would never want to hear the word deregulation again. Well, this is the kind of medicine that Tam needs. He needs it. Like castor oil, It will make him feel better in the long run.

Of course, I want to thank Tam also. Nuclear might be the next train that I take, and it's nice to get some acquaintence with the kind of ignorance that I'll have to go up against if I'm to get the seat that I deserve.

Fred

"TVO's application for a new reactor was based primarily on economic criteria (lowest kWh cost, lowest sensitivity to fuel price increases), but it noted the considerable energy security and greenhouse benefits. Climate policy is a major reason for government support for the proposal, while its detractors supported a massive increase in natural gas use (from Russia) for electricity generation. Projections suggest that about 7500 MWe of additional capacity is needed in Finland by 2030.

The country's 1997 energy policy stressed availability, security, diversity, price, and the need to meet international environmental commitments. For electricity, Finland is part of the deregulated Nordic system which faces shortages, especially in any dry years which curtail hydroelectric generation. With growing demand and the need to ensure reliable economic supply over the long term, various studies were carried out which showed that nuclear was the cheapest option for Finland.

Figures published in 2000 showed that nuclear had very much higher capital costs than the others --EUR 1749/kW including initial fuel load, which is about three times the cost of a gas plant. But its fuel costs are much lower, and so at capacity factors above 64% it was the cheapest option.

August 2003 figures put nuclear costs at EUR 2.37 c/kWh, coal 2.81 c/kWh and natural gas at 3.23 c/kWh (on the basis of 91% capacity factor, 5% interest rate, 40 year plant life). With emission trading @ EUR 20/t CO2, the electricity prices for coal and gas increase to 4.43 and 3.92 c/kWh respectively:"

Nuclear has lots of experience in Ontario Canada too. Our small number of publicly funded nukes have faced huge repair bills in recent years, at taxpayer's and ratepayer's expense, to refurbish them and avoid shutting altogether.

In part, the lack of any new privately funded or government funded plants in the last 20 years has made the situation for meeting peak demand now an ever looming crisis in Ontario.

Private funding for nuclear is a non-starter and always has been because firstly the huge capital investments needed over several years to build them is fraught with payback risks. Competition from fossil plants has historically been stiff until recently, and when combined with politicians' crusades to keep rates as low as possible, the payback timeframe has always been unpalatable for private investment. Public opposition from NIMBYs also makes it very tough to site any new nuclear plant let alone get blessings on environmental impacts.

Today with climate change and escalating volatile fossil fuel costs and availability on everyone's radar screen, and the pressing need to rebuild old plants and bring new capacity on line to satisfy demand growth, you have a recipe for very tough choices to make for the future. The Ontario government views building new nuclear plants as initially very expensive and taking many years to bring substantial new capacity on line, and so must be planned for well in advance if nuclear is chosen.

Fuel cost predictability and availability is another big challenge in making choices, and uranium when compared with fossils is considered the lesser of all the evils. The same applies for nuclear's apparent lower carbon emissions. So the unfolding scenario at least here in Ontario is to plan on big nuclear for the long range future, and in the meantime provide economic incentives to develop a hybrid grid with lots of distributed renewable, and foster greater efficiency and conservation technologies within industry and the residential consumer.

Would you care to follow up on your figures for Finland's new Olkiluoto nuclear plant in light of the already long delays and dramatic cost increases that particular plant is facing?

If you're not familiar with this history: the Olkiluoto plant is already 2 years behind schedule and at least 1.5 billion euros over budget.

I do not know what subsidies Finland has thrown at nuclear power, but I suspect there are some significant ones.

I certainly respect Finland's (or any nation's) right to invest in nuclear power if they wish. But we must acknowledge the actual costs, as well as the many other downsides of nuclear power, and not rely simply on ex ante cost estimates. This is the point of the Kammen/Koomey analysis: history has shown that the cost estimates for nuclear plants in the US were way off and this history is quite likely to repeat itself if there is a new generation of nuclear plants in the US.

Cost estimating is by definition estimating. A past history of making far too low estimates for nuclear can be viewed another way.

What you may be overlooking is the learning experience in estimating. Without being an expert on nuclear, given blunders have been made in past, past errors in estimating can in theory be used to make more informed estimates for the future.

In the art of technological design, learning from design choices, especially the first time a new technology is developed, has a huge impact on the ability to improve future generations of it. It greatly contributes to a designer's experience and, more importantly, the innovative creativity to lower the costs of future designs.

The latest CANDU reactor technology last I heard was supposedly being touted as considerably lower cost than earlier initial designs.

The learning experience in design does not rule out the possibility of repeating past estimating blunders, which the Kammen/Kooney analysis you cite claims is highly likely to repeat for nuclear. My point was that the economic cost and its ability to accurately predict in the future for any big central generation is also being heavily weighed against environmental costs.

You stated the following: "Then explain to me how nuclear is an "emissions free" source of electricity. We must of course consider the lifecycle emissions of each technology, and folks like Smith/van Leeuwen (Netherlands) have found that lifecycle emissions of nukes can be as high as those for natural gas plants as we move toward lower grade ores, which require more electricity to process. "

With respect to life cycle emmissions the Smith/van Leeuwen (S/vL) analysis uses very old data. The primemary source of CO2 that is discussed is the CO2 that comes as a result of the enrichment process. The data is based on the operation of the old US enrichment facilities such as K-25 at Oak Ridge (Where I am sitting today). Remember the K-25 plant was built during WWII with little care givien to the energy efficiency of the operation. It assumes that all the input power comes from old TVA coal fired plants. First TVA has always had some percentage of hydro-power feeding their system. Second the gaseous diffusion enrichment process is being changed over to centrifuge enrichment which is much more energy efficient and the advanced centrifuge will be even more so. Third with nuclear in the mix and more efficient modern fossil plants there is less CO2.

A second source of CO2 in the S/vL analysis comes from the manufacture of the cement used in the construction of the nuclear plant. Current wind turbines require about 4 times more cement per kilowatt of output then a nuclear plant, based on the nameplate capacity of each.

There are also assumptions in the analysis based on a 40 year life, a 60% capacity factor and fuel burn-up of 30,000 Mwd/MTU. I believe the S/vL analysis is deeply flawed.

With respect to uranium supply, the energy available from each gram of uranium is 1 Mwd/gm. This is true if you fission U235 or U238. Today the burn-up is 50,000 Mwd/MTU. That is equivalent to burning 5% of the U235 in the fuel. U235 makes up only .7% of the uranium coming out of the ground. Based on this once through cycle, if you start with 1000 gm of uranium you have 7 gm of U235, you are only burning 0.35 grams of the original uranium. If the fuel cycle is closed as proposed by President Bush in the GNEP program using fast reactors we could extract more then 80% of the energy from the uranium (U235 and U238) rather then the .035% we are using today. Does not look like we have a uranium supply problem. In addition this would require using only the uranium already mined and refined and would require little or no additional enrichment.

Ken

You HAVE been given prolific cost data from John Sutherland on this very site (which you conveniently forgot to mention) he gave you mountains of references. You need no more proof.

Plant life expectancy of 23 year - baloney. That can only be the case if you include the ones that anti nukes cause to be shutdown...talk about a self fulfilling phrophesy. The FACT is that many plants have plant life extensions well beyond 40 years.

As for cost I deal in reality not popular fiction dredged up by make believe economists. Output of this plant is 4.2 cents/kw hour all inclusive of fuel, staffing, decommissioning long term fuel storage, amortization - all of it. The ONLY industry on the planet that does so including wind. Solar power 42 c/kw hour (hoped for) not including storage when the Sun is not shining at night - wind 15c/kw hour not including storage costs for when the wind stops.

Like I said cheap. And we will make it cheaper still.

It is no wonder Patrick Moore deserted the likes of you. He realised that windmills cannot meet the worlds power needs and never will.

If PWR costs are so high suggest you build CANDU plants.

Malcolm

Bruce Power that runs the Bruce Nuclear Development is a privately funded organisation that is investing significant funds in new plants and refurbishing 4 units at Bruce A. That plant is contributing very nicely to the bottom line of the consortium involved. Do they know something Tam and you do not. Clearly they do as they are prepared to put their money....well you know the rest.

Apparently Bruce Power considers it a worthwhile proposition. That Company is also planning new reactors in Alberta to assist with the tar sands developments in that Province and planning new plants at the Bruce site...hardly a commercial vote of no confidence in the technology is it??

And Tam please do not bother telling me the tired old story that Uranium is running out bla bla bla. Candu Reactors can run on waste PWR fuel and Thorium fuel cycles in addition to Uranium and those fuels are very plentiful let alone the 98% of Uranium still remaining in the used fuel.

Japan now has the technology to extract Uranium economically out of the sea (no mines required). Running out - pure baloney and you darn well know it.

It isn't.

Bruce has been taken over by private British ownership in Ontario recently largely because of the province's incentives to attract more investment in generators of all kinds.

My point is Bruce was already there - it didn't have to be built from scratch, and for the most part needed refurbishing. If it had to be built from scratch, it's debatable whether private hands would have bought into it.

But your are perfectly right, technology for uranium and the investment opportunities for nuclear plants are indeed changing. The British private company that bought Bruce wouldn't perhaps have bought it if they believed there was no bright future for nuclear, particularly in the pending demand for more nuclear. And given the Ontario government has firmly taken the stand that it no longer wants generation to be totally publicly owned, the only other choice is to make the regulatory environment profitable for private interests to ante up, even for nuclear.

So we will surely see more private investment in nuclear, which will be history in the making in Canada.

Thanks for more sterling examples of your sunday-supplement wisdom.

Did you say nuclear plant lives of 23 years, Tam? Not balony as Malcolm says. Beautiful! Even the monumentally ignorant former prime minister of Sweden would find it difficult to buy that, and he thinks that nuclear energy is obsolete. And even...

Fred

So we have you to thank for exactly WHAT again?

Bob: Your errors regarding the investment history of the Bruce station throw all of your positions into doubt. BNFL (British company) bought Bruce when it was first privatized, but then had to re-sell it when their business in Britain got into trouble. They sold it to Trans Canada Pipelines and the Ontario Teachers Pension Plan, who are happily expanding the plants and planning additions.

Bruce being subsequently purchased from BNFL by other private parties merely supports my last comments, at least in my view.

Being in the electronics industry I don't routinely hear much more that what's released to the news media when it comes to large corporate deals in the electricity industry. If you consider my previous comments to be in "error" by this omission about Bruce, and "throws all of my positions into doubt", then perhaps this would be a good time for me to bow out of submitting any further comments to these Energy Central forums, and leave it for the error-free experts in the electricity industry.

