Bravo! Prepare for the incoming arrows.

Ed

"UPC Wind, an independent North American wind power company, today commemorated the first year of full commercial operations for Mars Hill Wind at a one-year anniversary event. In its first year of operation, the site has generated enough power for more than 19,000 New England homes. .... Since beginning commercial operations on March 27, 2007, Mars Hill Wind has generated more than 133,500,000 kilowatt hours (kWh) "

http://topics.energycentral.com/centers/wind/news/detail_en.cfm?enid=9989493

In attempting to learn what the proponents are always trying to hide (the actual capacity/ availability of the generation) I googled for "UPC MARS HILL" and learned that the wind farm as originally proposed is rated at 42 MW. Doing some quick math reveals that it's actual capacity factor over the past year was 8.68%, although that article also rated the facility at 38,000 "homes" so perhaps it's only half operating and actually achieved 17.35% capacity? (Wind generator propoters would do themselves a huge service to get rid of that annoying "home" unit of electricity. Go metric or something.)

The "propoters" don't want you to know certain things; and, the reporters are too lazy, or too uninformed, to calculate and clarify

Ed

Here is another. TVA has a wind farm on Buffalo Mountain near Oliver Springs, TN. It has a capacity of 29 Mw. During the period from November 2007 through January 2008 it produced 792,321 kwh. This is about 1.24% of the rated capacity.

Ken

It may please you to know in Ontario Canada our provincial government has just now embarked on a procurement process for our next large nuclear plant, which is likely to be our biggest ever. They share the view that nuclear is probably the best choice for base-load central generating stations, and where ditributed renewables will augment them over time. They even have plans to shutter all our large coal-fired generators in part because of their pollution and GHG problems, and the public's increased economic health care costs they helo to create.

In the province of British Columbia regulators and the large central utility operator BC Hydro appear much more interested in "clean" renewables. They have approved dozens of future new small hydro generators for the many untapped rivers and streams in that province's mountains. They have hundreds more applications in the queue. This is stirring up the anger of environmentalists and citizens in BC, leading to public demonstrations, because of the ecosystem disruptions to their pristine water ways and local surrounding forests.

Too bad BC doesn't consider building one or two nuclear plants instead. What BC may be ignoring is that if global warming is for real and continues, the mountain glaciers that feed their water ways will begin to disappear and dry up, if they haven't started to decline already.

As long as electric power is a real-time on-demand commodity that is used on a discretionary basis by consumers for much of their power needs, we will always need reliable large central generators that have peak demand reserve for base-load needs, or alternatively some revolutionary economical storage mechanism in their place.

Bob Amorosi, M.Eng. Resident of Ontario Canada

Anyway, the issue in BC probably isn't warming, or capacity factors or cost. It's votes. The people who are in want to stay in, and one way to risk that not happening is to tell the TV audience that nuclear is less expensive and more reliable than wind or something when they don't want to hear it.

This morning on Swedish TV one of the big pieces of news was that nuclear had fallen out of favor again in this country. Of course it has fallen out of favor, since everybody who can lie with a straight face tells the comatose electorate that wind will supply them with all the power they need at bargain basement prices. Ed Reid says that reporters are too lazy or uninformed to give their audience the truth, but in point of fact the laziness and ignorance is everywhere: try signing up for a tour in some of these 'think tanks' and economic research institutes for example.

Everything considered, the rise in energy prices is a good thing, because it will clarify for friends and neighbors just what kind of energy world they are living in.

Fred

Bob

Within hours of my post yesterday above, a news story aired in Canada last evening that the BC government has capitulated on some of the proposed approved hydro generators.

Some of the proposed generators would have required 7 river tributaries to be diverted that feed a large river in BC's interior, and a new transmission line to be built through a large provincial park to carry all the new power to more populated areas. BC's Environment Minister decided late yesterday to block them, the official reason being to prevent the proposed new transmission line from invading a pristine provincial park.

Funny thing - the Minister's announcement coincided with about 1000 people from a small community near the proposed generator sites holding a public protest meeting yesterday. As you say above Fred, "votes" tend to be a much more relevant issue for politicians than anything else. I'll bet this is what forced the BC government's hand yesterday, not true environmental concerns.

If I was much younger perhaps I would have chosen to become an economist instead of an electrical engineer, and signed up for some of your course teachings Fred. You have this uncanny ability to read social behavior all around the world, especially with politicians.

When will the large majority of voters catch on?

.

The article contains several "code phases" ("a threatened wilderness area","a First Nations archeology site ","an ancient First Nations travel route ") which i've come to interpret as really meaning "We want a piece of the action for free". Not to say that every situation applies, eg. this particular one ("Water would be sucked away from a popular 500 metre falls") looks like it may actually be more damaging than useful, in which case the defenders IMHO should be proposing nuclear generation as the obvious solution.

On another subject - here's my ideal power system world as a consumer.

I would like to see large central stations like new nuclear be built to keep the grid supply reliable, and I might even be prepared to pay higher billing rates to keep it that way as long as the billing rates reflected the system costs and were not making system anyone in the power industry overly rich in the process. To compliment this I would seriously look into investing in distributed renewables, especially for my own property such as solar PV or solar thermal. I could then have "free" power some of the time, selling any excess generation capacity back out onto the grid and even make a little money doing it to pay for my solar investment. During the poor or no sunshine periods I would then switch to and rely on the traditional grid, perhaps using a reformed market system like your IMUEC to buy grid power from whomever I choose whenever I choose.

In future if battery storage technology advances a lot further, I might even consider storing my excess generation capacity on sunny days. Then I have a back-up too in case something in the traditional grid collapses and cannot provide reliable power.

Just a dream, but dreaming is necessary to realize a vision of change.

Building new nuclear generators would complement IMEUC because it would provide the grid a base of reliable supply. Then when I go shopping for power on the grid I would have retailing choices that would include ultra-reliable sources like nuclear. I mean there are times like when my furnace is running in winter or when I'm cooking dinner on my electric stove that I simply must buy from a reliable source. At other times perhaps reliability is not so critical and I could buy from a wind mill.

The fact that nuclear can achieve this level of performance/assurance for such a small amount of money illustrates just how superior the technology is with respect to waste stream issues. For fossil plants, the cost of any long-term sequestration of their wastes will be more than an order of magnitude higher. This makes it (quantitatively) clear that the benefits of zero CO2/pollution emissions vastly outweighs any "problems" with nuclear waste.

As far as economics in general, it must be noted that the cost presented in the article are the operating cost, and do not include capital costs. Nuclear's operating costs are indeed very low, but capital costs are the issue. The comparison of overall costs is more instructive (unless the idiotic notion of closing an existing nuclear plant is being considered, but that's a no brainer anyway).

As for wind's economics, it must be noted that the intermittentcy issue is far smaller in regions with massive hydropower, like Scandanavia. Dam reservoirs are the one practical and economic means of large-scale energy storage that we have today, and dams can be used to even out wind's erratic generation. What I once said about solar power in the Sahara applies for wind power in places like Scandanavia. It will make economic and practical sense there first. IOW, if it can't make it there, it can't make it anywhere.... Thus, in places like that, it simply boils down (to a greater degree) to simple, per-kW-hr economics. What is the total annual generation versus the overall capital and annual operating cost. It remains true that the (unexpectedly?) low capacity factors referred to in some of the responses will still have a negative impact on per-kW-hr economics, as they reduce the annual generation, but it is not nearly as bad as a situation where this causes supply problems, grid problems, or required expensive fossil fuel backup, etc...

I've read that they are going to close the massive coal plant at the Nanticoke site in Ontario (the largest coal plant in North America). I've also heard that the communities around the plant are actively lobbying the govt. to build a nuclear plant on the site. This was not in response to any govt. request or overture. They did this proactively, of their own volition. They actually want/prefer a nuke.

When you think about it, it makes perfect sense. You have a place with a huge coal power plant, with a massive transmission infrastructure in place. You also have a large local work force that worked at the power plant that would otherwise need jobs, and would transition into working at a nuclear plant easier than anything else. Not only are transmission costs avoided, but the grid is basically designed to have a large supply source at that location. Thus, adding capacity at that location may retain grid stability, whereas building at another location may reduce stability, as the grid is designed to take a large amount of power from that location. The situation begs to have a large-scale alternative power plant placed there (yes, even as opposed to distributed generation).

For me, the whole idea is great from a symbolic perspective. A new nuclear plant being built on the ashes of North America's largest coal plant. This, my friends, is how one reduces pollution and CO2 emissions! I've always thought that Ontario had its head on straight with respect to energy policy, more than anywhere else. Make a firm decision to phase out coal (unsequestered coal anyway), try to replace as much of it as you can with conservation and renewables, and replace the rest with nuclear.

And yes, capital cost is a big issue here, and I'll have to look at that more closely. But on the basis of what I know about Sweden, and am learning about Finland, I think that the average total cost of nuclear will be competitive. This is certainly true when comparing it with gas, because the global (conventional) gas peak is probably only a few decades away. As for coal, I dont know how that resource will fit into a low emissions scenario without a cost adjustment of some sort that will make it less attractive.

I would like to discuss a concept which I have not yet found on this sight, and that is the idea of low quality v. high quality energy, in this case, electricity.

Much of our demand for energy in the residential and commercial sectors is for heating, cooling, and eventually, transportation. These uses do not necessarily demand immediate availability of high quality power. However, industrial users, and some transportation sector users, perhaps, need high quality power.

I suggest that the current distribution system, and the nuclear alternatives which you advocate, be the source of high quality power for the upcoming century. I also suggest that the focus of the remainder of the energy business start to look at ways to lower the standards of consumed power for things which are less critical.

By creating widely distributed sources of low quality energy, for individual site use, low quality energy can be used for home and commercial building heating and cooling, recharging electric vehicles, LED-based lighting, etc. Just as many people now rely on their own personal/family automobile, they will have their own local or even personal energy generation system, with some combination of renewable mechanisms for sources, and an acceptable connection to the "grid" in which to release any surplus, or make-up for any shortfall. Co-located with this would have to be an intelligent energy management system to control the use of power based on the current and anticipated environmental situation. With this, yes we may have a few uncomfortably cold or warm days each year, but not harmfully or fatally so.

Homes could rely on rooftop solar, for exampe, and a small sub-kilowatt wind turbine, to charge a battery system, which would then run lighting, heating and cooling equipment. New designs for cooling or heating, such as ceiling-mounted solid-state cooling/heating systems, with their own low power fans, could replace central HVAC systems, and relieve the grid of having to drive 2kw compressors and electric fan motors, which waste a lot of energy just stirring about working fluids and air.

