A Reactor-Level Analysis of
Busbar Costs for U.S. Nuclear
     Plants, 1970-2005
 Jonathan G. Koomey* and Nathan Hultman**...
Recent interest in nuclear power

• Climate change mitigation issues (e.g.
  Blair announcement)
• EPACT 2005
  – Subsidie...
New plant status from NEI
    Updated 4/2007




FY = Federal fiscal year, CY = calendar year Copyright Jonathan Koomey 20...
Goals of this work

• Creating fair, accurate, and comparable
  historical cost estimates
• Explaining history using limit...
Status of work
• Hultman, Nathan E., Jonathan Koomey, and Dan
  Kammen. 2007. "What history can teach us about the
  futur...
The Generations of Nuclear Energy




                    Source: DOE Generation IV Project

            Copyright Jonatha...
Status of new reactor designs




   Source: Energy Information Administration, “New Reactor Designs”.
   http://www.eia.d...
Previous studies
•   Komanoff
•   Rothwell
•   EIA (Hewlett)
•   Zimmerman
•   Navarro
•   Marshall
•   Many others

     ...
Focus on direct costs
•   Capital costs
•   Construction duration
•   Interest
•   Capacity factors
•   Heat rates
•   O&M...
Some costs not included
• Taxes (these are transfer payments)
• Waste disposal costs beyond the 0.1
  ¢/kWh current fee (u...
Why levelized costs?

• ¢/kWh a common metric for comparing
  supply and demand-side technologies
• Just analyzing capital...
Levelization method

• Calculate present value of some future
  expenditure or stream of expenditures
  using the real dis...
Weaknesses of levelized costs

• Method depends somewhat on forecasts
  – less accurate for reactors completed most recent...
Methods
• Calculate costs at the reactor level
   – Discount rate = 6% real
   – Use reactor specific data when possible
 ...
Key data sources
•   Capital costs: Komanoff (except 4 reactors)
•   Construction duration: Komanoff
•   Interest: Avg US ...
Detective work on four reactors




   Koomey with Joe Roy of MMWEC in August 2006. Roy
   supplied monthly construction c...
Results
• Key components of total levelized costs
  –   Installed costs
  –   Capacity factors
  –   Total O&M costs
  –  ...
Large increases in installed capital
 costs for plants completed >1982
 Installed costs include 6%/yr real interest during...
Projected installed costs are at the
mid-to low end of historical costs




           Copyright Jonathan Koomey 2007   19
Projected and historical capacity
     factors match up well
 Early reactors for which we don’t have cost data
 Main sampl...
Operational improvements led to
higher capacity factors for all plants




            Copyright Jonathan Koomey 2007   21
Projected construction durations
generally lower than historical data




                                      Early reac...
Projected capacity similar to history
  Early reactors for which we don’t have cost data
  Main sample for which we do hav...
Projected O&M costs generally
lower than historical experience




         Copyright Jonathan Koomey 2007   24
Total levelized costs by date of
         first operation




          Copyright Jonathan Koomey 2007   25
Projected busbar costs/kWh lower
 than most historical experience




           Copyright Jonathan Koomey 2007   26
Comparison of best case historical
  costs with current estimates




           Copyright Jonathan Koomey 2007   27
Implications for new reactors?
• Advocates for new plants say “So what? New
  plants are totally different from the old on...
Opportunities for a nuclear revival
• Interest driven by
  – Tax credits/R&D
  – Need for reductions in
       • Greenhous...
New nuclear infrastructure will be
            more highly optimized
  1978: Plastic models on roll-around carts          ...
Uncertainties for a nuclear revival
•   Plants still mostly site built
•   Are there near-term construction bottlenecks?
•...
Spot prices for Uranium Up!


