Nuclear power success in Georgia

Investment Analysis Clubs Macro Economic Trends and Risks
21

Jaak,

We in CT needed a bus route between two close together city centers. Hartford to New Britain over $125k people in each cities on the poor side often. The route could have been done in the early 90s for $90 million. It was put off to the 2014 period roughly, the cost over $600 million.

I get the smaller reactor projects are supposed to avoid the one off inflationary pressures. The problem is we can not easily for all sorts of national reasons export nuclear reactors willy nilly while buying them for installation in the US IN THE QUANTITIES to make the one off inflationary pressures truly subside. Yes there will be a bit of success.

The bigger thing the small reactors will never be deflationary. Alternative energy will eat their lunch further out on the time line.

Other nations will be investing heavily in alternative energy installs.

We need our resources going into deflationary solar energy projects. We are just fooling ourselves with other projects.

1 Like
22

My understanding is that Georgia’s Vogtle 3 & 4 plants are cost nightmares. And if I do a quick search on current costs, I find that nuclear is among the most expensive energy sources
https://www.eia.gov/outlooks/aeo/assumptions/pdf/table_8.2.p…

What numbers can you provide that show that these new plants will produce inexpensive power in the years ahead?

I believe you are asking honest questions and are looking for honest answers. The following is a little long, but the issues involved are not as simple as linking to a biased wikipedia article.

First of all, the link you provided describes overnight costs in terms of dollars per kilowatt. This is cost per unit of capacity. A better comparison, in my opinion, is comparing to kilowatt-hours of actual electricity produced. This is where capacity factor comes into play. The capacity factor of nuclear is high. As I previously wrote in this thread, the US average nuclear CF is better than 90% for several years now. The capacity factors for the intermittent renewables are less than 50%. (wind = 35%, solar = 25%) When you factor in the actual electricity produced, then nuclear comes out better. Nuclear produces power 24 hours a day, 7 days a week. Solar and wind farms could never hope to provide that kind of baseload constant power. Wind and solar must always be backed up with other, dispatchable and reliable sources of power. That extra cost is not included in the estimates for wind and solar.

Even when kilowatt-hours are the measure, the analysis is often biased against nuclear. These kinds of analyses are usually called Levelized Cost of Electricity [LCOE]. To cite just one complaint of mine about LCOE, the lifetime of a wind farm, or a solar farm, is maybe 20 or 25 years. The design lifetimes of today’s nuclear power plants start at 60 years, and it wouldn’t surprise me if they go even longer, maybe 80 or 100 years. It is common for US nuclear plants operating today (built in the 1970s and 80s) to have license extensions out to 60 years. Wind and solar farm operators will need to replace their equipment two or three times in those 60 years. That extra replacement cost is not included in the LCOE analysis.

As I wrote previously, construction cost is amortized over a long period of time. Operating cost is also important. From the following, we see that nuclear total operation, maintenance, and fuel costs are low compared to fossil fuels.
https://www.eia.gov/electricity/annual/html/epa_08_04.html

Total O&M + Fuel
Fossil steam: 34.86 mills per kwh (10 mills per cent)
Gas turbine and small scale: 24.55
Nuclear: 21.92
Hydroelectric: 12.71

Hydroelectric plants are the least expensive, but we cannot build big dams everywhere, for obvious reasons. Hydro should be used, where it can be used to good effect. It should also be recognized that a big part of fossil fuel power plant operating costs are for fuel. Natural gas, in particular, can have wide price volatility, which increases the cost of power from those power plants. Nuclear fuel costs are much less volatile. Whenever you see cost comparisons of nuclear versus fossil fuel, you need to ask about the assumptions that are made for fuel price.

How much will Vogtle 3 and 4 add to customers bills? The following link seems to say the construction cost recovery will add about 10%.
https://www.augustachronicle.com/story/news/2021/06/23/georg…

From the link (2021):
Georgia Power estimates the total increase will hit a peak of 10 percent per month in 2023 or 2024 before tapering off. The spokesperson said that estimate would hold even if Unit 3 is delayed further.

Since the price of electricity in Georgia is currently about 10% cheaper than the national average, that article seems to indicate that Georgia may come up to about the national average. Compare that to California, with its expensive renewable energy, and the price of electricity is almost twice the national average, and skyrocketing even more every year.