Separation of low and high quality energy needs, and creating systems which service each in an environmentally responsible manner, can go a long way towards solving the problems we are debating the solutions for.

The concept of low quality v. high quality in the selection of fuels for raw energy production is also relevant. The idea of co-generation arises from the initial use of high quality fuel to generate (high quality) electricity, and then use the waste heat for low-quality needs, such as industrial heating, cooling, drying, etc., as well as residential heating (most notably in Finland). Why should anyone, today, consider burning a high quality fuel, such as natural gas, just to heat air up a few degrees to heat their home? It is convenient and still affordable (but no long inexpensive), yes, for now, but may not be so in the years to come. That high quality form of energy should really be used where it is absolutely necessary to achieve temperatures in excess of 1000 deg-F for the purposes of the process - do you see what I mean? Even the core of your reactors does not reach much beyond these temperatures in order to boil the massive amounts of water to generate steam in a 1GW nuclear facility...The highest steam temperature acheived is only about 500-600 deg-F.

If we view "combustion" as a high quality form of energy, and seek to use lower quality forms for our basic needs, we get a new angle on how to solve our energy issues.

I welcome your comments, please!

Regards, Rich

Your comments are perfectly reasonable, all of them.

The dilemma we have in society as a whole is in the legacy systems already in place. There are high up-front costs for consumers of power and fuel to change the sources for them. It applies to both residential consumers and to industrial consumers.

My posting above just yesterday describes exactly what you are talking about from a residential consumer’s point of view. It would be very desirable to have an existing power grid with access to both high quality and low quality power sources, and most importantly with technology at my fingertips to be able to switch at my will to buy from the source of my choice. Add to this some sort of solar renewable energy system on my house that I can use for free when it is practical, and maybe sell excess power back out onto the grid, or store it for future use. For home heating, I would be seriously interested in alternative heating fuel sources if my natural gas cost was bound to escalate over time.

The key problem is how do I as an average consumer afford to change to this vision. It would cost me thousands of dollars to install the solar equipment on my house along with the necessary electrical hardware to connect it up to the grid. Buying from power sources of my choice at will is not possible yet, at least where I live in Ontario Canada, because the whole electricity system would have to reform to something like Len Gould's IMEUC proposal to achieve it.

I face similar problems to add hardware to my house to provide alternatives to my natural gas heating furnace or hot water heater. Even if I know as an educated person that investing money in these things could save me money down the road, most of the general public is adverse to investing money in systems that too often viewed as the governments' responsibility or home builders’ responsibility (in the case of new homes) to provide or change.

In summary it boils down to money - who would pay to implement the changes necessary to reach what we are talking about. There are some financial incentives being offered by our governments here in Canada to help with some of these changes, but they are not being taken up by the public in widespread fashion, at least not yet.

Good or even optimal solutions for the problems that are discussed in this forum are definitely going to be found, because I dont think that it's possible to solve problems any longer by going to war. If it was of course, the Third World War would be at our doorstep, because there is not enough oil or gas in the crust of the earth to provide as much as we want of those items at prices that we think are reasonable, and I no longer believe that Mr Malthus had to wrong idea. I remember a post for somebody's article by a young lady in which she more or less suggested that we could stop our discussions about what technology made sense because the real problem was the population problem.

Where this matter of reactor temperatures are concerned, these are definitely going to increase, although I haven't heard anything about getting the temperature you mention. Maybe the 'fourth-generation' reactors will solve that problem. The key thing though is not getting the right technology but getting it sooner rather than later, but I'm going to let somebody else deal with that because I am very pessimistic. What I want to do is merely to help get rid of some of the bad ideas that are in circulation.

The unfortunate part of these issues is that they are often very complex, though that does keep us in debate fodder.

What I think is (maybe?) needed is a general public re-education campaign of some sort attempting to help people a) understand energy b) realize the differences you point out in source quality / value / cost / reasons for cost. c) etc. etc. Problem there may be whose oxen get gored in the process, I suppose.

Some thermodynamics engineers will recognize the example Len describes about ground-source heat pumps, and even work towards refining them to improve their energy efficiency for space heating even further. If only educated people (like Len) and industries making the equipment were able to do a better job of educating the general public i.e. by advertising and so on, we might see it used more in practice. Education of the public in disguise is clever and targeted marketing, and is very important and necessary for any new technology to be commercially successful. Without the message getting out, the public is too heavily influenced by the readily-available natural gas furnaces most of us already use, and the huge network of gas distribution pipes to easily deliver it to our homes.

Len also alludes to the fact there are vested interests in the legacy methods in that some oxen will be gored if there is widespread change from legacy methods. In other words vested interests in legacy methods can be / are a huge drag on supporting changes to become widespread.

From energy utilization as well as safety standpoints, high temperature gas reactors are superior to conventional water reactors. However, unclear whether or not the gas reactor technology will ever actually materialize. Mike

http://ca.news.yahoo.com/s/cbc/calgary_klein_french

http://www.canadianbusiness.com/markets/headline_news/article.jsp?content=b032897A

Also Areva hinting that the TCPL / Bruce Power group's 4,000 MW station is not the only plans for additional nuclear generation in Alberta.

Are there fixes to the localized issues of cooling water shortages due to such high concentration of nuclear energy generation on sites that can't support that need? Perhaps newly proposed designs with reduces water use needs.

Are there techniques that reduce the mines' eco-footprints or end the contamination of in-situ mining that supposedly 'permanently' contaminates those aquifers?

With such massively more concentrated central generation and transmission, how do the probabilities of large groups of consumers losing power compare in the following scenerios? a) mostly nuclear eventually scaling up to a majority of them being 4-5 GW per site. b) a mandated half nuclear and half distributed renewables (small to large scale). c) regionally specific, market selected mix of "b" above. As a side part, what is the probability that under such outages a nextdoor neighbor will still have power?

Given a large scale buildup in nuclear power and the highly skilled and TRUSTED workforce that will require, how does that affect the probability of an accident at any stage of the 'well-to-wheel' process? Remember that TMI, which was mostly human error, didn't actually release any radioactivity and still nearly singlehandedly caused a 30 yr moritorium. More recently, we've had the shutdowns in Florida that caused many more to lose power than should have for the relatively 'small' problem that started it. What if anti-Davis-Besse news would have gone viral?

What are the prospects that a large buildup, caused by a national push, will implicitely cause unintended monopolistic prices? For example, my locale is 60% coal and 40% nuclear and my prices have risen much faster than justified lately.

Personally, I think the nuclear is the obvious choice for baseload, but I still need some answers before I can support any government mandate-like or promotion sort of legislation. There are too many unintended consequences yet. They 'thought' ethanol mandates were a good idea too.

However, that much discussed side is only half the gains available. The other one is a little more complex. The energy quality is automatically tied to it's cost. Since it needs to be directed to where it makes the most sense, those who can take best advantage of it will become the first adopters. For example, CHP is the most efficient use of natural gas. 40% or 50% is nice but I'll take 35% any day if I get to keep 95% of the remaining part as well. After that, geothermal heat pumps do make sense but combined with CHP, they get even better. Nuclear and other centralized power would follow after these onsite methods are considered.

The really neat part of this is that the backup fuel of such systems is natural gas. Since our big storage problem is that electricity is only instantaneous use, this allows us to use natural gas (in backup mode) as our storage medium. Now we can shift demand from the grid to the pipeline and visa-versa to provide a pseudo storage for nearby (or onsite) intermittant renewables.

BUT, I think that I've got the economics down pretty good. For instance, if we take the good Tam Hunt's favorite topic, wind power, all you have to do is to notice the situation in Denmark. The price paid for electricity in that country by households is the highest in the world, for which they can thank the over-utilization of windpower. Moreover, in Sweden, the price of electricity continues to climb because the high-level ignoramuses making decisions insist on believing that windpower is less expensive than nuclear.

Looking a little closer at the situation, the conclusion that I come to is that if nuclear plants were constructed in four years, which the Japanese can do - and thus any industrial country can do; and if they were amortized over 70 years, which obviously is possible, since they can last at least that long; and since nuclear facilities are intrinsically safe, a zero tolerance rule should prevail for personnel at nuclear facilities - who would also be paid appropriately - which should take care of reliability and safety, then the cost of nuclear-based electricity would be lower than any energy medium. For me, as a teacher of economics with a fetish for the bottom line, the details are unimportant as long as I have access to inexpensive and reliable electricity, which was the case before Sweden joined the EU, and could easily be the case again.

I can answer one question though, which concerns monopoly pricing. Where electricity is concerned, I'm all for it! It has to be regulated of course, but I'm prepared to argue that what we have in many places is a natural monopoly or strong oligopoly, and in the light of the evidence from this part of the world, and elsewhere, all of the talk about competition is nonsense or worse. I dont see how anybody with a decent access to economics 101 could fail to understand that although, admittedly, when they began this deregulation craziness for electricity and gas, the lies told by some prestigious and competent economists brought a new element to the table. For instance, you never heard Enron talk about nuclear, because what they were after were the fees that came from trading deregulated electricity and gas, and the presence of nuclear would have made these more difficult to get.

A new study just published in Sweden claims that the 'liberalisation' of the electric sector has resulted in a 10% decline in welfare for this country. Maybe, but I don't need a study to tell me that the beginning of the nuclear retreat, along with the restructuring of the electric sector and membership in the EU was the quintessence of stupidity.

Fred: Doesn't your approach result in a less than optimal overbuild of systems, and therefore overpricing of electricity to customers, vs. a system of intelligent demand management / load levelling? Especially in regions which do not have access to significant storage hydro for use as peaking resources? And don't regulated monopolies have an inherint market incentive to increase unit costs as much as possible? IMEUC is an investigation of how we might fairly improve on "monopoly pricing".

Which did the study claim?

The combination of real time pricing with bi-directional real time metering should resolve the issues you raise above. The real time price is the only determination required. The real time price captures all of the positive and negative impacts.

Todd,

While they would add to the cost, I know of no reason why dry cooling towers could not be used with nuclear power plants, which would resolve the cooling water concern for plants located away from saline or brackish cooling water sources.

Ed

What are the chances we'll ever get real time pricing for consumers in a heavily regulated utility industry without substantial market reform ?

Same question applies to real time bi-directional metering, given utility companies and smart meter manufacturers currently control who and whether anyone can access electricity system information through an AMI network.

Great article and great discussion. It is indeed odd how NG was deemed the saving technology by anti-nuclear people, when any thoughtful look would show that shortages were just around the corner.

I didn't know Joe Romm shared intellectual congress with Amory Lovins. Perhaps Joe is better now. He did write a pretty good book about the problems with hydrogen, and is presently an active PHEV booster.

