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PostPosted: Dec 16, 2012 7:38 am 
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I wonder what's behind these high costs. How do you justify spending 11100 million dollars on a PWR? Is the pressure vessel made out of gold? Platinum steam generator tubes? Where is all this money going?


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PostPosted: Dec 16, 2012 10:54 am 
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Cyril R wrote:
I wonder what's behind these high costs. How do you justify spending 11100 million dollars on a PWR? Is the pressure vessel made out of gold? Platinum steam generator tubes? Where is all this money going?
Union wages and engineering time for regulators' sake? I have a study somewhere that shows that there was a 2X multiplier here in the USA between the least and most expensive groups of NPPs built in the early 80s due to labor costs. Material cost were effectively the same (used the same certified sources). Both China and Russia have INCREDIBLY cheap slavbor costs.

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PostPosted: Dec 16, 2012 11:01 am 
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If labor costs on average $100,000 more per FTE than in China, then an added cost of say 6000 million over a Chinese EPR would suggest 60,000 FTEY to build an EPR. That's absurd. A thousand people working 60 years!!! This can't be correct.

Something else is going on here. I can't put my finger on it.


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PostPosted: Dec 16, 2012 11:14 am 
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Cyril R wrote:
If labor costs on average $100,000 more per FTE than in China, then an added cost of say 6000 million over a Chinese EPR would suggest 60,000 FTEY to build an EPR. That's absurd. A thousand people working 60 years!!! This can't be correct.

Something else is going on here. I can't put my finger on it.
Divide by two on direct labor costs and divide the materials by two for indirect labor costs on uncertified materials, throw in maybe 1.5x more for the lawyers, there you have it! :mrgreen:

PS: It wouldn't surprise me if Hitachi has had as many as 5,000 people working for 12 years on this. They obviously intended to sell quite a number of them in Japan. Now they have to recoup their costs in a small number of plants rather than across many. Why should we be surprised if the price is so high. Maybe the UK should do a prorated repay on the costs, i.e., if the next plants sell for less, they get a prorated share of the difference back.

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PostPosted: Dec 16, 2012 12:39 pm 
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FOAK ABWRs have already been built in Japan for $2/Watt in the 1990s. On time, on budget, in a high wage country. So this one doesn't fly.

Modern Western ABWR offerings have been about 3x that. For some reason, costs have tripled in the last 20 years or so. What's the breakdown of that?


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PostPosted: Dec 16, 2012 2:53 pm 
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Cyril R wrote:
FOAK ABWRs have already been built in Japan for $2/Watt in the 1990s. On time, on budget, in a high wage country. So this one doesn't fly.

Modern Western ABWR offerings have been about 3x that. For some reason, costs have tripled in the last 20 years or so. What's the breakdown of that?

Yes there's something seriously bent out of shape here, something seriously wrong especially when consider that all of the main equipment comes from the same sources. Can local differences in construction cost, trade labour, regulatory and other issues really account for the balance. I have no answers and much the same questions as you do.

For MSR/LFTR the lessons have to be to keep your local footprint low and manufacture as much equipment as possible in prefabricated and pretested modules which you drop into place and connect up. Try to keep field erection of equipment to a minimum. This has other benefits also like reducing and simplifying site QA requirements which where things seem to go wrong on some of these projects.

This is a shame in many ways because you would like for major project to boost and enhance the local economy around the plant.


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PostPosted: Dec 16, 2012 5:11 pm 
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Yes, these cost overruns and delays are difficult to explain. But designs such as the EPR and AP1000 are built and deployed globally, so it is interesting to do a cost comparison between countries. The Chinese started building the EPR in Taishin in 2009 and will finish by next year. The Finnish and French construction of EPRs started a couple of years earlier and construction will still not have finished by next year. Strange, as I would expect western workers to have a higher productivity than Chinese workers, judging by the salaries they earn.

On the other hand, although those cost overruns are very annoying, at least most of this 'cost overrun' money stays at home in construction workers' pockets and is not sent to Russia, Qatar or Saudi-Arabia, which would be the case if gas turbine would be built and the natural gas would have to be imported. Yes, uranium would have to be imported but only in tiny amounts compared to natural gas or coal.

It also important to look at the big picture. France's (80% nuclear) annual imports of uranium (u3o8) only amount to approx. 11,000 tons, which, with a price of, let's say. 100 euros per kg, is just 1.1 bn. euros p.a. Imagine what would have to be imported and spent if coal or natural gas had to replace 63 GWe of nuclear capacity ("inefficient" PWRs). Retail and wholesale customers in France also enjoy low electricity rates in comparison to neighboring countries. If French customers would have to pay German rates it would be double the current French rate, making French electricity consumers approx. 50 billion euros worse off on an annual basis. A cost overrun of 3 or 4 billion euros for an EPR, which will run for 60 years, doesn't seem to be much, compared to that amount.