As the future unfolds and we see the massive changes happen to the electricity industry, and likely sooner than later, I promise to think of you, Jose Antonio, Fred, Malcolm, Tam, Edward, and the other highly vocal electricity industry people on this website, particularly in seeing whose vision of the future comes true and why.

Best Regards, Bob Amorosi, M.Eng. Resident of Ontario Canada

I’ve read some studies that suggest wind is cheaper than nuclear, but have read a lot of others that say the opposite. An OECD report called “Projected Costs of Generating Electricity – 2005 Update” (search on title to download PDF) gives nuclear power total generation costs (on page 45) ranging from ~2.5 to 4.5 cents/kW-hr, excluding outliers. On page 55, its wind power cost estimates range from 4 to 11 cents/kW-hr, excluding outliers. Now, this report’s nuclear projections did not include the recent run up in material (and other) costs, but these issues affect wind as well (as wind actually uses more raw material per unit energy). This issue is discussed at the following link:

http://www.cleantechblog.com/2007/12/offshore-wind-report.html

from which I quote: “……the installed cost of an onshore wind project is projected to increase from an actual cost of Euro 1540/kw in 2003 to a forecasted cost of Euro 2940/kw by 2013.” If one scales these capital cost numbers to account for wind’s capacity factor (of ~25% to 33%), you come up with “equivalent” capital costs of ~$4000 to $5000 per kW in 2003 and almost double that in 2013.

A recent EnergyBiz magazine article called “From Malawi to Texas” whose PDF can be found at:

http://www.energycentral.com/centers/energybiz/detail_issue.cfm?id=23

refers to wind projects with costs of $1600 to $2500 per rated kW. Accounting for CF, this equates to nuclear plant capital costs somewhere between $4500/kW and $9000/kW.

The wind (equivalent) capital costs quoted in both these reports are as high or higher than even the most recent nuclear plant cost projections, which fully reflect the recent run up in commodity prices. And the both correspond to per kW-hr prices that are as high or higher than the 8-11 cents quoted for nuclear in the KeyStone report.

Finally, there is this statement from Britain’s most recent (2008) energy policy white paper (at the link below) that “the cost of carbon dioxide abatement with nuclar power is GBP0.3 ($0.6) per tonne, compared with the next cheapest, onshore wind, at GBP50 ($98) per tonne.” Apparently, they think that nuclear is less expensive than wind, or any other renewable source.

http://www.world-nuclear-news.org/nuclearPolicies/Nuclear_power_is_vital_to_Britain_100108.shtml

I would ask Tam the same question he asked Fred. Can he come up with specific reasons why any of the cost projections from the above (multiple) sources are invalid?

For these reasons, I've grown tired of the whole competing studies game. Doing studies and arguing endlessly about which ones are right is not the way to glean the truth. This has become clear. The way to honestly and objectively winnow out the truth is to leave it up to the market. We should tax or limit air pollution, CO2 emissions, and foreign energy imports, so that these very large, very real external costs (for fossil fuels, mainly) are accuratley reflected in the market price. Then we should just let whatever happens happen. Personally, I think that some mixture of nuclear and renewables will result, but frankily what I think (or prognosticate) doesn't matter. The only important issue is that we get the policy right.

I generally agree with Malcolm about how what utilities are actually doing worldwide seems to argue against Tam's position on relative costs. Renewable sources are mostly only being built in response to outright mandates and/or massive per kW-hr subsidies. In Europe they are several cents/kW-hr. In Britain, they are guaranteed a price (90 pounds/MWh) that is double the market price (and way over what nuclear costs). Meanwhile, everywhere utilities think hard CO2 limits will be imposed, they are voluntarily building nuclear plants. Britain is a perfect example. Companies are coming forward to build new nukes, with no subsidies. All they wanted from the Energy Review is the govt.'s permission to do so!! All nuclear needs is some degree of confidence that CO2 prices will be such that nuclear can compete with fossil fuels. It has never needed help competing with renewables.

Then there is always the question about why "environmentalists" argue that renewables are actually cheaper, but then always support policies like renewable portfolio standards ("you MUST build renewables") and outright bans/moratoriums on nuclear power ("you CAN'T build nukes"). Some competition. It's pretty clear that competition is exactly what they're afraid of. If renewables were as economic as Tam suggests, there would simply be no need for RPS, period. Are you saying, Tam, that you're withdrawing your support for any and all RPS policies, and for CA's nuclear moratorium?

One final thing that I just have to comment on. All Tam does is damage his credibility when he talks about 23-year plant lives. Everyone knows that they will last 60-100 years. Saying that nuclear has significant net CO2 emissions doesn't help either. Virtually all studies show that nuclear's net emissions are a few percent of fossil fuels' and are similar to or lower than most renewables. Once again, a market approach will determine the truth concerning any net emissions, for nuclear or any other source. They will show up in the price.

If a current technology nuclear generator has a capacity factor of 100%, an installation of 4 such nuclear plants also has a capacity factor of 100%, and also 4 times the capacity.

However, each of the nuclear plants has an individual reliability of 90+%; and, a combined fleet reliability of 99.99% delivering the capacity of any one plant.

Wind turbines, on the other hand, can achieve improved fleet reliability only by being installed at multiple locations selected to minimize or eliminate the likelihood that more than 1 of the wind farms is influenced by a given weather pattern. Assuming the ability to locate the wind farms so that they are influenced independently by local weather patterns, achieving 90% reliability of the capacity of 1 of the wind turbines would require the installation of 8 turbines at 8 locations. Achieving 99.99% reliability of the capacity of 1 of the wind turbines would require the installation of 32 turbines at 32 carefully selected locations.

The wind turbines, unlike the nuclear plants, would produce additional "source of opportunity" power, but at far lower reliability and thus of far lower value.

Assuming a nuclear plant capacity of 1 gW, replacing its capacity (at the same level of reliability) with current technology wind turbines would require the installation of ~2700 wind turbines of 3 MW rated capacity spread evenly over 8 carefully selected sites of 1 gW capacity per site.

The "firming" of wind is one thing. The transition of wind from "source of opportunity" power (energy replacement) to reliable power (capacity replacement) is quite another, requiring multiple wind generators in multiple locations and a grid capable of moving the resulting power output from any or all of those multiple locations to the market.

While producing reliable power with wind turbines may be possible, it appears to be economically unlikely in the foreseeable future. The availability of high density, long term, fast-in/fast-out storage would reduce the required number of turbines and/or the required number of discrete locations, but arguably not the system installed cost.

I don't know what the answer is, but I am reasonably sure that it has not been "hermetically sealed in a mayonnaise jar on Funk & Wagnall's porch since noon today".

I also found the economics section of the report illuminating. The admission that "...we cannot provide an analytic answer to the question of whether new, standardized designs built in an environment of low inflation will look a lot more like Zion ($1,108/kW) than Nine Mile Point 2 ($10,769/kW)..." seems, how shall we say it?, rational. Kind of reminds me that pi is transcendental, but not algebriac. So, taking a cue from you, let's transcend Fred's aggression and look at what Keystone says about algebra. Seems like they observe that "...While we did not attempt to estimate the cost and risks of other generating technologies, it is clear that utilities and their regulators do...". Now this bit of purpose shows at least some recognition of comparative economics. You know, Tam, the kind of crude $differential calculation I mentioned earlier in this string. Not albebraic does not mean algebra adverse, so despite your claims that such calculations have nothing to do with new plants, nuclear or otherwise, let's revisit the $differential. When the curious Keystone factor of 2.5 is applied to my crude exercise, the antithesis of "chump change" swells from $7.74e+9 to $1.935e+10. We both know which technology this favors. To paraphrase good, old Ev Dirksen, "A few more orders of magnitude and we'll be talking real money."

As for the credibility of Tam, he has none. If Joseph Goebbels were alive he would be shaking his head if he heard Tam sounding off. Compared to Tam Goebbels was an amateur. The problem of course is the lack of aggression of people with the right answers. Richard Quest of CNN questioned the US Energy Minister Samuel Bodman on nuclear, and Bodman politely said that "he didn't see how the US could provide the electricity" that was going to be needed over the next twenty years without nuclear. What he should have said was that it was impossible to provide that electricity at the optimal cost without nuclear, and if you if you dont like it.... Of course, if he had put it that way it would have taken the edge off Quest's toothpaste smile, since on at least one occasion Mr Q. was dumb enough to question the efficacy of nuclear.

Levelized cost. Tam knows as much about that topic as he does about brain surgery. The problem is that he knows more than most people, and that includes some of our brightest graduate students. You can thank their dumb advisors and teachers for that, since these dumb advisors and teachers specialize in teaching them things that are not worth knowing. His reference to the Kammen study though is interesting. I could be wrong, but I suspect that Kammen also has a first class seat on the anti-nuclear gravy train.

Having said that, let me say that a selection of the pro-nuclear comments above - with the exception of mine, of course - should be reproduced and circulated to... These comments are great.

Fred

Let the market place of ideas, consumers, producers and manufacturers’ work it out with lower costs the driving force. The government can and should establish reasonable policy targets, but the actual implementation should be left to those with the incentive and expertise.

If governments (e.g. the City of Santa Barbara) want to help, then grant direct tax relief for building efficiency improvements and reduce government spending to pay for it. Yes, the government would have to initially shoulder some of the burden. However, with less money spent on energy, more is available for the local economy, including the local government. The utility companies will come up with ways to reduce costs so they can earn a reasonable profit. Ultimately, everybody can win – the magic of the free market.

PS While spirited discussions are a good thing, we might want to sheathe our swords.

Mike

I can also mention that although the power company directors know - which Tam doesnt - that this country should have more nuclear, they dont care any more, because deregulation gave them more money and perks than they thought were possible. Yes, those directors were underpaid, but instead of deregulating, their salaries should simply have been doubled (or something). If they didn't have so much money, they might be interested in informing the dumb politicians of the advantages of nuclear as compared to the nonsense that Tam and the anti-nuclear booster club is selling.

Fred

All,

I'm going to combine my response to all the pro-nuclear folks, summarizing some previous comments I've made and placing my thoughts in one spot for ease of comprehension.

Subject: Cost-effectiveness of nuclear power in the US and California

First: historical prices. The recent Kammen/Koomey analysis of 99 plants in the US (the majority of existing and decommissioned plants) found a wide range of levelized costs for nuclear power, from 3.2 c/kWh to over 14 c/kWh. Most fell in the 5-8 c/kWh range, which is more expensive than electricity from coal or natural gas over the same time period covered.