Although I think he means well, Lovins has been a highly destructive influence on energy policy worldwide. He is quite a charismatic and gifted speaker, but totally wrong on many points. A dangerous combination.

That being said, his main (recent) argument against nuclear power has been cost, and to a certain extent I agree with him. The EIA numbers do not account for the cost of buildingi the plants (just the operational costs) so they are not fully informative numbers. I've discussed this before, and I will say again that the full costs of nuclear power is probably closer to about 8 cents/kw-hr to date. (I might as well get this out before Tam writes it...)

In theory we could build the plants cheaper, be we haven't and we don't. In theory we could have fewer regulatory challenges on new plant construction, but that is not reality either. I guess you could say the fear issue with nuclear power drives up its cost, in a very real and tangible sense. I think this is the case. FWIW, I think 8 cents really isn't that bad, and probably still cheaper than coal when accounting for the CO2 issue. So nuclear still makes sense. If we can make it cheaper, all the better.

I do think you oversimplify the fear of nuclear power by people. It might be a bit more complicated (and to some extent, warranted) than you seem to indicate. The present opportunity afforded to nuclear power is the greater fear of global warming, one which (compared with concerns about nuclear power) is much more real and presents real concerns. So nuclear has a second chance. Try not to blow it this time.

Also agreed that in addition to more nuclear capacity, real-time metering and conservation/efficiency is needed to curb the demand side as well. Working at both ends, hopefully we can meet in the middle before things really start hitting the fan.

You cite an article from the Economist as your source for the cost of nuclear power? Aren't you an economist and capable of accessing primary literature on this issue?

You cite the price paid by Swedish ratepayers as dispositive proof that nuclear power in Sweden is cheap? Surely you know that subsidies and other market distortions have strong impacts on the price ratepayers pay for any energy generation technology.

As I've mentioned many times in our discussions, here are links to the most recent state of the art RIGOROUS analyses of the likely cost of new nuclear plants. I note preliminarily that these estimates are almost certainly far too LOW b/c the cost of all new generation technologies has gone up dramatically in recent years. A recent Cambridge Energy Research Associates report found capital costs had risen 130% since 2000. Here's the link to a 2007 Edison Foundation report on the cost of new facilities:

http://www.edisonfoundation.net/Rising_Utility_Construction_Costs.pdf

Here's a link to the 2007 Keystone report on the cost of new nuclear plants (8 to 11 cents per kWh), which was comprised of a diverse and impressive group of scholars:

http://www.keystone.org/spp/documents/FinalReport_NJFF6_12_2007(1).pdf

Here's a link to the 2007 California Energy Commission report on the levelized cost of all new generation technologies:

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

READ THESE. You surely won't, however, and you'll instead continue to spout more sophistic propaganda. But I continue hope you may actually do some real work and dig in to these reports.

Jorge Zanelli, Nuclear Energy Working Group [Chile]"

Also regarding CANDU costs anyway, the only public data I could find was this 2005 financial statement by Trans Canada Pipelines, a 1/3 co-operator of the eight reactors at Bruce. "Operating costs for the year ended December 31, 2004 were $35 per MWh compared to $36 per MWh for the period February 14 to December 31, 2003. Average realized prices in the year ended December 31, 2004 were $47 per MWh compared to $48 per MWh during TransCanada’s period of ownership in 2003"

That $35 per MWH translates to $0.035 / kwh, and as near as I can tell, includes the payments to capital which they are making to OPG, and all decomissioning and waste management costs. It also includes a $10 million charge for a study to expand the facility's capacity.....

Here in Ontario where our provincial government has started the competitive procurement bidding process for our next nuclear station, of paramount issue is the employment created to build the station. Our native Candu technology from AECL would by default funnel much of the capital spending to Ontario labour companies. The foreign nuclear companies competing for the station are also promising as a requirement of their proposals to keep all construction work done by Ontario companies to keep much of the money spent here.

In essence building nuclear stations is a pretty large make-work program for the public, which is often a valid political motivation for governments to go out and spend large sums of taxpayer's money. In this case if Ontario gets a large reliable central generator out of it as well, they kill two birds with one stone.

Operating costs almost certainly do not include payments for capital construction. This is definitely not the case for EIA numbers and I wouldn't assume that unless the report explicitly states so.

-Jim

If the regulators want it, it will happen; if not, it will not.

There is no more reason for the consumer to have access to the system because of its bi-directionality. If the real time system provides the consumer with pricing data, it too would be bi-directional.

Len,

If bi-directional real time metering is in place, there is no need to sell customer output, since it will be taken at the current grid price; and, it is highly unlikely that any other customer would take it at a rate higher than the prevailing grid rate.

The safe interconnection has been being worked on for years, but the cheap part has been elusive. It would seem to me that a modification of an existing transfer switch, which prevented export to the grid if the grid were not powered, would resolve the issue.

Ed

Massive investment in renewables admittedly has potential to create (lots of) work too if done on a large scale. The problem in part in the electricity industry is that the system has historical legacy in its design to more easily accommodate large central generators rather than distributed renewables. So it is naturally easier to entertain large central stations - the choice of location site for Ontario's next nuclear station is also a major issue of debate because the province wants to be able to connect up to transmission lines as painlessly as possible.

There are also politics in Ontario involving past investments in research and development - R&D on Candu has been heavily subsidized with tax revenues over the years, so there are vested interests wanting foster its commercialization in Canada rather than abandoning it in favour of other generation technologies.

Things may indeed be changing as we write this with all the efforts underway to develop "smart grid" technology, and possible market reforms being studied like Len’s IMEUC open standards proposal. So many renewables have a bright future too I think in many parts of the world.

TransCanada Reports Fourth Quarter Results from Bruce Power L.P.

"and other nuclear power shills"

That's a tad offensive. Given your errors in assumption, I can as easily claim simply to be doing my best to keep facts straight, including the straight fact that Bruce Nuclear generated all it's power for 2004 at a cost including capital (covered by lease payments to OPG which are booked as operating expense) of $0.035 / kwh. If not true, then why are they showing a profit with an average SELL price of $0.046 / kwh ? Surely auditors on a public company such as Trans Canada Pipelines wouldn't allow that to slip by?

I am a firm believer much more could be done on this front if the utility industry were embracing in-home demand response and real-time demand monitoring technologies. But there are many economic barriers to see this happen on a wide scale yet I'm afraid.

http://www.brucepower.com/uc/GetDocument.aspx?docid=947

Len last posting strongly suggests it is possible to build and run a large nuclear plant competitively. It hi-lights that capital costs are not necessarily cast in stone by past reports, or are at the very least variable depending on where you are located calculating them.

Having potentially competitive capital costs, high reliability, long lifetimes, low environmental impact, and given they create a lot of employment to build should make nuclear a very tasty option for governments to buy into.

Yes we have economics in Sweden with a very good self-confidence that promote different technology as nuclear. They carry out accounting and then they think they are the best suited to tell other about technology ????. Is there anything in the history that indicates that we should believe in economic forecasting. Since Marx and other priest try to convince their human fellows that they know how life will turn out to be there has been a huge work on mathematical models that finance and politicians adopt as soon as they are presented. Every economic Nobel price winner claims that they have a tool that makes it possible to predict society movements and stock development. I have read two books the last years that gives a good picture of the big picture. Critical mass (how one thing leads to another) Philip Ball Against the Gods (The remarkable story of risk) Peter Bernstein All these economic models that have been presented during all years that is claimed to predict the future in the society fails. This is because the invisible force that is called NEW TECHNOLOGY, CREATIVE DESTRUCTION, DISRUPTIVE TECHNOLOGY always destroyed the extrapolation of the past

Energy business does not need more accounting. It needs disruptive technology based on law of thermodynamic as the writer of Innovators dilemma put it..

peter platell

Re Bruce costs, I'd urge you to dig deeper and talk to their financial people if you can. I can't say I know much of anything about Canada's power industry, let alone its nuclear industry, but here in the US some nuclear plants have been paid for, so their operating costs are now an accurate representation of the cost of electricity from those plants. But if we include historical capital cost expenditures, as we should, in order to derive the "levelized cost," which is the number that really matters, we find that nuclear power has historically been fairly expensive in the US. I suspect this is the case also in Canada, but don't know for sure.

More importantly, the costs of power from new nukes is the topic in the analyses I linked to above. Due to the dramatic increases in capital costs and uranium costs, as well as financing costs, new nukes in the US will likely be very expensive. We have better options that don't have all the waste and safety issues that come with nuclear power.

We have numerous 500 MW and above solar power projects proposed in California, with various technologies. We also have 364 MW of existing large solar projects near Barstow.

Geothermal provides 5% of California's electricity, all from central station plants.

Hydropower of course comes quite large, though I am not an advocate of large hydro.

Last, biomass plants can be built quite large, with the UK looking at building a 500 MW biomass plant in Wales.

Replacing Ontario's proposed 2400 Mw of new nuclear construction with equivalent wind turbines, using the Canadian Wind Energy Association's figures about the 2006 Melancthon I Wind Project of $126 million for a total capacity of 67.5 MW, would cost about about $4.5 billion. Of course no wind project operates at near 100% so the actual cost, using a CF of 30%, would be about $15 billion.

Maybe I'm missing something, but I don't see the huge capital cost advantage, especially condidering that the Melancthan I project was completed largely before the huge run up in resource and construction material prices.

Tam: Perhaps it is your research which is flawed?

http://www.ieso.ca/imoweb/siteShared/monthly_prices.asp

I'd say Tam's theories that his "levelized cost" calculations are more valid than real markets need more detailed backup than some clearly biased "study".

As for intellectual honesty, do you have enough to refer readers to Murray Duffin's rather unbiased series of 2004 Energy Pulse articles? The one on nukes is particularly interesting.

Try to remember as you respond that "...a shill is someone who is paid to represent a cause (and the facts be damned) or someone who simply prefers to ignore facts for ideological reasons."

I'm totally ignorant of the state-of-the-art nuclear plant design and their capital costs, but like my industry in electronics, there is always continuous engineering refinements being developed with the occasional breakthrough, many that are often intended to lower costs. Costing in my industry anyway is a never ending sea change as new technologies emerge, much like what Mr. Peter Platel above is spewing about.

The US, particularly in your neck of the woods in California, appears to be way ahead of Ontario in large scale renewables, especially solar, reasonably because you have much longer summers than we do up north here, our winters are very cloudy and long. Since you already have a considerable legacy of large scale renewables in place, with industries that make them located nearby, it may very well be easier to get approvals, get better costing deals to build them, etc. for new renewables plants when compared with nuclear.

