Re: Mook's quote about nuclear being a "low grade heat". Is it true?

From: Scott A Crosby (scrosby_at_cs.rice.edu)
Date: 07/11/04 

Date: 11 Jul 2004 08:11:45 -0500

On 10 Jul 2004 23:32:51 -0700, william.mook@mokindustries.com (william mook) writes:

> > I posted some numbers for fuel and O&M costs in another message.
> > Unfortunately, my ISP's news-server doesn't show it, but I did see
> > this message on google. So here are some numbers again...
> >
> > One plant (not a top performer) has an annual fuel cost of ~$22M -
> > $23M. Their O&M costs are about $150M.
>
> The costs charged for nuclear fuels bear little relation to their
> total cost of production, even so, I agree the fuel costs are a small
> part of the total - capital costs are the largest.

Wouldn't fuel-supply expenses be capitalized by the fuel supplier, and
amortized over the fuel they produce and sell to nuclear reactor
operators?

> > With a capacity factor of 96% and net output of 850MWe. This
> > works out to a yearly cost for fuel and operation of $173M and an
> > annual output of 7.19e+9 kWh. About 2.4 cents per kWh
>
> If all you were doing is paying the government set rates for nuclear
> fuels, then nuclear would be golden. But you're not. You're paying
> for all the costs of the nuclear fuels plus all the costs of
> construction and maintenance, and all the costs of cleanup of both
> the power plant the spent fuels, and the portion of the fuel
> production infrastructure that supplied the fuels to your plant.

Which daestrom documents is funded, either through decomissioning
obligations, a per-MW*h fee for waste disposal, etc. If you want to
convince me, you'll either have to explain how daestrom was off on all
of his numbers by a factor of two, or what catagory he forgot to
include. You can make convincing arguments, but this isn't one of
them. Show me a table with each cost, with daestrom's numbers and your
numbers and explain why yours are higher.

> Adding all this in gets you something greater than $5.00 per watt
> and something that's not competitive on a kWh basis.

Besides, if nuclear power is inherently this expensive, then why
would, say, France be using it to supply their country? If nuclear
power is as much of a black hole for money as you claim, where is the
missing mass.

> > A top performer that I know of had a capacity factor 96% last year, an
> > O&M budget of $98M and annual fuel costs of $28M. This works out to
> > 1.3 cents per kWh generated.
>
> But this is not the only cost and its not the largest cost. So, its
> not a good predictor of real costs. Which is why folks who have
> invested in nuclear power don't have the capital to invest more, or
> the inclination to invest more.
>

There's also public sentiment. After the round of decade(s)-long
construction delays causing capital costs to spiral, I'd expect
caution.

>
> > The 'check' written to GNF is pretty
> > straight accounting.
>
> Yet all the costs are not covered by that check.
>
> > The O&M costs at a nuc are something on the
> > order of 70% labor costs. With a staff between 500 and 750 (depending
> > on the plant), you can 'ball park' the O&M as (700 people X
> > $100000/yr)/0.70 => $100M.
>
> Why not look at DOE EIA figures, or the figures reported by NRC, or
> even the 10ks reported by the publicly traded companies who own
> nuclear plants?

http://www.eia.doe.gov/cneaf/nuclear/page/analysis/nuclearpower.html

>From which I see >90% average utilization for nuclear power (I recall
you saying it was 80% a few days ago).

Going by the O&M&FUEL expenses reported, at $.018/kW*h and at 90%
utilization for a 1GWe plant comes to $140M/year. Eyeballing the graph
and guessing about $.004/kW*h for fuel, O&M would be $110/year.

10% off for such an offhand estimate ain't bad daestrom. Congrats.

And as the average is the average, how might these numbers improve if
a half dozen of the worst-performers were ignored?

> Here are some filings from nuclear plant operators though - check it
> out;
>
> http://gsbwww.uchicago.edu/fac/richard.leftwich/teaching/Trash/More%20Trash/keyspan98_files/filing_raw.htm

I don't see this even discussing nuclear power.

>
> http://gsbwww.uchicago.edu/fac/richard.leftwich/teaching/Trash/More%20Trash/baycorp98_files/filing_raw.htm

Interesting that a 3% stake, 34MWe owned by Montaup was bought for 3
million. $.10/W for resold capacity. Later it discusses a contract
selling the power for 5.24c/kW*h, so the value of that electricity
should be about $12M/year, so that stake in Seabrook should have been
worth at least $30-50M, not $3M.

Something is strange. Daestrom, would you have an opinion on this?

> They make huge distinctions between their nuclear and non-nuclear
> components, and point out that the losses they suffer are due in large
> measure to the massive losses they suffer from the operation of their
> nuclear assets.
>
> This suggests that no one is making money in nuclear energy at the
> This suggests that no one is making money in nuclear energy at the
> moment. Which suggests and explanation as to why no new nuclear
> plants are being built.

There appears to be a general oversupply of generation.

As pointed out in the 10K:

   In addition, non-utility wholesale generators of electricity, such
   as independent power producers ("IPPs"), Qualifying Facilities
   ("QFs") and EWGs, as well as power marketers and brokers, actively
   sell electricity in this market.

And in the EIA url I gave above:

   First among these in the short term is that many if not most
   regions of the Nation presently have surplus baseload generating
   capacity. This short term base load surplus must be worked off
   before any new nuclear construction can be seriously considered.

If there's an oversupply of baseload, you'd expect costs to be low,
especially now that cogeneration has become popular and is increasing
the supply.

> http://www.citact.org/nucrep.html

Which has no predictive value about under liabilities. *Every* single
one of the reactors predicted to be retired early in 1999-2003 in the
'best case for nuclear power scenario' is still operating. Makes one
question the other claims.

Scott

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