In conclusion, I will admit, yet again, that the construction cost of the Vogtle 3 and 4 nuclear plants is much higher than originally planned. But this does not mean that EVERY nuclear project MUST ALWAYS have the same costs. The nuclear power haters assume the costs will always be the same high price. China builds nuclear power plants of about the same size, and from what I understand comparable quality, at much less cost. This is because the Chinese construction firms have become good at building multiple plants over the years. The more times you do something, the better you get at it. The following link says they are planning 6 new plants at a total cost of $18.7 billion. That is only $3 billion per plant. Even if their real costs are double that, the price is still very reasonable. BTW, four of the plants cited in the article below are the same model of AP1000 Westinghouse plant being built at Vogtle. In China, they are now called the CAP1000 model.

https://asia.nikkei.com/Business/Energy/China-greenlights-6-…

  • Pete
10 Likes
23

Even when kilowatt-hours are the measure, the analysis is often biased against nuclear. These kinds of analyses are usually called Levelized Cost of Electricity [LCOE]. To cite just one complaint of mine about LCOE, the lifetime of a wind farm, or a solar farm, is maybe 20 or 25 years. The design lifetimes of today’s nuclear power plants start at 60 years, and it wouldn’t surprise me if they go even longer, maybe 80 or 100 years. It is common for US nuclear plants operating today (built in the 1970s and 80s) to have license extensions out to 60 years. Wind and solar farm operators will need to replace their equipment two or three times in those 60 years. That extra replacement cost is not included in the LCOE analysis.

The levelized cost is the total lifetime cost divided by the total lifetime power generated. As the years pass the dominator gets bigger, which means LCOE goes down.

To put it another way, let’ say there are two wind farms side by side. The are identical except one lasts for 10 years and the other lasts for 20 years. The LCOE of the 10-year farm would be approximately double that of the 20-year farm.

1 Like
24

To put it another way, let’ say there are two wind farms side by side. The are identical except one lasts for 10 years and the other lasts for 20 years. The LCOE of the 10-year farm would be approximately double that of the 20-year farm.

My complaint is the analyses apply the same lifetime to all forms of generation. From the LCOE calculations from the EIA…

https://www.eia.gov/outlooks/aeo/pdf/electricity_generation…

We calculate all levelized costs and values based on a 30-year cost recovery period, using a nominal after-tax weighted average cost of capital (WACC) of 6.2%. In reality, a plant’s cost recovery period and cost of capital can vary by technology and project type.

Most wind farms won’t last the 30 years assumed in the numbers. From doing a little Googling, it appears today’s solar panels will last 30 years, but I also know the output of each panel goes down over time. Do they factor in that decreasing output? For solar farms out in the desert, the blowing sand and dust might slowly scratch up the glass surfaces. I believe the semiconductors themselves also degrade over time.

But the nuclear power plant is only middle aged at 30, as long as it is kept in good operating condition, keeping up with the scheduled inspections and maintenance overhauls.

  • Pete
4 Likes
25

We calculate all levelized costs and values based on a 30-year cost recovery period, using a nominal after-tax weighted average cost of capital (WACC) of 6.2%. In reality, a plant’s cost recovery period and cost of capital can vary by technology and project type.

Huh. That doesn’t make a ton of sense. I wonder why they do it that way?

26

The nuclear power haters assume the costs will always be the same high price.

Pete,

You are doing two things again. You are ignoring the high inflationary factor of building nuclear plants. Telling us it wont always be the same is besides the point. You are pointing to China which has the same costs problems brushed under the rug. You do not know the full cost of Chinese plants. They are not less expensive because they are Chinese. The Chinese plants also face the inflation factor.

We need deflationary energy policies. In the process of discussing CF you are not discussing batteries. Batteries and solar are deflationary.

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27

syke,

Wind is at times been leading as deflationary. In the long run wind wont be as deflationary as solar.

Some uses of wind will make more sense because it will be abundantly available. It also runs overnight.

The primary deflationary forces are in solar and batteries. Here the US can win. Particularly as we upgrade our grid systems.

28

waterfell writes:

  1. Nuclear produces power 24 hours a day, 7 days a week.

  2. Even when kilowatt-hours are the measure, the analysis is often biased against nuclear. These kinds of analyses are usually called Levelized Cost of Electricity [LCOE]. To cite just one complaint of mine about LCOE, the lifetime of a wind farm, or a solar farm, is maybe 20 or 25 years. The design lifetimes of today’s nuclear power plants start at 60 years, and it wouldn’t surprise me if they go even longer, maybe 80 or 100 years.

  3. As I wrote previously, construction cost is amortized over a long period of time. Operating cost is also important. From the following, we see that nuclear total operation, maintenance, and fuel costs are low compared to fossil fuels.

Total O&M + Fuel
Fossil steam: 34.86 mills per kwh (10 mills per cent)
Gas turbine and small scale: 24.55
Nuclear: 21.92

====================================================================

Comments:

  1. Nuclear power plants do not operate 24/7. If they did then they could show a capacity factor of 100% instead of 90% over the life of a nuclear power plant.