Is it wise to rule out anything altogether based purely on costing and cost forecasting given the looming crisis in the energy industries we are facing ? As a prudent design engineer, I wouldn't. Diversification mitigates the risks, even if it means including more costly options in the mix. Ontario.is diversifying its mix of generation sources that includes nuclear and big hydro (we already have them), large and small scale renewables, but instead is ruling out coal fired plants altogether primarily because of its hit on the environment and associated health care costs. And public health care is a sacred cow in Canada which takes precedence over many things politically here.

Tam: Sorry if I got a little heated prior. I now realize I went too far (not unusual for me, as most others here know). I simply happen to be convinced that nuclear rather than coal should be used for baseload electricty generation, and can honestly see no alternative to that position. I've also investigated the waste management issue enough to be convinced it's not a serious problem relative to the alternatives. And I'm also certain the I would prefer if the darn reactors wouldn't be built in the midst of heavily populated areas, even though the odds of them doing any damage are very low, I still think it's a risk we needn't take just to save 5% on the transmission costs of moving them a thousand miles north-west of here, into the hard bare granite of the Shield area on the height of land between Superior and the Artic watershed of Northwest Ontario, a place where permanent sequestration of the spent fuel amounts to simply excavating a shaft. For amusement I've designed a system where the reactors and steam generators are built in containments excavated several hundred meters down into that solid granite in isolated chambers with pre-piped emergency cooled walls and sealing pairs of blast doors which can simply seal the unit in permanently if it tries to melt down. Installing the turbines at ground level above allows gravity to provide the feedwater pressure via several redundant water-steam pipe loops, thus eliminating one of the most critical points of failure, the feedwater pumps. Spent fuel storage bays are excavated adjacent the containments and are designed to store the spent fuel and other radioactives for as long as may be necessary, including permanently with records. Simple steam pressure will raise the generated steam to the turbines at only a 3.5% energy loss, completely acceptable. I then re-configured the tranmission lines by using high-pressure aluminum tubes for conductors hung, on the towers of extended-height 1.5 MW wind generators. Even with the reduced capacity factor of sub-optimal siting, the wind turbines will provide a significant proportion of the delivered electricity, and the aluminum tubes are pressurized with hydrogen which is delivered to auto refueling stations on highways along the path. The heavy steel towers make excellent high-pressure hydrogen storage containers with minimal additional reinforcement. Off-peak electricity is used to generate hydrogen at the reactor site, which is stored in the towers and delivered as needed.

Concept also works well with reactors in eg. N Mexico and transmission to LA.

All this is do-able (with some minimal technical problem solving or mods, eg. dealing with hydrogen's effects on the steel towers) and makes technical and economic sense, and depending on system design, will deliver electricity to the cities at near-identical costs to current systems. I've gotten no response whatever beyond "Who are you to be talking that way?", though no-one's actually identified a flaw in it, either technical or economic. Ah well, was just trying to help. I even tried to put it into the public domain with an article to EnergyPulse, but was told that it was not understandable. Anyway, I've since turned my interest to improving the design of a new bio-fueled-or-solar modified-stirling engine-generator. Prototypes due out of the shop any week now. Will be interesting.

So you see, I'm not actually a rabid proponent of nuclear, simply a realist.

In an earlier comment, James Hopf is incorrect when he writes that 0.1 cents/KW-hr charge which US nuclear for disposing of nuclear waste "pays for the entire nuclear waste program."

Would that there were a "nuclear waste program." But there isn't. Hoff apparently thinks that saying makes it so, as he goes on to write:

"The fact that nuclear can achieve this level of performance/assurance for such a small amount of money illustrates just how superior the technology is with respect to waste stream issues."

I do not understand why Hoff believes that there is a working nuclear waste storage program.

The nuclear industry has failed to provide for a working nuclear waste program. For the industry to say that the problem is that the federal government has not opened a high-level nuclear waste storage facility is just passing the buck.

In the meantime, by storing spent fuel rods on site, either in dry or wet storage, nuclear utilities have turned existing plants into de facto high level waste dumps that make very attractive targets for terrorists. It is doubtful whether any state would have approved the construction of these plants if the state officials had known that the spent fuel rods were going to be stockpiled on site.

The fact that nuclear can achieve this level of performance/assurance for such a small amount of money illustrates just how superior the technology is with respect to waste stream issues. For fossil plants, the cost of any long-term sequestration of their wastes will be more than an order of magnitude higher. This makes it (quantitatively) clear that the benefits of zero CO2/pollution emissions vastly outweighs any "problems" with nuclear waste.

Ridiculous nonsense. The government made a contract to do it and collected sufficient payments for it. (Not to mention creating a large proportion of the waste in weapons and naval propulsion systems defending the transport routes of your preferred alternative.)

Let me explain to you what we have here, or the bottom line as I call it. People have short memories and they don't read much, and so they think that they can get along without inexpensive and reliable energy - and they CAN get along, but at a price. When that price becomes too high they will get the message , and the message is this: STATE OF THE ART NUCLEAR IS UNBEATABLE!

One of those great American songs 'The Man Who Got Away' contains one of my favorite lines: FOOLS WILL BE FOOLED'. That's only up to a point though, isn't it? A fool in Germany and a fool in New York have recently informed me that they are going to take away some of my "exposure", by not circulating my "rants". Poor me, but I can sympathize with them, because something much more important than my lost exposure is on the table here, which is that neither the Germans nor the New Yorkers nor anybody else is going to willingly surrender the advantages provided by a plentiful supply of cheap energy, especially after they have enjoyed that energy for a while. And as Len Gould pointed out earlier, if they can't renew that supply peacefully, then they are going to resort to other means.

Peter, I know this book 'The Remarkable Story of Risk' that you referred to, which is written by a finance insider. If I caught one of my students reading it he or she would be failed on the spot. He's like this man who wrote me from New York: he doesn't know anything, but he tries to give the impression that he knows everything.

Fred

Reading Mr. Gould's statement, you would think that the government has a nuclear waste program for disposing of high-level waste from the civilian nuclear power program.

But the fact that the government signed a contract to dispose of civilian waste does not constitute a working program. Collecting money from the civilian nuclear industry to pay for a federal program of civilian nuclear waste disposal does not constitute a working program.

There is no such program. The absence of this program is why spent fuel rods are piling up in on-site storage facilities at every nuclear power plant in the country.

If Mr. Gould can identify a working federal nuclear waste disposal program for high-level nuclear waste from civilian plants, he should do so. Otherwise he should abandon this argument as being baseless.

In a prudent world, we should never had started building commercial reactors without a working high-level waste storage program in place. The nuclear power industry and its allies at the AEC and the NRC have been promising such a program for more than 6 decades, and yet there is no program. Just because you BELIEVE it is possible to create a high-level waste storage program does not mean that there IS such a program. Beliefs are only beliefs, however much we may wish that they were true.

I do not, by the way, dispute Mr. Gould's claim that the federal government, through military programs, is directly responsible for the generation of huge amounts of high level military nuclear waste.

In short, it is not an emergency situation, not in the USA or anywhere else.

Now a few hot cups of coffee of reality for a few of you:

Tam, renewable energy sources are no replacement for baseload capacity. Not without some kind of inexpensive storage (which does not exist) or extensive use of real-time metering (which also does not exist yet and the yield of which is unclear). The cost of backup capacity skyrockets as renewable capacity rises higher than 10%.

Len, at least in the U.S., until Yucca Mountain is operational, we do not have a working system of civilian nuclear waste storage, at least in any long-term sense. It doesn't matter that it is not a cost issue -- it's a problem that doesn't seem to get resolved, and it drags on the entire industry.

A lot of these nuclear power debates have the techies debating the touchy-feelies. Both drift away from reality. The techies speak of what nuclear power SHOULD be, and not what it is. Waste disposal SHOULDn't be a problem, but it is. The plants SHOULDn't cost so much, but they do. People SHOULDn't be afraid of nuclear power, but they are.

The touchy-feelies are out of touch with what people will really accept. They think people can deal with a less than on-demand power system, but they won't. They think people are will to pay more for cleaner power, but they won't. They think that only they (personally) have the right to cop a NIMBY attitude, but they aren't; everyone has a NIMBY attitude.

In short the realists (techies) live in fantasy world of nuclear power SHOULDs, and the touchy-feelies fantasize about a future, but not at the expense of ANY of the current realities that they enjoy (cheap, convenient, power).

To the debate point that nuclear power is expensive, I will say so? 8 cents is high, but with time, we can do better. If we had the sense to replicate a design, we can probably bring costs down over time. It's a stupid argument anyway; with the way the government gets its hands on any major energy issue, determining the actual cost of these things is impossible anyway. The price of nuclear power is no more "fair" than the price of gasoline, with its free protection subsidies via the U.S. military.

If I were a CAMECO exedcutive I'd say the same thing ;<] (Sorry, there I go again)

As one of the "techies" I agree whole heartedly we like to dream a lot and make statements about whet SHOULD be reality but isn't.

Cheap convenient power is slowly on its way to becoming extinct for whatever political, government incompetence, or technical reasons. Two big reasons are our dependence on fossil fuels and the inevitable hit on the environment, and its eventual cheap readily available supply running out such as in "peak oil".

Without techie dreamers like us, there might not be any debate on the subject let alone people and industries wanting to change things as part of making a living for themselves. After all it’s the techies from other disciplines that invented nuclear as one source for cheap reliable power many decades ago.

Nuclear may have lots of advantages but it's cost to build new plants, dispose of waste, and operate economically is probably very unfair given how reliable it can be and its longevity. In a capitalistic society, are you surprised the cost of many things may be unfair ? I'm not.

It is precisely the game of economics that drives techies like us to dream of inventing new technologies that might save us from losing cheap reliable power down the road.

When I return to studying deregulation it will have to do with Germany, where the deregulation chickens have come home to roost. But, at the same time, according to my sources, they are going green in that country. Going green, together with the possibility of insufficient electric capacity, but with the phonies claiming that they can take up the slack by dealing in emissions permits and other financial scams, makes me wonder when the voters in that and other countries will come to their senses.

Good post. Apprently the "death knell" that rang for nuclear power has not reached Canada. For the Canadian Gov. putting up the capital, who cares what the cost is ! it is Gov. money or so they think.

Len

I doubt seriously that the operating costs of the Canadian nuke plants contain the capital cost in spite what you read and interpret. Capital debt amortization is a huge chunk of the selling price of kilowatts; altho, in the Canadian bookkeeping, I doubt if it is.