                                         $113/lb in
                                        ...
Advice on evaluating projected
      costs for new reactors
• Compare apples to apples ($/kW)
  –   Inflation adjustment
 ...
Questions to consider on
   projected costs of new reactors
• Can DTE afford to wait?
  – Risks of early adoption
  – Risk...
Comparing projected costs for other
new reactors (EPR, ABWR, ESBWR)




       ABWR

      ABWR
      ESBWR




          ...
Future work
• Improved reactor by reactor O&M costs,
  forced outage rates, and incremental capital
  additions (sources?)...
Conclusions
• Just examining capital costs gives an
  incomplete picture of historical developments
• Reactor size interac...
Conclusions (continued)

• Larger, more sophisticated operators
  have been able to increase capacity
  factors and reduce...
EXTRA SLIDES




 Copyright Jonathan Koomey 2007   39
Another look at total busbar costs

                                            PWR=Pressurized water reactor,
           ...
Total levelized costs vs. capacity




           Copyright Jonathan Koomey 2007   41
For plants started > 1968 (with one
exception), capacity was ≥ 800 MW




                                         Early r...
For plants finished > 1975,
      capacity was ≥ 800 MW
Early reactors for which we don’t have cost data
Main sample for w...
Overnight costs vs. reactor
        capacity




        Copyright Jonathan Koomey 2007   44
Construction duration increased
  for reactors started >1972
 Early reactors for which we don’t have cost data
 Main sampl...
As reactor capacity became > 800 MW,
  construction duration varied more
    Early reactors for which we don’t have cost d...
U.S. average nuclear capacity
factors improved substantially after
               1985




           Copyright Jonathan K...
Lifetime capacity factors have also
improved, partly due to retirements



                                            Ear...
Reactor efficiencies don’t vary much
   Early reactors for which we don’t have cost data
   Main sample for which we do ha...
Limited data on incremental
additional capital expenditures




         Copyright Jonathan Koomey 2007   50
Avg costs for O&M, fuel, and incremental
    capital additions vary over time




              Copyright Jonathan Koomey ...
Improvements in capacity factors affect
  total O&M costs after the mid 1980s




              Copyright Jonathan Koomey ...
Total O&M costs vary widely




        Copyright Jonathan Koomey 2007   53
Without New Investments U.S.
                 Nuclear Capacity Declines                    Capacity With and Without Licen...
RECENT CONSTRUCTION COST
            EXPERIENCE ($2002)
Genkai 3                                        $2,818/kW (overnig...
New U.S. Reactor Licensing Process
Old Process: The two-step licensing process (10 CFR 50)

            Construction      ...
Energy Policy Act of 2005
•   Loan guarantees for up to 80% of project cost
     – Valid for all GHG-free technologies
   ...
Energy Policy Act of 2005

  •   Renewal of the Price-Anderson Act of 1957
       – Liability protection extended until 20...
Upcoming SlideShare
Loading in...5
×

2007 Koomey talk on historical costs of nuclear power in the US

1,012

Published on

This is a talk I gave at the Detroit Edison Company on April 17, 2007. It's the most complete version summarizing our work on the historical costs of nuclear power. That worked appeared in three refereed journal articles:

Hultman, Nathan E., and Jonathan G. Koomey. 2007. "The risk of surprise in energy technology costs." Environmental Research Letters. vol. 2, no. 034002. July. <http: />

Hultman, Nathan E., Jonathan G. Koomey, and Daniel M. Kammen. 2007. "What history can teach us about the future costs of U.S. nuclear power." Environmental Science & Technology. vol. 41, no. 7. April 1. pp. 2088-2093.

Koomey, Jonathan G., and Nathan E. Hultman. 2007. "A reactor-level analysis of busbar costs for U.S. nuclear plants, 1970-2005." Energy Policy. vol. 35, no. 11. November. pp. 5630-5642. <http: />

The last article is the primary source--the other two derive policy insights from the data developed in that last article.