  2. LCOE analysis ae not biased against nuclear. The LCOE is a measurement used to assess and compare alternative methods of energy production. The LCOE of an energy-generating asset can be thought of as the average total cost of building and operating the asset per unit of total electricity generated over an assumed lifetime. It does not matter how many years are assumed as the lifetime. The LCOE is a very important metric in determining whether or not to move forward with a project. The LCOE will determine if a project will break even or be profitable.

The LCOE is a fundamental calculation used in the preliminary assessment of an energy-producing project.

The LCOE can be used to determine whether to move forward with a project or as a means to compare different energy-producing projects.

The formula to calculate the LCOE is (Present Value of Total Cost Over the Lifetime)divided by (Present Value of All Electricity Generated Over the Lifetime).

  1. From the following, we see that nuclear total operation, maintenance, and fuel costs are low compared to fossil fuels. But we also see that nuclear is 4 times higher when compared to solar and wind (small scale).

The O&M cost for natural gas and small scale is 4.89 mills per kwh
The fuel cost for natural gas is 19.65 mills per kwh
The fuel cost for solar & wind is 0.0 mills per kwh

Therefore,
O&M + Fuel for solar & wind = 4.89
O&M + Fuel for nuclear = 21.92

Jaak

29

The levelized cost is the total lifetime cost divided by the total lifetime power generated. As the years pass the dominator gets bigger, which means LCOE goes down.

To put it another way, let’ say there are two wind farms side by side. The are identical except one lasts for 10 years and the other lasts for 20 years. The LCOE of the 10-year farm would be approximately double that of the 20-year farm.

============================================================

Your example is silly. Why would you assume a 10 year life for one and a 20 year life for another if they are identical? That is not done for LCOE calculations.

Jaak

30

Leap1 -

You are pointing to China which has the same costs problems brushed under the rug. You do not know the full cost of Chinese plants. They are not less expensive because they are Chinese.

I find it very interesting that you post many statements here without any links to back up your position. I think it would be much more helpful to all of us if you were to provide some background or other proof that what you post is accurate.

Without links, there is nothing in your posts but conjecture - which I guess proves the point that “you get what you pay for”. These boards are free…

'38Packard

  • would rather see links then ploink Leap
7 Likes
31

Nuclear power plants do not operate 24/7. If they did then they could show a capacity factor of 100% instead of 90% over the life of a nuclear power plant.

That’s a bit disingenuous and you probably know it.

Nuclear power plants generally do operate 24/7. But they also go down for maintenance. They tend to run continuously for long periods of time (measured in months or years) then shut down for maintenance for several weeks at a time. Those maintenance shut down periods are what gets the typical nuclear plant to a 90% capacity factor.

This is in stark contrast to solar, where the output swings up and down on a regular daily cycle, with tweaks to that daily cycle for the local weather - generally cloud cover. Or to wind, which has a more irregular change in output. These do not run 24/7 like nuclear does.

So saying that nuclear power plants do not operate 24/7 might be technically correct, but it hides they way those plants actually operate. They do operate 24/7, but they do not operate 24/7/365.

–Peter

22 Likes
32

They do operate 24/7, but they do not operate 24/7/365.

=============================================

Yes I know they operate 24/7/330. So utilities need 36 day per year for O&M and fuel loading. Do you have any other comments on my nuclear power cost and schedule statements?

Solar and wind may be variable, but new onshore wind turbines are averaging around 40%, offshore wind turbines are averaging around >50% and solar is averaging around 25%. The beauty of solar is that is provides electricity during the sunlight hours when all the AC units are stressing the grid.

Jaak

33

As a conclusion to this thread I have shown up thread the following:

  1. Nuclear power can not be claimed to be a success in Georgia because nuclear accounts for only about 25% of the electrical generated in Georgia.

  2. Natural gas, wind & solar produce much more and cheaper electricity than nuclear in Georgia and USA.

  3. The capital cost of building nuclear plant is much higher than building a natural gas, wind or solar power plant.

  4. The O&M + Fuel costs for nuclear are much more than wind & solar:
    O&M + Fuel for solar & wind = 4.89 mills/kwh
    O&M + Fuel for nuclear = 21.92 mills/kwh

  5. Levelized cost of electricity (LCOE) for nuclear is much more than for natural gas, wind & solar when realistic data are used. Speculation about 60, 80 and 100 year operation of nuclear is wishful thinking. The older a nuclear plant gets the more repairs and new components are needed. For example, France has 10 to 20 nuclear plants that are over 40 years old and now they are being shutdown in stages to repair corrosion of safety related piping welds.

