Nuclear Cost Estimates Rising
Rapidly
By Pam Radtke Russell
The
rising cost of materials and labor has the potential to put an end to the
nuclear renaissance before it ever gets started. Company estimates that have
been released show costs for an individual unit could be as high as $12
billion, and one consultant expects those estimates could rise if material
prices continue to escalate.
Florida
Power & Light told the Florida
Public Service Commission late last year that the cost for building new
units at Turkey Point in south Florida could be up to $8,000 per kilowatt -- or $24 billion for two units. Earlier this
year, Progress Energy pegged its cost estimates for two new units on
"There's
a lot of sticker shock," says Jim Harding, an energy consultant who helped
the
In
October, Moody's Investor Service estimated total overnight costs of a new
nuclear plant, including interest, would be between $5,000 and $6,000 per
kilowatt. But even those numbers are only guesses, Moody's notes in its report,
New Nuclear Generation in the United States. "We believe the
ultimate costs associated with building new nuclear generation do not exist
today and that the current cost estimates represent best estimates, which are
subject to change."
While
the Florida PSC ultimately gave FPL approval to move forward with the Turkey
Point project and is evaluating Progress Energy's proposal, other companies,
such as
"It's
not an easy decision for a utility to make going forward," says Harding.
The decision to move forward with building a new nuclear plant is going to be a
real "head scratcher" for companies to
determine whether they can finance such a large project and whether it will be
the most cost-effective resource, he adds.
Best Option
Adrian Heymer, senior director for new plant deployment for the
Nuclear Energy Institute, says that many companies are regularly evaluating
conditions. He says that new nuclear plants are still the best option for new baseload generation, but expects that not all 17 companies
with plans for new nuclear generation will move forward.
"Some
people may run the evaluation and say no, others may say yes, this is for
us," Heymer says. Moody's report says it expects
only one or two new plants to be online by 2015 -- the target date for many of
the companies that have proposed new nuclear units.
The cost
to get firm estimates may turn some companies away from pursuing nuclear power.
A company must spend at least six months and several million dollars to get a
number it is comfortable with, Harding maintains.
Despite
the cost issues, new baseload generation is a
necessity in many places in the country. If new nuclear plants aren't built,
other power plants will have to be built.
"If
not nuclear, then what?" asks the nuclear industry's Heymer.
Coal, gas and other fossil-fueled power plants all use the same raw materials
that are escalating in price. Moody's report notes that the same cost
uncertainties facing nuclear plants are also problematic for new coal plants.
"Consultant
Harding says that he estimates that operating cost per kilowatt-hour for a new
nuclear plant will be 30 cents per kilowatt-hour for 12 or 13 years until
construction costs are paid down, at which point operating costs will drop to
18 cents. Harding adds those costs are a tough sell when concentrated solar
power and wind power can be had for about 14 cents per kilowatt-hour. He said he
believes that those renewable resources, as well as natural gas, and perhaps
LNG, might prove competitive to a new nuclear plant.
In the
end, the cost of a new nuclear plant won't be known until it comes online. And
Harding expects that if prices continue to rise, even
Nuclear
energy's potential could therefore be undercut by the high price of construction.
And while the same phenomenon exists with respect to other energy forms, the
nuclear industry is already battling a generation-long handicap.
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