Published in: Technology, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
1,012
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
40
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

2007 Koomey talk on historical costs of nuclear power in the US

  1. 1. A Reactor-Level Analysis of Busbar Costs for U.S. Nuclear Plants, 1970-2005 Jonathan G. Koomey* and Nathan Hultman** *Staff Scientist, Lawrence Berkeley National Laboratory and Consulting Professor, Stanford University **Assistant Professor, Georgetown University Presented by Koomey at DTE, in Detroit, MI April 17, 2007 JGKoomey@stanford.edu http://www.koomey.com Copyright Jonathan Koomey 2007 1
  2. 2. Recent interest in nuclear power • Climate change mitigation issues (e.g. Blair announcement) • EPACT 2005 – Subsidies – Loan guarantees • International investments (e.g. China) • Expressions of interest by U.S. utilities Copyright Jonathan Koomey 2007 2
  3. 3. New plant status from NEI Updated 4/2007 FY = Federal fiscal year, CY = calendar year Copyright Jonathan Koomey 2007 3
  4. 4. Goals of this work • Creating fair, accurate, and comparable historical cost estimates • Explaining history using limiting cases and statistics • Comparing historical cost estimates to recent projections of nuclear costs • Characterizing mistakes to avoid if nuclear power is to undergo a rebirth in the U.S. Copyright Jonathan Koomey 2007 4
  5. 5. Status of work • Hultman, Nathan E., Jonathan Koomey, and Dan Kammen. 2007. "What history can teach us about the future costs of nuclear power." Environmental Science & Technology. vol. 41, no. 7. April 1. pp. 2088-2093. • Koomey, Jonathan, and Nate Hultman. 2007. "A reactor- level analysis of busbar costs for U.S. nuclear plants, 1970-2005." Energy Policy (accepted, under revision). January. • Hultman, Nathan E., and Jonathan G. Koomey. 2007. "Energy technology costs and public support for R&D: Accounting for surprise by disentangling uncertainties." Submitted to Environmental Research Letters. April 15. Copyright Jonathan Koomey 2007 5
  6. 6. The Generations of Nuclear Energy Source: DOE Generation IV Project Copyright Jonathan Koomey 2007 6
  7. 7. Status of new reactor designs Source: Energy Information Administration, “New Reactor Designs”. http://www.eia.doe.gov/cneaf/nuclear/page/analysis/nucenviss2.html Copyright Jonathan Koomey 2007 7
  8. 8. Previous studies • Komanoff • Rothwell • EIA (Hewlett) • Zimmerman • Navarro • Marshall • Many others Copyright Jonathan Koomey 2007 8
  9. 9. Focus on direct costs • Capital costs • Construction duration • Interest • Capacity factors • Heat rates • O&M costs • Fuel costs • Incremental capital additions • Waste disposal • Decommissioning Copyright Jonathan Koomey 2007 9
  10. 10. Some costs not included • Taxes (these are transfer payments) • Waste disposal costs beyond the 0.1 ¢/kWh current fee (uncertainties on Yucca Mountain) • Externalities (e.g. accident risks beyond those covered by insurance), routine radiation emissions (generally small) • Subsidies Copyright Jonathan Koomey 2007 10
  11. 11. Why levelized costs? • ¢/kWh a common metric for comparing supply and demand-side technologies • Just analyzing capital costs ignores other big effects (eg. ∆ capacity factors) • Collapsing the time dimension can yield useful insights Copyright Jonathan Koomey 2007 11
  12. 12. Levelization method • Calculate present value of some future expenditure or stream of expenditures using the real discount rate (e.g. decommissioning 40 years hence) • Annualize that present value using the capital recovery factor over the reactor lifetime (generally 40 years) to get the levelized cost Copyright Jonathan Koomey 2007 12
  13. 13. Weaknesses of levelized costs • Method depends somewhat on forecasts – less accurate for reactors completed most recently • Method submerges discontinuous events – long periods of a reactor being off-line – rapid changes in O&M costs or capacity factors • Levelized cost figures often are compared inconsistently to other ¢/kWh numbers Copyright Jonathan Koomey 2007 13
