I stopped studying this issue a couple of years ago, but unless I am mistaken it is still considered a failure by European observers. And not just European. David Victor (of Stanford university) and Ruth Greenspan Bell (of Resources for the Future) had an unfriendly attitude toward that practice, and I'm amazed - shocked no less - that they were unable to get their messages through to the good Waxman and Markey. and their advisers.

Welll, maybe I'm not shocked or amazed or anything else., considering.....

No. Ultimately, a "cap" sets an upper limit on annual carbon emissions. Ultimately, a declining "cap" sets a declining upper limit on annual carbon emissions. Ultimately, a "trade" provides a degree of flexibility in the timing of emissions reductions.

Selling emissions allowances puts an artificial price on carbon emissions. Auctioning emissions allowances puts an artificially-driven "market price" on carbon emissions.

No artificial price for carbon emissions will be correct, since the cost of reducing carbon emissions, even in an artificial "market", would increase progressively as the easier, less costly opportunities to reduce emissions are exhausted.

Any "price" set on carbon emissions would increase the cost of compliance with a "declining cap", since the "price" would have no direct impact on the capital investment required to implement the low/no carbon technologies which would actually be required to reduce the annual carbon emissions.

This discussion, here and elsewhere (including the US Congress), is distorted by the indiscriminant use and intentional and unintentional misuse of words and expressions.

I believe that all of the discussion of "pricing carbon" is an intentional misdirection, designed to divert attention from the massive capital investments which would be required to actually reduce carbon emissions in response to a declining "cap". I estimate these investments to be an order of magnitude greater than the frequently discussed federal revenue stream from allowance sales or auctions.

Building much more nuclear power is a prime example of one way to reduce carbon emissions that is far too expensive. Professor Banks is right, America cannot really live without nuclear power. But sadly America, and Canada, will be gradually forced to live increasingly without much of it because the up-front costs of building them is too high to stomach.

Ontario recently solicited bids for at least two new reactors to add to its Darlington power plant. The Canadian company AECL's bid was the only compliant bid and was poised to win the contract, but its price tag was far too high for the Ontario government. Quoted below from today's Toronto Star on-line newspaper article "$26B Cost Killed Nuclear Bid" by Tyler Hamilton, found at http://www.thestar.com/business/article/665644

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

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

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

"It's shockingly high," said Wesley Stevens, an energy analyst at Navigant Consulting in Toronto.

Energy and Infrastructure Minister George Smitherman announced on June 29 he was suspending a competitive process for the purchase of new reactors for Ontario. He cited the price tag as "billions" too high, but would not reveal the amount of the bid from AECL, deemed the only compliant proposal out of three offers.

AECL's $26 billion bid was based on the construction of two 1,200-megawatt Advanced Candu Reactors, working out to $10,800 per kilowatt of power capacity.

By comparison, in 2007 the Ontario Power Authority had assumed for planning purposes a price of $2,900 per kilowatt, which works out to about $7 billion for the Darlington expansion. During Ontario Energy Board hearings last summer, the power authority indicated that anything higher than $3,600 per kilowatt would be uneconomical compared to alternatives, primarily natural gas.

Much of the dramatic price increase relates to the cost of labour and materials, which have skyrocketed over the past few years. Nuclear suppliers and their investors also have less tolerance for risk.

The bid from France's Areva NP also blew past expectations, sources said. Areva's bid came in at $23.6 billion, with two 1,600-megawatt reactors costing $7.8 billion and the rest of the plant costing $15.8 billion. It works out to $7,375 per kilowatt, and was based on a similar cost estimate Areva had submitted for a plant proposed in Maryland." ---------------------------------------------------------------------------------------------

The problem of course is the same as that in Germany toward the end of WW2. As Speer pointed out, even intelligent people believed up to practically the last week of the war that Germany would manage to escape defeat - or at least unconditional surrender. Today, even intelligent people are buying the cap-and-trade fantasy.

