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 Post subject: Economics of Nuclear
PostPosted: Mar 04, 2014 7:54 pm 
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Location: Toronto, Canada
I have created a page that will continue to be refined about the Economics of Nuclear energy.

http://economicsofnuclear.com

One topic I am struggling with is what determines whether a nuclear plant earns money or not. The size and perhaps country or State/Province? I know that natural gas in the US is cornering the market for some states. Here in Canada we have Bruce and OPG who seem to be thriving. I see several possible explanations but want to hear some of your opinions.
1) Demand for electricity i.e. Ontario sells it's excess electricity to the US
2) Size matters i.e. Kewaunee was a small company
3) Ontario has less and more expensive natural gas?
4) Licensing is more costly in US? i.e. could that alone rob companies of potential profits?

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 Post subject: Re: Economics of Nuclear
PostPosted: Mar 05, 2014 1:57 am 
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Why did Kewaunee really shut down. What factors let that happen?

Here's what Robert Steinhaus said on the Energy Reality Facebook group

Quote:
Financial disincentives contributing to the closure of the Kewaunee nuclear plant -
1) active discouragement from the federal government
2) active discouragement from state agencies
3) low natural gas prices
4) ratcheting regulations
5) a financial environment having plenty of better and more interesting places to invest risk capital

For penetrating insights (when my inspiration flags and my mind blanks) I tend to turn to Rod Adams - Kewaunee closure announcement reinforces sense of deja vu -


http://atomicinsights.com/kewaunee-clos ... f-deja-vu/

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 Post subject: Re: Economics of Nuclear
PostPosted: Mar 05, 2014 7:51 pm 
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Another link to Kewaunee shutdown information. It's a pdf file.

http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CDgQFjAA&url=http%3A%2F%2Fkcedc.org%2Fwp-content%2Fuploads%2F2012%2F11%2FNuclear-Plant-Closure-Summary-of-the-Situation.pdf&ei=48EXU8qxEsi6yAGjxYCwDw&usg=AFQjCNHl2TI2efnt-baLJzkgCK_DNHyZYw&sig2=JQIW5IQQGQYNAf5JpB3Btw&bvm=bv.62577051,d.aWc

Several years before closure, the now defunct Nuclear Management Company (NMC) tried to make Kewaunee and Point Beach a 3 unit site. They were only about 3 miles apart. The plant cultures were too different to make a successful meld. This would have been the equivalent of a 1.5 gigawatt plant. It would have been like a small Palo Verde.

Here's another:
[urlhttp://www.jsonline.com/business/kewaunee-nuclear-power-plant-shutdown-cost-is-nearly-1-billion-lr9j5fg-203912611.html][/url]

The stated reason was low natural gas prices, but I have wondered if there isn't some sort of accounting chicanery involved to make Entergy money. That big pot of money saved up for decommissioning was turned over to them.

I don't think we'll have the low prices for natural gas very long. They are talking about exporting the stuff, using it for trucks and with the closure of beau coup coal plants many new combined cycle plants are going to be built. I think Entergy was short sighted in closing Kewaunee.


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 Post subject: Re: Economics of Nuclear
PostPosted: Mar 06, 2014 4:35 pm 
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I'm not sure how relevant these are for Kewanee, but in many places they are a big contributer.

The 5 minute auction method in cahoots with subsidized, MANDATED, unreliable power like wind and solar.

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 Post subject: Re: Economics of Nuclear
PostPosted: Mar 07, 2014 2:51 am 
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Wind or solar energy require either storage or gas back up.
If nuclear could be stored as molten salt/lead, it could be the back up for both. Solar energy storage in salt has been tried with limited success. It would enable limited renewable when available and assured power from nuclear when required. Fast/ high temperature/ MS Reactors producing heat at higher temperature will be more suitable. The storage can be arranged as a part of heat exchangers.
Gas is cheap only in the US, which may be temporary.
The Chinese have low cost nuclear and are expanding it in a big way. They are also developing gas from coal for ease of cleaning it. If they use nuclear steam for gasification, they may get it cheaper than imported gas. Cheaper nuclear and costlier gas in China could make it possible.