  6. Utilities across USA have done their own LOCE calculations for new large nuclear plants. These analysis show that new large nuclear plants are not at all economical compared to natural gas, wind & solar. These utilities across USA have been investing more that 90% of their money in new natural gas, wind & solar power plants. Only one utility in USA has gone ahead and plowed over $30 billion into two units that are still unfinished.

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38

Are you saying two things? One the Chinese communist would report cost overruns to their nuclear projects after tons of propaganda? Two the Chinese can build nuclear plants with no cost overruns?

I’d like your expert ideas on how the Chinese have avoided the cost overruns on their nuclear projects?

I want zero links from you. I want you up to my standards of thinking independently about reality. Meaning say what you think on the topic. Explain in business terms how the Chinese build nuclear plants without cost overruns.

I do not ploink posters. I act like an adult and discuss things. I do not announce I am going to ploink someone. I do not tell other people who are not able to have discussions on topics that I need to pick up my marbles and go home.

Most importantly when I disagree with another poster if I am wrong I very quickly see that and like an adult admit it in public. I do not hold onto resentments over discussions.

35

jaagu wrote:
2. Natural gas, wind & solar produce much more and cheaper electricity than nuclear in Georgia and USA.

First of all, no electricity is generated from wind turbines in the state of Georgia. At least nothing that shows up on the EIA database.

https://www.eia.gov/electricity/monthly/epm_table_grapher.ph…

Florida, Alabama, Mississippi are also at zero from wind, as well as other states with either zero or very low wind power output. The US southeast is just not very windy on a consistent basis (notwithstanding the occasional hurricane that blows through).

There is a small amount of solar PV power produced in Georgia, but still less than nuclear.

Solar: 3025 GWh (first 5 months YTD)
https://www.eia.gov/electricity/monthly/epm_table_grapher.ph…

Nuclear: 13,147 GWh
https://www.eia.gov/electricity/monthly/epm_table_grapher.ph…

Nuclear currently produces about 4 times more electricity than solar PV in Georgia.

Natural gas power plants do produce more electricity than nuclear in Georgia, but the claim was “cheaper electricity”. Is natural gas cheaper? Let’s say all of the existing power plants are old enough so they have all paid off their construction costs. Looking at fuel costs, natural gas right now is rather expensive.

Henry Hub natural gas futures price today: $7.70 per MMBTU
https://www.cmegroup.com/markets/energy/natural-gas/natural-…

The average heat rate for natural gas power plants in the US is 7732 BTU per kwh.
https://www.eia.gov/electricity/annual/html/epa_08_01.html

(7732 BTU / kwh) x ($7.70 / million BTU) = $0.0595 per kwh, or 59.5 mills per kwh. That is just for fuel. Fuel cost for nuclear is 6.1 mills per kwh. If we add in Operation and Maintenance costs, a natural gas plant will be about 65 mills/kwh. Nuclear total operating cost is 22 mills/kwh.

https://www.eia.gov/electricity/annual/html/epa_08_04.html

This is why I wrote in another post that fossil fuel LCOE cost analysis must be examined to see what fuel cost is assumed. I have previously shown that the assumed uniform operating lifetimes and cost of capital interest rates that are used in the LCOE analyses also make those numbers questionable. LCOE might be useful as a rough estimate starting point, but people can put too much faith in the exact numbers, assuming total accuracy down to the dollars and cents.

Bottom line: Natural gas at $7.70 makes operating a gas-fired power plant more expensive than if gas is at $2.00. (Currently, as I write this: $8.20) It looks like the US will be exporting more LNG in the future, which will limit how much domestic supply is available. I can’t predict the future, but I think it will be a while before natural gas is back to the $2 range.

https://www.eia.gov/dnav/ng/hist/n3035us3m.htm

  • Pete
2 Likes
36

Florida, Alabama, Mississippi are also at zero from wind,

Peter,

That is political, economic, financial and business mismanagement if you take an honest look. It does not make your case.

37

First of all, no electricity is generated from wind turbines in the state of Georgia. At least nothing that shows up on the EIA database.

There is a small amount of solar PV power produced in Georgia, but still less than nuclear.

==================================================

First of all Georgia could have lots of wind and solar energy except for Georgia Power and Southern Company working with state regulators to prohibit wind and solar because it would show the fallacy of nuclear power and too many residents would opt out of Georgia Power with roof top solar at much cheaper prices and no payments for nuclear power construction.

