Cha-Ching: More evidence nuclear power costs have skyrocketed

The Tennessee Valley Authority is the latest utility group to disclose revised estimates on the cost of building a new nuclear plant. The TVA says it now expects the cost of building a twin-reactor plant based on Westinghouse AP-1000 reactors could reach as high as $17.5 billion (U.S.). A few days earlier, Eskom, which is South Africa’s state utility, said it was dropping plans to build a single-reactor nuclear plant because of the “magnitude of investment” — an estimated $10 billion (U.S.).

Of course, these costs don’t include operating costs, long-term waste management and plant decommissioning costs, or costs for the massive volumes of water that are needed every day for cooling of the reactors. There are other costs as well, but somehow they never seem to be calculated in discussions about the economics of nuclear.

Eskom cited the fact that electricity demand is down because of the economic downturn so it didn’t make sense to rush into such an expensive infrastructure project. It’s not alone — power demand is falling across North America as well, including Ontario. In fact, the Ontario Power Authority has agreed to re-do its long-term load forecast for the province in light of recent consumption declines. It will be interesting to see what the agency concludes, and how the government will react if the forecast has been revised materially downward and the bids coming in to build a new 2,000 MW nuclear plant are much higher than expected.

Will Ontario make the same decision as South Africa? Somehow I doubt it, but certainly if the load trend falls and the nuclear cost trend rises, the government here will have some explaining to do if it hopes to sell the nuke plan to the general public.

My guess, if such a scenario does occur, is that the government will suddenly be all ga-ga over electric cars and the need to build nuclear plants to handle the sudden rise in grid load as more cars plug in.

7 thoughts on “Cha-Ching: More evidence nuclear power costs have skyrocketed”

  1. “the need to build nuclear plants to handle the sudden rise in grid load as more cars plug in”

    I don’t know about Canada but in the States and the UK this isn’t a given. It all depends on when people plug in. This is why development in V2G has to be expedited so that the mechanisms are in place to make overnight charging the natural choice. Then the generating infrastructure costs will be kept down.

  2. We are talking projected price here, and that will be very much dependent on the rate of inflation that impacts not only the cost of nuclear power, but also the cost of renewables generating systems. Potential nuclear plant owners are prudently projecting the impact of inflation on their building costs, while renewable advocates are pretending that it won’t happen to them. But the history of renewables costs during the last five years suggests that it is happening to them already. Further Renewables are even more vulnerable to inflation in the price of raw materials like cement and steel, than nuclear is. A prolonged economic down turn will slow the inflation rate, but that slowing will significantly lower nuclear construction costs.

  3. Right now we’re seeing a lot of wind generation being installed. And we’re seeing an interesting occurrence in Texas. Wind farms are *paying* utility companies to take their extra power at night. (The wind tends to blow harder at night when grid demand is down.)

    We’re likely to continue to build more and more wind generation as the resulting electricity is starting to challenge fossil fuel produced electricity in cost and the pressure (think carbon tax) to cut back on fossil fuel is increased. We’re going to build wind generation for daytime/peak use. That’s going to create a lot of cheap power for off-peak/nighttime car charging. Building for peak means that you’re overbuilding for off-peak.

    Hard to see how we’re going to build a lot more nuclear when the price is 2x – 3x more than the price of wind generation. And the spread is most likely going to increase, not decrease….

  4. @Scatter – You don’t need V2G to make overnight charging the natural choice, you just need to make it easy to choose overnight charging. V2G is a two way technology (controlled charge and discharge), and quite frankly is a long way off so long as batteries are expensive and have a limited life.

    While you are correct there is plenty of generating capacity at night, one reason it is idle at night is that it is expensive to run. Only the cheapest baseload generators run at night. With a flattened load curve, additional baseload nuclear can be more economic than running existing generation using relatively expensive fuel.

    And to echo what Charles said, any downward pressure on commodity prices due to the most recent economic troubles will also put downward pressure on nuclear construction costs. Just because prices go up, doesn’t mean they can’t come down. We all should understand by now that ever-rising prices are not a guarantee.

  5. While V2G is still a way off and battery tech isn’t ready yet, grid upgrades need to get moving so that everything is in place when battery tech is ready (which is inevitable and likely sooner than we would expect given the investment which is flowing in that direction). In my view the economic incentives that V2G offers are the only really viable way of ensuring overnight charging – without it, the diferential isn’t really that great.

  6. Nuclear energy is unsustainable, that is the problem. Disposal of nuclear waste eventually uses up any economic advantage we may see with initial cost estimates, and with the reactor technologies currently proposed in all commercial developments, fuel supply is also unsustainable. The fact that every nuclear plant is a potentially huge environmental disaster just adds to my aversion to this technology. Give me technologies that people can use for the next 1000 years if necessary.

    Having just visited numerous Greek and Roman towns in Europe, it makes me reflect we are thinking in terms of time spans that are far too short. Nuclear is a patch, not a solution to humanities energy needs.

    steve

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