Transcript Document

The Economics of Nuclear Power
Steve Fetter
University of Maryland
Cost of Electricity, U.S. Reactors
(2004$/MWh)
14
Number of Reactors
12
10
8
6
4
2
Average COE,
2005, all sources
0
30
100 105 110 115 120 125 130 135 140 145
3035 404045 505055 606065 707075 808085 909095 100
110 120 130 140
Cost of Electricity ($/MWh)
150
Koomey & Hultman (submitted) 2007
Cost of Electricity, 99 U.S.
Reactors (2004$/MWh)
Cost of Electricity ($/MW)
140
120
100
80
60
40
20
0
0
20
40
60
80
100
Rank
Koomey
& Hultman
(submitted
to EP 2007)
Koomey
& Hultman
(submitted)
2007
Components of COE
Cost of Electricity ($/MWh)
140
120
100
80
60
Construction, Interest, Capital
Additions, Decommissioning
40
20
Non-Fuel O&M
Fuel
0
1
11
21
31
41
51
Rank
61
71
81
91
Where’s the Learning Curve?
Cost of Electricity ($/MW)
140
120
100
80
60
40
20
0
1/1/67
1/1/71
1/1/75
Start of Construction
1/1/79
Nuclear Power Economics
Estimated cost of electricity (COE) for a
new U.S. nuclear reactor:
Expense
COE
($/MWh)
Construction
50
Non-fuel operations and
maintenance (O&M)
15
Fuel-related expenses
Total
5
70
Nuclear v. Alternatives ($/MWh)
nuclear
coal
gas
wind
solar
capital
50
30
12
60
250
O&M
15
5
3
10
5
fuel
5
10
25-50
0
0
total
70
45
40-65
70
250
+ $100/tC
0
25
12
0
0
new total
70
70
52-77
70
250
Nuclear Capital Cost
• Construction costs in U.S. are highly uncertain
– no operating reactors ordered after 1973
– last reactor was completed in 1996
• Reasonable estimate for the overnight
construction cost of new advanced light-water
reactors: about $2000/kWe
– $2 billion for a 1000-MW reactor
Overnight Construction Cost
OCC ($/kW)
Actual
Japan
Korea
Estimated
EIA
NEA
GE
Framatome
Westinghouse
Finland
2300 - 2800
1800
1500 - 2000
1800
1400 - 1600
1200 - 1300
1000 - 1700
1600
Overnight Construction Cost ($/kW)
Overnight Construction Costs
(2004$/kW)
8000
6000
4000
2000
0
0
20
40
60
80
100
Rank
Koomey & Hultman (submitted to EP 2007)
From OCC ($/kW) to COE ($/MWh)
COEcap 
Fidc
Fpreop
Fcont
CF
Fcr
Ftax
Fins



OCC 1 Fidc 1 Fpreop 1 Fcont
8766CF
F

cr
interest during construction factor (~0.2)
pre-operating cost factor (~0.1)
contingency cost factor (~0.1)
capacity factor (0.85)
fixed charge rate
property tax rate
(~0.13/y)
insurance rate
 Ftax  Fins

From OCC ($/kW) to COE ($/MWh)
 $2000 
 kW  1.2 1.1 1.1  0.13 
$50





 y  MWh
h   MW 
 8760 y   103 kW  0.85
   
COEcap

OCC
($/kW)
1200
COEcap
($/MWh)
30
1600
40
2000
50
2400
60

Fixed Charge Rate
Construction costs are financed through debt
(bonds) and equity (stock). Electricity sales must
be sufficient to pay dividends to investors, after
taxes and other expenses are paid, which requires
recovering a fraction of total up-front costs each
year: “fixed charge rate” or Fcr.
Fcr depends on the rate of return necessary to
attract the required capital. For a regulated utility,
the average cost of money is modest: 6 to 7%/y
(half the rate for large private firms).
Fixed Charge Rate
 
 
 1 b i
bib
1
e

Fcr 

N
1 t e  1 1 i
1 1 ib

e
te
b
ib
ie
N


N

te
  bib t e 
N

corporate income tax rate (38%)
fraction of capital raised with bonds (0.5)
rate of return on bonds (5%)
rate of return on stocks (8%)
capital recovery/depreciation period (15 y)
Fuel Costs: Once-Through Fuel Cycle
UF6 Conversion
LEU
fresh
fuel
“front end”
“back end”
spent
fuel
Wet
Storage
Dry
Storage
(optional)
Repository
U3O8
Front-end Costs
unit cost
units/kg
$/kg
$/MWh
Uranium
$50/kg
10 kg
$500
1.3
Conversion
$5/kg
10 kg
$50
0.1
Enrichment
$100/SWU
6 SWU
$600
1.5
Fabrication
$250/kg
1 kg
$250
0.6
$1400
3.5
Total
Assumes fuel with 4.4% U235 and burnup of 50 MWtd/kg,
tails assay of 0.3% U235, and efficiency of 33%
Back-end Costs
$/kg
Wet storage
$/MWh
included in capital, O&M
Dry storage
$200
0.5
Geologic disposal
$400
1.0
Total
$600
1.5
$2000
5.0
Total front + back
From $/kg to $/MWh
 $2000   kgHM   3 MWth   d 
$5