Fred

If as professor Banks claims the real costs of nuclear should actually be near $2500 to $3000 per kilowatt, it begs the question - WHO IS GOUGING WHO IN THE NUCLEAR GENERATION BUSINESS ?

But even so the question remains as to how are we going to get the $2500-3000 figure I mentioned earlier. Well, the structure that houses the reactor - no matter how complicated - is easy to put together in the two countries in which I have done any thinking lately about structural engineering, and these are Sweden and China. The problem is the reactor itself, and that problem is not going anywhere as long as they have a construction program resembling the one in Finland. for their new Gen 3 reactor.

Obviously those reactors have to be constructed in factories, or factory-like installations. This is a comparatively new idea - as far as I can tell about 40-50 years old, or almost as old as the peaceful use of nuclear energy. The question then becomes why isn't this being done, and for the time being I think that I will leave this up to someone else to answer.

Reactors these days (not 40 years ago) require ultra heavy forgings, i.e. greater than 180 tons, no U.S. supplier can deliver this size. a given reactor may require 200 forgings in all. The reactor vessle alone takes 7 large forgings, one of them 500 tons. The AREVA design uses 4 steam generators each greater than 500 tons. Get the idea?

But here's the problem. To build a forge capable of handling 600 ton ingots would take ten years and at least a billion dollar investment and the forge of that scale would then be capable of producing far more than the 70,000 tons of steel for all of the reactor orders for the U.S.. That is not nearly enough to pay for the investment.

So the real question is why would anyone make that investment when: A) you need a mill close by to supply the 600 ton ingot when, in fact, there isn't one here in the U.S.. And B) nuclear power is an incredibly uneconomical way to generate electricity in the first place at about 20 cents per kWh.

The new study by Mark Cooper at Institute for Energy and the Environment at the Vermont School Of Law (The Economics of Nuclear Reactors), pegs the cost of new nuclear at 12-20 cents. The recent Severance study pegs it at between 25-30 cents. Six other credible studies peg it about the same.

In fact the conclusion of the Cooper study is that nuclear in the U.S. over the life of the plants would cost Americans up to $4.1 trillion more than it would cost to generate the same electricity from any number of more sensible alternatives.

The point that I have made previously on this site is that nuclear developers have little interest in providing end use energy to the public at any cost nor is their interst in providing jobs, their real interests are quite different and have much more to do with creaming huge amounts of money off the top of a largely corrupted funding process here in the U.S. It's a way to get alot of free public money in the form of loan guarantees, subsidies, etc.

The same sort of thing holds where the US iand nuclear is concerned. Why spend billions and billions in Iraq and Afghanistan instead of for the extra heavy forgings you are talking about? After all, the taxpayers in the US want those forgings, although perhaps they are too ignorant to know it YET.

And as for it taking ten years to construct an important piece of equipment, nobody wil ever make me believe that. The shipbuilding program that began after Pearl Harbor resulted in the US building a navy that was larger than all the navies in the world in three years, and which included at least 75 aircraft carriers. The 12 reactors that provided approximately half of the Swedish energy supply were constructed in about 13 years.

Sensible alternatives. What sensible alternatives? Let me note once more how I deal with all this. The great American TV audience has come to believe that there are sensible alternatives to nuclear. They can't find anyone who can prove that to my satisfaction, however I accept that in a democracy their illusions must be respected. I'm so generous here because the optimal program for the US (right now) probably does not call for a huge expansion in the nuclear sector. The optimal program in fact just calls for the decision makers and movers-and-shakers to educate themselves sufficiently in these matters to understand how the US energy sector will have be be structured in the long run, since in the short run greed, dishonesty, incredible ignorance and a few other things of that nature seem to have taken over.

As for the Vermont University Study and what you call other credible studies, please pardon me if I ignore those. I took a look at some so-called credible studies of future electric costs about a year or two ago and ended up depressed...for a few minutes. Something like when I taught in Hong Kong and received some 'credible' information about electric deregulation from a number of other economics teachers in that great city. I fell into a deep depression that lasted on that occasion until the next morning, when I bought a copy of Fortune Magazine, and learned that many executives at Enron were selling their shares in that company.That told me all that I needed to know about credible views of electric deregulation, and before I left town I used some very unacademic language to describe the research of persons I disagreed with.

