Antinuclear

USA finding that the economics of nuclear power don’t add up

It is past time for utility executives and their regulators to take a step back and reassess. An honest look at the real costs of nuclear power will show that the economics don’t add up. It is time to stop believing in impossible things

Nuclear Power Economics Requires Believing In ‘Impossible Things‘, Energy Collective, Dennis Wamsted, 6 Nov 15  It is increasingly clear that the economics of nuclear power don’t add up. Just in the past two and a half years, for example, seven plants at six sites have been shut down due to uneconomic performance or massive equipment repair costs—and other plants are on the chopping block.

Similarly, the two ballyhooed active construction projects, in Georgia and South Carolina, are seriously behind schedule and way over budget. Nonetheless, utility executives and regulators in a number of states still have not gotten the message, notably in Florida and Virginia where executives at Juno Beach-based Florida Power & Light and Richmond-based Dominion soldier on, pushing new reactor proposals whose economics, simply put, just don’t add up and could leave ratepayers holding the bag for billions of dollars in nuclear construction costs.

The charade is particularly obvious in Florida, where FPL, a unit of NextEra Energy, annually goes through a process with state regulators to show the feasibility of a proposed two-unit, 2,200 megawatt addition to its existing facility at Turkey Point south of Miami. The yearly dance was completed last month with regulators signing off on FPL’s feasibility analysis as “reasonable” and approving the utility’s ability to recover from ratepayers the roughly $25 million it will spend this year on the reactor proposal.

A closer look at FPL’s analysis, however, shows that, at best, it stretches the boundaries of what can be considered reasonable. In particular, there is the little matter of whether the plant will be built and operated for 40 years, or 60.

It does make sense to operate expensive, capital-intensive facilities such as nuclear plants for as long as is safely possible, and many utility companies in the U.S. currently have sought and received 20-year license extensions from the federal Nuclear Regulatory Commission to operate their reactors for 60 years. FPL is one of those companies, having secured NRC license extensions for its existing Turkey Point units (numbers 2 & 3) as well as its two reactors at St. Lucie. (There even is talk about the possibility of some reactors seeking a second 20-year extension, bringing the total operating life to 80 years.)

However, those extra 20 years don’t come free. In fact, there are significant new costs involved in relicensing a reactor and stretching its operating life from 40 to 60 years. For example, when Xcel Energy decided to relicense its single unit Monticello plant it spent $665 million to increase the plant’s capacity and repair/refurbish/replace equipment throughout the unit in order to secure its 20-year NRC life extension. Similarly, the Minneapolis-based utility spent $280 million to replace the steam generator at Unit 2 of its Prairie Island nuclear facility in order to pave the way for that reactor’s 20-year license extension.

But FPL is now blurring the lines and using the estimated costs for the new reactors’ initial construction(an ever-changing number, but currently pegged at between $10-$15 billion, with total project costs, with financing, at upward of $20 billion) and spreading them out over both a 40-year and a 60-year operating life—without adding any additional capital costs. This new math, which FPL used for the first time in its 2014 feasibility analysis, does exactly what the utility wants: The economics of the plant do look better when calculated over a 60-year period. However, it is a sleight of hand that can’t be economically justified since the capital costs used in the calculation are for a plant that will operate for 40 years……..

Unfortunately, it is not just FPL that believes in “impossible things” as the Queen so memorably said inAlice In Wonderland; the state’s public service commission staff also has bought into the fiction. Since no one submitted a competing analysis, the staff wrote in its recommendations memorandum on the case for the Florida PSC, it can’t analyze the reasonableness of FPL’s numbers. “Therefore, staff is not persuaded that the company’s forecast of environmental compliance costs related to C02 is unreasonable.” Perhaps a little in-house analytical work would have done the trick?

A third issue that doesn’t even make it into the annual FPL feasibility filing is the little issue of decommissioning. Cleaning up a closed nuclear site, regardless of whether it operates for 40 or 60 years, takes a lot of money. How much, you ask? Try an estimated $517 million PER reactor, according to FPL’s latest license application documents on file with NRC. These funds will be collected from ratepayers once the proposed reactors enter commercial operation—but for reasons unknown they aren’t even considered in the annual feasibility fleecing in Florida. “Curiouser and curiouser,” said Alice……….

Finally, as a reference for the scope of the costs involved, Norwood concluded by noting that at its current projected capital cost, North Anna 3 already is projected to cost more than 10 times what the utility’s most recent combined cycle natural gas plant, the roughly comparable 1,358 MW Brunswick facility, took to build.

It is past time for utility executives and their regulators to take a step back and reassess. An honest look at the real costs of nuclear power will show that the economics don’t add up. It is time to stop believing in impossible things. http://www.theenergycollective.com/djwamsted/2288575/nuclear-power-economics-requires-believing-impossible-things

November 7, 2015 - Posted by Christina Macpherson | Uncategorized