(A note on levelized cost analysis: this is a way in which all relevant costs for a given technology can be assessed and averaged over the expected facility lifetime. So capacity factors, fuel costs, capital costs, lifetimes, etc. are included in any decent levelized cost analysis).

Kammen and Koomey conclude that the price of nuclear power has generally been far higher than was estimated and that many plants faced significant delays in construction and huge cost over-runs.

Closer to home, a recent CA Energy Commission report found that CA's two existing nuclear plants (San Onofre and Diablo Canyon, each 2 GW each), had massive cost over-runs.

The CEC report states, at p. 138: "Construction costs at Diablo Canyon exceeded the initial $320 million estimate (1968 dollars) by more than $5 billion, and construction costs for SONGS Units 2 and 3 exceeded the initial $436 million estimate by over $4 billion." The report is available at:

http://www.energy.ca.gov/2007publications/CEC-100-2007-005/CEC-100-2007-005-F.PDF

Moreover, these two stations are now seeking steam generator replacement at about $700 million each (see the same report).

The same report states the levelized cost of electricity from Diablo Canyon, for ratepayers, was 10.0 c/kWh from 1985 to 2006. The report also makes it clear that it's very difficult to figure out the actual cost, but that it was probably quite a bit higher than this amount b/c ratepayers were often shielded from the full costs. (See p. 126).

So, historically, it's fair to say that nuclear power in the US, and in California, in particular, has been quite expensive, with some exceptions, particularly for earlier plants completed before the Three Mile Island accident.

Second: new plant costs. As I've noted, the Keystone report does a great job of projecting levelized costs for new plants, finding an average cost of 8-11 c/kWh the most likely scenario. However, as I've also noted, the Edison Foundation report on the increasing capital costs for all power generation indicates that the capital cost assumptions for the Keystone report are probably underestimates.

The CA Energy Commission report supports this analysis as it pertains to new plants in California. Keep in mind both of these reports were completed in 2007 so include data about rapidly escalating capital and fuel costs that were not included in the 2003 MIT report or the 2004 Univ. of Chicago report (both of which still found that new nukes would cost more than natural gas or coal plants unless a carbon cost was included).

Don, I'm having a real hard time seeing how you get from Keystone's estimates to the conclusion that Murray Duffin's 2 c/kWh or so figure may be accurate. That's a 4-fold magnitude order of difference that cannot be made up simply by assumig a lower cost of money - unless you assume a radically longer lifetime than the Keystone report does. And as we've seen in California, longer lifetimes (even far under 40 years, as is the case with San Onofre and Diablo Canyon) means dramatically increased costs for steam generators and other costs. $700 every twenty is most definitely not chump change.

Fred, we can safely ignore your uninformed rants.

Ed, please see the IEA's recent report on the cost of firming intermittent renewables. It shows that your analysis of wind vs. nuclear is far off the mark.

http://www.ewea.org/fileadmin/ewea_documents/documents/events/2006_grid/Hannele_Holttinen.pdf

Also see the 2005 IEA report, Variabilty of Wind and Other Renewables, online at:

http://www.iea.org/Textbase/Papers/2005/variability.pdf.

Also see the Lawrence Berkeley National Lab report summarizing many recent studies estimates of the costs of firming wind power in the US. It found that up to 30% wind penetration could be had while adding only 10% to the cost - making firmed wind far cheaper than new nukes or natural gas plants. Online at:

http://www.nrel.gov/docs/fy07osti/41435.pdf.

Last, I would take the opposite view of Malcolm regarding the alleged renaissance of nuclear. It will be a brief and unimpressive renaissance because it is being lead by governments throwing billions of dollars at new plants, in the hopes that massive subsidies will finally bring costs down to reasonable levels. It probably won't work and the existing fleet will gradually senesce and wither away.

"... high density, long term, fast-in/fast-out storage...", you say. Could've sworn we had same 40-odd years ago with BISO and TRISO fuel particles.

Also, strikes me that if an industry is actually “deregulated”, then there should be more competition, not less. Maybe the transmission and distribution of power is inherently monopolistic by its’ very nature (kind of like roads, sewers and water supply systems) and requires tough regulatory oversight to curb the inherent tendencies of those who have no competition. Generation, however, may be more amenable to the rough-and tough world of competition -- assuming, of course, that the playing field is actually more or less level. Ultimately, the least cost solutions should be allowed to prevail.

I was able to access the first link. The other two were inaccessible.

My comments were based on engineering and statistics. I repeat my comment that "firming" wind is one thing; making wind a reliable source, suitable for replacing the capacity of a nuclear plant, is quite another.

Engineering analysis and statistical analysis are not able to make a silk purse from a sow's ear, or to turn lead into gold. Obviously, you use different approaches. I hope your clients remember your contact info when the bovine excrement encounters the turbine blade.

In fact it's about the only thing that you have right. Frankly, I didn't see how anyone could make the mistakes that you make when treating this topic except the dumb academics that I have had to deal with over the years. You know, the kind in the social sciences faculties that are impressed with people like you. But now I understand why you make these silly mistakes, It's laziness. You are just too lazy to do the kind of work that will enable you to find out how things really work, counselor. Of course, you arn't as lazy as the people who listen to and accept what you say, but that's another matter. Fortunately though, they can be redeemed - and so can you, because regardless of what you want, without a solid base of reliable nuclear power, the majority of Californians are not going to make it, and so eventually they will get bored with your foolishness. Take my advice: get on the winning team.

And Michael Keller, you don't really mean it when you talk about generators and competition. Think about it. Soak up the lessons of history. This is what Enron argued for, and were able to obtain a variant of in California. Market solutions yes - when they can work! But when they can't, something else. As for this business of the capital cost of new nuclear plants being high, well, they wouldn't be high if they had been built five years ago instead of five year in the future, which is going to be the case. However I'm prepared to believe/argue that regardless of when they are built they can be lower than alternatives.

Fred

You're getting there , Tam. Now do the math before you assert:

" And as we've seen in California, longer lifetimes (even far under 40 years, as is the case with San Onofre and Diablo Canyon) means dramatically increased costs for steam generators and other costs. $700 every twenty is most definitely not chump change."

As always, your colorful allusions are superb.

Don

ENRON gamed the system which is what speculators invariably attempt when the supply of a commodity is short. The State of California aided and abetted the supply shortage. If more nuclear plants had been available, the mess would have been avoided. The ultimate point is we need a diverse and plentiful supply of energy. Otherwise the miscreants run wild, particularly when the regulators are more or less absent.

The studies I've cited to regarding the cost of new nuclear plants use rather optimistic expected plant lifetimes, given history, but chose such lifetimes through a public and peer-reviewed process.

Fred

What are the numerous renewable energy technologies available at prices lower than nuclear, other than geothermal and the reliable fraction of hydro? Remember that we are talking technologies which will support a "four 9s" grid, unless you are also into "rational rationing" and/or government controlled thermostats.

I think your comments are helpful. I hope you will consider posting again.

I think Tam's cost numbers on nuclear power are reasonable. 5-8 cents/kw-hr. Maybe even 10-12 cents. The 5-8 number is what I have (currently) parked in my mind about nuclear power. The point is, given the high capacity factor of nuclear (Ed Reid's comments) I think nuclear is still justified.

If we want to lower nuclear power costs, we should agree on a good basic design and build 100-200 of them cookie cutter fashion. It is criminally and economically insane how we building nuclear power stations in the United States.

Given the future problems with coal (CO2 emissions, and personally, I'm not a huge fan of the mercury either...) the alternative is either nuclear (5-8 cents/kw-hr nuclear) or renewables + electrical storage. Electrical storage will be pricey, so I don't see how nuclear is not the best choice economically, even at 5-8 cents/kw-hr.

The nuclear industry has to get their ducks in a row on waste storage, however. I think this is a highly solvable problem that isn't getting solved, and is bringing down a valuable industry. It's easier to store some radioactive glass for 10-20,000 years than it is to store compressed CO2 gas forever.

Since I participated in U.S. nuclear plant design, construction and commissioning for a good number of years, your definition of criminally and economically insane must extend to me. "Transcending" that implication for the moment, would you care to comment on USDOE EIA ELectric Power Annual 2006 Table 8.2, "Average Power Plant Operating Expenses for Major U.S. Investor-Owned Electric Utilities, 1995 through 2006"? It's accessible at the DOE/EIA website.

No. I do not care to comment on the EIA Table. I don't care if someone thinks nuclear power costs 3 cents per kw-hr and someone else thinks it costs 8 cents. It's not enough to make a difference. Not to me anyways.

And yes, I do think it's ridiculous that each plant is designed individually. I don't know why we couldn't build them like the French do. It's great that your were able to work as a nuclear plant designer, but perhaps if there were a few less designers (not you specifically, of course) then maybe the EIA numbers might be even lower than they are.

OK, I broke down and checked the table, giving a price of about 2 cents per kw-hr for nuclear power. Is that right? The cost is broken down to operation (.89) maintenance (.568) and fuel (.485). These are numbers for 2006.

So the EIA says 2 cents, I say 5-8 cents. This is the same EIA that believes all the Saudi oil reserve projections too, right?

I could see how Tam's assertion that nuclear power costs due not fully reflect overruns in construction, often to regulatory approval (because each one has to be a unique design and construction event.....argh...) could be correct. I could see how a large company could move those costs to some other place so the plants look a little more economical than they are. (I'm not saying that is definitely what has happened - just that it could happen.)

First, there is essentially zero probability that nuclear power could be rendered uneconomical due to increases in the price of uranium. The price is already falling, as a result of the rapid pace of recent discoveries and mine reopenings. Even at the sharp peak prices that were hit last year, the cost of uranium was still a very minor factor in the cost of nuclear electricity. At prices that would begin to put a dent in nuclear COE, reserves would increase exponentially, since lower grade ores that exist in abundance would enter the reserve base.

Projections that show the COE from new nuclear projects to be uncompetitive continue to depend on high estimates for both the capital cost of plants and the cost of capital to finance the plants. One can argue about the capital cost estimates, but the point I would make is that the capital invested in the plant is buying a real physical asset with a guaranteed future value. It is not based on speculation and is not going to be depreciated away. It will be producing a revenue stream for at least 50 years. Given the coming energy crunch, the value of that revenue stream seems certain to rise at rate higher than inflation.

