On Thu, 05 Sep 2013 13:30:08 +0100, Nightjar
wrote:
On 05/09/2013 11:33, Java Jive wrote:
This is the perpetual claim of the pro-nuclear lobby here, but yet
again, just as with TNP, It's just so much hot air - you give no
FIGURES in support of your argument...
Given so often in the past, it shouldn't be necessary to repeat them.
That's the first time I can recall seeing any of these links.
Specific analysis follows, but some general points come out of all of
them, either stated openly, or by implication ...
- The relative costs are HIGHLY dependent on the discount rate
chosen for Discounted Cash Flow (DCF). The documents all work between
5% and 10%, while the standard Treasury rate is 3.5%, however in the
liberated energy market what really matters is what rate a commercial
company would use, or rather what the people lending the money to the
commercial company for the project would use.
- Nuclear power is also HIGHLY sensitive to the capital cost of
building the plant, and all these reports pre-date the latest
announcements by EDF concerning the projected increase in cost of
Hinkley C, to wit: "The Times reported the cost of building each EPR
reactor had increased to £7 billion, which Citigroup analysts did not
regard as commercially viable, projecting a generation cost of
16.6p/kWh for private-sector financed reactors." Incidentally, note
something that even I had previously missed - that's each reactor,
and there are two, so that's £14bn total.
If we don't wish to accept the Citigroup analysis, or wish at least
get some sort of independent figure, how can we adjust these reports
to account for this massive increase in capital expenditure? Well we
can take the increase from 4.5 to 7, a ratio of 1.56, and multiply up
the nuclear capital inputs by this ratio and put them back into the
figures given. Yes, it's crude, but it should at least give us an
idea what the very minimum cost of nuclear can possibly be. I shall
only bother to do this for the two most recent documents you linked,
as the others are too far out of date to be at all useful.
So specific analyses of the two most recent documents linked by you
follow, with the above calculation included ...
http://www.oecd-nea.org/pub/egc/docs...ummary-ENG.pdf
(this PDF is locked, so can not easily quote from it)
+ At least it's tolerably up to date, 2010.
+ p 10 (printed), 11 (viewed)
It apparently includes some cost of nuclear waste management:
"Again, these figures include costs for refurbishment, waste
treatment, and decommissioning after a 60-year lifetime."
The data we require for the above calculation is here ...
- p 5 (printed), 6 (viewed)
From the graph for 10% discount rate, the median figure for European
nuclear seems to be 105 $/MWh, of which the text says 75% reflects
capital costs. So that's:
105 - 0.75*105 + 1.56*0.75*105 = 149.1 $/MWh = £95.57/MWh
Or 9.6p/unit
http://www.pbworld.com/pdfs/regional...model-2011.pdf
+ Again, reasonably up to date, 2011.
- p 4 (printed), 8 (viewed)
"The model also contains input assumptions for the cost of CO2
disposal, waste disposal, decommissioning, fuel price projections,
exchange rates and CO2 price projections; however these parameters
were outside the scope of the work undertaken by PB and have values as
set by DECC."
The implication of this would appear to be that the costs of handling
nuclear waste are included but out of date, as is the cost of all
types of fuel, nuclear and non-nuclear.
The data we require for the above calculation is here ...
- p 16 (printed), 20 (viewed)
Unit cost for nuclear is 7.41p, capital cost is 5.55 of that, so we
have:
7.41 - 5.55 + 1.56 * 5.55 = 10.52p/unit.
So, to the nearest penny or so, the absolute MINIMUM that new build
nuclear powered electricity is likely to cost is 10p/unit.
Incidentally, compare that with a recent posting by TNP:
On Sun, 25 Aug 2013 11:47:35 +0100, The Natural Philosopher
wrote:
nuclear need never be more than at most 10p.
I don't think anyone needs say any more about this constant source of
disinformation.
So, is this 10p/unit a reasonable guesstimate? It seems so ...
http://www.bbc.co.uk/news/uk-england-somerset-21774652
"Today, electricity sells on the wholesale market for about £45 per
megawatt-hour (MwH). But anything under £90 a MwH would see Hinkley
lose money." So, according to the BBC, Hinkley needs at least
9p/unit, which is in reasonable agreement to the calculations above.