A) The scale of the plant required to do the forgings of that size is too big. It could do the forgings for the 33 reactors but would have far too much capacity in order for the investment to pay back. Also how about a mill that can deliver a 600 ton ingot?, there isn't one in the U.S.

B) Once such a facility is up and running in the U.S., in accordance with your advice, the international market would be oversaturated because China, Russia, South Korea, France, India and the UK are all trying to do the same thing...i.e. jump on the bandwagon to cash in on the so called nuclear renaissance, and they have a big jump on the U.S. relative to ultralarge forging capacity. Again a really bad business decision for the U.S.

The Cooper study is an analysis of HOW nuclear cost estimates are arrived at, he analyzes 36 other recent cost projections for new nuclear in this paper. He also examines these cost estimates in relation to alternatives. (www.vermontlaw.edu, Ailis Wolf, 703-276-3265 or aawolf@hastingsgroup.com)

FB above: "Sensible alternatives. What sensible alternatives?" 1. Waste heat recovery and conversion to electricity using Organic Rankin Cycle expanders or external combustion engines.(less than $.02 / kWh) 2. Enhanced geothermal ($.04-.06 / kWh production cost) especially now with the prospect of using biphasic fluids for much higher efficiencies at low temps 3. Load shifting using thermal (ice)storage to eliminate peak demands 4. CSP with thermal storage ($.04-.07 per Len Gould on this site) 5. Using torrefied biomass to replace the coal at most coal fired plants 6. Demand side management especially for chiller controls, variable speed drives on industrial motors, lighting and voltage control 7. mCHP (with heat recovery on site) of all sorts including solid oxide fuel cells, pellet fired external combustion engines/gen sets. 8. Wind for 10-15% of the U.S. demand Number one alone (waste heat) could generate eight times as much electricity as all 33 proposed nuclear plants, it could be done today with a payback of less than five years on the equipment and for less than $.03 per kWh.

It will be decades - at least - before the things in your last paragraph make any serious impression on the energy picture in e.g. Sweden, despite the influence of environmentalist morons and limosine liberals on the political decision makers. With all due respect, those figures of yours are absurd - at least in the short run. I'm prepared to believe though that in the long run - after all the glitches are smoothed over - these 'innovations' might have something to offer, where the emphasis is on 'might'.

Where nuclear cost estimates are concerned, I don't require the assistance of Mr Cooper. I know all that I need to know about that issue - in fact I taught it to first year microeconomic and finance students for well over ten years.

Not at all true:

For example (item #1) ElectraTherm can show performance figures for their installations. They are only one of many companies in this field which includes Ormat Inc, a very large company, who have been doing this for years. The Bent Glass installation in Philadelphia will have a payback of less than two years.

Item #2, enhanced geothermal; 4 -6 cents is a well known and understood number that is not questioned by any engineer or knowledgeable planner including the people at MIT who conducted some of the better studies on it.

#3 ice storage load shifting. These systems were in place 20 years ago and are only now really catching on. Peak shaving alone would negate the need for new generation for the next ten years according to recent engineering studies.

#4 Len Gould sited the S&L study that forecast 3.5 to 6.2 cent electricity for CSP. Seimens and investors in Germany are now going forward with the Desertec project in N. Africa. So what is wrong with that study?

#5 Torrefied biomass startups are all over the place here in the U.S. because they have a coal equivalent fuel at under $5 per million BTUs, and with anticipated carbon credits, very profitable. You don't think torrefaction is possible and could be done today on a large scale?

etc, etc....FB.....I think you may have a tendency to make sweeping, dismissive statements that you are not entitled to make. Everything I said in that paragraph is easily supported and well understood by those in the industry (not academia....industry)

FB: "but I've got no taste for pie in the sky, or for that matter oddball energy departures designed to allow a few highly articulate hustlers to take advantage of the know-nothings in government, and of course to get. rich in the process."