 kgHM   50 MWthd   MWe   24 h  MWh
• Compare to total COE of $70/MWh
– fuel related costs ~ 7% of COE
• Conversion, enrichment, fabrication costs stable
• At $50/kg, uranium 25% of fuel costs, 2% COE
– average price paid by U.S. operators in 2006
– if price doubles, COE increases 2%
Uranium Prices
350
Spot market price
Average paid by US reactor
operators
Uranium Price ($2006/kg U)
300
250
200
150
100
50
0
1970
1975
1980
1985
1990
1995
2000
2005
2010
Direct Disposal v. Reprocessing in LWRs
LEU
UF6 Conversion
spent LEU
spent LEU
spent MOX
spent MOX
U3O8
LEU
fuel
MOX
fuel
spent
LEU
Pu
DU
Conversion
UF6
Interim
Storage
rU
HLW and ILW
Repository
Reprocessing and Recycle
• Widespread agreement that today R&R is more
expensive than direct disposal
– official studies in France and Japan
– recent studies by MIT, Harvard, Chicago
• Advocates argue difference is small: additional
1.5 to 4 $/MWh (~3-8% of COE)
– but total cost is high: $1-3 billion/yr, plus $50-100
billion to reprocess 60,000 tons already discharged
• Advocates argue difference will disappear soon
if nuclear power grows and U price increases
– but premium is likely to persist for 50-100 yr even if
nuclear grows substantially
Premium for R&R in LWRs
COE ($/MWh)
(mill/kWh)
4
$200/kg interim storage for DD
$2000/kgHM = reprocessing
price
3
$200/kg waste credit for R&R
$1500/kgHM
2
$1000/kgHM
1
$500/kgHM
0
-1
0
40
80
120
160
Price of Uranium ($/kgU)
200
240
Breakeven Uranium Price
$200/kg interim storage for DD
$200/kg waste credit for R&R
These estimates are favorable to R&R
• $200/kg interim-storage charge included for
direct disposal (but not R&R)
• $200/kg (50%) cost savings for waste disposal
• MOX fuel fabrication well below recent prices
• No charges for Pu storage, Am removal,
reactor relicensing, or extra security for MOX
• Equal disposal costs for spent MOX and LEU
(or continuous recycle of without cost penalty)
LWR (direct disposal) v. FBR
UF6 Conversion
LEU
U3O8
LEU
fuel
spent LEU
Interim
Storage
Repository
HLW, ILW
Pu
rU MA
DU Conversion
UF6
Premium for R&R in FBRs
15
Ccap
($/kWe)
UtilityOwner
Owner
Utility
$1000/kg reprocessing
$400
($/MWh)
COE (mill/kWh)
10
$300
$200
$100
5
$0
0
-5
0
50
100
150
200
250
Uranium Price ($/kgU)
300
350
400
Uranium Resources
• Breakeven U price > $130/kg even in best case
• How much U is available? Red Book gives 16
Mt available at $130/kg, but…
– high-cost resources in many countries (e.g.,
Australia) not estimated;
– unconventional resources (e.g., phosphates)
not included;
– little investment in exploration in last 20 y
– most minerals have steadily decreased in
price with increasing consumption
43 of 47 Elements Have Decreased in Price
Rato of Price to Price in 2000
100.00
10.00
1.00
Sr
Co
Ta
0.10
Sr
Tl
Cs
0.01
0
20
40
60
80
Percent of Cumulative Production (to year 2000)
100
A Very Rough Estimate of Ultimately
Recoverable Uranium Resources
• Red Book give 2.1 Mt at $40/kg
• Hore-Lacy: “a doubling of price from present
levels could be expected to create a tenfold
increase in measured resources.”
• So there should be 21 Mt available at $80/kg
and 210 Mt at $160/kg
• In general:
R ~ 2.1(P/40)e
where e = long-term price elasticity of supply
Recoverable Resources
Longterm
elasticity
of supply
Source
e
$40
$80
$130
2.1
21
105
2.48
2.1
12
39
2.35
2.1
11
34
2.1
11
16
UIC (doubling price creates ten-fold 3.32
increase in measured resources)
Deffeyes and MacGregor
(ten-fold decrease in concentration =
300-fold increase in resource, p ~ c)
Gen-IV (based on U.S. reserves
for various mining methods)
Red Book
MtU recoverable at
price less than
Nuclear Electricity Production (TWh/y)
IIASA/WEC Global Energy Perspectives
45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
1980
2000
2020
2040
2060
2080
2100
Cumulative Uranium Consumption (Mt U)
Cumulative U consumption:
LWRs with direct disposal
40 Mt U @ $130/kg (e = 2.48)
40
34 Mt U @ $130/kg (e = 2.35)
30
20
17 Mt U @ $130/kg (Red Book)
10
0
2000
2020
2040
2060
2080
2100