A lot of investors these days are desperately looking for safe parking places for their portfolio funds. I.e., investments whose actual value won't be swept away by a devalued dollar. Frankly, a share in a nuclear power plant looks like a pretty damn good investment.

To be fair, the same consideration could apply to new solar and wind resources, if one trusts the estimates for 30-year lifespans.

As Tam points out, amortized capital expenses must be added to operating expenses to get the total cost. The arguments occur when folks have quite different takes on what these expenses are or will be. Quite naturally, those who see no potential in the technology want to emphasize past experience that enhances their vision. Just as naturally, those who see potential in the technology want to emphasize past experience that favors. Murray Duffin's 2004 article, which is available in the Energy Pulse archives under the contributor drop-down button, assessed both positions.

Deliberate misrepresentation of U.S. IOU operating expenses, I understand, can lead to prison time.

Fred

I don't know. I just provided the numbers from the EIA table (2006).

In almost all other businesses, capital expenses ARE part of operations costs, just like rent is part of a business cost when running a store (It certainly wouldn't be under maint. or fuel)

But it looks like these expenses are not under operations, and the EIA has chosen not to include them, or even an estimate of them, in their tables.

Let's try a really rough guess: So a 3 Billion dollar plant generating 1500 MW is on the hook for 300 Million annually in amortized capital expenses. That would work out to be about 2.3 cents per kw-hr.

So adding that to the EIA's 2 cents gives us 4.3 cents per kw-hr.

I'm sticking with my 5-8 cent estimate, maybe leaning to the lower end.

When France went nuclear, they built 56 reactors all of them the same. That means any safety or operational issue that was discovered with one would be a shared experience that the others could benefit from. Training could also be streamlined and made more efficient. I don't understand how people who fret about fractions of pennies ignores this huge oversight and problem, on the part of the U.S. nuclear power industry.

OK, I found out Fermi II (which produces 1500 MW) pays about $75 Million/month in amortization. That's 900 Million/year. Add in the 3 Billion dollar close down costs and we are at about 1 Billion year, conservatively.

So that raises the capital cost to 7.6 cents per kw-hr, for a total of 9.6 cents.

I'll still stick with the 5-8 cent estimate.........

The US is not France. Each utility is an independent entity. This new gerneation of plants will be more consistent in design but there will still be multiple approved designs. Westinghouse/Toshiba have the AP1000 with 14 applications expected. GE/Hitachi have the ESBWR with 5 applications expected. Toshiba has the ABWR with 2 applications expected. Areva has the EPR with 7 applications and Mitsubishi Heavy Industries has the US APWR with 2 applications. These are either applications already into the NRC or expected through early CY 2009.

So the US is going to still have 5 different plants ranging in size from 1000MWe to 1700MWe. The difference is that the design will be complete before construction is started and they will also have an operting license before construction is started.

In the current plants design continued during construction and many changes were made to address regulatory concerns. This accelerated after the TMI-2 accident extending construction times during a period of very high interest rates and thus skewing the costs.

I understand. Far be it for strict capitalists to agree on a standard design that would save us all a lot of money.

A friend of mine who works at a nuclear power plant told me once that someone decided that a fire extinguisher should be moved from one wall to another. This move was finally approved, but the paperwork costs for this change totaled about $10,000. He has to scrounge for computer parts on-line because none of the approved computers were built after 1985. Every singular plant has to jump through these hoops because we insist on independent designs. A single set (or maybe even 2-3 sets) would be simpler for all of us.

A couple additional points:

The average lifetime of retired US nuclear plants has been 20 years, with Three Mile Island 2 included (which shut down almost right away), and 21 years w/o TMI included. There have been 15 such plants in the US, totaling almost 9 GW. These figures come from Geoffrey Rothwell, at Stanford University.

Apologies for previous comments about average lifetimes will be humbly accepted.

Second, uranium costs are still a relatively small portion of the levelized cost of electricity from nuclear plants because it takes a few years for prices to be fully reflected due to long-term contract changes. The spot price is back down to $78, from $135 last year - but still up 1,000% from $7 in 2000. Long-term prices are still a bit lower, but as the so-called renaissance in nuclear power builds around the world (we'll see a few new plants for sure) and as HEU supplies from the FSU are exhausted in the 2012 timeframe, we'll see uranium prices skyrocket even further methinks. And before then, we should start to see the fuel cost component of nuclear start to rise significantly. The total fuel cost for nuclear is about 25%, according to the Nuclear Energy Institute. With uranium costs half of this amount, as long-term prices rise from their lows of a few years ago, we can expect the 12.5% cost component rise to 30-50% of the total cost, depending on many factors.

Re levelized costs, I've repeatedly cited the recent (Dec. 2007) levelized cost estimate of numerous technologies done by the CA Energy Commission. That report found that biomass (landfill gas, anaerobic digestion, etc.), small hydro, geothermal, and wind are all cheaper, on a levelized cost basis than natural gas combined cycle, advanced nuclear, and coal with gasification (which would have to be built if it wanted to serve California, pursuant to SB 1368, and it would also have to add sequestration, which is currently extremely expensive, so coal is effectively off the table for California).

I haven't seen a good levelized cost estimate for large hydro, perhaps you have? Either way, it's irrelevant b/c almost no one other than the Governor is advocating for more large hydro in California.

I wonder if you could inform Mr Rothwell that he doesn't know what he is talking about if he claims that the lifetime of nuclear plants in the US is 20 years. Of course he didn't claim that, nor could anyone else with half a brain; but if, just if he did, when you drop into Uppsala for that famous debate with my good self, bring him with you. He can have a dose of the medicine that I'm saving up for you.

You see, Tam, given the opportunity, I'm going to clear all of this up - at least the economics and the 2+2 side. Whether you will understand it though remains to be seen. I saw your post above about levelized costs and its components, and counselor, that was strictly off-the-wall.

But to show you that I'm not a fanatic, I'm going to overlook those insipid remarks of Michael Keller about politicians and California, which I feel were at least partially directed to me. Even so however, I feel it necessary to poing out to Mr Keller that what (rational) "people" actually want is not just energy, but reliable and comparably inexpensive energy, and the way NOT to get it is with electric deregulation and listening to charter members of the the anti-nuclear booster club.

Finally, a part of the bottom line: if wind could do what Tam and his know-nothings say that it can do, you wouldn't be able to look out of a single window in Sweden without seeing a windmill, and the truth is that while there are some in this country, I have never seen one.

Fred

Speaking of not getting the drift, I wonder if that doesn't apply to a lot of people.

It's like this. Tam wants the US to go completely renewable. That's his bottom line. Once you understand that, no calculations are necessary. Nuclear, gas, coal...all of that will be rendered passé. Or maybe just "rendered", which is a word that came into use a few years ago, and involved putting people into airplanes and flying them someplace where they would be uncomfortable, only in this case, reactors and boilers would be put into tugboats and dumped into the Pacific.

And, if the result of this fiasco means that the price of a kW of electricity approached that of a bowl of chili, the good people of Tam's home town, or his 'hood', wouldn't lose too much sleep, Santa Barbara is one of the richest communities in the world, and if you can make it there then, cashwise, you can make it anywhere. For instance, if the weather goes unexpectedly sour, the Hanoi or Bangkok Hiltons might be good places to crash until the elements return to their natural order.

Why do people buy Tam's fantasies and misunderstandings? Well, fifth rate 'experts' from first rate universities can get the decision-makers to buy just about anything, and manipulating the TV audience has become child's play. Many persons contributing to this forum think that it's the politicians who cause the trouble, but actually it's the pseudo-intellectuals who have put crazy ideas into the politicians heads. Remember what Irving Berlin said in his great song 'Oh how I hate to get up in the Morning'. It wasn't just the bugler who brought misery into his young life, but '"the pup who got the bugler up".

Fred

I'm not sure just saying Tam is wrong is very productive. He DOES seem to be predisposed to leaning away from nuclear power, but that's no reason not to take the time to refute his viewpoint. Not for his benefit, as I don't think he will change his mind anytime soon, but for the benefit of others who might be reading this.

Tam's main points seem to be power plant lifetime (20 years instead of 40-50), cost of Uranium, and overall plant cost. Of the 3, I think only the latter has substance, and is affected by the first point as well.

I know many early reactors were small and not built to last that long. I am thinking of the Yankee (31 yrs, 600MW) Big Rock (35 yrs, 70MW) and some others. Fermi II is set to close in 2030, so that would be 45 years of operation. So I'm not sure operation lifetime is really going to be as short as Tam suggests. Larger plants are also more economical to run and thus, more likely to be kept open for a longer period of time.

Roger makes a good case that the cost of Uranium is a non-starter. (It is unwise to dismiss what Roger says out of hand....)

I am still getting my head around cost issues with the plants. I think this is a valid point. I think one needs to be realistic about how much these things cost, and go into a new build cycle with eyes wide open on this problem. I'm not saying that can't be built economically, I'm sure they can. But it is apparent they haven't been built economically to date. (The Midland, Michigan power plant cost $3.5 Billion over 10 years and was never completed! Shouldn't these and other unfinished projects be included in the overall costs of nuclear power plants that actually ARE completed and operated?)

So Tam is incorrect about lifetime and the issue of Uranium cost. But he is correct in pointing out that the to-date track record of plant cost is not good.

What I take out of that is not the nuclear power is a bad idea, I think its a good idea. But perhaps one shouldn't pooh-pooh wind and solar so much. Begging Congress for a 3 cent wind subsidy to bring the cost of wind from 6 to 3 cents (or whatever) seems kind of lousy in the wake of multi-billion dollar plants delivering electricity (albiet 24/7, which is valuable) at 10 cents.

As you are wrestling with cost issues, consider once again the much-maligned Table 8.2, the volume of electric energy supplied over time by those 24/7 multi-billion dollar plants and what the operating expense would be to deliver the same volume with the alternatives.

Also consider what happens to 10 cents, if, for example, Roger's observations have merit. The result is the reason plant license extensions, which recognize that the Midlands, Rancho Secos, Shorehams, etc. are not the norm for life cycle, are so important. That, in some instances, costly mistakes have been made is not in dispute. Whether having "been there and done that" has any value is.

How did you say Ford amortized the Edsel?

No matter what theoretically poor saftey record and risk of problems nuclear may be accused of having (a position to which I do NOT subscribe) it STILL can't be as bad as coal. Learning is a critical and continuing process, Tam.

Incidentally, I don't pay any attention to anything that that gentleman says. His Sunday Supplement wisdom isn't intended for my ears.