The last nail is being driven in the nuclear "coffin". Altho, the original promise for nuclear was very optimistic, it has since been on a down hill slide. It will cause taxpayers $billions to dismantle these aging "dinosaurs". The reason for nuclear's demise is: -safety problems -inability to dispose of nuclear waste -potential uncontrolled proliferation of nuclear materials in the hands of terrorists -highest cost for generating electricity (14.5 cents/kWhr) of all fossil fuels and all of the commercial renewable energy sources. -during the period 1985-2007, there was a huge cost escalation form $1 billion to more than $9 billion for the same size nuclear plant -the NIMBY factor (see energypulse latest news article)

Twelve European countries since 1987 have voted to ban, stop or oppose nuclear power plants. Germany will shut down all it nuclear plants in 2020. Finland's nuclear power construction is a disaster waiting to happen, e.g. poor quality steel, wrong concrete specs. Zirconium used in nuclear power rods is expensive and there is limited ore supply.

Nuclear requires large amounts of electricity, i.e. fossil-fired plants, to separate isotopes and generate the fluoring (for UF6). Nucler also does not have a small "footprint",(sq. km/kwatt). If one adds the acreage of the uranium mining, ore dump, ore processing, extraction, conversion to UF6, fuel rod storage, storage of local nuclear waste, etc., etc., it requires far more acrease than wind or solar-Stirling engine power.

Currently, the cancer rate for the Belarus' children has had a large increase down wind of the Chernobyl disaster. If the Chernobyl disaster had occurred in the U.S., there would have been 10 million march on Congress to ban nuclear power.

In 2007, solar has shown an $48 billion in sales and grwoing . Since 2000, solar sales have grown an astounding compounded rate of 31% to 2007. For month sales see www.solarbuzz.com An ex-nuclear engineer (GE) who has seen "the handwriting on the wall "

How shall the car gain nuclear cachet?

No one will dispute solar and wind are much more environmentally friendly than other conventional generation sources including nuclear. The point of much of these discussions is that small or large scale renewables like solar and wind will have a tough time satisfying the developed world's appetite for cheap reliable electricity without new conventional generating stations being built. Over long periods of time sure renewables have a bright future, but they wont likely resolve the emerging world crisis in energy soon enough, particularly if demand growth isn't drastically slowed down with huge conservation and efficiency measures, and / or the world's population and third world countries' growths aren't stalled. And nuclear is the lesser of the all the evils of any conventional large central generation.

I would prefer if the darn reactors wouldn't be built in the midst of heavily populated areas, even though the odds of them doing any damage are very low, I still think it's a risk we needn't take ...

says Len Gould. All experience suggests the risk to the neighbours of Teller-approved reactors is zero. In theory it must be infinitesimally more than that, but in the real world, by replacing power sources that cause frequent severe accidents, people become safer when nuclear plants start up near them.

If the nuclear plants are on ships, people get on board shortly before the startup is scheduled -- and these people have been known to include environmentalists working for pro-oil-and-gas green-as-in-greenback groups.

Nobody believes nuclear plants are dirty or dangerous -- including the people who are paid to say, or insinuate, just that. Governments pretend to believe them so as to protect very large fossil fuel tax revenues. (Fred Plett, those revenues are why loan guarantees to nuclear plant builders are so good: if government loses billions paying off defaulted loans, and makes them back on natural gas royalties and taxations, it just breaks even, and has no reason to slip money to the opposition you call huge.)

How shall driving gain nuclear cachet?

No one will dispute solar and wind are much more environmentally friendly than other conventional generation sources including nuclear.

...except to the extent that (1) they are at token scale, 100 nameplate GW of nuclear being replaced by 1 nameplate GW wind plus ~120 nameplate GW natural gas, or (2) they are at scale, and change wind patterns or albedo over areas, per year-round average gigawatt, as big as whole counties.

How shall the driving gain nuclear cachet?

"The Limited Partnership will make annual lease payments during the initial lease term that will consist of both fixed and variable payments. The fixed payments began at $62 million in the first year increasing to $92 million in the 18th year." ..... "The amendment provides for annual supplemental rents of $25.5 million (increased annually by a CPI adjustment) per year per operating reactor payable by the Limited Partnership. Should the hourly annual average price of electricity in Ontario fall below $30 per MWh, the supplemental rent reduces to $12.5 million per operating reactor."

So with I think 6 operating reactors, Bruce Power's annual payments to capital per reactor are, in the first year, in millions, $62/6 + $25.5 = $35.8 . Assuming an original 20 year amortization negotiated by OPG with British Energy, at 8% interest, that values a then 20 yr old 600 MW reactor at $350 million, likely a quite accurate market price. And that payment IS included in the $0.036 / kwh cost of generation. NOTE the clause "Should the hourly annual average price of electricity in Ontario fall below $30 per MWh [$0.030 / kwh], the supplemental rent reduces [from $25.5 million] to $12.5 million per operating reactor."

So again, YOUR backup??

And so on and so forth.

Fred

Wind certainly is unpredictable. PV is more predictable, has two scales to consider and much better matches peak needs. CSP solar however is an entirely different animal. With competitive costs now and the best forcast for economies of scale, it also is mostly made of cheap labor which has the best starting point for those economies of scale to accelerate. ...and yes, it also has cheap storage capabilities which we will begin to see once the price premium drops for peak-only power. IMHO, it is the only technology with 500 mw scales possible and a long term trend of price reductions.

I consistantly push this technology because given that last fact, it's the only way to give the inevitable future nuclear monopoly any price competition.

http://www.insidebayarea.com/oaklandtribune/ci_8705700

An excerpt:

"Energy cost estimates and the way to calculate them vary widely, but in a different study, solar energy costs were roughly pegged at 20 cents a kilowatt hour (though this is anticipated to eventually drop to 10 or 15 cents), 8 to 10 cents a kilowatt hour for wind, and coal 7 cents a kilowatt hour, according to Arjun Makhijani, president of the Maryland-based Institute for Energy and Environmental Research, a nuclear watchdog group founded in 1987. .....The price of natural gas fluctuates between nine to 111/2f cents per kilowatt hour, according to industry sources."

(Note that the quotes for the other source came from a nuclear opponent.)

What's really driving it is expected hard limits on CO2 emissions, which will basically take coal out of the picture, and result in a massive run up in natural gas price (if they try to turn to that as an alterative). Thus, it will boil down to nuclear and renewables. The utilities apparently think that renewables will not be able to meet all (or most) of the new needs, due to intermittentcy, if not outright higher per kW-hr costs. Once again, I'm still wondering why reactor bans and renewable portfolio standard are required if renewables are so capable and cheap.

One final comment on whether nuclear waste "is" or "shouldn't be" a problem, and whether we have a "working" nuclear waste program. Nuclear power plant waste has always been completely contained, over nuclear's entire 40-year history, unlike fossil plant wastes, which have always been dumped, es masse, directly into the environment. Over all this time, storing/handling the nuclear waste has cost a negligible amount of money, has killed noone, and has had no measureable public health or environmental impacts. (In contrast, fossil plant wastes have been causing hundreds of thousands of annual deaths worldwide, and are the single leading cause of climate change.) If that's not a "working" waste program, I don't know what is.

Not only "shouldn't" nuclear waste be a problem, it ISN'T a problem. And we are quite sure that it never will be. The (strict) requirements demand no less, and we have a valid plan for meeting those requirements right now (Yucca). It is clear, right now, that no matter what we end up doing with the waste, it's impacts will be much smaller than those of fossil fuels, and much smaller than the waste streams from other industries. It's fairly accurate to say that nuclear is the ONLY industry with a "working waste program". It's the only one that's ever been required to have its waste stream have no impact, and provide detailed evidence of that fact. It is fossil fuels that have no working waste program, not nuclear.

In case anyone thought that the main result of reducing (or not increasing) nuclear would be more renewables, as opposed to more fossil fuel use, check out this article (one of the more disgusting and infuriating articles I've read recently).

http://www.spiegel.de/international/germany/0,1518,544926,00.html

I dont know if I'm going to let you see my work however. Why should I - you wouldn't understand it. Sweden and Norway have had the lowest electricity costs in the world over the last decade - as low on the average as Australia, where cheap and plentiful coal provides the background for the cost and price of electricity - and the Swedish price has also been surprisingly low. Denmark of course has the highest price, thanks to their excessive resort to __________. (I'll let you fill in that blank.)

Len, I take some offense to your statement that the studies I linked to are "clearly biased." Did you read the reports? Did you see who wrote them? These are not biased reports. They are state of the art, written by respected entities and individuals attempting to discern the likely new costs of nuclear plants (and with some of the studies I linked to the likely cost of new power plants in general). Re wholesale power markets as evidence for the competitiveness of new nuclear plants, I must repeat what I wrote to Fred: such an analysis ignores the large subsidies and other government support that go in the front end. Do you know what subsidies nukes receive in Canada? I don't, but Bob has suggested they are quite large. Also, no where in the world has a single nuclear plant been built in a competitive market. They've all been rate-based, which is another way of saying risk is socialized (on the backs of ratepayers) and gain is privatized (for shareholders of utilities). Some plants now operate in the wholesale market, but this is only the case after a plant has been built in a non-competitive market and then sold.

"Levelized cost" analysis is the sine qua non for judging competitiveness from a public policy perspective (my perspective and hopefully yours too) b/c this analysis gets at the actual cost to ratepayers. No other analysis gets to the actual cost.

Thanks for the article, but Ugh!! Proof that Europe is far more screwed up than even the United States.

I agree that a nuclear waste management plan is workable; France has one that works. But I can't agree the U.S. has a long-term working plan until Yucca mountain or some equivalent is put in operation.

On nuclear power pricing, I have a question, what has been the cost of electricity historically? Near as I can figure, it's hovered around 8 cents per kw-hr (retail) in 1999 dollars since the early 60's. (That makes today's price about 10-11 cents retail, which is not too far off.) It's hard to see that inflation in the cost of building new plants (versus something that was built 40 years ago) isn't going to lead to higher prices in generation.

The basic point that Tam makes is that nuclear power is a bit more expensive than coal. I agree to the tune of 8 cents, but not his higher numbers. The naysayers say this isn't so, but don't really back this up with hard numbers. The more straight-speaking ones (like Edward) say this represents current costs, but future plants can be less expensive (I tend to agree.)

As for Warren's comments, they are simply ridiculous. Let's demolish just one of them: the electricity cost of refining Uranium by diffusion. According to the CameCo Corporation, which does this sort of thing, 100,000 SWUs (enough to run a 1,000 Megawatt plant for a year) requires about 250,000 megawatt-hours, or 2500 kilowatt-hours per SWU. That seems like alot, but that fuel then produces 8,760,000 megawatt-hours from the plant (maybe a little less if you account for some downtime.) So the electricity used in the refining is 2.8% of the total electricity produced by the final product. No reason nuclear power plants couldn't power their own refining operations.

