Nuclear Power Plants Maintain Lowest Production Cost for Baseload Electricity

Nuclear Energy Institute ^ | 9/3/03 | Nuclear Energy Institute

[chimera]

WASHINGTON, D.C., Sept. 3, 2003—Last year was the fourth straight year that nuclear energy was the low-cost leader for baseload production of electricity. Production costs—which encompass fuel plus operations and maintenance at a plant—averaged 1.71 cents/per kilowatt-hour (kwh) at nuclear power plants in 31 states.

Nuclear power production costs were lower than coal-fired power plants, 1.85 cents/kwh; natural gas plants, 4.06 cents/kwh; and oil-fired plants, 4.41 cents/kwh. Stable and competitive supplies of low-cost nuclear fuel and efficient power generation at nuclear power plants—a record 780 billion kilowatt-hours—resulted in low production costs in 2002. The average fuel cost for nuclear plants last year was 0.45 cents/kwh, compared to 1.36 cents/kwh for coal and 3.44 cents/kwh for natural gas.

“Nuclear plants continue to demonstrate they have tremendous value in our country’s diverse electricity system,” said Marvin Fertel, the Nuclear Energy Institute’s chief nuclear officer. “The combination of low production costs, high reliability, safe operation and clean air benefits positions nuclear energy favorably to meet our baseload electricity needs today and for future expansion.”

The average capacity factor at nuclear plants climbed to a record high for the fifth straight year at 91.5 percent in 2002. Capacity factor is a measure of efficiency that is the percentage of maximum electricity a plant can supply to the power supply system. Increased efficiency at nuclear power plants has added the equivalent of 26,000 megawatts, or about 26 large power plants, to the electricity grid since 1990.

The excellent performance of U.S. nuclear plants also contributes significantly to the avoidance of air pollutants and carbon that would result from increased emissions from fossil fuel plants. Last year, nuclear plants avoided more than two million tons of nitrogen oxide, four million tons of sulfur dioxide and more than 179 million tons of carbon.

[chimera]

The latest costs figures for last year, for those interested. To head off any specious arguments right off the bat, please note the following:

1. Yes, costs for waste disposal are included. Producers pay a millage levied by the DOE on electricity produced by nuclear generators to fund the Yucca Mountain project (and other programs) in its entirety.

2. Yes, costs for liability insurance are included, which is privately provided and paid for by the plant owners. It is not a "government subsidy".

3. Yes, costs for security and security upgrades are included, which were not provided by the government, but were funded by the plant operators in response to government requirements.

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[Reeses]

Does cost of production include cost of construction? There's not a single nuclear power plant being constructed right now in the United States. It's not because it's illegal, it's because no investor in their right mind would attempt it in the current lawyer/terrorist economy.

[truthandjustice1]

great comments; nuclear power offers the best hope for energy independence. the "small is beautiful" crowd not with standing.

[elfman2]

Not intending to be contentious, but I wonder if the cost of the eventual demolition of the plants themselves has been addressed. I vaguely recall talk of large pieces of the structures remaining radioactive for centuries (or maybe it was millennia) . If this is true, does anyone know if there’s a solution other than managing the sites’ isolation for all the years?

[chimera]

Does cost of production include cost of construction? There's not a single nuclear power plant being constructed right now in the United States. It's not because it's illegal, it's because no investor in their right mind would attempt it in the current lawyer/terrorist economy.

These are O&M costs. Comparison of capital costs is a difficult animal because with any capital-intensive project, you can kill it if you stretch it out long enough. As you've probably noticed, its not just nuclear plants, but for all intents and purposes, nothing is being built out there, be it nuclear or coal or solar or oil or gas-fired or windmills off Nantucket. Its the NIMBY/NIMTOO/NOPE/BANANA/LULU syndrome gone mad!