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PostPosted: Dec 16, 2012 8:07 pm 
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Cyril R wrote:
FOAK ABWRs have already been built in Japan for $2/Watt in the 1990s. On time, on budget, in a high wage country. So this one doesn't fly.

Modern Western ABWR offerings have been about 3x that. For some reason, costs have tripled in the last 20 years or so. What's the breakdown of that?
Had they gotten US NRC cert by the 90s?

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PostPosted: Dec 16, 2012 11:55 pm 
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The costs in Europe are the ones mentioned. They need their own certification and not in the US. It has to be labor costs and productivity.
If the Europe and N America import a major part of consumer goods from low cost origins, they could also import the reactors as it has a bearing on the cost of power and ultimately on industrial production. Russian and Chinese offers should be seriously considered by the UK. The fact that the British utilities are being run by EdF is probably the main block.


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PostPosted: Dec 17, 2012 12:21 am 
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I believe the major cost overrun driver is having to do things over and delays. EPR in Finland had to do a significant amount over when they discovered the sub's did not know what they had to do for a nuclear power plant.

In the US, we've had some do overs with the rebar being more modern than what was certified. They ended up ripping out the newer (and I've heard better) rebar and installing the older certified stuff. The biggest hit on cost though is the schedule delays induced by such rework.


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PostPosted: Dec 17, 2012 7:18 am 
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jagdish wrote:
The costs in Europe are the ones mentioned. They need their own certification and not in the US. It has to be labor costs and productivity.
True, but Hitachi has already paid the expense for NRC cert, according to the article. That expense needs to be repaid somehow.

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PostPosted: Dec 17, 2012 12:23 pm 
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KitemanSA wrote:
jagdish wrote:
The costs in Europe are the ones mentioned. They need their own certification and not in the US. It has to be labor costs and productivity.
True, but Hitachi has already paid the expense for NRC cert, according to the article. That expense needs to be repaid somehow.


I can't imagine the regulatory cost is more than a few hundred million $. We're talking about a billions of dollars difference that needs to be explained. It's clear that some factors are big, such as mentioned here by some people. But how big are the effects? Can we make a top 5 list of things that lead to the biggest cost overruns? Starting with this allows us to have an economic focus. For example, if errors in onsite labor are a big one, then we must increase use of factory prefabrication. This then has further implications on module size, etc.

But there are some things very wrong here, because the new AP1000 builds in the USA are around 3x the cost of Chinese AP1000s. Despite the claimed streamlined licensing and better integrated inspections (I don't buy any of it, judging from the recent rebar issue) the cost is still much higher. If it is labor cost, then what kind of labor is dominant, etc. we will need to identify this.


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PostPosted: Dec 17, 2012 4:41 pm 
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Cyril,

I cant tell you where the money is going,
but I can tell you, as soon as humans are released from
competitive market pressures, the sky is not even the start of the limit.
I offer naval ships vs merchant ships as an example.
See http://www.c4tx.org/ctx/pub/two_ships.pdf.

The LPD a modest transport which would cost less
than USD 50 million if competitively bid to the world's
shipyards is costing the US taxpayer 1.5 billion plus per unit,
and availability has stunk.

A 1GWe LWR, nuclear side only, requires very roughly the resources
(steel, etc) of a 300,000 ton tanker . The yards
can profitably build this ship (18 times the size of the LPD) for about USD 80 million.
And you can make a strong argument that the tanker
is the more complex animal facing a far more difficult environment.
BTW the yards can build this tanker with about 400,000 m-h direct labor
(roughly 200 man-years) starting from flat steel.

Jack


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PostPosted: Dec 17, 2012 5:16 pm 
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djw1 wrote:
The LPD a modest transport which would cost less
than USD 50 million if competitively bid to the world's
shipyards...
Sorry Jack, this is hogwash. The LPD17 Cl is SUPPOSED to be a WAR ship and has COMPLETELY different construction requirements. Even the "simple" act of attaching the longitudinals is made substantially more complex and expensive by the need to survive weapons effects.

I am not delighting that the LPD17 Class had, and still has, its weeping soars, but your comparison is worse than apples vs aardvarks!

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PostPosted: Dec 17, 2012 5:23 pm 
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Jack may have indirectly identified one significant reason why the costs are so high.

Large companies need to bring in a minimum set amount annually to stay in business. Indeed, when congress tried to save money by stretching the $7B CVN21 from ~7 years execution to 10, the company basically said, "now it will cost $10B".

Long execution and low rate. Build three times as many...

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