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PostPosted: May 14, 2014 8:49 am 
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Just found this great article on Fukushima impacts. It is not too recent, but has a fairly good perspective for a change.

http://caravel.sc.edu/2012/09/what-in-t ... reactions/


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PostPosted: May 24, 2014 12:17 pm 
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Cyril R wrote:
Just found this great article on Fukushima impacts. It is not too recent, but has a fairly good perspective for a change.

http://caravel.sc.edu/2012/09/what-in-t ... reactions/

Yes, but... The most popular fuel type for new generation globally is not part of the comparison.

CCGT fuelled by natural gas is extremely competitive on all of those metrics except CO2, but even then it is the lowest CO2 fossil option. It would be really nice to see that same study with CCGT in the mix.


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PostPosted: May 24, 2014 2:32 pm 
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Lindsay wrote:
Cyril R wrote:
Just found this great article on Fukushima impacts. It is not too recent, but has a fairly good perspective for a change.

http://caravel.sc.edu/2012/09/what-in-t ... reactions/

Yes, but... The most popular fuel type for new generation globally is not part of the comparison.

CCGT fuelled by natural gas is extremely competitive on all of those metrics except CO2, but even then it is the lowest CO2 fossil option. It would be really nice to see that same study with CCGT in the mix.


Is it competitive in the case of Japan ? Natural gas is close to $ 15 per MMBtu in Japan. See:
http://ycharts.com/indicators/japan_liq ... port_price


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PostPosted: May 24, 2014 5:22 pm 
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That is certainly expensive gas, in the most efficient CCGT plant that would equate to about $90/MWh just for fuel (ouch). Edit: Many LNG supplies are on a term contract basis due to the high cost of the LNG infrastucture, so the contracted price may be different and lower than the spot price. I just did a quick search and it looks like only 10% of Japanese gas is purchased though spot markets, suggesting that 90% is contracted.

In the study they seemed to be using average pricing from different jurisdictions, many which probably don't hold for Japanese conditions. That said, any of those local price differentials will only help to make the nuclear option look relatively cheaper and probably put coal and gas on equal terms while everywhere else gas is trumping coal, but it does all come down to the relative cost difference between these different types of fossil fuels.

None of this discussion undermines the central expectation that in the Japanese context that nuclear power will be cheaper, less polluting and use far fewer resources that any competing generation technology if natural gas is priced at $15/GJ.

We do need to acknowledge that this whole area is quite tricky as so much depends on the assumptions adopted, at a guess $43/MWh for nuclear sounds like historic not today's price for a new plant in a first world nation. For example in Europe and the US new nuclear (real projects) seems to cost $5,000+/kW, that equates to about $110/MWh in extremely rough numbers, not far behind the CCGT and not $43/MWh. Please note that in highlighting that example I'm not criticising the author, I'm just trying to demonstrate how these studies are quite tricky to do and are very sensitive to assumptions.


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PostPosted: May 25, 2014 9:19 am 
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This whole Fukushima thing just blows me away. I've seen bad car accidents. There will be bad car accidents. People get killed. Do you stop using cars because of an accident? Japan is messing up their balance of trade with other nations because they have to import diesel and LNG for their electricity. They have nuclear plants that were not affected by the Tsunami standing idle. Why shut down what is still good and useful?

The cost of their goods and services will rise due to higher energy prices. Their standard of living will decrease.

The Japanese people are not stupid. If there are other plants near the coast where they would be affected by tidal wave, modify the plant so that it won't be. Certainly, a country like Japan with their great technical expertise can do this.

About a half dozen people died due to the nuke plant vs thousands due to the Tidal wave. Yet all I hear about is this nuke plant problem. It seems like the emphasis is very disproportionate to the actual problem. In addition, I've heard the contamination in the affected area is quite low, bordering on nearly harmless. Folks aren't picking up much dose. OK - The plant got screwed up and will be an environmental cleanup issue for some time. Just do it.

Ever hear the phrase, "Throw the baby out with the bathwater?" This is what Japan is doing by shutting all their nukes down. It's like cutting off their nose to spite their face.

When is the world going to get rational about this stuff?


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PostPosted: May 25, 2014 5:00 pm 
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5000/kw should make about 60-70/mwh for a 90 percent cf.


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PostPosted: May 25, 2014 10:46 pm 
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Cyril R wrote:
5000/kw should make about 60-70/mwh for a 90 percent cf.