Georgia has tremendous solar potential and onshore/offshore wind potential. North Carolina has allowed solar energy, and they are reaping the benefits with installed solar capacity just behind California and Texas.

But things are cracking open a little bit in Georgia because they know they are being screwed by Georgia Power and the state regulators. Read the news:

July 24, 2022

In a victory for Georgia consumers and the clean energy economy, the Georgia Public Service Commission (PSC) has voted to approve a solar resource plan that should result in an increase in Georgia Power’s solar energy procurement by 6 to 9 gigawatts through 2035 and add 500 megawatts of battery storage to the energy grid. When paired with solar, energy storage can keep the lights on reliably, even during extreme weather conditions and spikes in electricity demand.

Also before the PSC today was a vote to expand Georgia Power’s popular monthly netting program by as much as 15 percent, bringing rooftop solar within reach for 75,000 Georgia households. Commission Vice Chair Tim Echols — who has been a champion for net metering expansion — brought the measure forward, before it failed in a 3–2 vote.

https://cleantechnica.com/2022/07/24/advocates-celebrate-win…

So I hope waterfell now understands why renewables are not generating as much electricity as nuclear in sunny Georgia. It is the anti-renewables mentality that is keeping consumers tied to coal, natural gas, and nuclear in the southern states except for Texas and North Carolina.

Here is some more information on renewables in Georgia:

July `6, 2022

All renewable energy in Georgia is delivered at below avoided cost. That means solar, biomass, and wind are putting downward pressure on rates and saving consumers money while providing clean, renewable energy.

Georgia has become a hotbed for renewable energy companies and increasing solar and biomass significantly can help hundreds if not thousands of Georgia businesses. There are solar farms in over 70 counties in Georgia and each community has benefitted from the commercial tax revenue and clean energy.

Rooftop solar also has significant room for growth. Currently, there is a cap of 5,000 potential customers. The program reached capacity quickly. Georgians clearly want more rooftop solar as private consumers. In the Southeast alone, there are hundreds of thousands of rooftop solar customers with no more issues than any other form of development.

https://www.savannahnow.com/story/opinion/2022/07/13/ga-powe…

Jaak

1 Like
38

July 13, 2022

The Georgia utility regulators of the Georgia Public Service Commission needs to deliver both back slaps and butt boots in a July 21 hearing on Georgia Power.

Kudos for the utility’s long-overdue commitment to shuttering coal plants and investing in renewable energy resources, particularly solar.

Condemnation for treating ratepayers like a broken ATM that spits out dollars like a hen does eggs.

The PSC is poised to approve Georgia Power’s latest version of its Integrated Resources Plan, also known as the IRP, a document outlining the utility’s operating strategy for the next 20 years. The plan is updated and reviewed by the regulators every three years, with the focus on adjustments to the energy resource mix and then associated rate and fee changes.

The 2022 IRP was released in January and was a revelation — Georgia Power would close nine coal-burning units and three oil-burning units by 2028 and all coal plants by 2035. Meanwhile, the utility would grow solar capacity from 3% to 40% of its portfolio, making sunshine the utility’s second biggest source of energy.

https://www.savannahnow.com/story/opinion/2022/07/13/ga-powe…

39

Sticking it financially to Georgia Power ratepayers:

July 13, 2022

Georgia Power customers who don’t examine their monthly account statements live in blissful bill ignorance.

Studying the power company’s current statements leaves ratepayers feeling powerless. The fees for “environmental compliance” and “nuclear construction.” The usage info that allows for calculation of kilowatt cost.

Georgia Power is now asking for more. Last month, utility officials outlined their request for rate and fee adjustments. They asked PSC regulators to grant them permission to add another $14, on average, to monthly bills starting in January, with additional small bumps to come in 2024 and 2025.

Georgia Power insists the rate increase is necessary to modernize the power grid and improve customer service — some of the same justifications cited in 2019 when the utility pushed up rates by an average of $6 per month.

The pending hikes won’t be the only ones marring future bills. Georgia Power starts recouping costs on those new nuclear reactors once they go into service next year. That’s another $3.78 a month.

This isn’t nickel and diming. It’s gouging.

https://www.savannahnow.com/story/opinion/2022/07/13/ga-powe…

Jaak

40

Georgia Florida, Alabama, Mississippi are also at zero from wind
—
That is political, economic, financial and business mismanagement…

However, it makes sense from looking at a map of average wind speeds in the United States.
www.ndstudies.gov/energy/level2/module-4-wind-hydropower-sol…
The Southeast is notable for its large area of low wind speeds. Then remember that available power goes with the cube of the wind speed, so even a small decrease in the speed results in large decrease in the power.

DB2

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