  14. 14. Methods • Calculate costs at the reactor level – Discount rate = 6% real – Use reactor specific data when possible • Capital costs • Construction duration • Capacity factors • O&M (needs improvement) • Decommissioning (split by PWR vs. BWR) – Use averages when necessary • Fuel costs • Incremental capital additions (better if by reactor) • Waste disposal Copyright Jonathan Koomey 2007 14
  15. 15. Key data sources • Capital costs: Komanoff (except 4 reactors) • Construction duration: Komanoff • Interest: Avg US electric utility ROI 1971-2001 • Capacity factors: Komanoff, IAEA • Heat rates: NEI • O&M (fixed and variable): NEI, EIA • Fuel: EIA • Incremental capital additions: EIA • Waste disposal: MIT • Decommissioning: OECD Copyright Jonathan Koomey 2007 15
  16. 16. Detective work on four reactors Koomey with Joe Roy of MMWEC in August 2006. Roy supplied monthly construction cost data for Seabrook. Updated capital costs also compiled for Comanche Peak 1&2 and Watts Bar. Copyright Jonathan Koomey 2007 16
  17. 17. Results • Key components of total levelized costs – Installed costs – Capacity factors – Total O&M costs – Construction duration – Capacity • Total levelized busbar costs – Over time and rank ordered • Comparison with current projections Copyright Jonathan Koomey 2007 17
  18. 18. Large increases in installed capital costs for plants completed >1982 Installed costs include 6%/yr real interest during construction Copyright Jonathan Koomey 2007 18
  19. 19. Projected installed costs are at the mid-to low end of historical costs Copyright Jonathan Koomey 2007 19
  20. 20. Projected and historical capacity factors match up well Early reactors for which we don’t have cost data Main sample for which we do have cost data Copyright Jonathan Koomey 2007 20
  21. 21. Operational improvements led to higher capacity factors for all plants Copyright Jonathan Koomey 2007 21
  22. 22. Projected construction durations generally lower than historical data Early reactors for which we don’t have cost data Main sample for which we do have cost data Copyright Jonathan Koomey 2007 22
  23. 23. Projected capacity similar to history Early reactors for which we don’t have cost data Main sample for which we do have cost data Copyright Jonathan Koomey 2007 23
  24. 24. Projected O&M costs generally lower than historical experience Copyright Jonathan Koomey 2007 24
  25. 25. Total levelized costs by date of first operation Copyright Jonathan Koomey 2007 25
  26. 26. Projected busbar costs/kWh lower than most historical experience Copyright Jonathan Koomey 2007 26
  27. 27. Comparison of best case historical costs with current estimates Copyright Jonathan Koomey 2007 27
  28. 28. Implications for new reactors? • Advocates for new plants say “So what? New plants are totally different from the old ones” – Need to prove this assertion by actually building plants cheaply • Some lessons have already been learned – Streamline licensing – Standardize designs – Operate plants more effectively • IT for construction management and operations much more sophisticated now • International experience accumulating Copyright Jonathan Koomey 2007 28
  29. 29. Opportunities for a nuclear revival • Interest driven by – Tax credits/R&D – Need for reductions in • Greenhouse gas reductions • Imported oil (need electric vehicles) – International markets • Much improved – Technology – Design – Management – Construction processes – Licensing Copyright Jonathan Koomey 2007 29
  30. 30. New nuclear infrastructure will be more highly optimized 1978: Plastic models on roll-around carts 2000: 4-D computer aided design and virtual walk-throughs McGuire Nuclear Station Reactor Building Models. 2002 NRC processing time for 20-year license renewal: ~18 months 1000 MW Reactor (Lianyungang Unit 1) Source: Per Peterson, UC Berkeley Copyright Jonathan Koomey 2007 30
