NEI Nuclear Notes

The Washington Post tried a front page story about nuclear energy – and if you develop a higher profile, as nuclear energy has done, then newspapers are going to take a closer look at you. We expect that and in truth the story isn’t bad. For nuclear energy followers, the news isn’t very new at all: In states such as Georgia, Florida and South Carolina, utilities have won permission to charge customers for some of the cost of new reactors while construction is still in progress -- a financing technique that would save utilities a couple of billion dollars for each reactor. Previously, utilities had to wait until power plants were in operation before raising rates, as they still do in most states. This is CWIP, or Construction Work in Progress, approved by legislators in some states and not in others. The salient point behind it is that a utility can recoup interest charges and thus not suffer interest on top of interest – and thus, its customers don’t suffer it either. The Po...

More than a month ago, Mr. Craig Severance wrote about his lively debate on new nuclear costs with NEI’s Leslie Kass and in response, we posted this . The following week, Mr. Severance responded timely to us and now it’s our turn again. We’re on our second round of posts and the debate has gotten into the weeds. The statements on nuclear from Mr. Severance have become more glaring, in my opinion, so that simply letting just a few of the statements go would be a mistake. Besides the needless analogies and repeating literally half of his rebuttal with previous literature, there are some major interpretation issues Mr. Severance assumes in his latest rebuttal that need airing. (Disclaimer: you're about to read a really long post with no pictures and visuals, hope you enjoy and make it through it!) “Black Box” From Mr. Severance's latest post: The NEI fight-back response is welcome in that we are blowing open the "Black Box" of hidden assumptions about the costs of new ...

A couple of weeks ago the Foundation for Nuclear Studies hosted a debate on the Hill between NEI’s Leslie Kass and Colorado’s Craig Severance (author of a recent controversial study on new nuclear plant economics ). Mr. Severance summed up the event nicely in a post he published last week : It was a very cordial discussion and afterward we all shook hands and posed for pictures. Yet, the differences were sharp. Yes they were. I was at the debate and right off the bat Mr. Severance was hitting zingers to the nuclear industry on costs. No doubt the industry had a large learning curve to overcome in the past. Yet look where we’re at today: 104 nuclear reactors generating 20% of the US’ electricity representing only 10% of the US’ total installed capacity while operating more than 90% of the time. No other source of energy does that. Assumptions Matter The main point of Mr. Severance’s presentation was, of course, to show the estimated enormous expense to build a new nuclear plant. Estim...

In case some of you missed it, the Climate Progress blog has picked up a study by Craig Severance, Business Risks and Costs of New Nuclear Power [PDF]. The report has quite a number of holes in it, in my opinion, and the biggest hole has to do with a flawed assumption in how the study calculates the cost of electricity from a new nuclear plant. We've been discussing and debating the study over at Climate Progress and the author has been great in responding to most everyone's critiques. So what's the flaw? The study claims that a new nuclear plant's capital costs, when all is said and done, will be about $10,500/kW. Many studies that I'm aware of estimate that a new nuclear plant will cost between $5,000-$8,000/kW for the all-in construction costs. Mr. Severance's capital cost assumptions are quite a bit higher than the highest estimate but whatever. That's not the flaw of the study's cost numbers. The flaw is how the cost of electricity from a new...

Titled "The Cost of New Generating Capacity in Perspective" found on our Financial Center section at nei.org : Like all new generating capacity, there is considerable uncertainty about the capital cost of new nuclear generating capacity. Credible estimates of overnight capital costs range from $2,400/kWe to as much as $4,540/kWe. This wide variation in costs can be attributed to several factors: uncertainty about escalation of commodity prices and wages, the fact that design work is not complete and, until it is, it will be impossible to produce a precise cost estimate, and some early estimates did not include all the costs involved in the construction of a power plant (see “Understanding the Cost Components of New Generating Capacity,” page 4). While these costs are daunting, it is important to recognize that capital costs are only the starting point for any analysis of new generating capacity. A more accurate measure of economic competitiveness, and one that is more importa...

We’re now on our third week of posts seriously looking at Amory Lovins’ and the Rocky Mountain Institute’s latest paper that bashes nuclear energy. Today’s post deals with the paper’s claim that nuclear energy’s “true competitors” (according to RMI) are cheaper and therefore “produce” more “climate solution” than nuclear. I will show that RMI relies on weak sources, no sources, and cherry-picked data for their cost assumptions to exaggerate their claims. From page 19 in RMI’s paper (pdf): Every dollar spent on new nuclear power produces 1.4-11+ times less climate solution than spending the same dollar on its cheaper competitors. For a power source merely to emit no carbon isn’t good enough; it must also produce the least carbon per dollar… To come up with the above statement, RMI’s paper takes the cost assumptions for each technology from their graph below, inverts them to get kWh per dollar, finds each technology’s “CO2 emissions displaced relative to coal,” multiplies the kWh per d...

The purchase of a major asset, whether a car or a new power plant, frequently involves a trade off between the purchase price and operating costs. A column by Joseph B. White published in The Wall Street Journal's Eyes on the Road column on June 16, 2008 titled, " Still Waiting for Hybrids to be the Smartest Buy ", updates us on the trade-off between the higher purchase price and lower fuel costs of hybrid cars like the Toyota Prius . White shows that, even with gasoline at $4 per gallon, a typical consumer would have to drive the hybrid vehicle for more than seven years to begin to realize net savings compared to the non-hybrid alternative. Said differently, if the consumer expects to keep the vehicle for more than seven years, purchasing the hybrid could make sense economically. Interestingly, the article also mentions some of the non-economic reasons buyers offer to explain their willingness to pay a premium for a hybrid. Among them are a desire to be "greener...

Conferences, campaign speeches, and media all contributed to an especially busy NEI Monday. At Brookings , Sen. Lamar Alexander (R) called for a bipartisan Manhattan project leading to "clean energy independence." The U.S. representative to the IAEA , Ambassador Greg Schulte, discussed nonproliferation initiatives at a Woodrow Wilson International Center event. Sen. John McCain (R) continued his policy tour, stopping in Oregon to deliver his address on climate change . And The Wall Street Journal published an article looking at the costs of new plant builds. Mark Flanagan responded via the NEI blog. Scott Peterson took to the airwaves, citing industry and independent analysis that shows nuclear-generated electricity to be cost-effective and competitive. Peterson also emphasized the bipartisan support for new plants in statehouses and Congress.

Tampa Tribune ’s “Nuclear Costs Explode” piece provided some updated insights to the estimated costs of a new nuclear plant. The article began with Progress Energy’s cost reassessment of a new nuke from an initial estimate of about $5-7 billion per plant. “Based on new industry estimates, the tab for Progress Energy's project could surpass $10 billion.” The reason for the increase: because the cost of concrete, steel, copper, labor and reactor technology has soared as energy companies move forward with plans to build more than 30 new reactors nationwide. Also, Progress Energy's initial estimate excluded the cost of land, inflation, interest payments and new transmission lines. … A September 2007 report commissioned by the Edison Electric Institute, a nonprofit trade group for the nation's electric utilities, showed that steel prices have risen 60 percent since 2003. Copper prices nearly quadrupled between 2003 and 2006 and cement prices rose 30 percent during the same per...