[blau993]

On your second point, the Price-Anderson Act does provide an insurance subsidy of sorts, albeit at a "catastrophic" level. That said, I take no issue with the report or with the safety and efficiency of nuclear power. My local utility is Baltimore Gas & Electric. When its Calvert Cliffs nuclear plant was down for refueling and overhaul several years ago, it made a noticeable difference in my monthly bill. Ditto when the plant went back on line.

The biggest stumbling blocks to building new nukes in this country are the construction costs (including permitting and fighting the inevitable legal battles) and the storage/reprocessing issue, both of which are exacerbated by a lack of political will. The technology and the ability to run these plants safely is barely an issue.

[Thermalseeker]

The technology and the ability to run these plants safely is barely an issue.

Unless, of course, you consider the TVA Browns Ferry plant workers who were irradiated last week.

My next door neighbor works at TVA Sequoyah in the zone. TVA has been trying to get workers from Sequoyah to go and work at Browns Ferry, but nobody wants to because it is considered unsafe by the workers. According to my neighbor the NRC is "all over" Browns Ferry for operational violations. Bet you didn't hear about that in the news, did ya?

[chimera]

Not intending to be contentious, but I wonder if the cost of the eventual demolition of the plants themselves has been addressed.

Every operator of a nuclear facility, be it a power plant, research reactor, fuel fabrication facility, enrichment plant, medical isotope producer, etc., is required to demonstrate to the NRC, on an annual basis, the financial capability for eventual safe and complete decommissioning of the facility. There are a variety of way to do this, such as purchase of long-term bonds, establishment and maintenance of a liability pool, etc. But they all involve commitment of real, liquid financial assets that are verifiable and audited on a routine basis.

As far as I know, this is the only industry required to do this. Things like manufacturing establishments, chemical plants, oil refineries, office complexes, airports, roadways, bridges, and almost anything else you can think of, are not required to plan for and pay up front for the costs of their eventual retirement.

And that is not because there is any “special hazard” associated with decommissioning of these facilities that also couldn’t be associated with some of these other industries. Chemical hazards, for example, remain toxic for essentially and infinite half-life. Yet in some cases chemical companies simply walk away from the mess (e.g., Love Canal, or Times Beach). Yet everyone freaks out about nuclear waste, which is probably the most carefully managed and handled byproduct out there.

I vaguely recall talk of large pieces of the structures remaining radioactive for centuries (or maybe it was millennia) . If this is true, does anyone know if there’s a solution other than managing the sites’ isolation for all the years?

Many, many nuclear facilities have been safely and economically taken out of service in years past, in this country and abroad. There are a variety of ways to do it, things like immediate dismantlement, SAFSTOR, entombment, etc., are some of the strategies designed to accomplish the task. What you end up doing depends on the nature of the facility, where it is located, and any plans for the future of the site.

Management of the materials is not a major technical issue. We have been dealing with materials management since the dawn of the atomic age. The first thing to remember is that the volume of materials you’re dealing with is relatively small. What can’t be recycled is generally disposed of in licensed waste facilities. Things like the laws of physics (radioactive decay) work wonders for reducing the radiological hazard in fairly short order.

[chimera]

On your second point, the Price-Anderson Act does provide an insurance subsidy of sorts, albeit at a "catastrophic" level.

That only comes in if the privately-funded liability pool limit is exceeded, which is in the $4-$5 blllion range. Not likely for credible accident scenarios.

Even if it were there is provision for Congress to go after the operators for the funds that may have exceeded the pool limit. Now, before people say "That's bogus, because Congress will have to pass that...", I say, you want to see a speed record set for passing legislation? Just let it be for something that goes after the "evil nuclear corporations". That's a two-fer: "evil corporation" and "evil nuclear". You betcha Congress would pass that in a New York minute. The second the liability pool limit was exceeded, there'd be Congresscritters falling all over themselves to co-sponsor that bill, and it would be on the President's desk to sign within a few seconds of that happening.