  31. 31. Uncertainties for a nuclear revival • Plants still mostly site built • Are there near-term construction bottlenecks? • U.S. political system still decentralized • Fuel prices up a lot recently • Risk of accident anywhere in the world • Link to proliferation (N. Korea, Iran) • Need new repository? • Competition more intense now – More electricity generation options – Deregulated markets • Capital markets may be skeptical Copyright Jonathan Koomey 2007 31
  32. 32. Spot prices for Uranium Up! $113/lb in early April 2007 Copyright Jonathan Koomey 2007 32
  33. 33. Advice on evaluating projected costs for new reactors • Compare apples to apples ($/kW) – Inflation adjustment – 1st of a kind vs. Nth of a kind – One vs. two reactors on a site – Full reactor costs vs. power block • Beware of – Possible certification delays – Lack of specificity of possible bottlenecks – Lack of real world experience in construction • Check modularization and parts counts • DTE: First mover or fast follower? Copyright Jonathan Koomey 2007 33
  34. 34. Questions to consider on projected costs of new reactors • Can DTE afford to wait? – Risks of early adoption – Risks of delay • Can contract be structured so vendor bears some risk for cost overruns? • What if uranium prices stay high? • Has DTE considered a scenario exercise? Copyright Jonathan Koomey 2007 34
  35. 35. Comparing projected costs for other new reactors (EPR, ABWR, ESBWR) ABWR ABWR ESBWR Copyright Jonathan Koomey 2007 35
  36. 36. Future work • Improved reactor by reactor O&M costs, forced outage rates, and incremental capital additions (sources?) • Statistical analysis and development of limiting cases (e.g., pairing of example reactors). • Compare cost estimates for site-built and mass produced technologies – is more cost variability guaranteed for site-built technologies? – How can cost variability be minimized? • International comparisons Copyright Jonathan Koomey 2007 36
  37. 37. Conclusions • Just examining capital costs gives an incomplete picture of historical developments • Reactor size interacted with regulatory delays and slowing electricity demand growth, affecting capital costs, financing costs, O&M costs (and perhaps capacity factors) • Projected capital costs, O&M costs, and construction durations are low compared to historical experience (but may still be correct) Copyright Jonathan Koomey 2007 37
  38. 38. Conclusions (continued) • Larger, more sophisticated operators have been able to increase capacity factors and reduce O&M costs • Key uncertainty is whether the regulatory and technical changes implemented thus far are enough to result in real reductions in installed costs and construction duration Copyright Jonathan Koomey 2007 38
  39. 39. EXTRA SLIDES Copyright Jonathan Koomey 2007 39
  40. 40. Another look at total busbar costs PWR=Pressurized water reactor, BWR=Boiling water reactor. Cohort indicates one of eight predictive cost categories described by Rothwell : Category 1 denotes Westinghouse PWR < 700 MW; Category 2 = Westinghouse PWR 700-1000 MW; Category 3 = Westinghouse PWR>1000 MW; Category 4 = Babcock & Wilcox PWR; Category 5 = Combustion Engineering PWR; Category 6 = General Electric BWR < 700 MW; Category 7 = GE BWR 700-1000 MW; Category 8 = GE BWR > 1000 MW. Levelized costs (which exclude subsidies and externalities) are calculated using a real discount rate of 6% as described in online supplemental material. Copyright Jonathan Koomey 2007 40
  41. 41. Total levelized costs vs. capacity Copyright Jonathan Koomey 2007 41
  42. 42. For plants started > 1968 (with one exception), capacity was ≥ 800 MW Early reactors for which we don’t have cost data Main sample for which we do have cost data Copyright Jonathan Koomey 2007 42
  43. 43. For plants finished > 1975, capacity was ≥ 800 MW Early reactors for which we don’t have cost data Main sample for which we do have cost data Copyright Jonathan Koomey 2007 43
  44. 44. Overnight costs vs. reactor capacity Copyright Jonathan Koomey 2007 44