Fred

I don't think we are in dispute. I have no doubt that other countries, such as Norway, Sweden, and France, can and do operate nuclear power plants economically.

I think that can also be done in the United States, and I would love to see that happen.

However, when it comes to that, I am afraid I am from Missouri. You will need to show me.

Tam, me being completely ignorant of nuclear plant costs I can however tell you this. Here in Ontario our newest and largest plant Darlington was commissioned I believe just about 20 years ago and has lots of life in it yet. The oldest plant I think is Pickering, commissioned in the mid-1970's (not sure), and it went through massive refurbishing over the last few years at a painfully higher-than-expected cost, but probably less cost than building it from scratch.

The Ontario provincial government admits nuclear typically has relatively high costs, especially for older generator designs. But cost is not the only factor to consider - the prospects of climate change and more volatile and potentially skyrocketing fossil fuel prices in the future have made nuclear the least of all evils. Distributed renewables are very appealing and are being invested in too, but as others have said on this website renewables alone will not be enough. Large central plants, mostly nuclear and some hydro, together with distributed renewables are viewed as the lowest risk vision of the future grid.

What is happening in Santa Barbera is also happening in Ontario's cities. Many larger municipal governments have now hired energy efficiency managers, and together with their local utility demand and conservation managers help builders design high efficiency buildings. There is also lots of financial help available now from all levels of government to retrofit existing buildings. For example up to $5000 in grants is available from the federal government alone to audit and then retrofit a consumer's house with better insulation and windows, appliances, etc.

Bob Amorosi, Resident of Ontario Canada

The majority of buildings, both residential and industrial, in the northern US and Canada usually have both heating and cooling systems for four seasons of weather. Much of the heating is natural gas. Indoor lights tend to operate full time for many hours a day, whereas heating and cooling systems draw relatively large power demands but only over several short periods of time over any given day. By getting the whole of society to switch to more efficient lighting (CFLs and LEDs), the base-load power demand over a large area will be lowered, and so too the peaks in demand. Granted some of the peaks will get stretched out a little over time by for example some electric heating running for longer periods during the heating season, offsetting somewhat the total energy saved by the new lighting, but this tradeoff is considered worth it.

The net result is a flattening of power demand curves. The benefit of lowering the peaks can increase the reliability of the grid and stave off the cost of building future power plants, and in areas where there is already insufficient peak generation capacity it will reduce the threat of rolling blackouts. The net energy savings over a large area over time also significantly lowers GHG emissions for those that believe global warming and climate change is a looming crisis.

And listen, when they were debating this in the Finnish Parliament, there were persons who actually believed that Finland could get the power they needed by constructing windmills.

Fred

http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSN2957446620080129

Also, to Fred and others talking about longer nuclear plant lifetimes, you simply are using faith-based policymaking. The US average retired plant lifetime has been 20 years. This is fact and not debatable. What is debatable is how long today's other plants will last and how long new plants will last. The two 2 GW plants in California are a bit over 20 years old and they're both replacing the steam generators to the tune of $700 million each. So, yes, plant lifetimes can be extended, but at what cost? The same arguments can be made for any technology, so we can't simply assume longer lifetimes and ignore the costs.

Jim, I am not wrong on the two points you mention and dismiss. I just mentioned that average plant lifetime in the US is fact, and thus not debatable. And the uranium cost is also fact and not debatable. We know what the costs for uranium are today, and we know the portion of levelized cost this represents. We also know that uranium costs have skyrocketed and will probably continue to skyrocket. All we don't know, and thus what is still debatable, is the degree to which the 25% fuel cost (half being uranium and half being refining costs) component of the levelized cost of nuclear power today will rise to as long-term contracts are renewed - at much higher costs. A 1,000% increase in uranium costs is significant and real. Those who wish to ignore this show yet again that they do not belong in the "reality-based community."

A 2005 OECD comparative study showed that nuclear power had increased its competitiveness over the previous seven years. The principal changes since 1998 were increased nuclear plant capacity factors and rising gas prices. The study did not factor in any costs for carbon emissions from fossil fuel generators, and focused on over one hundred plants able to come on line 2010-15, including 13 nuclear plants. Nuclear overnight construction costs ranged from US$ 1000/kW in Czech Republic to $2500/kW in Japan, and averaged $1500/kW. Coal plants were costed at $1000-1500/kW, gas plants $500-1000/kW and wind capacity $1000-1500/kW. -- At 5% discount rate nuclear, coal and gas costs are as shown above and wind is around 8 cents. Nuclear costs were highest by far in Japan. Nuclear is comfortably cheaper than coal in seven of ten countries, and cheaper than gas in all but one. At 10% discount rate nuclear ranged 3-5 cents/kWh (except Japan: near 7 cents, and Netherlands), and capital becomes 70% of power cost, instead of the 50% with 5% discount rate. Here, nuclear is again cheaper than coal in eight of twelve countries, and cheaper than gas in all but two. Among the technologies analysed for the report, the new EPR if built in Germany would deliver power at about 2.38 c/kWh - the lowest cost of any plant in the study."

Also, the US is one of those places that has access to relatively low cost fossil fuels: coal and natural gas. Though these fuels are certainly rising in cost very fast, catching up perhaps at some point with higher priced areas like the EU and Japan. Either way, it's not a question of fossil fuels or nuclear. The question should always be: "How can we dramatically reduce energy consumption through increased efficiency and what kind of renewable energy should we use?"

There is of course a continued role for natural gas, coal and nuclear over the next couple of decades as we transition away from these old power sources, but all new plant developers should take a very hard look at renewables instead, including baseload renewables like geothermal, biomass, and small hydro.

I just got back from a "concentrating solar power" conference in San Francisco and there are some exciting technologies being developed. Rocketdyne has recently partnered with United Technologies to form a new company called Solar Reserve. This new company is developed 250 MW "power tower" plants that will be completely dispatchable b/c they'll use molten salt thermal energy storage to store sunlight for days at a time. They claim (we'll see if they're right) that their technology will be cost-competitive with natural gas. And I also hear from the utilities in CA that they are taknig concentrating solar power very seriously b/c it is very low carbon, potentialy quite cheap over time, and a very good fit for load due to the fact that max output almost coincides with peak demand.

Reactor fuel with a 5% enrichment can produce 60,000 MW-days (thermal) per metric ton of initial (enriched) uranium metal. This equates to ~20,000 MW-days electric. Multiplying this by 24 and 1000 yields 4.8 x 10^8 kW-hrs.

Given that natural uranium is ~0.7% enriched (U-235) and depleted uranium is ~0.2% enriched, it takes 11.3 metric tons of U3O8 to produce one ton of pure uranium metal with an enrichment of 5%. This corresponds to ~25,000 lbs of U3O8. Dividing the kW-hrs (above) by this U3O8 mass results in ~20,000 kW-hrs being produced by every pound of U3O8.

If one assumes a uranium (U3O8) price of $100/lb, and divides it by 20,000 kW-hrs, you get a uranium ore cost of 0.5 cents/kW-hr. Not much, in the grand scheme of things.

And frankly, $100 is a very high estimate for the long term price of uranium ore. The $138 price was a very temporary spike, based largely on speculators. It has already settled back to $80. And these present day prices already take the fact that weapons uranium will dry up in 2010 into account (that's why they're that high). We may see high prices over the short term, but this is only due to the fact that it takes some time to get new mines permitted and into operation. We have a whole lot of closed mines that can be opened, a lot of known reserves that have never been exploited, and we have already found huge quantities of new uranium since the price went up. We can expect a large increase in production levels, sometime before our (US) new plants come on line. Over the long term, uranium prices will settle somewhere between $50-100 (probably closer to $50, i.e., 0.25 cents/kW-hr ore cost).

I work in the industry, and I know of nobody who is even remotely concerned about long-term uranium supply. Nobody who is building new plants (utilities, financiers, etc...) talks about the issue as a concern. The issue of ore cost, along with the issues of waste management costs and plant decommissioning costs (all of which will never amount to more than a fraction of a cent/kW-hr) are nothing compared to the main economic issue, which is, always has been, and always will be, the issue of reactor construction cost.

BTW, another thing nobody is even remotely concerned about is plants closing before 40 years (or 60 years for that matter).

Let me mention though that I can't imagine a new plant closing before 70 years. And of course, once we get into the amortization formula, there is a significant difference between 40 and 70 years. The thing to remember here is that Tam is trying to run a game on the folks in the cheap seats. Not only does he insist that the life of nuclear plants is 20 years, but he wants base loads to be carried by "SMALL" hydro. Why SMALL? The answer is that designing LARGE hydro might require the same kind of technological excellence as nuclear, which makes it strictly 'non-grata'.

Fred

I don't know what labor costs are on a levelized cost basis, but surely they would be subject to the same inflation concerns even more so. I think a doubling or more of engineers would create shortages which would drive salaries skyward.

So we have these 2008 predictions of electricity costs that say 5 cents (give or take) but that isn't accounting for inflation. What will inflation do to the plant costs 5 or 20 years from now? How about waste management? What will happen to the massive transmission infrastructure buildup costs when too much generation gets too area concentrated? What about the correlating water supply question also? What about the IOU's corporate greed made possible by this new oligopoly?

All things considered, how is this even being compared on the same $/kwh basis with relatively inflation-free, capital cost only, one time purchase renewables? Maybe I'm just not up on the new economics.

All I know is that if I purchase (or share the purchase of) some fuel free generator that may even be labor free (as in DG) for a single purchase price plus interest, in 20 years my costs DROP to zero when it's paid off, not double from inflation. What's not to understand?

Perhaps someone more knowledgeable in the details could help me answer those?

Fuel cost cited by EIA is .485 cents/kw-hr.

Assuming that figure represents 1/2 fuel cost and 1/2 fuel processing, then we have about .243 cents for the fuel. Even with a 1000% increase, that would raise the fuel cost to only about 2.66 cents/kw-hr (2.43 + .243 = 2.66). Not desirable obviously, but not a deal-killer either.

The fuel cost is certainly in the noise compared with the cost of building the plants.

And I don't think you can simply hang on the statistic of previous plant lifetimes. The newer ones are all having longer lifetimes. If I said to you: "For the past 20 years, the average cost of PV has been $10 per watt, so PV makes no sense", you'd argue that technology has advanced and they are no longer this expensive.

What has been the lifetime of plants built since 1990? What is is average lifetime when cancelled projects are omitted? I have faith that you are searching for the truth; for yourself and others. Hanging onto a single statistic is probably not the best way of finding it.

