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To: org.whodat

I think you overestimate the liability insurance requirements ($300 million per facility primary insurance, and then secondary insurance) and how much it costs.

The Price-Anderson Act set up a pooling of liability across all operating reactors in the US. Right now, their pooled liability account is worth over $10 billion. Since the insurance requirements are based on a per-facility basis, and not on a size of the facility, the costs of the insurance are easily reduced by increasing the size of the reactor’s generation capacity.

The economics of nukes play out like this: the up-front capital costs are very high, but the ongoing operational costs on a per-MWH basis are lower than fueled power plants, and the economics become only better if we see $14/MMbtu natural gas, or high coal prices.

Here’s an example of the bizarre economics of power generation with our cheapest and most plentiful fuel: Due to the sulphur reduction requirements, coal in many areas of the US becomes uneconomical when one counts up the scrubbers and retrofits necessary to meet modern EPA requirements. Powder River Basin coal is cheap (because it has less BTU content than eastern coal), but it is low in sulphur. The problem is the transport cost - PRB coal could come out of Wyoming at, oh, $14/short ton, but by the time it reached the east cost, rail costs might have turned that into $60/ton. That’s still better than the $100/ton for local Appalachian coal, even with the higher BTU content, because the costs for emissions retrofit drives the capital and operational costs up with the higher S content.

Ah, but what happens if these plants convert to PRB coal... but then the price of diesel goes up to $5/gal in the future? Well, they’re screwed, and so are their ratepayers. There’s nothing the power company can do but pass the costs of coal+transport (which would likely be, oh, $70+/ton) through.

With a nuke? Pfah. It just keeps churning along, impervious to most all changes in oil/coal/natural gas prices. Can they recoup their costs in the future high fuel cost environment? Yes, they can, provided they could get sufficiently attractive financing for their capital costs.

All of the foregoing does not take into account the costs of carbon cap-n-trade scams, which would simply raise the price of coal/NG/oil plants even further. And nukes would be sitting there, smiling all the way to the bank, because they would have to pay no emissions trading fees.

The liability insurance costs for nukes will disappear into the noise in the future promised to us by The One and his acolytes.


36 posted on 01/17/2009 8:26:38 PM PST by NVDave
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To: NVDave
The Price-Anderson Act set up a pooling of liability across all operating reactors in the US. Right now, their pooled liability account is worth over $10 billion. Since the insurance requirements are based on a per-facility basis, and not on a size of the facility, the costs of the insurance are easily reduced by increasing the size of the reactor’s generation capacity.

You could buy it cheaper from AIG, but then they would never intend to pay off. So you are back to the funny money insurance and your tax dollars.

45 posted on 01/18/2009 6:42:43 AM PST by org.whodat (Conservatives don't vote for Bailouts for Super-Rich Bankers! Republicans do!)
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