You seem to have missed the point of the original question. Nuclear in general is high capital costs, high annual fixed operatingEino wrote:Who is going to invest in this business that only gives a return during the "peak" hours? Will the rates be so high to get the necessary return as to be exorbitant?
Will the utilities be run by private organizations or public? With public, I could see rate bases being good for the common good. With private, the stockholders must be considered.
The Nuke plants that they are building in Georgia are pretty expensive. Despite the rhetoric that I've heard multiple times that building LFTRs will be cheap, I'll bet the capital costs will still be high. The turbine, generator, auxiliaries, substation and political gifts to the public do not come cheap. The combined cycle option will cost even more. The capital costs and interest charges will need to be paid back. I'd think the investors would not want to see any product given away for free.
If this is a "merchant" plant, the investors will want every penny. They will be out to maximize returns. They will scream at any Public Utility Commission (PUC) that comes up with a rate structure that gives things away for free. They will enlist the aid of the conservative groups who will howl about government regulations and welfare electricity. There will be a spate of articles about the death of capitalism and the usual nonsense.
Another aspect to this is innovation. A cheap product does not encourage innovation. We are speaking of LFTRs, a conceptual product worked on long ago at Oak Ridge. Will free electricity ever encourage the beancounters to loosen their pockets for new ideas? This is happening right now with the cheap natural gas. Necessity is the mother of invention. Few new nukes are being built in the US due to the gas supply. No innovative new nuke plants are being constructed due to cheap natural gas. Free electricity would have the same effect.
Yeh,....to cheap to meter is too high a price to ever be built.
costs, but very low marginal costs for squeezing out one extra MWh. LFTR/MSR will be even more extreme in this regard because of very efficient use of fuel, i.e. very low marginal price of energy production. Given that their cost structures are fixed relative to their capacity why not bill on consumers that basis? That's the question.
The best answer as to why not is that there will probably always be peaking plants with high fuel costs, and for those plants to make an extra MWh they have to recover that fuel cost in an energy price ($/MWh), unless the use of peakers becomes so limited that they become ancillary service and not a transparent open market participant.
The capacity payment would only be available to plants who were on line or available 85%+ of the time and covering 90%+ of all coincident peak demand periods.Who is going to invest in this business that only gives a return during the "peak" hours?