They aren't oddball to engineers who understand them and the companies now implementing them.

The problem is quite the opposite of what you are portraying in terms of policy: the approaches listed above should be funded because they all deliver elect at far below the cost of nuclear power, and can do it today... but are not funded and won't be funded because they do not support the interests of the entrenched oligarchy in the U.S. Nuclear, coal, oil and the "wars" that you rail against are all firmly in the interests of the oligarchy who are cashing in on a grand scale.

Of course if you want a neutral study, here's on from MIT

It is indeed true as our esteemed Mr. Edwards has noted that any new nuclear power plant cost estimate must include a rather large random number to feed the LAWYERS who will fight it tooth and nail at least until they've derived their pound (or tons) of flesh.

The basic premise of Barken's article still stands however, which is that we are entering a political cycle (at least temporarily) wherein our political masters have concluded they know better than we how to live our lives; are adopting measures that will A) line their pockets and B) cause havoc for those poor engineers trying to make stuff that actually works. After all, since one lawyer can cause 1000 engineers to sit idle (or unemployed) which profession is more powerful, at least in our current political world?

Thanks for telling me that Siemens is going ahead with some project in North Africa, Barry, I wish that they were going through with one in the jungle behind my house, because I own those weeds as well as the sunlight occasionally falling on it, and they might get a 'nationalization' for their troubles. By the way, it will be ten years at least before we have any solar energy from North Africa under our cooking utensils, and according to some French estimates by tht time we could be paying 300 dollars for a barrel of oil.

How many acres of weeds do you have back there? We could talk about that.

When you get into nuclear, you hear/see some strange things.

Fred

Although I have taught this to first year students in microeconomics and finance, HE COULDN'T UNDERSTAND. He has some kind of important position somewhere, but he is too dumb to comprehend the kind of arithmetic presented to first year students at Boston Public..

WHAT IS GOING ON IN THAT COUNTRY ANYWAY? WHERE DO PEOPLE LIKE THAT COME FROM? Barry, what is the point in quoting someone like that in a forum like this?

or so his bio claims.

A partial bio above Fred, I apologize for citing his recent 74 page, what I took to be, well referenced study on how nuclear cost estimates are arrived at. After this I'll cite your study, could you please give the link so we can all benefit from your erudition.

Speaking of his Yale degree and Fulbright Fellowship, I think that I deserve some favorable notice and respect. After all, I was expelled from engineering school in Chicago after failing ALL my courses except english and history, and I failed those courses twide. The Dean of Engineering pronounced me hopeless. But I improved. I improved so much that I was also expelled from the US army leadership school at Fort Ord California.

I want to assure you and anyone else with a sincere interest in the issue, that Dr Cooper wouldn't be able to benefit from my textbook. It wasn't written for anyone like him, and here I can say that if someone like that provides what you call "expert testimony" to state and federal agencies in the United States of America, then that country is in a bad _______ way.

About his well referenced study. The study that both you and I need is the one referred to by Jeff, from the Nuclear Institute. If I caught one of my students reading Dr Cooper's 'study' I would tell him or her that we dont practice freedom and democracy in my classroom where a study like that is concerned, just like we dont cater to the work of Lord Stern.

So Meester Cooper is an economist, Jeff. Maybe you heard wrong. Are you sure he told you that he was an economist and not a communist..

With the phasing out of many sources of energy from fossil fuels there is scope enough for everyone. More important is how do you form an acceptable mix? How do you get costs down so to maintain a decent standard of living? Have you examined the benefits of working together? They are far greater than this "fistfight in front of a forest fire". If you want some answers to these questions, please let me know. I am about to publish a lengthy paper on this very subject. Herschel Specter mhspecter@ns.sympatico.ca

We don't have enough textbooks in energy economics. We also don't have enough competent teachers. Where did junk like the Waxman-Markey legislation come from if not masterpieces like Cooper's 'Energy and Equity', and commentators like Barry Hanson who for some twisted reason have singled out Cooper's work as the real deal..