  45. 45. Construction duration increased for reactors started >1972 Early reactors for which we don’t have cost data Main sample for which we do have cost data Copyright Jonathan Koomey 2007 45
  46. 46. As reactor capacity became > 800 MW, construction duration varied more Early reactors for which we don’t have cost data Main sample for which we do have cost data Copyright Jonathan Koomey 2007 46
  47. 47. U.S. average nuclear capacity factors improved substantially after 1985 Copyright Jonathan Koomey 2007 47
  48. 48. Lifetime capacity factors have also improved, partly due to retirements Early reactors for which we don’t have cost data Main sample for which we do have cost data Copyright Jonathan Koomey 2007 48
  49. 49. Reactor efficiencies don’t vary much Early reactors for which we don’t have cost data Main sample for which we do have cost data Copyright Jonathan Koomey 2007 49
  50. 50. Limited data on incremental additional capital expenditures Copyright Jonathan Koomey 2007 50
  51. 51. Avg costs for O&M, fuel, and incremental capital additions vary over time Copyright Jonathan Koomey 2007 51
  52. 52. Improvements in capacity factors affect total O&M costs after the mid 1980s Copyright Jonathan Koomey 2007 52
  53. 53. Total O&M costs vary widely Copyright Jonathan Koomey 2007 53
  54. 54. Without New Investments U.S. Nuclear Capacity Declines Capacity With and Without License Renewal 120000 Capacity with 100% license renewal Current licensed capacity 100000 80000 Capacity (MW) 60000 40000 20000 0 60 63 66 69 72 75 78 81 84 87 90 93 96 99 02 05 08 11 14 17 20 23 26 29 32 35 38 41 44 47 50 53 19 19 19 19 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 Source: Dominion Resources, 2005, via Joskow (MIT) Copyright Jonathan Koomey 2007 54
  55. 55. RECENT CONSTRUCTION COST EXPERIENCE ($2002) Genkai 3 $2,818/kW (overnight) Genkai 4 $2,288/kW (overnight) Onagawa $2,409/kW (overnight) KK6 $2,020/kW (overnight) KK7 $1,790/kW (overnight) Yonggwang 5&6 $1,800/kW (overnight) Browns Ferry RESTART $1,280/kW (overnight estimate) Finland EPR (AREVA-Seimens contract only) $2,350/kW (nominal estimate 2005) Bruce RESTART $1,425/kW (nominal estimate 2005) Source: Paul Joskow, MIT Copyright Jonathan Koomey 2007 55
  56. 56. New U.S. Reactor Licensing Process Old Process: The two-step licensing process (10 CFR 50) Construction Build Operating License Plant License New Process: Combined licensing process (10 CFR 52) Early Verification Site of Combined Inspections, Permit Construction Tests, and Build Plant Analysis, Operating and Standard License Design Acceptance Specification Criteria Copyright Jonathan Koomey 2007 56 Source: Berger and Parsons (MIT CEEPR 2005), via Joskow (MIT)
  57. 57. Energy Policy Act of 2005 • Loan guarantees for up to 80% of project cost – Valid for all GHG-free technologies – Higher leverage, lower debt cost reduces overall project cost • Production tax credit of $18 per MWh for new nuclear capacity through 2021, subject to 2 limitations: – $125 million per 1,000-MW per year – 6,000-MW eligible, allocated among available capacity • Insurance protection against delays during construction and until commercial operation caused by factors beyond private sector’s control – Coverage: $500 million apiece for first two plants, $250 million for next four – Covered delays: NRC licensing delays, litigation delays Source: Joskow (MIT) Copyright Jonathan Koomey 2007 57
  58. 58. Energy Policy Act of 2005 • Renewal of the Price-Anderson Act of 1957 – Liability protection extended until 2025 • Legislation updates tax treatment of nuclear decommissioning trust funds to reflect competitive electricity markets – All decommissioning trust funds will qualify for tax deductibility (not only those of regulated utilities) • Federal commitment on R&D portfolio ($2.95 billion authorized) • Creates Assistant Secretary for Nuclear Energy at DOE Source: Berger and Parsons (CEEPR, 2005), via Joskow (MIT) Copyright Jonathan Koomey 2007 58
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×