May I also ask who in the department of economics at Cal (Santa Barbara) resigned and left you in charge of levelized cost analysis. Listen, Tam, you've really got to stop writing the kind of things that you have in your last post. Spend a little time out in that sensual California sunshine and forget about things like levelized costs that are "uber important" for for the heavy scientific discourse that you specialize in. Visit the nearest beer garden and practice your restaurant German.

By the way, I checked those links out. Couple of real sweethearts in that bunch of cost experts. If this forum was a seminar or a conference, and those gentlemen were present, they would keep their mouths shut. There wouldn't be any help for you in that quarter, counselor.

Fred

Finland's Oiluoto nuclear construction plant is overseen by the French company, Avera. I wonder if they managed construction on any of the French reactors ?

As I said before, the Danes get 31% of their electricity from wind. Now, they have started construction in the "hydrogen valley" to generate hydrogen for smoothing out the wind power generation.

Len

In answer to your questions go to www.hydrogennow.org and read the articles. According to the IAEA, the cost for electricity from nuclear power plants is 11-14 cents/kWhr. This, I believe, takes into consideration the capital amortization costs.

A report about 4 years ago by a Government health group has shown that there is a low increase in cancer rates durrounding our Nation's nuclear reactors.

Since I know GE's nuclear reactors (BWR) are the safest in the world but only 15% of the world's nuclear reactors are of GE design. The light water, helium cooled, MOX, etc. reactors are of a different design so I cannot vouch for them !

My company is now designing 24/7 solar-hydrogen 500 MW power plants for installation in the U.S.

As to nuclear waste, I don't WANT Yucca Mountain to proceed and neither does the Bush Administration nor the Congressional leadership on energy. We are clearly, but reticently, on a course for spent fuel reprocessing and actinide burning. Once in place, that would leave the issue of nuclear waste as a trivial one - for rational and objective people. The latter excludes the anti-nuclear crowd and assorted leftists who seek an emotive issue.

One thing that is seldom discussed is how electric supply projects with high first costs and low operating costs (like nuclear, hydro, and wind) function as a call option on future electric prices. With nuclear, once the construction is complete, the future cost of electricity for 60 years is pretty much constrained. Inflation in plant staff salaries and yellowcake/enrichment costs are the remaining exposures and both have weak effects on busbar costs.

Conversely, technologies with low first cost and high fuel costs leave one uncovered to future commodity prices - like the landed price of LNG.

Something like the choice between a fixed rate mortgage and an ARM, isn't it?

Levelized cost analysis allows for an apples to apples comparison across technologies. It's that simple.

What standard would you propose for policymakers to judge the economic merits of a given power plant proposal?

I think you've pretty well met your definitions for a shill and for intellectual dishonesty. Can you do better with an explanation of your abhorrence of the Grand Coulees, the Boulders and "...large hydro..."?

Fred,

You, Ed and Graham sure tickle this funnybone and make astounding good sense at the same time. I must say, though, any instruction on capital recovery you might give the anti-nukes like Tam, Warren and Richard are probably wasted. One need only consider Tam's reaction to Joseph's to-the-point post to see that.

Levelized costs. There is a hill with a ski lift about 9 or 10 minutes from my house, and one of my favorite lectures had to do with calculating costs for that installation. I dont see any difference between calculating that levelized cost than calculating one for your favorite nuclear plant. What it comes down to is using the amortization formula, although the important thing there is the schedule for borrowing to finance the installation - which unfortunately is not always available for passersby. I tell you what - until further notice I'll latch on to the information provided by Jim Beyer, which will provide a base-point/datum for my humble calculations.

And Tam, you did notice I hope what Joseph Somsel said about the cost situation for nuclear after the plant is constructed. A large increase in the price of nuclear fuel will have little effect on electricity prices, while this is not the case with gas and coal - and the gas price is certain to escalate. This has the effect of lowering the relative price of nuclear with respect to gas, just as the absence of emissions lowers that price with respect to coal. Furthermore, as Josept pointed out, we are moving toward the reprocessing of a large amount of spent fuel, which means that you can stop telling your admiring audiences that nuclear fuel is scarce.

Of course the more I read the comments above the less satisfied I am with the way that I have been hung up on this matter of 'levelized costs'. The important thing here should be the interest rate - which the authorities should ensure is the 'prime rate' - and what is sometimes called "subsidies". If governments want inexpensive and reliable electricity over the next fifty or one hundred years or longer they should take a hand in the game. Why should it be possible to construct a nuclear plant in Japan in four years while it could take twice as long in the US?

An educated discussion, Tam? If you really and truly want one of those visit the economics department at your local university. Of course, their idea of educated and mine are probably not the same, but that will make things easy...for you.

Fred

These are REAL cost figures taken from AUDITED FINANCIAL statements of a public company. I can't find any flaw in them.

However, that 10.0 c/kWh was not the full cost b/c shareholders had to eat some of that cost. Diablo Canyon is atypical, however, b/c it was found out during construction that it was near a fault line so was delayed in its construction and had to be shored up.

My point is that looking only at costs paid by ratepayers can ignore a lot of things. So, again, levelized cost analysis allows policymakers to assess the likely costs of new generation, in an apples to apples comparison, taking into account available subsidies.

I think your figures bear out a cost of not far from 8 cents (as I've said). Maybe a little less if the plant construction goes smoothly. More (sometimes much more) if there are plant construction cost overruns. One thing that needs to be acknowledged is that these overruns are often substantial.

Fermi II was estimated to cost $229 Million in 1969. Actual construction costs were established in 1988 to be $4.858 Billion. Quite a difference from the estimate. This is a 1000-1100 Megawatt plant.

A new plant of similar size has been proposed. Its estimated construction cost is $3 Billion by DTE Energy (2007). This is higher than Len's 350Mx4 for a 750 MW reactor (1.4B/750MW or 1.87B/1000MW) by almost a factor of 2. Based on this DTE estimate, a better figure for the 750MW reactors would be $2.25 Billion, probably more considering the worse economies of scale.

(DTE also said they could get up to $300 Million in Federal money to help with the construction.)

So I stand by my 8 cents.....

B) Not applicable in Canada as all private-held nuclear (90%) is profitable. Any nuclear which managed to avoid the inexcusable legal delays of the 1980's in the US is also not a burden to shareholders I'd expect.

C) Current reactors, eg. Bruce, are already scheduled in financial statements above for >50 year lifetimes. (Chances are they will never retire, just continually upgrade). Agreed, refit costs also fairly high but a long-term investor could make a good case for running the first 20 years at breakeven just to get the next 30.

I still contend that "Levelized Cost" stuff is FAR to subject to the viewpoint of the calculator. Define "subsidy".

It's not really so black-and-white, largly opinion. Also, the jobs Canadians get to do on a new reactor for AECL are distinctly different than the placing re-bar and pouring concrete type of "local input" we'd get on new reactors from AREVA or GE.

Then the US NRC said they "wouldn't have time to evaluate the design" for licensing. So materials costs may have increased some lately, but you're way high for a smart install with no delays.

The total federal subsidy to them was around $500 million per year. How much of this is for R&D I don't remember, but without this money AECL would not be a viable business today.

CANDU ACR is actually a 1,200 MW reactor.

"The design promises significantly reduced specific capital costs, and lifetime Levelized Unit Energy Costs. Its shorter construction time reduces financing costs and responds to market needs. Overall, the ACR-1000 is competitive with, or more economical than, gas or coal power generation, and other nuclear power generation technologies."

[From an interview with John Polcyn, AECL, July-August 2004, Nuclear Plant Journal NB the interview discusses the ACR-700, the 1,200 MW ACR-1000 now available should be more economical, though $Cdn-US exchange rates have gone up] http://npj.goinfo.com/NPJMain.nsf/0/925c1cd59329aba586256fe70058f59b?OpenDocument

"What is the current overnight capital construction cost of ACR-700?

We are projecting the cost to be $1,000 (U.S.) per kilowatt installed for the 5th unit (the first unit of the third twin). The cost for the first unit will be $1,255 (U.S.) per kilowatt installed. The second twin units will be in the range of $1,100 (U.S.) per kilowatt. The first plant will take 44 months for construction and the 5th unit will require only 36 months construction time period. AECL has designed the ACR-700 for modular construction based on the success we had on Qinshan in China. We currently have over 200 modules which we envision will be built at various locations in the U.S., which will reduce our onsite workforce considerably as compared to the "stick building" approach of building everything on site as was done for the existing operating nuclear power plants in the U.S. "

What happened was that a traditional monopoly utility discovered that improving nuclear operations would result in nice profits to the shareholders. The utility average capacity factor in 1985 was about 70%. Management (and I was a management employee) quickly set about making the asset more valuable by boosting capacity factor to 90% and reducing outages from 90+ days to around 33 days. Diablo Canyon set a number of production records for the US nuclear industry in the day, including world record run - I still have the commemorative jacket. The current utility outage requirement for NEW plants is 17 days.

Spurious scrams were also reduced, improving both the bottom line and public safety.

As to why we don't use levelized cost in business decisions, think about something called "the time value of money." Would you think it wise to lend me $1 million today on a promise to get $1 million back in 2 years? In the mean time, I could make $100+ thousand in interest. Likewise a dollar sunk in a project today is not the same as a dollar received in 60 years at end of plant life.

A guess regulators don't have to worry since the capital costs are all OPM.

A heavy water reactor has a HUGE first cost inventory of expensive heavy water, hence the AECL's accent on "levelized" costs since the cost of capital for that heavy water makes the technology uneconomic to US buyers. The lower enrichment costs don't begin to balance that factor.

http://www.energycentral.com/centers/news/daily/article.cfm?aid=10042857

provides yet another example of the "working" waste programs for other industries / energy sources.

By any rational definition, the nuclear power industry is far closer to having "solved" its waste issues than most, if not any, other industry. Other industries simply aren't even asked to answer such questions. How's the process (and associated scientific proof) for isolating cadmium/arsenic-bearing solar cells indefinitely coming along? How about all the other types of E-waste. Other toxic chemical wastes? Petrochemical wastes? And of course, all that coal ash....

We know, right now, that nuclear waste will never have anywhere near the impact/risks that other waste streams do, no matter what we end up doing with it (even if we bury it and leave it forever). Of course, the real truth is that we aren't going to have to contain it for 10,000 (or a million) years, but only for the hundred years or so (at the very most) it will take us to come up with a way of processing and eliminating the waste. Either way, and no matter what we do, one thing is clear. Public health and the environment will never be significantly impacted. We know that right now, with certainty.