[Final Authority]

I think that these numbers are derived from the new numbers related to the capital costs after de-regulation when the power industry (local utilities)were relieved from the carrying costs of these expensive producers. The way I think it worked is that the utilities could now charge for all aspects of supplying power by line item. One of the largest expenses in NH (Seabrook) was the capital costs. They sold it at yardsale prices to another company but still charged the stranded costs directly to the end consumer. So now the costs are wrapped into the supply (production) and the distribution resulting in extrodinarily high prices in NH (over $.20/kWh.). The cost of production is now cheap (seemingly) but when the cost of distribution is added (this includes stranded costs which used to be the cost of production) all seems reasonable but the price is still high.. It was a scam concocted by politicians and bankers to relieve the extreme debt of Public utilities and make a quick buck in the re-finance business as well.

After the first full year of operation the utility that built Seabrook published the production figures. I did some calculations simply by multiplying the production by the going wholesale price of a kWh and the number I got would never pay the mortgage never mind the varible costs of production as well. That is why we now have de-regulation and stranded costs. I think this is correct, please inform me otherwise if I am not.

[Between the Lines]

If this is true, does anyone know if there’s a solution other than managing the sites’ isolation for all the years?

One way is to ship it elsewhere. Radioactive reactor to be shipped to S.C.

[BIGZ]

It is obvious that the intent is to prohibit the expansions of any energy source, not just nuclear, in order to starve the country energy and slow the economy. This ploy by the greens, aka socialists, is what Koyoto was all about. California has not developed a new energy plant in years and the result is evident.

[chimera]

This is just routine disposal of activated materials. The Trojan reactor vessel went to Hanford, as I recall.

Mild steel will have the usual suite of activation products, short-lived forms like 59Fe, and longer-lived trace elements like 60Co. But even at 5.25 years half-life, it's literally the blink of an eye in terms of geologic disposal (even shallow, low-level waste disposal).

[Poohbah]

lawyer/terrorist

I think you're being redundant here.

[vikzilla]

Complete BS.

Lets see, the company I work for makes a nuclear MW for about 31.00 a MW. The coal fired facility makes it at 9.80 a MW hr.

Staffing at the Nuclear facility is btween 650 and 700 people. Staffing at the coal faired facility I work is 102. There is no way in hell these numbers are correct. Even the numbers I quote are pencil whipped by my company to show nuclear power in the best light.

The numbers you quote just don't tell the whole picture. Nice try.

[chimera]

Not necessarily. Remember, these are O&M costs. We're comparing apples to apples. Do your cost figures assume a fully amortized capital cost? If not, and ongoing amortization of capital costs are folded in, especially for a "newer" plant that was unnecessarily delayed and stretched out in construction time by the wackos and various other lawyers and special interest groups, per MWHr costs could come out differently.

Then again, its a hard playing field to level because of the number of variables. There is a coal-fired plant near here that had to buy out all the property of the surrounding village because of air pollution concerns. I don't know exactly what cost that will add, but wouldn't be surprised to see it pushing 100.00 per MWHr or so.

[chimera]

The numbers you quote just don't tell the whole picture. Nice try.

Well, you're free to check with NEI and argue the numbers with them. This is the information we have, most likely gleaned from the FERC and other sources. Rage against the machine if you want, but the numbers are there and probably won't pay much mind.

[Between the Lines]

This is just routine disposal of activated materials.

I understand that this is a routine disposal and it does not concern me that it is being disposed of in my home state. The Catawba plant is litteraly in my back yard and the McGuire is about 15 miles upriver. We enjoy power bills in the $60 to $90 per month range and look forward to even greater savings when both plants go to MOX fuel in 2007.

[chimera]

The McGuire site is very picturesque. I have been out on Lake Norman and viewed it from that vantage. I keep lobbying the missus about SC for a retirement state. N. Mrytle Beach with an oceanfront condo sounds just about perfect. It's about the only dream I have left...