However, I am more in favor of smaller systems focused on offsetting any given building's needs onsite which fully eliminates the labor and transmission components of that amount of generation and makes co-gen/CHP a win-win for all. It's frustrating that the only discussion of solar thermal seems to be in relation to large centralized plants sitting way out in the desert when people just need to understand that the US averages around 4 kwh/day of free sun hitting each sqare meter of roof space. Sure, economies of scale can favor the bigger systems, but many of the parts that work on a large scale can be scaled down cheaper with a high volume small scale and the rest are more than offset by the CHP doubling of output.

There's a reason we all have refrigerators. Even though a plant could make all our ice needs faster and more efficiently, a one-time capital purchase is much cheaper to the consumer than an inflation sensitive (and taxable) ongoing service.

I know where you're coming from: you're trying to make fools of the voters. And you know something, in the near - as opposed to the distant - future you are going to succeed. But I'm philosopical about this farce; the voters are going to get exactly what they deserve. In the distant future however, when the voters finally come to their senses and figure out what your program is all about, they are going to insist on the nuclear plants that should have been constructed years ago.

Here in Sweden, with the price of gasoline almost twice as high as it is in the US, a tax will likely be put on gasoline because of some crazy idea originating with the parasites in Brussels about suppressing CO2. Thanks to nuclear energy, the Swedish air (and that of France) is the most CO2-free air in Europe, and if those two nuclear plants had stayed open, this tax would be unnecessary - in theory that is, because the ignoramuses in Brussels would have found some other reason to impose one.

Fred

"Purdue University recommends building a 300-mile "Indiana coal corridor" - at a cost of about $1 million a mile.

Overall, the Assn. of American Railroads estimates that $148 billion needs to be invested in freight infrastructure over the next 28 years. The industry says it needs federal assistance to help it cover about $39 billion of that cost. "

-- also --

"FutureGen Clean Coal Project to be Cancelled?"

Apparently IGCC costs a LOT MORE than nuclear ($1.8 billion for a 250 MW plant)

Tam: Where I'm coming from is easier -- Choose one, coal or nuclear. -- At now, there are no alternatives and groups like yours are the problem, not anywhere near the solution.

All reactors that have been shut down were either prototypes, or were shut down well before they had to, usually due to politically-motivated attacks/actions. Lifetimes for prototypes are not expected to be as long, as their performance and economics are overtaken by the follow-on generation (given the steep learning curve). Despite this, many of the prototypes, like Big Rock Point still operated for ~30 years.

Most of the politically-motivated plant shutdowns occurred in the 1990s. While many of these actions were based on economic analyses that were questionable in the first place, they were also abbetted by the time period in which they occurred, when we had a temporary natural gas glut. Care to guess what the assumed future natural gas price was in the analysis that was the basis of the decision to shut down the Trojan plant?? Less than $2/MBTU!!! In retrospect, it's downright embarrassing. If those plants had hanged on for just a few more years (or were sold to a large reactor operator), they would be operating today, and there would be no talk of shutting them down. Plant aging was NOT the reason they were closed!! So, you can't use that to support the notion that the plants don't last that long.

By continuing to cling to the discredited notion of ~20-25 year nuclear plant lifetimes, Tam is undermining whatever credibility his other arguments may have. Why would we trust his judgment or analysis on anything else?

As for steam generator and vessel head replacements, the new set of components will last far longer than the last. Believe it or not, the industry has learned a thing or two (from experience) about metallurgy and wear issues. The replacements will last for the rest of the plants' 60-year lives. For new plants, it is likely these components will never have to be replaced, but at most they will have to be replaced once over a plant's 60-80 year life. A one-time capital expense of ~$600 per installed kW, over a 60+ year plant life does not impact the economics much. At that time, the plant's initial construction is paid off, and its operating costs are much smaller than that of competing sources. $600/kW for 30-40 more years of nuclear plant operation is an economic no-brainer. Such equipment replacement issues do not change the central fact that nuclear power's overall economics are almost entirely governed by the upfront construction cost.

Do people understand English here? This is the third time I've stated this.

Fred, I don't know how you ever became an economics professor. You have yet to presenty any cogent numerical economic analysis. All you do is spout rhetoric and impute impure motives to those who disagree with you. I prefer facts.

Keep in mind we can play this game with any technology. If we want to extend lifetimes for any technology, we can just throw money at it. How much should we throw?

An ore cost of $200/lb would correspond to an electricity cost contribution of ~1 cent/kW-hr, which would add ~0.75 cents to current power costs (based on an assumed present contract price of $50/lb). In theory, this would add ~$7/ton to whatever CO2 cost is required to have nuclear beat out coal. I must stress, however, that I see no possibility of uranium getting anywhere near this. No long-term contract will ever exceed $100 (i.e., a 0.25 cent increase from today).

As for the coal comparison, that project was not merely IGCC, but the FutureGen project, which involves CO2 sequestration. This truly is a leap in technology, and this is definitely a small, prototype plant. Thus a comparison to commercial nuclear plants may not be entirely fair. A fairer comparison would be to the high-temperature, gas-cooled, hydrogen production reactor DOE has planned for the Idaho National Lab. The cost estimate is ~1 billion for a ~150 MW plant, which is about as bad as the FutureGen quote you referenced.

Nuclear's on-going costs are, and always will be, a small fraction of nuclear's overall cost. The operations and maintenence costs, which include labor, fuel, and the occasional hardware replacement, are only ~2 cents/kW-hr. This is the only component that is potentially subject to inflation. So, you should apply any escalator to that (2 cent) cost only.

All waste management and disposal costs, and all plant decommissioning costs are paid for by interest-bearing trust funds that are paid for by small per-kW-hr charges (~0.25 cents/kW-hr for decommissioning, and 0.1 cents/kW-hr for all waste management). Invesment accounts (trust funds) rarely, if ever, experience a negative real interest rate, over any significant time period. Thus, as time passes, these funds get larger and larger, and become more and more able to cover the costs, accounting for any inflation. Even if these funds somehow yielded tragic performance, all we're talking about is possibly having to contribute 0.2 cents, vs. 0.1 cent, to the waste fund, or perhaps another ~0.2 cents to the decommissioning fund. There is no potential here to significantly impact nuclear's overall cost (which, once again, is pretty much only sensitive to the construction cost).

Once built, the going forward cost for a nuclear plant will always be much lower than the total cost (including construction) any alternative source of new capacity that would otherwise replace it. In terms of the initial decision to build a nuke, such expenses, that occur decades down the road, well after it is paid off, do not have much effect on the economic analysis.

Finally, I've been hearing (here, I think), that solar PV panels and wind turbines also have finite lifespans, perhaps only 20 years. It is also true that their operating costs (labor and materials, subject to inflation) are not negligible, and may even be over one cent/kW-hr. Thus, the lifespans of the equipment for these renewable sources is no longer than that of nuclear plant steam generators and/or reactor vessel heads (whose lifespan is ~30-40 years). The only difference is that the nuclear plant only has to replace a few key components (at a small fraction of initial construction cost), while for wind and PV, one may have to buy a whole new system. To the extent that way-downstream costs would effect any decision to build nuclear or renewable, I'm afraid that its about a wash at best.

It is not all all reasonable to view a 40-year lifetime as optimistic, for several reasons that I've already given. No plants have been closed due to plant aging problems/effects. The only plants that have been closed due to a legitimate inability to economically compete are a few small prototype plants that were built in the 60s. None of the commercial plant closures in the 90s had anything to do with plant aging effects. A large number of our operating plants are almost 40 years old right now. They are not having any operational problems and there are no plans to close them. Their operating costs are MUCH lower than the cost of replacing them. That is why every single owner is pursuing license extension.

You suggest that it will become uneconomical to continue to run these plants before they reach 60 years (or even 40!). If that were true, the utilities would not be seeking license extensions, or paying to replace major plant components for that matter. As I said above, paying ~$600/kW for 30-40 more years of nuclear plant operation is a no-brainer. They've done rigorous economic analysis, and they've come to the obvious conclusion. Gas is not $2/MBTU anymore (and never will be). The fact is that, even with all periodic equipment replacement costs averaged in, the overall average (long-term) operating cost of an existing nuclear plant is far lower than any of the alternatives. The utilities know this.

How much money we should "throw" at keeping any existing power plant in operation is strictly an economic question; one which the utilities are more than able to answer. Once again, as I keep saying, the best approach is to just let the market make such decisions. We need to fix the fact that fossil fuels' massive external costs are not counted, period, that's all. All these purely economic issues, that we're discussing here, can be solved by the market, and by the utilities.

I'm still waiting to hear you say that, given your confidence that pretty much all renewable options are cheaper than nuclear, you are withdrawing your support from any and all renewable portfolion standards, and any renewables subsidies for that matter.

I would in fact support the elimination of all subsidies for power and a complete market system. I have no doubt that not a single new nuclear plant would be built. For a very good piece of evidence to support this, see my earlier link to the just-announced decision by MidAmerican to cancel their proposed Idaho merchant nuclear plant.

There has not been a single nuclear plant built anywhere in the world that is a merchant plant.

They are all rate-based (meaning the costs are guaranteed to be recovered through utility rates, for those readers who are not familiar with this term). So your discussion of "letting the market" determine whether steam generator costs, etc., should be expended to extend plant lifetimes is a non sequitur. There is no market involved. It's purely a regulatory decision.

In fact, in California, no one even knows the full cost of our nuclear power plants for consumers. As I mentioned in a previous post, the Energy Commissions' most recent analysis of the cost of San Onofre and Diablo Canyon was inconclusive, but did find that costs passed through to ratepayers for Diablo Canyon between 1985 and 2006 were 10.0 c/kWh. And this was not the full cost b/c ratepayers were shielded from many costs. There is also much controversy over expending the $700 million to upgrade the steam generators b/c of the ongoing enormous burden to CA ratepayers. As you may know, the CA deregulation fiasco was sparked in large part due to the very high costs incurred by the utilities for their nuclear plants (see the 1994 Blue Book).

Re uranium costs, your analysis is belied by the Nuclear Energy Institute (which you may be familiar with). NEI found that total fuel costs are about 25% of the total levelized cost, and uranium is about half that. And these figures assumed the very low costs we saw from a few years ago. I am not, however, concluding that NEI is necessarily right, so I look forward to your response as to why they are wrong.