All sources get large subsidies, and on a per kW-hr basis, renewables' are the largest by far (this is even more true in Europe). And of course, there's nothing like an outright mandate (what I call the "ultimate subsidy"). What subsidies nuclear has gotten have mostly occurred in the distant past. In the '90s (the Clinton Era) nuclear got virtually no subsidies at all, while all other sources got healthy subsidies (which is what Clinton meant when he said that nuclear should be "left to compete in the market"). His idea of "fair competition". In recent years, things are finally turing around, and nuclear is more on a par with other sources.

The following article,

http://www.energycentral.com/centers/news/daily/article.cfm?aid=10044232

is just one example of some of the hidden (indirect) costs associated with many renewables (wind) projects. Are these costs included in Tam's "levelized cost" calculations? Will the ratepayer's pay these additional costs, or will it come out of the producer's bottom line? Or, will they ask the govt. to cover these extra, indirect costs? The back up power (intermittentcy) and transmission costs associated with wind are formidible.

The study below provides estimates of the overall energy inputs for the entire nuclear power process (including mining, ore/fuel processing and enrichment, plant construction, decommissioning and waste management/disposal, etc...). The study shows that the total inputs are ~2% of total output, a relatively good EROEI, I think.

http://www.world-nuclear.org/info/inf100.html

BTW, your calculations earlier were for gaseous diffusion enrichment, which is much less efficient (and requires much more energy) than centrifuge technology. The latest technology uses less than one tenth as much energy (electricity) as the older approach. In the US, we are in the process of building one or two new enrichment plants that will use the latest, gas centrifuge technology, and we will then (soon) retire our old (~40+ years old) gas diffusion enrichment plants. As a result, the energy input for enriching the fuel will fall by more than an order of magnitude, to no more than 0.25%. I believe the study I linked assumed centrifuge technology, which is why the sum of all energy inputs could be ~2% or less.

Why am I wrong? The answer is that as a teacher of economics I am guilty of 'best-practice/state-of-the-art thinking. When I was in Japan with the US army I encountered plane parts and weapons that looked like artifacts from the 19th century, but for the last two decades the Japanese have been able to construct nuclear facilities in 4 years. Is it really true e.g. that the US cannot do the same, and do it in the immediate as compared to the distant future? That it is impossible in what some people call the 'capital of technology' to construct an energy base of reliable and comparatively inexpensive nuclear power, using the same approach as the French when they came to the conclusion that they did not want to be dependent on foreign sources of oil, gas, and coal...

The same sort of comparison is valid where Sweden is concerned. When you look for cost (and surprizingly price) figures, Swedish nuclear WAS comparable with Swedish and Norwegian hydro. 'Was' because the half-baked electric deregulators and haters of science, technology and rationality finally gained the upper hand, and gentleman, they intend to keep it.

Fred

Our electric industry regulators are under provincial government jurisdiction, and they often appear to turn a blind eye to new technologies unless the provincial governments in power force its use on our electric industry. When they don't force anything new, nothing gets done with the excuse there is no way to pay for it, in spite of many in the public recognizing a new technologies' benefits.

Fred

If the vessel to which you are adding something already contains more of that something than is desirable, continuing to add that something more slowly will not resolve the issue. If the vessel is a common vessel and others are also adding that something to the vessel, even if you and/or one or more of the others stops adding that something to the vessel while others do not stop, your actions will not resolve the issue. Once everyone stops adding that something to the common vessel, it becomes possible and perhaps practical to begin removing a portion of that something from the common vessel to achieve the "ideal" vessel content.

The statement above is the reality of the CO2 issue, if you believe: that AGW is occurring; and, that the "ideal" global average temperature and atmospheric CO2 concentration have been exceeded; and, that it is essential to return to the ideal. If you accept the logic, the ultimate global CO2 "cap" must approach zero asymptotically, or the carbon tax must be large enough to force carbon emissions to approach zero asymptotically.

If you accept the logic, then no US county or state, no single national government or sub-set of national governments can resolve the issue. Only universal, global action would be sufficient. If you accept the "tipping point" and "global catastrophe" arguments, we'd better hurry!

If you accept the logic, the combustion of coal, oil and natural gas must cease, or the resulting CO2 must be permanently sequestered. That leaves us with hydro, geothermal, solar, wind, OTEC, wavepower and nuclear. Hydro has reasonably predictable "reliable" and "source of opportunity" components. Geothermal, OTEC and wavepower can be reliable sources, when and where available. Nuclear can be reliable essentially anywhere. Solar is intermittent, but mostly predictable. Wind is intermittent and less predictable. Solar and wind must be coupled with storage if they are to make the transition from "commodity replacement" to "capacity replacement".

Therefore, I'm with you. Start building the nuclear now, for both replacement and growth, until its combined reliability and cost are eclipsed by one or more alternative technologies. In the meantime, let's agree to stop comparing the "costs" of "reliable" and "source of opportunity" power as if they were the same thing. They're not.

Global warming or AGW is basically a non issue for me. I dont know anything about the physics and have no intention of learning. I'm also not particularly interested in the economics or politics. What I do know however is that I would never accept the opinions of people like Lomborg or Michael Chricton, who as far as I can tell dominate the anti-AWG booster clubs. I also dont know anything about carbon taxes, however some day I hope to completely understand the mechanics of emissions trading, which I presently regard as a scam.

Where the energy thing is concerned, I'm mostly concerned with Sweden. I want the two reactors that were closed replaced, and a reactor the size of the one they are constructing in Finland constructed in this country. I also think that it is a good idea if the nuclear inventory in the US is not allowed to deteriorate, and possibly is increased. In the short run I mean, because in the long run the people in the US and Sweden are not going to accept a low-energy future, and that means a lot more nuclear.

I'm partial to levelized costs. Their use in a book by Bertrand Barre and Pierre-Rene Bauqis can help me prove to the broad masses what I want to prove, which is that nuclear makes a lot of sense. As for solar and wind, this is what the people want, so give them a taste. But just a taste.

Anyway, I think that I've given the customers considerably more than they paid for where oil and electric deregulation are concerned, and now - before the outdoor tennis season begins - I'm going to take a close look at nuclear. And before I forget, THEY are NOT going to deal with this global warming thing in a way that we economists would judge "optimal". Instead, there might be some very ugly scenes somewhere down the pike, but that's for the Bruce Willis lookalikes in the Pentagon to deal with.

Fred

We're pretty much on the same page.

My point above is that, if the AGW "acclaimers" believe we are facing a serious problem, why do they continue to focus on unserious proposed "solutions".

They act like they see an opportunity which must be "snuck up upon", rather than a problem which must be addressed aggressively.

I guess that makes me a cynic, at the very least.

Ed

"[E]stimated spot market revenues did not provide sufficient fixed cost recovery for new generation investment. However, the analysis for the past four years (2004-2007) does show a positive trend of net revenues increasing for a new combined cycle unit, with estimated net-market revenues in 2007 of approximately $84/kW-year and $95/kW-year for Northern and Southern California, respectively, but these estimates are well short of the estimated annualized fixed costs of $132.6/kW-year. Despite the positive trend in spot market revenues, the fact that California’s spot markets did not provide sufficient market revenues for fixed cost recovery five years in a row underscores the critical importance of long-term contracting as the primary means for facilitating new generation investment."

Perhaps what you see is generators realizing that they should let the California market "go forth and have intimate relations unto itself", until such time as the market provides adequate returns to capital. Based on recent history, investors would have to be "certifiable" to invest in generation to serve California, especially if it is located in California. Hopefully, the market will begin to price spot power reasonably before there is none available. Otherwise, it's "lights out".

"The answer, my friend, is blowin' in the wind" - if the wind is blowin'. Otherwise, bend over and hold your ankles.

Ed Reid

Odd but what CAISO complains about is pretty much what I predicted in my 2003 article, "Deregulation and Nuclear Power";

http://www.energypulse.net/centers/article/article_display.cfm?a_id=214

In essense, we have a fluctuating market where overbuilding creates surplus that result in below replacement revenues until a shortage occurs when the resulting profits trigger another way of overbuilding. I likened it to pork belly futures.

Malcolm

Your analysis re the cost of nuclear power, while already contradicting your figures cited in your original article are still too low, apparently b/c you use capital cost figures that are far too optimistic. Again, each country is a little different, but we were discussing US nuclear cost figures and all you have to do to see why your analysis is wrong is read the Keystone report, which lays out in gory detail their analysis. And then keep in mind that capital costs have risen substantially since the Keystone report was produced.

Malcolm, the worst outcome is of course a growing population and a decreased supply of energy that leads to a lower standard of living. This is what we are going to get in this old world of ours thanks to people like Tam. But don't worry. In North America and Scandinavia the television audience is not about to accept a lower standard of living, regardless of what they say after the cognac has gone around the table a couple of times. I can also mention - but don't tell Tam - that the nuclear plants that they will start building 5 years from now should have begun construction 5 years ago when the interest rate was at rock bottom. Of course, in my calculation I used an interest rate of 10%, although if things worked the way that I think they should work, the rate would be the 'prime rate', which is probably about 5% now.

Incidentally, several people have told me that I am too optimistic where the supply of nuclear technicians, engineers etc are concerned. I don't believe that for a minute. If there arn't enough of these people it's because governments are too dumb to recruit and train these people in the manner that they should be recruited and trained. If governments are serious about boosting the supply of energy they can do it in a heartbeat. I don't particularly care for the governor of California, but he has the beginning of the right idea about how to deal with this energy dilemma, particularly if he does not listen to half-baked defeatists who need to be taught how to think.

Fred

The new Fermi plant is estimated to cost $3 Billion, probably a reasonable estimate given they've built one before and it is going to be right next to Fermi II. Some ancillary resources will already be in place. It will produce 1000 MW.

Depending on the interest rate (6-8%) over 30 years that will mean an annual capital cost payment of about 200-250 million dollars. Assuming 90% capacity, that means a total of 7,884,000 MW-hr will be produced. or 7.884 x 10^9 kw-hrs. Dividing 2.5x10^8 dollars by that and we get 3.1 cents per kw-hr. Maybe round it up to 4 cents given the inevitable cost overruns. Add the operating costs of 3-5 cents per kw-hr and we get 7-9 cents. Not 3 cents. Not 5 cents. Not 14 cents.

One could tail the debt out to 40 or 50 years, but it wouldn't really improve the payment that much, plus after 30 years, you probably have to spend some money on long term maintenance, etc.

Also Fermi II does a little better than 1000 MW, close to 1100 MW, and the new plant is expected to be more efficient still. This will bring the numbers down a bit.