What's going on here? What's happening?

The question of setting standard would evolve once we consolidate out practice whole heartedly.

A couple of things from the article above. Mr. Barken refers to "pricing a pollutant." I don't care what the EPA has said, CO2 is not a pollutant, it is essential to life on this planet. The earth has gone through periods when CO2 levels were 5 or more times higher than they are now, withnot detriment to animal life and to the absolute benefit of plant life.

As for CO2's impact on the climate, I don't want to get into that. I only question what impact will the current and projected rounds of Cap and Trade have on world emmissions? According to my reading, after piling significant additional cost onto every family in the developed world, the net result will be virtually no statistically significant reduction in world temperature to the end of this century. The only certain impact will be to drive any CO2 producing economic activity that is at all portable to the developing nations.

The true benefit of Cap and Trade will be to individuals like the author, who have hitched their wagons to this particular runaway locomotive.

Paul Stevens

Now, one of the reasons that I am so positive about nuclear is that to me it is the most flexible source of energy. Some very smart people consider nuclear and the only thing they see or think that they see is a large building containing an apparatus (i.e. a nuclear reactor) that might explode at any time. In addition, it's fuel is as dangerous as poison gas and must be concealed in the bowels of the earth for hundreds of thousand of years. The fact - i.e. FACT - is that in 50 years they will be producing reactors that - scientifically - make the present reactors look like stage-coaches is overlooked. As for that fuel, later it will be dug up by robots and fed back into these new reactors.

You see, science can do this. People like me could do this if there are any faculties of nuclear engineering left for us to go to in X years.

So in Y years we we have the nuclear sector we deserve, but I wonder what kind of world those great reactors will be populating. Speaking of California's lovely governor, it might be useful to check out his film 'Running Man'. He might run past one of those reactors.

Perhaps I have a jaded view, but strikes me that a carbon trading financial market can not help but introduce more “middlemen” while opening the door for a gaming the system. Both increase the costs, to the detriment of the end user.

A more direct approach would seem more logical. Phase out the older, inefficient plants over time by increasing fees on their carbon emissions and use the proceeds to provide low interest loans for building more efficient facilities. We end up with lower emissions and less fuel use.

This is easily done at the state/regional level with the region deciding what types of new energy facilities are reasonable for their situation.

This solution completely avoids providing additional revenue to the Feds and financial markets. Alas, this would complicate efforts by politicians to curry favor (i.e. money for re-election) from the powerful, the primary objective the current legislation.

As to the cost of new nuclear power plants, +6 to 8 billion $ (US) is plausible for the larger plants (this excludes the cost to payback the debt). That is awfully high and at a level where you a playing “you-bet-your-company” for a private or public utility. History strongly suggests that costs will be higher and it will take longer to build the plant than initially expected. Few companies have the financial wherewithal to shoulder the risk.

In my opinion, new conventional nuclear plants are currently priced outside the market place in the US. To be viable, costs need to be significantly reduced.

Absolutely correct. Carbon trading is a scam designed to enrich traders. I vote(d) for a simple carbon tax at source, but one can't say the word "tax" in the US for some reason.

If we go back in time, nuclear plants built in the 70's are currently generating excellent profits for their owners while providing the end user with reasonably priced power now that the debt is paid off. These plants, however, created a lot of financially problems when they were first built. This is not that unusual for power plant investments

During the 1990's, large numbers of natural gas fired combined-cycle plants were built owing to the low cost of natural gas. When the cost of natural gas skyrocketed, numbers of owners and developers more-or-less gave the keys to the bankers and walked away.

Clearly, reducing the construction cost of nuclear plants would substantially ease the financial risk to lenders and owners. However, in the longer view, nuclear power is good for the end-user, environment as well as nation and should be more actively pursued. Such strategic thinking is, unfortunately, not consistent with the “grasshopper” mentality of America.