How did I become an economics professor? Well, it wasn't due to my pedagogical abilities, which are right there at the top of the heap. IT WAS DUE TO LUCK, THAT'S HOW! But I can assure you of one thing, Counselor, If you ever find yourself in a seminar room or conference with me, I'm going to make you feel so inferior that you'll never want to hear the word energy again.

What I would like for everyone to know just now however is that nuclear energy is a sure winner. Regardless of how those new plants that Malcolm Rawlinson mentions above come about, who pays for them or doesn't pay for them, they are on the way, and that's everywhere. Even the most ignorant professor of economics at Tam's favorite university - and gentlemen, if we are talking about the University of California at Santa Barbara, that means one of the most ignorant in the world - probably understands that fact. Do you know why? Because the optimal solution of the energy 'problem' for countries like the US and Sweden is a base of reliable and comparatively inexpensive nuclear power, on top of which there is a big slice of renewables - wind, sun, biomass, hydrogen, etc. There will be some other things too, but somebody else can go into that just as they can determine the relative sizes of the two non-nuclear bundles.

John Sutherland says that Tam does show any respect for facts. Of course he doesn't. What are facts as compared to his career?

Fred

Have you read your latest brief on DCNPP & SONGS costs? Even the interesting characters on the California Energy Commission might have a problem with being classed as nonentities. Your less than conclusive rhetoric appears to be catching up with your truly unique logic!

Similarly, China now makes half of the world’s cement and flat glass, and about a third of its aluminum. In 2006, China overtook Japan as the second-largest producer of cars and trucks after the United States.

Its energy needs are compounded because even some of its newest heavy industry plants do not operate as efficiently, or control pollution as effectively, as factories in other parts of the world, a recent World Bank report said.

China’s aluminum industry alone consumes as much energy as the country’s commercial sector — all the hotels, restaurants, banks and shopping malls combined, Mr. Rosen and Mr. Houser reported.

Moreover, the boom is not limited to heavy industry. Each year for the past few years, China has built about 7.5 billion square feet of commercial and residential space, more than the combined floor space of all the malls and strip malls in the United States, according to data collected by the United States Energy Information Administration.

All these new buildings require China to build power plants, which it has been doing prodigiously. In 2005 alone, China added 66 gigawatts of electricity to its power grid, about as much power as Britain generates in a year. Last year, it added an additional 102 gigawatts, as much as France.

That increase has come almost entirely from small- and medium-size coal-fired power plants that were built quickly and inexpensively. "

Does anyone care to know how many small distributed 5 kw generator units would be needed to supply " Last year, it added an additional 102 gigawatts " ? That would require 20.4 million new units, or about as many as there were new auto's built last year worldwide. Just for China to go renewable, provided a technology existed, would require developing an industry the size of the worldwide auto industry.

China is indeed a problem and they are building huge amounts of new coal plants. They're also investing heavily in renewables and nuclear. They plan numerous new nuclear plants and a crap load of new renewables (30 GW of new wind by 2020, last I heard). They installed the 3rd largest component of new wind in 2007 so they're making this reality. They also have by far the largest installed capacity for solar thermal on homes, with literally 2/3 of the global market. These renewables are currently dwarfed by new coal plants, but the future will be different.

Even for China, it is not simply a question of coal or nuclear. The question is, again, should they invest more in energy efficiency (improving the efficiency of their existing infrastructure), renewables, natural gas, nuclear or coal? They are looking at all these options and have unfortunately decided to invest primarily in coal to date. However, did you see the news over the last week about China's coal crisis? Due to various factors, they are experiencing shortfalls in coal supplies and coal has hit new record prices in Asia over the last few months. UBS just dramatically raised its coal price forecasts. And of course China became a net importer of coal last year. So there may be some real changes in China's calculus quite soon.

They have a good start on renewables, with a 10% by 2010 renewable portfolio standard and some other ambitious goals for renewables, etc.

But, back to the US, again nuclear makes no sense economically.

And I can conclude fairly that none of your nuclear proponents are actually serious or fairminded about this matter b/c none of you have yet acknowledged or discussed MidAmerican's decision to cancel its Idaho nuclear power plant - based purely on cost. Anyone? Anyone?

Nuclear construction is acknowledged by many to be very costly, and it's very hard for anyone to swallow the risks of investing in it. This is complicated by regulated markets making private investment even tougher to attract, especially in where government is the regulator, for example like it is here in Ontario, b/c government policies and regulations tend to change like the seasons and cannot be counted on over long periods of time.

What does a seasoned stock investor do when faced with many risky choices - he diversifies by investing something in everything, including the more expensive choices. What will Californians do if nuclear is completely ruled out today based on cost predictions, and then 20 years from now it turns out to be a huge mistake as many authors here would argue. Is this a risk worth taking ?

Ontario is not so inflexible (as you appear to be). The politicians here view the risk of not using nuclear to be too high even if it will cost the taxpayers and ratepayers more. Just look at what is happening to China's decision to favor coal so heavily over the other choices. There's a good chance they will regret it.

If you really are willing to leave it up to the market, and abide by the result, then we agree on policy, and there's no point in belaboring this further. We should lobby to get those policies passed and just wait and see what happens.

Just to clarify the terms, however, I said that fossil fuels external costs need to accounted for in their price. Otherwise, most generation will be provided by fossil. Specifically, we need large taxes to reflect these cost/effects, or outright requirements for the reduction or elimination of emissions/imports. Agreed, nuclear has never been built strictly under the "free market" because fossil fuels are somewhat cheaper due to the fact that they are held to vastly lower requirements and their external costs are not counted. I have never said otherwise. But its also true that renewables have NEVER been built under a "free market" either. They have only been built w/ large subsidies and/or outright mandates. I am willing to leave the choice between nuclear and renewables entirely to the market.

As for subsidies, I'd happily agree with eliminating most or all of them. Realize, however, that on a per kW-hr basis, renewables are at least as subsidized as nuclear, and fossil fuels are subsidied as well. FutureGen, IGCC, and the Alaska gas pipeline all get both loan guarantees and tax credits, to name just a few examples I know of. Renewables get PTCs, help with transmission costs, and a whole lot of other incentives and favorable terms. And of course, there's no subsidy like an outright mandate for use (essentially infinite). The per kW-hr subsidies being thrown at renewables in (European) countries that are actually trying to generate a significant fraction of power with them are truly astonishing (10-50 cents/kW-hr).

As for the uranium ore cost (per kW-hr of nuclear electricity), there is no potential source of error in my calculation. When it said that fuel is 25% of the cost, NEI was clearly referring to the (~2 cent) total operating cost of an existing plant. It is general knowledge (within the industry) that nuclear's "fuel" cost is ~0.5 cents, i.e., ~25% of the overall operating cost (of ~2 cents), where the "fuel" cost refers to the entire cost of the fuel assemblies (including ore processing, enrichment and fuel assembly fabrication). The statement that ore is half of the total "fuel" (assembly) cost agrees with my calculation of 0.25 cents/kW-hr, for a uranium price of $50. If the NEI site text says or suggests anything else, it needs to be fixed.

On the MidAmerican pullout, so one proposal was not persued, so what? There are still over 30 going forward. Percentage-wise, coal is faring much worse. I'm hearing that a majority of the coal proposals over the last several years are not going forward. It's also common for renewables proposals to not go anywhere. It happens.

The price of all supply options have gone up alot, due to higher steel, concrete and other materials costs. This makes conservation more attractive. I think that, given the higher costs, utilities think that people will conserve more, and that various conservation options may now make sense. Basically, over the next several years, they will mount an all out effort to pick all the "conservation fruit" that is out there, both low-hanging and higher-hanging. If successful, this may reduce or eliminate the rate of growth in electricity demand over the next several years, thus avoiding the need for new capacity. This may allow them to "wait out" the spike in materials prices. It must be understood however, that this will only be able to supress demand growth for a limited time, after which (i.e., after all the fruit is picked), demand growth will resume, perhaps even at an accelerated pace. Hopefully the supply options will be ready by then.

Anyway, let's just cap carbon and see what happens. Given your economic arguments/confidence, you can't justify actively blocking nuclear and not giving it a chance to compete. The good news is that it looks like we will get to see what happens (under a carbon cap), since the next president will be either a democrat or McCain.

Perhaps we could take a Kyoto-like approach, requiring the number of illegal aliens in the US to be reduced to x% below 1990 levels by some date certain, perhaps keyed to the date certain for carbon emissions reductions. Unlikely, however, under a Democrat or McCain.

The only problems might be that: the carbon cap required to avoid further increases in atmospheric CO2 concentrations approaches zero asymptotically; and, reversing the increases in atmospheric CO2 concentrations and the acidification of the oceans would require the extraction of CO2 from the atmosphere once annual CO2 emissions reach the zero level.

Any US president who imposed carbon taxes or a carbon cap on the US in the absence of corresponding carbon taxes or caps imposed by all other global governments would deserve to be impeached, at the least; and, preferrably, drawn and quartered. No local, county, state, or federal government can take any action which would solve a global problem on a local basis.

Global problems are amenable only to global solutions.

I myself am a big proponent of greater energy efficiencies and more conservation at the consumer level. They not only lower demand growth but they continue to foster innovation within the very industry that made Silicon Valley famous in your neck of the woods, which is the industry I work in.

If our utilities focus much more on promoting more consumer conservation and power efficiencies over the next several years, then it is in governments' and the electricity industry's best interest to support our utility companies as much as possible since it will take a lot of consumer education and money to see become widespread throughout the public.

Maybe you should sign up for a course in Econ 101. In the case of Ontario, thinking in terms of opportunity costs and the aggregate of ratepayers, nuclear is unbeatable - assuming that Tam doesn't do the calculating, and concludes that slightly higher energy costs today cannot be compensated for by lower (relative) costs in the future, as was the situation in Sweden.

As for leaving it to the market - COMPLETELY to the market - how is that supposed to play out when you have the kind of increasing returns to scale that exist with e.g. nuclear and natural gas. The voters want reliable and comparatively inexpensive electric power, and they should be given this instead of bizarre lies about how their future will be made sweet if only they replace nuclear with wind, sun, biomass and "SMALL HYDRO".

As for China, they are NOT going to ROB the people in the underdeveloped parts of their countriy by using e.g. renewables instead of nuclear, because that's what it would come down to.

