Cost of new nuclear in Ontario? Anywhere from $7,400 to $10,800 per kilowatt, depending on your appetite for risk

I have a story in today’s Toronto Star that pegs the price of two 1,200 megawatt ACR 1000 reactors from Atomic Energy of Canada Ltd. at $26 billion, including all balance of plant costs. That would put the cost at $10,800 (Canadian) per kilowatt, far beyond previous projections. Really far. The story was based on information supplied by sources close to the bidding, including one directly involved on a bidding team. It also found that the Areva bid — involving two 1,600 EPR reactors — came in at $23.6 billion, or roughly $7,400 per kilowatt. It was deemed non-compliant, however, likely because Areva wouldn’t guarantee the price (which explains the lower price, maybe?).

I can understand the Areva price (apparently it’s based on a similar bid for a plant being planned in Maryland), but like many I’m personally shocked at the high amount of the AECL bid. Yes, I wrote the story but like many have a difficult time believing such a high number. My sources, however, are quite credible.

I’ve yet to get any reply from the government or industry that denies or confirms these numbers. Premier Dalton McGuinty was scrummed by reporters earlier this morning and he didn’t refute the numbers, saying only that the process is confidential. McGuinty could have said something general like “The numbers are far off” or “Not even close” to dispute the article, but he didn’t. The $26 billion figure, by the way, almost completely consumes the budget for Ontario’s 20-year nuclear expansion strategy, as estimated in 2007 by the Ontario Power Authority. That budget was to cover a new build at Darlington and at least two refurbishment projects.

9 thoughts on “Cost of new nuclear in Ontario? Anywhere from $7,400 to $10,800 per kilowatt, depending on your appetite for risk”

  1. The Olkiluoto Plant in Finland, Europe’s newest nuclear reactor is costing around US$4000 /kW. It is smaller than the ACR and after four years of construction, it is still not finished. France’s Areva is building this plant and the cost/time overruns are making headlines.

  2. If one looks at the cost of the new gas turbine plants that are going in – costing $360M and producing 300 MW, the cost is about $1,200/kW. But with utilization expected to be less than 5% – and fuel costs added (at about 30% efficiency) this is very costly energy… Most new generation can be costed this way, but one needs to consider utilization that can be achieved reasonably.

    Many of the newer large hydro plants have costs of $3,000 – $5,000/kW and they are capable of running only 30-40% of the time at full load.

    It may ba a little unfair to compare the peaker plant that is only needed a few hours annually with a plant that will be base loaded and likely run with an annual load factor of near 90%, but the need to fully compare is real – and decomissioning costs also need to be included.

  3. @ BC Green: A gas turbine operating at 5% capacity factor can be very profitable because it’s selling at the highest (peak) value per kWh. Gas turbines are wondrously flexible, giving them a good bargaining position in day to day power markets. Actually, most of the gas turbine peakers operate in the 10-40% capacity factor. They can operate in 90+% utilization but coal is cheaper for that purpose in most grids today. Higher utilization is often done with combined cycle gas turbines because they are more efficient and running them more of the time, then, justifies the extra investment and complexities.

    Nuclear plants sell pretty much all the time (deep baseload). Not a very good average selling price.

    Anyways, even with that nuclear plant you’d still need to build new gas fired peaking generation, so it’s not an either or comarision. Gas turbines and nuclear baseload is in fact a very good combination. There is competition with 60% efficient combined cycle natural gas power plants vs nuclear as these plants can be run anywhere from load following to baseload. Such a plant can be built for under 1500 USD/kWe anywhere in the world so natural gas prices have to be heroic for nuclear power to be able to compete, even when the benefit of greater dispatchability for the combined cycle powerplant isn’t valued strongly. (In the future, there will hopefully be more attention to demand management such as end use thermal storage for peak shaving and greater flexibility in general no matter what the future energy mix will be.)

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