By NPV analysis
$5000/kW, $12/MWh O&M, 35 Year project life, 4 years to build and commission, 90% CF, 9% Discount Rate, 30% Company Tax, decommissioning 10% of build cost (real), 10% diminishing value depreciation.

All of that pops out at $99.39/MWh as the required electricity price to provide the 9% ROI (after tax) on the initial investment. Looks like the first guess was off by $10/MWh. If I eliminate the decommissioning costs and the annual O&M, I still get $86.78/MWh as the required power price to make 9% ROI after tax.

What was the agreed floor price on the EDF proposal for the UK? about US$120/MWh is what I recall, but I probably remembered the wrong number.

Edit: Found in another thread, at today's exchange rate £89.50 => US$150/MWh, it certainly doesn't match my vision of cheap nuclear power.
DaveMart wrote:
The strike price is £92.50, but drops to £89.50MWh if they also build at Sizewell:
https://www.gov.uk/government/news/init ... at-hinkley

This is a lot more than current gas prices, but a lot less than offshore wind etc.


Last edited by Lindsay on Jun 01, 2014 1:14 pm, edited 1 time in total.

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PostPosted: May 26, 2014 10:50 am 
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Eino wrote:
This whole Fukushima thing just blows me away. I've seen bad car accidents. There will be bad car accidents. People get killed. Do you stop using cars because of an accident? Japan is messing up their balance of trade with other nations because they have to import diesel and LNG for their electricity. They have nuclear plants that were not affected by the Tsunami standing idle. Why shut down what is still good and useful?

The cost of their goods and services will rise due to higher energy prices. Their standard of living will decrease.

The Japanese people are not stupid. If there are other plants near the coast where they would be affected by tidal wave, modify the plant so that it won't be. Certainly, a country like Japan with their great technical expertise can do this.

About a half dozen people died due to the nuke plant vs thousands due to the Tidal wave. Yet all I hear about is this nuke plant problem. It seems like the emphasis is very disproportionate to the actual problem. In addition, I've heard the contamination in the affected area is quite low, bordering on nearly harmless. Folks aren't picking up much dose. OK - The plant got screwed up and will be an environmental cleanup issue for some time. Just do it.

Ever hear the phrase, "Throw the baby out with the bathwater?" This is what Japan is doing by shutting all their nukes down. It's like cutting off their nose to spite their face.

When is the world going to get rational about this stuff?

Fear can cause people to make very poor decisions and there are several people who make money by fanning that fear. Folks who argue against it get very quickly labeled. We need to really push comparisons with alternatives to help people understand.


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PostPosted: May 26, 2014 2:06 pm 
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There is a camp that does not want to mention renewables' shortcomings when advocating for thorium molten salt reactors, but I agree with Lars, we will not make much progress dodging the fundamental benefits to be gained from nuclear and the contrast with renewables. You can talk yourself silly extolling the benefits of nuclear but if the listener is secretly thinking wind and solar will be all we need then you are just running on the treadmill and going nowhere.

It is only, in my experience, when you compare actual data and projections that people take notice and realize wind and solar cannot power our society. It is especially painful for strong renewable advocates to realize their hoped for solution results in brown coal plants (fossil lock) such as in Germany and no real reduction of CO2. Intermittency is a huge problem and no amount of wishing it away can make that problem disappear. Batteries suffer from a factor of a million in density, not to mention huge pollution problems. I am all for alternatives off the grid, and in isolated places, but we have to show that the public power system requires stable, dense, dispatchable energy. That it is safe, uses abundant fuel, and is likely less costly is icing on the cake.

I sometimes say I wish renewables were the answer but wishing it will not make it true, but it is far more complicated than that -- it makes it worse.


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PostPosted: May 27, 2014 2:38 pm 
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Lindsay wrote:
Cyril R wrote:
5000/kw should make about 60-70/mwh for a 90 percent cf.

By NPV analysis
$5000/kW, $12/MWh O&M, 35 Year project life, 4 years to build and commission, 90% CF, 9% Discount Rate, 30% Company Tax, decommissioning 10% of build cost (real), 10% diminishing value depreciation.

All of that pops out at $99.39/MWh as the required electricity price to provide the 9% ROI (after tax) on the initial investment. Looks like the first guess was off by $10/MWh. If I eliminate the decommissioning costs and the annual O&M, I still get $86.78/MWh as the required power price to make 9% ROI after tax.


Lindsay, can you explain how you calculated this? are you sure that 5000/kWe is overnight cost? I thought it included interest during construction already.

Also 9% is quite a high interest rate, since the bank will cover 40% to 50% or so at a lower interest.