Can you "pony up" a few numbers, Tam,

Fred

Capital Costs: 4.6 to 6.2 Fuel: 1.3 to 1.7 Fixed O&M: 1.9 to 2.7 Variable O&M: 0.5 to 0.5 Total: 8.3 to 11.1 (These are in Cents/kWh)

I think the capital costs are too high. I don't see how this is supported with reasonable calculations. I think some folks might think their fuel is too high as well. The O&M is probably not too far off. Even so, this is a likely mean value of 9.7 cents.

If we lower the capital costs by a 1.5 cents (3.1 to 4.7) so their low end matches DTEs estimate, we have a total of 6.8 to 9.6 cents, with a likely mean value of 8.2 cents.

Good heavens, no, Tam. Fred is, well, a bit more aggressive than I. The Keystone report, in my estimation, contradicts nothing. You are, however, at least half right about the report's contributors and endorsers. Half of them are not political hacks. Of course I'm referring to the half that see a vigorous future for nuclear power.

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 algebraic. 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 algebraic 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."

Bertrand Barre and Pierre-René Bauquis also use 0.20 in their calcuations, labeling it the wind capacity factor for Europe. Probably makes some people think of calling French fries Freedom fries, doesn't it - although I'm not going to mention any names.

Fred

That's not my data. I just copied that from the Keystone report. I am not a nuclear power costing expert, nor do I play one on TV.

Fred.

I'm actually not sure that Keystone's capital costs are too high, whereas I'm quite certain that the quoted operating costs are way too high.

The kW-hr cost due to capital for future construction projects is very uncertain, due to uncertainty in the actual cost as well as its high degree of sensitivity to financing terms (i.e., the interest rate plus a lot of other factors). Operating costs on the other hand are known to a much greater degree of accuracy. For our large fleet of existing plants, the total annual operating costs are a matter of (documented) record. And there is no reason to believe that these costs will be any higher for new plants. In fact, given all the time spent to improve the designs and incorporate all the lessons learned from 30+ years of operating experience, the O&M costs will be lower, if anything.

The following link provides a detailed (and recent) report on nuclear plant operating costs. There are also a bunch of useful download links under the "production costs" header, that give a breakdown of the overall cost (i.e., how much of the fuel cost is from raw ore, enrichment, etc....). They also give operating cost comparisons between energy sources.

http://www.nei.org/resourcesandstats/nuclear_statistics/costs/

The average total nuclear plant operating cost (for 2006) was ~1.75 cents/kW-hr, ~0.5 cent of that being for the fuel assemblies. This number has been trending downward for years. The increases in uranium ore price may slow, or perhaps even reverse this downward trend, but total operating costs will not exceed 2.0 cents/kW-hr.

Thus, I would add 2.0 cents/kW-hr to your capital costs (be them from Keystone or wherever) to get nuclear's total cost. Based on the capital cost range you gave, it looks like the cost range will be 6.6 to 8.2 cents. Sounds more correct to me, and it agrees better with DTE.

Based on rough rules of thumb I've developed over the years, capital kW-hr costs of 4.6-6.2 cents correspond to overnight capital costs of $2,300 to $3,100 per kW. If DTE can build the plant for $3,000/kW, then the final total power costs should be somewhere between 7.5 and 8.0 cents/kW-hr, according to my rough calculus.

$0.0332, $0.0276, $0.0250 / kwh -- 6% interest

$0.0509, $0.0472, $0.0462 / kwh -- 12% interest

Clearly illustrates the importance of interest rate assumptions in above numbers, which is why in IMEUC I proposed offering private generation an insurance guarantee of their bonds with the taxpayer's worth for approved projects, thus assuring AAA bond ratings and near-prime interest rates.

Fred

Essentially, I don't go very far by anybody's (calculated costs), and prefer actual balance sheet figures as I've quoted above. $0.036 cost, significant profit on $0.046 sale on a 20 yr old reactor set with a lot of life remaining.

Speaking of the good Tam though and his hobby horse, wind, I think that the work done by Jeffry Michel in Germany on the capacity factor in that country - 0,17 average although maybe 0.20 last year - tells some of us what we want to know, because they are apparently out of land sites that (in theory) could pull that capacity factor up.

Fred

I would also argue that a "70 year amortiation" is impoossible. However, a 30 year one is not and many US plants have 20 year ones. Many plants (I think it's about 40%) ARE in fact paid off and thus the capital costs have disappeared and thus CHEAP to run.

The problem is that Tam doesn't really levelize the costs over the actual real lifetime of nuclear plants which is now going to approach 60 years, not the original 30 and 40 for most plants.

New Gen III plants will not only run for 60 years, they are likely to run for more than 80 years. Then what? it's even CHEAPEr. Most NPPs in the US are gold-mines for the owners since they are so cheap to run.

David Walters

For example, it wouldn't cover tax treatments. Since I'm posting on the day before my US and state taxes are due, let me expand a bit.

In the US, the Internal Revenue Service allows accelerated depreciation (actually "Modified Accelerated Cost Recovery System" (MACRS)) that classifies assets into classes then gives the % of first cost (basis) that can be deduced per year from taxable income. [Note - I'm not a tax accountant!]

Solar and wind equipment used to make electricity is a five year asset class while nuclear plant is 15 year asset class. Both exclude the underlying land values which do not depreciate.

That means that the owner of $3000/kW plants, one wind (or solar) and one nuclear, could writeoff $960 the first full year for his wind or solar plant but only $285 for his nuclear plant per kilowatt capacity.

At the 39% top corporate tax bracket for 1,500 MWe installed, that's almost $40 million a year difference to solar or wind in after tax earnings that can be used for dividends whether electricity is sold or not.

For perspective, with 50% equity and 6% ROE, total profits would be about $135 million if everything went well. This favorable tax treatment increases the cash available for dividends by about 30% over nuclear that second year of operation.

Again, I'm no tax or financial accountant but this is a reasonable ballpark estimate of the difference tax treatments make in investment decisions not accounted for in "levelized costs."

It's important to distinguish public policy thinking from investor thinking. Investors will of course consider all the relevant tax breaks and other subsidies b/c it impacts their business decision.

Public policymakers, however, need to consider the "naked cost" of generation and then decide what subsidies, if any, to provide, or what technologies to permit/pursue in light of the lay of the land for subsidies at the state and/or federal level. So discussion of levelized costs for new plants is the only appropriate analysis from a public poilcy point of view.

Excepting socialist generation, the motivations of investors are very pertinent since private investors are expected to put up the money at risk.

You're clearly missing the point with your "socialist generation" statement. Do you understand the difference between an investor and a policymaker?

Are you being obtuse or just rude?

A "policymaker" wants to play with other peoples' money. As to "socialist," I'm applying the strict definition - "government ownership of the means of production" - here, government-owned electrical generation. "Policymakers" as government officials can require involuntary contributions from taxpayers or otherwise indebt them to build government-owned generation.

As to subsidies, the production tax credit for both an nuclear and "alternative" and "renewables" has little justification if BOTH are removed. The insurance against licensing risk has some justification in that poor government is the source of the risk. With clear regulations and crisp judging, there would be no risk and no need for insurance.

Subsidies for "clean coal" (carbon sequestation) are pure pork with little expectation of success based on thermodynamics.

BTW, a small correction to my calculation about: the after-tax profit would be about $83 million so the tax break of $40 million would be almost a 50% bounty.

You seem to misunderstand the purpose of risk insurance for nuclear plants. The Price-Anderson Act insures against the risk of serious accidents. There are other "construction delay" insurance policies available for nuclear plants. Both types of insurance are socialized costs (meaning they're paid for by ratepayers and taxpayers) with privatized gain (meaning utilities and merchant companies will pocket the profits).

Joseph, I'm curious for the basis of your statemet (quote) Subsidies for "clean coal" (carbon sequestation) are pure pork with little expectation of success based on thermodynamics.(/quote) ? It would seem to me that a) inground oxy-blown gassification accessing otherwise unmineable coal b) post-expansion cooling to < -0 degC to condense out water c) profitable sale of the CO2 to Extended Oil Recovery operations. ...... make "clean coal" a highly likely economic proposition which shouldn't need subsidy.

Tam, please don't tell me about what they have done, are doing, or will do in Sweden. The reduction in nuclear capacity is a gigantic mistake - though not as 'gigantic' as entering the European Union of course. Just about everyone knows it of course, but they are too 'polite' to say or do anything about it.

And by the way, the movers and shakers in Germany are talking now about extending the life of nuclear plants, AND...bringing more coal into the picture. (You thought that I was going to say 'AND...building new nuclear plants'.)

But, building new nuclear plants is not likely but certain where Germany is concerned. If you were worried about that, you can stop worrying now.

Fred

If Merkel can fangle a majority in the upcoming German elections, you can kiss the reactionary "phase out" good bye. And yes folks, the Germans do plan to build more coal plants (not as many as first considered: 26!!!! but a "mere 8" after the backlash).

Sweden. Ahhh...Sweden. At no point in Swedish history did the majority of Swedes *ever* support a phase out of nuclear energy. Back in the 80's they were not presented with a "continue" or "phase out" choice. The choice was "phase it out now" or "phase it out later" was presented. The pro-nuclear Swedes opted for the latter.

The bottom line is that countries with lots of nuclear generally have lower carbon emissions. Obviously. It means that they have almost no coal. This is a good thing, not a bad thing.

Back to Germany. Movement is afoot to extend, as Mr. Banks indicates, the life and capacity of Germany's nuclear power plants. This is, of course, "cheap to do", and since we are talking economics here, a very important development.

Czeck Republic, Slovakia, Romania, Poland, France, and Bulgaria are all expanding nuclear energy. The Swedes will surely overturn their ban. And the Italians...will continue to display the ultimate in NIMBYism by quadrupling their investment in new nuclear everywhere but in Italy itself.

David Walters

I'll grant that there may be special cases where unique coal resources or unique markets for CO2 could make CO2 recovery economic. However, a stand-alone coal plant requires either pure oxygen input or massive and expensive means for separating the CO2 from the 80% of N2 in the exhaust. Either is energy-intensive and blows the EROEI for the process. Based on the first principles of thermodynamics, it is a dead end for stand-alone plants with no ready market for the CO2.

With insurance payouts, the one doesn't "pocket the profits", one covers one's losses. The construction delay insurance for nuclear is against licensing risk only.

So the public bears the risk of these socialized insurance policies, reducing costs dramatically for private companies investing in nuclear plants. Socialized risk equals private gain in this case.

Too bad nuclear proponents like Len Gould feel the need to misrepresent wind power in order to promote nuclear power.