Fred

Fred

Here in Ontario our provincial government is in favour of building more nuclear, and they probably think its cost over the long term is competitive for large central stations, but I am not privy to knowing whether they think its opportunity cost is "unbeatable". My point to Tam was they find it hard to swallow the huge up-front investments required to build them since they have usually been at taxpayer's expense and not private investment, and because they have been running deficits for the last many years until just now, with huge pressures for other infrastructure rebuilding in our aging cities and the massive health care cost in a publicly funded system. Nevertheless they are budgeting for billions to spend on nuclear and the refurbishing of the grid over the next 25 years.

The debate here on whether nuclear should be discounted completely as in Tam's case is better left to economists and environmentalists. I only thought it would be helpful to enlighten this forum on what's going on in Ontario. For my own good from here on I will stick to posting comments on subjects I am more educated in, which is the prospect of fostering much more consumer conservation and power efficiencies with new electronics technology.

The art of predicting the future economy of any given choice is an "art" in the true sense of the word. The world is full of stories of economists that blow their predictions and those that are accurate. On that note I have the utmost respect for economists because they are brave enough to accept the future as their ultimate judge. I don't know your past record, but please keep up the dialogue on this website, it goes very far in educating others like me.

But to get back to nuclear, here we have a no brainer. As far as I'm concerned, you can tell the decision makers in Ontario that - if they need a large amount of electricity - they can't loose if they build nuclear plants. In fact new facilities should have been constructed a few years ago when the real interest rate was close to zero. And yes, I don't know of any country in Europe or North America that has lost on nuclear, regardless of what anybody thinks.

Something else I'm not worried about is the cost of power stations. I don't know what is going on in Canada today, but I would be willing to bet that politicians and their constituents throw away enough money on nonsense to build all the extra power stations that are probably needed. That's what they have done in Sweden. We need more electricity and at a lower price, so they close two nuclear stations and send billions of dollars to parasites in Brussels and stone age countries.

Where these new investments in power are concerned, it would be nice if they were undertaken by private interests; but if not, governments shouldn't hesitate. For example, why should Americans be denied the electricity they need because their government decided to mismanage a war that shouldn't have been fought - and wouldn't have been fought if Mr Clinton had been interested in something besides jogging and playing the saxaphone, and maybe a few other things.

You say that decisions about nuclear should be left to economists and environmentals. That's a good way to get everything wrong. For instance, your mentor Tam knows as much about nuclear as I do about brain surgery.

And so on and so forth.

The older nuclear units, once their construction debts are paid off, are stunning cash cows for their owners. Also, real bargains for the rate payers.

The Trojan plant in Oregon appears to have been replaced with combined cycle plants using ~$8/mmBTU natural gas versus ~$1/mmBTU nuclear. Pretty dumb decision for the rate payers but I suspect the "greens" were delighted.

As to the Idaho situation, might not be enough demand to justify building a nuclear unit at that location -- this is conjecture on my part. Mike

IPPs may own nuclear plants today, but not a single merchant plant has ever been built anywhere in the world. Investors simply won't take that risk. They've all been rate-based, shifting all the risk to ratepayers - with very high costs in many places such as California (see my posts above).

If you have a power plant (or your house, for example) with a +60 year lifetime and pay it off in 20 or 30 years, it is a real financial bargain when it's paid off. Should you not buy a house because you have to borrow money to pay for the debt in the interim?

On a "hand grenade" comparison for a new plant constructed today Fuel Cost O&M cost Fixed cost (including debt repayment) Combined-cycle 75% 10% 15% Nuclear 15% 30% 55% Coal 30% 25% 45% To achieve a 15% return (before taxes) on equity, the nuclear unit's sell price would be something like $95/mWh, the coal plant’s price about $60/mWh and the combined-cycle plant would need to sell power at roughly $65/mWh while. This is at a natural gas price of $7/mmBTU -- price on NYMEX was about $8/mmBTU last week.

What's the price of natural gas going to be in 5 years, 10 years? No idea, other than it will likely be significantly higher than it is now. Well, as long as you can pass the cost of fuel along to the poor consumer, who cares. I submit that kind of attitude is not helpful.

Should we "bet the ranch" on renewable energy? Would not be prudent, in my opinion. Simple fact is that the amount of energy we use dwarfs (by orders of magnitude) the practical capabilities of "green" energy.

Is the higher capital cost of a nuclear plant worth it? Well, it certainly was for the folks who own them now. If history repeats itself (they tell me it does), an investment in a nuclear plant today is likely to be pretty profitable for everybody in the future.

Ultimately, however, "You pay's your money and takes your chances" ... unless of course you are the government, in which case you simply empty out the consumer's wallet if you screw up.

As for amortizing a power plant (or a house) in 30 years when its 'life' is 60, maybe that doesn't make economic sense. The amortization period should probably be 60 for the plant, because its actual life is AT LEAST 70 - unless of course Tam is doing the math. And of course, making it 60 instead of 30 has a healthy effect on the capital cost.

We need to distinguish public policy from investment strategy in this case. It may indeed be a good investment strategy for an IPP to purchase nuclear plants after they were built and rate-based. But is it good public policy? My many posts in this forum have attempted to show that it is far from good public policy, based on the cost alone (ignoring the many other problems for now). So some IPPs are making good money on nuclear plants now? What about the actual costs to consumers?

It's ironic that you slam the government at the end of your posting - for the wrong reasons. Because what you're suggesting, it seems, is good public policy is to have utilities ratebase new nuclear plants, and then have IPPs buy those assets once their debts are paid for (with all the risk on ratepayers). Now that's government (which regulates the utilities) working directly contrary to the public interest!

My main point in this forum has been that if we're looking at power production choices, we can eliminate nuclear based on the cost alone. It's generally not been economical in the US, and it is even less likely to be economical in the future. If we have a cap and trade or some type of carbon tax to internalize the cost of carbon, nuclear may become more competitive - but so will energy efficiency and renewables, which are the far better options.

Can EE and renewables do the job? Most definitely. Increase efficiency alone can do much toward meeting future demand on a nationwide basis. In states where EE has not been a focus, there is in fact more cost-effective potential than in states like California, which have been investing in EE for three decades. And renewables have enormous potential, particularly a combination of wind, large-scale solar, geothermal and small-scale solar for home and business use where it makes economic sense. In California alone, there is about 5,000 MW of new wind in the cue, just waiting for transmission lines to be built over the next couple of years. And there is literally 50,000 MW of large-scale solar proposed for Southern California, which can be made dispatchable with some technologies (trough or power tower, but not dish). The large solar is a bit more speculative, but it seems some companies are figuring out how to make it work in today's price environment, where renewables have to compete favorably on price with natural gas plants (the "market price referent" structure).

One of the smaller cities in this country, Växsjo, has done very well with renewables. People go there from all over the world to see how well it has gone for them and ostensibly to learn. The question then is could what has been achieved on a small scale be achieved on a larger scale - say e.g. the entire country. The answer is no. What they have achieved on the smaller scale is due to the nuclear and hydro background that has been provided.

In the long-run of course, things will be different. In fact the long-run would not be far away if Brussels and stone age countries did not receive most of the Swedish government's precious attention. There is no question at all but that if all the existing and potential technical talent in this country were fully mobilized, Tam's dream about renewables might be possible. Of course it cant be mobilized, because technological excellence is something the greens hate more than anything else in the world.

Vaxsjo is indeed a good example, as is Malmo in southern Sweden, for how cities can get off fossil fuels.

But Sweden itself is making great progress toward its "fossil free" by 2020 goal and will be relying on biomass, hydro, wind, and biofuels to meet that ambitious goal.

Denmark, your neighbor, already gets 20% of its power from wind and plans to go to 50% soon, with the support of the center-right government and the non-profit grid operator. Hydro in Sweden and Norway helps balance the wind power, but the entire grid in Europe is interconnected, as is the North American grid, so the potential for balancing intermittents like wind and solar against firm renewables like hydro, biomass and geothermal is large.

Sorry for the delayed response.

Utility records list several characteristics of their inventory of spent fuel assemblies, one of them being the "burnup level" of each assembly. This refers to the total amount of thermal energy released by the assembly over the entire time period it was in the reactor. Burnup levels have always been quoted in terms of megawatt-days per metric ton of uranium metal initially present in the assembly. I know from experience (in the industry) that fuel assemblies are currently attaining burnup levels of up to 60,000 MWd/MTU, and they need an initial U-235 enrichment of ~5% to attain that burnup level. So, I used this input data as the basis of my analysis.

A conversion from uranium metal to U3O8 has to be done at some point in the calculation, but it doesn't matter where. I chose to do the conversion in the cost part of the analysis, as opposed to converting the burnup level into megawatt-days per metric ton of U3O8. The answer's the same, regardless.

Tam, I dont want an interconnected grid. An interconnected grid means higher energy prices for me - or maybe I should say my wife, because if I saw our electric bill I would probably have a heart attack.

You say that Malmö is a good example. A good example of what? Thanks to the EU it will cease to be a Swedish city by 2020. As for Denmark, if they had had any intelligence at all they would have bought the Barsebäck plant instead of insisting that it close down. The economics and political argument here is so simple that I wont bother to provide it.

And listen, I am not against renewables in the long run - in fact in the long run they are essential, and everything possible should be done to move the long run toward us. What I'm against is pretending that in the short run renewables can replace nuclear without depressing our (i.e. my) standard of living.

And yes, Sweden is making great progress toward a fossil free community -according to you. They close the nuclear plants and start talking about importing natural gas, while importing electricity from Denmark which is a coal intensive country. Brilliant.

Fred

The California Public Utility Commission (CPUC) has approved long-term prices for the state's utilities to buy renewable energy from their customers. For seven of the state's utilities, the so-called "feed-in tariff," approved on January 31, applies to renewable energy systems located at public water and wastewater facilities, but for Pacific Gas and Electric Company (PG&E) and Southern California Edison (SCE), a separate feed-in tariff applies to any customer-located renewable energy system up to 1.5 megawatts in capacity. The tariff requires signing a long-term contract for 5, 10, or 15 years, but the price is adjusted based on the time of day of the power generation. For instance, for a system producing power throughout the day, a 15-year contract signed with SCE in 2008 would earn about 15 cents per kilowatt-hour on a summer weekday, while a system generating power from 8 a.m. to 6 p.m. (such as a solar power system), would earn about 22 cents per kilowatt-hour under the same circumstances. Overall, the tariffs range from 8 to 31 cents per kilowatt-hour. Facilities earning the tariff cannot be participating in other state incentive programs.

Feed-in tariffs have been used in other countries, such as Germany, to encourage a rapid growth in customer-located renewable energy systems, but the CPUC has set limits on the current tariffs.