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PostPosted: May 27, 2014 7:52 pm 
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This just shows how important low cost capital is to providing affordable nuclear energy.

Current 30 year gilts are 3.44%

That puts the cost excluding decommissioning and O&M at $33/MWh, and including those spits out a price of roughly $46/MWh.
(Does this model uprate electricity prices for inflation? If not then this assumes electricity gets cheaper in real terms over time which is an interesting effect - inflation linked gilts for 35 years are currently at RPI-0.09%)

Find me a dependable baseload that isn't hydro and is available for that sort of price. The current wholesale price of electricity in the United Kingdom is $70/MWh.
I don't think one exists.


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PostPosted: May 28, 2014 1:28 pm 
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E Ireland wrote:
This just shows how important low cost capital is to providing affordable nuclear energy.

Current 30 year gilts are 3.44%

That puts the cost excluding decommissioning and O&M at $33/MWh, and including those spits out a price of roughly $46/MWh.
(Does this model uprate electricity prices for inflation? If not then this assumes electricity gets cheaper in real terms over time which is an interesting effect - inflation linked gilts for 35 years are currently at RPI-0.09%)

Find me a dependable baseload that isn't hydro and is available for that sort of price. The current wholesale price of electricity in the United Kingdom is $70/MWh.
I don't think one exists.


The bank may be willing to lend you 3.44% or something close, the difficulty is in getting your own money. The bank won't fund 100%, more like 40 or 50%. Coming up with the rest at low interest is hard unless you're a sheik or Bill Gates. But if you can get 10% return for this portion and 4% from the bank portion, you could get a 7% interest on the whole.


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PostPosted: May 28, 2014 7:35 pm 
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Cyril R wrote:
The bank may be willing to lend you 3.44% or something close, the difficulty is in getting your own money. The bank won't fund 100%, more like 40 or 50%. Coming up with the rest at low interest is hard unless you're a sheik or Bill Gates. But if you can get 10% return for this portion and 4% from the bank portion, you could get a 7% interest on the whole.


I was proposing just having the state build the reactors with its own money.
Its the only source of low interest capital available in sufficient quantities.


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PostPosted: Jun 01, 2014 4:26 am 
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Cyril R wrote:
Lindsay, can you explain how you calculated this? are you sure that 5000/kWe is overnight cost? I thought it included interest during construction already.

Also 9% is quite a high interest rate, since the bank will cover 40% to 50% or so at a lower interest.

Sorry I cannot confirm the $5,000/kWe as overnight or total project cost, that figure was a mixture of new AP1000 costs in USA and EPR costs in Europe, just totally off the top of my head. My point was to illustrate that high capex means high cost electricity, even if the running costs are low.

9% is the discount rate, not the interest rate, it represents the after-tax return expected by the investor when investing their own capital. Given the very obvious real world risk by an investor wanting to build nuclear, I think that 9% might be light (look at the plants committed and never completed or finished and never run, look at the massive cost overruns on EPR in Finland, look at the German governments capricious decision to prematurely shutdown the German nuclear industry, all the idle NPP's in Japan, etc). Today, Nuclear is a financially risky business without government guarantees, subsidies or other support mechanisms.

One could build a more complex model to include project financing (which is common), but that masks the risk and can lead to poor project selections. If you borrow 99% at say 5% interest and only put in 1% as equity and demand 9% return on the equity, the required contract price of electricity will fall, but all of the risk is still there so any small adverse movement would very quickly make the project returns negative.

For any first cut investment decision I always advocate separating the investment decision from the financing of it. Make the decision to invest or not based on equity financing rates of return, then look at borrowing as a means to leverage or enhance that investment decision. But you don't have to do it that way, you could as you suggest borrow 50% and the required contract electricity price will drop accordingly.


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PostPosted: Jun 01, 2014 4:40 am 
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E Ireland wrote:
This just shows how important low cost capital is to providing affordable nuclear energy.

More correctly it shows that to be economically competitive nuclear needs to have a lower capital cost than current NPP's being built in first world jurisdictions.

Maybe there is some scope for a government underwrite to reduce the cost of financing, but government underwriting of any kind usually leads to inequities and distortions that increase cost and price overall. Look at all the government support for renewables, do we believe that they are a cost-effective investment decision for society as a whole (probably not).

The problem IMO is multiple layers of cost that create no benefit. China can reportedly build NPP's for acceptable prices, but not us in the west, well not yet. MSR's have to potential to dramatically improve that.


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