Why the extra 6.6p/unit from Citigroup? Well, ultimately we'd have to
ask them, but things that spring to mind a
- As it's not supposed to come in any way from HMG, EDF have to find
£14bn high risk long term capital on the open market, and that's not
cheap. I suspect they are going to want to pay highish dividends to
investors asap - rather like when you have a mortgage, the early
payments mostly repay interest, capital repayments only begin to
increase significantly when you've paid off most of the interest. This
would mean that, to make the investment worthwhile, they might have to
offer a higher return than allowed for in these documents.
- They may have included more stringent or realistic waste handling
costs.
- They may have included more stringent or realistic fuel costs, given
the shortfall projected by WNA.
But, as I say, ultimately we'd have to ask them.
At any rate, the above calculations effectively demolish any "nuclear
is cheapest" claim. At 10p/unit it will be at least as expensive as
onshore wind, and if the 16.6p/unit is in fact correct, then every
other technology is cheaper. Even the projected cost of carbon
capture at 3.5p / unit when added onto the projected cost of new
carbon build is still likely to be cheaper than nuclear.
And the WNA are projecting a world-wide shortage of nuclear fuel, and
we have no worthwhile indigenous supplies of it.
Specific comments about the two older documents follow ...
http://www.raeng.org.uk/news/publica...commentary.pdf
- 2004, so seriously out of date.
- There is no evidence at all that any costs of nuclear waste handling
has been included. If, as I believe, it hasn't, then that omission
alone makes the comparison utterly meaningless.
- p 1 (printed), 2 (viewed)
"The scope required a certain amount of simplification and
approximation of issues that would be of utmost importance to a
commercial organisation making an investment decision in the
electricity generation market. These include treatment of risk and
uncertainty, security of supply of fuel ..."
And we know already that the firms tendering for nuclear power are
asking for guarantees and subsidies. Beside the BBC link above, there
is also this older report:
http://www.guardian.co.uk/environmen...isters-reactor
"Nuclear power: ministers offer reactor deal until 2050. Energy firms
may get 40-year backing after government U-turn on subsidies"
"Industry sources believe the likely agreed price for the first
project in the pipeline to be contracted on this timescale – two 1.6
GW reactors to be built at Hinkley Point in Somerset by the energy
company EDF – will be below £100 (per MWhr = 10p/unit), though not by
a large margin. That price, however, is more than double the market
price for electricity, and higher than all but the most expensive
government forecasts for the future."
Which, as with other more recent reports, is more than 4 times the
figures given in this 2004 document.
- p 2 (printed), 3 (viewed) footnote to chart.
"With the exception of nuclear, the analysis assumes that
decommissioning is cost neutral. The capital cost estimate for nuclear
plant includes an allowance for the costs of decommissioning."
But again, apparently not of the cost of waste handling.
- p 5 (printed), 6 (viewed)
"The cost of nuclear and other renewables (deemed to be carbon
neutral) remain unchanged and, therefore, become more competitive as
the specific cost of CO2 emissions increases."
But nuclear is not carbon neutral, because of the ancillary processes
of mining the raw material, refining it to get the fuel,
(re)processing waste, etc, all of which consume various forms of
energy. As fuel gets scarcer, as projected by the WNA, more ancillary
energy input will be required to extract the 'active ingredient'.
- p 7 (printed), 8 (viewed)
"The issues to be addressed when considering an energy policy include:
security of supply, ..."
Of which, with nuclear, we have in the form of waste, which would
itself require expensive reprocessing, at very best about 1/3 of the
scheduled operating lifetime of the government's proposed new nuclear
build.
"Critical Issues
....
3 Further scrutiny of the commercial claims for nuclear power would be
useful because of the lack of data from existing new-build projects"
As evinced by the articles linked above and up thread, we have been
getting some of that data since, and it's not exactly encouraging.
http://www.iea.org/textbase/npsum/ElecCostSUM.pdf
- Dated 2005, so again, seriously out of date.
- Again, there is no evidence at all that any of cost of nuclear waste
processing has been included, so again, a meaningless comparison.
- p 11 (printed), 1 (viewed)
"In view of the risks they are facing in competitive markets,
investors tend to favour less capital intensive and more flexible
technologies."
.... which nuclear is not ... continues on this theme ...
"Investors now have to internalise these risks into their investment
decision making. This adds to the required rates of return and
shortens the time frame that investors require to recover the capital.
Private investors’ required real rates of return may be higher than
the 5% and 10% discount rates used in this study and the time required
to recover the invested capital may be shorter than the 30 to 40 years
generally used in this study."
Also, the document is too general and vague to be of much use.
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