Nuclear power: The price is not right

[RedEarth]

Nuclear power, Part 2: The price is not right

In mid-2007, a Keystone Center nuclear report, funded in part by the nuclear industry estimated capital costs for nuclear of $3600 to $4000/kW including interest. The report notes, “the power isn’t cheap: 8.3 to 11.1 cents per kilo-watt hour.“ In December 2007, retail electricity prices in this country averaged 8.9 cents per kwh.

Mid-2007 has already become the good old days for affordable nuclear power. Jim Harding, who was on the Keystone Center panel and was responsible for its economic analysis, e-mailed me in May that his current “reasonable estimate for levelized cost range … is 12 to 17 cents per kilowatt hour lifetime, and 1.7 times that number <20 to 29 cents per kilowatt-hour> in first year of commercial operation.”

At the end of August, 2007 Tulsa World reported that American Electric Power Co. CEO Michael Morris was not planning to build any new nuclear power plants. He was quoted as saying, “I’m not convinced we’ll see a new nuclear station before probably the 2020 timeline,” citing “realistic” costs of about $4,000/kW, he said.<!---->

So much for being a near-term, cost-effective solution to our climate problem. But if $4,000 per kilowatt was starting to price nuclear out of the marketplace, imagine what prices 50 percent to 100 percent higher will do.


In October 2007, Florida Power and Light (FPL), “a leader in nuclear power generation,” presented its detailed cost estimate for new nukes to the Florida Public Service Commission. It concluded that two units totaling 2,200 megawatts would cost from $5,500 to $8,100 per kilowatt — $12 billion to $18 billion total!(These are the actual costs, not adjusted for inflation.)

Lew Hay, chairman and CEO of FPL, said, “If our cost estimates are even close to being right, the cost of a two-unit plant will be on the order of magnitude of $13 to $14 billion. That’s bigger than the total market capitalization of many companies in the U.S. utility industry and 50 percent or more of the market capitalization of all companies in our industry with the exception of Exelon. … This is a huge bet for any CEO to take to his or her board.”

An October 2007 Moody’s Investors Service report, “New Nuclear Generation in the United States,” concluded, “Moody’s believes the all-in cost of a nuclear generating facility could come in at between $5,000 - $6,000/kw.”

In January 2008, MidAmerican Nuclear Energy Co said that prices were so high, it was ending its pursuit of a nuclear power plant in Payette County, Idaho, after spending $13 million researching its economic feasibility. Company President Bill Fehrman said in a letter, “Consumers expect reasonably priced energy, and the company’s due diligence process has led to the conclusion that it does not make economic sense to pursue the project at this time.”<!---->

MidAmerican is a company owned by famed investor Warren Buffet. When Buffet pulls the plug on a potential investment after spending $13 million analyzing the deal, it should give everyone pause.

Let’s take a look at one more example. Earlier this year, Progress Energy informed state regulators that the twin 1,100-megawatt plants it intends to build in Florida would cost $14 billion, which “triples estimates the utility offered little more than a year ago.” That would be more than $6,400 a kilowatt. But wait, that’s not all. As reported by the St. Petersburg Times, “The utility said its 200 mile, 10-county transmission project will cost $3-billion more.” If we factor that cost in, the price would be $7,700 a kilowatt.

http://climateprogress.org/2008/06/13/nuclear-power-part-2-the-price-is-not-right/

[Dogmudgeon]

1. Why is it that expensive?

Pro or anti-nuclear, the answer will NOT make you feel warm and fuzzy.

Inflation is starting to hit, and hit hard, in our basic industries. Nuclear energy is not subsidized nearly as heavily as we like to believe, so the price increases are showing up almost immediately. The price of wind power installations has also increased painfully. The inflation itself is coming from, what else, petroleum price run-ups. (Coal price is involved to some extent, too.)

Next, inflation will hit industrial goods. Then large consumer goods. It will work its way toward daily consumer spending. This happened almost the same way between 1967 and 1974.

I know the anti-nuclear movement has been gloating over cost escalation for a couple years, but it is ominous for many more industries than just nuclear energy.

--p!

[jpak]

2. We have been told by NEI shills/sociopaths that nuclear electricity is the cheapest by far

$0.0183 kWh

I guess they were lying to us.

Ya think??

:evilgrin:

[kristopher]

3. Lying? NO.

They were just using the cost figure derived after eradicating the initial capital costs through a series of bankruptcies and excluding all external costs related to waste storage. Other than that, they were right on target.

Using the same process we get a cost of wind and solar of $0.000000000000002 /kWh. (I made that up)