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 Post subject: Re: Economics of Nuclear
PostPosted: Mar 07, 2014 4:00 am 
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if you have the nuclear capacity, why bother with the unreliables?

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 Post subject: Re: Economics of Nuclear
PostPosted: Mar 07, 2014 9:09 am 
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If low capital rates can be obtained, nuclear can deliver electricity at insanely low costs - so low as to put everyone else out of business.

This is the reason I favour state ownership since I see no other way of delivering those low capital discount rates.


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 Post subject: Re: Economics of Nuclear
PostPosted: Mar 07, 2014 8:29 pm 
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"This is the reason I favour state ownership since I see no other way of delivering those low capital discount rates."

The regulated public utility model has worked pretty well. This gives the advantage of having the stockholders pony up the cost of the facilities and take some risk. Of course, since it is regulated, there is really little risk and a guaranteed return. It takes the market chaos away.

The safe investment allows a large investment of capital to be made. How much risk do you want to take with billions of dollars of investment? I think it may also ensure a bit higher quality plant. I think the non regulated power facilities are built to lower standards and are designed for less life. Those who invest in non regulated power facilities probably are not interested in the facility lasting 40 years as the utility investor would be. Those who invest in non regulated power facilities are after a quick buck.

Nuclear power plants, including LFTRs, may benefit from the controlled economy model rather than the free market model. The free market works well for I-phones and shoes, but less well for nuke plants.


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 Post subject: Re: Economics of Nuclear
PostPosted: Mar 07, 2014 9:10 pm 
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Eino wrote:
"This is the reason I favour state ownership since I see no other way of delivering those low capital discount rates."

The regulated public utility model has worked pretty well. This gives the advantage of having the stockholders pony up the cost of the facilities and take some risk. Of course, since it is regulated, there is really little risk and a guaranteed return. It takes the market chaos away.


In which case the state is simply subsidising the borrowing of the private investors who take none of the risk and make all the money.
Why not simply have the state borrow the money directly, that way any money made is retained by the state beyond the almost certainly lower dividend the state pays to its bondholders?


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 Post subject: Re: Economics of Nuclear
PostPosted: Mar 08, 2014 12:31 am 
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KitemanSA wrote:
if you have the nuclear capacity, why bother with the unreliables?

A diverse portfolio is always better and more acceptable. Sometimes nuclear and coal at other times is unacceptable.The lowest cost (which varies with time and place) is generally preferred.
At present, gas is cheaper in the US and coal and nuclear in China. The Japanese are realizing that running and using existing reactors will be economical for them. Germans perceive that renewable will be economical to them.
Indians are so short and the Chinese so ambitious that they are trying everything to their capacity.


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 Post subject: Re: Economics of Nuclear
PostPosted: Mar 08, 2014 1:49 am 
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How do you explain the success of nuclear in France? Could it be that prices are regulated? They can do that without the fear of backlash.

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 Post subject: Re: Economics of Nuclear
PostPosted: Mar 08, 2014 2:18 pm 
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jagdish wrote:
KitemanSA wrote:
if you have the nuclear capacity, why bother with the unreliables?

A diverse portfolio is always better and more acceptable.
Yup, a few LWRs, a lot of LFTRs, maybe a few LCFRs, I like diversity in nuclear reactors too. But fossil fuels should go the way of the dinosaurs. And the unreliables shouldn't even be considered in a sane world.

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 Post subject: Re: Economics of Nuclear
PostPosted: Mar 08, 2014 9:58 pm 
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Eino wrote:
Nuclear power plants, including LFTRs, may benefit from the controlled economy model rather than the free market model. The free market works well for I-phones and shoes, but less well for nuke plants.


The (GOVERNMENT) controlled economy model already exists for nuclear in the usa. Right now, any one of us could have a nuclear reactor/waterheater in our back yards, but the usa government outlaws them with massive red tape and regulation.

In usa, the government controlled economy has outlawed nuclear, yet allowed coal to pollute the skies and kill miners each and every day.


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