A closer estimate on nuclear energy cost options

I stumbled across a tool from the Bulletin of the Atomic Scientist, which purports to calculate the full cycle cost of nuclear energy. While it has its limitations, I think does highlight a few interesting points.


Figure 1: The Bulletin of Atomic Scientist (BoAS) costs, baseline & adjusted with various options compared to DoE estimates for renewables & fossil fuels

Firstly, the baseline cost they suggest for nuclear power works out at about a LCOE of $ 84.4 per MWh (the site quotes in cents per kWh, however, I’m converting to $/MWh because its what we usually use when quoting LCOE’s). This is a bit less than the DOE’s estimate of $95/MWh for nuclear. The DOE also quotes costs of $74/MWh for wind, $125/MWh for solar. By 2022 they expect costs in the range of $96/MWh for nuclear, $74/MWh for solar, $56/MWh for wind, with gas and coal between $54/MWh and $196/MWh depending on future prices and whether or not we are sequestering the carbon. Recall we are talking in terms of LCOE so this accounts for the intermittent nature of some renewables.

So first off this would suggest that nuclear might be competitive with coal, if there’s efforts to force CCS on the industry (i.e. no Trump, no climate change denial) and if fossil fuel prices go up. But that’s lot of if’s. It also suggests that nuclear isn’t competitive against renewables, and even if it is, that window is about to close. Indeed, we can use the Bulletin tool to get a better estimate on its current price, given that the cost of the Hinkley C project is known….well it will probably go up, but we at least have some ball park figure. The latest estimate for its overnight cost is £22.3 billion, which is $28.7 bn so that’s $8,696 per installed kWe, and its going to take 10 years and we assume 40% efficiency. So running that through our model gives a figure of $134/MWh, or about £104.6/MWh. You will immediately notice that this is well above the strike price of £92.5/MWh, suggesting that Hinkley C is going to lose money with every kWh it generates.


Figure 2: UK new nuclear costs (E/MWh) compared to various renewable energy options [Source: The energy transition.de, 2015]

And by comparison at a recent strike price auction agreed to a price of £57.7 per MWh (approximately $76/MWh) for offshore wind. One of the arguments in favour of Hinkley C was that the high costs of off shore wind, even though many experts warned the government at the time that this would likely be wiped out by future advances in offshore wind technology (which was at a very early stage of development when Hinkley C was first proposed, the widely held assumption is that the price of offshore wind would fall rapidly, as indeed it has).

So okay, we’ve proved Hinkley C is a crap sandwich, well I think we all knew that one already. What I think is interesting about this tool is what happens when you start playing with the settings. For example, if we increase the efficiency of our nuclear reactor from the baseline of 33% (again industry standard for new build reactors would be closer to 40% these days) to 55% (the best you could possibly hope to get with a Brayton cycle) you only cut the cost of electricity by 2%. This confirms a point I made some time ago, there is no point spending a lot of money on some super expensive Brayton cycle kit, greatly increasing the construction costs only to make a tiny improvement in the plant’s electricity output.

However, if we decrease the capacity factor of our plant, from a baseline of 90% to say 70%, the price goes up by 25%. Pull it down to 60% the price goes up to +50% of the baseline price and at a capacity factor of 50% we are paying 74% more for our electricity. Its is often argued that nuclear can operate without any form of backup, but this ignores how grids work. But everything needs back up not least because demand is not constant all of the time. In the absence of storage, there will be times when some plants will see their capacity fall significantly. Load following power plants will typically operate at between 70-50% capacity factor, while peaking power plants can be less than 50%. At such cost levels it would simply be more economic to build energy storage than add more nuclear plants…so why not just do the same thing with renewables and save some money?

The model doesn’t appear to consider the costs of decommissioning or the clean up costs of fixed infrastructure related to the nuclear fuel cycle, which is something of an oversight. Keep in mind those costs aren’t small, its currently costing more to decommission some nuclear plants than it cost to build them. Including the costs of decommissioning Selafield the UK’s current bill is about £117 billion. That said, it is difficult to quantify this down to the level of an individual plant or MWh.


Figure 3: UK Nuclear decommissioning costs breakdown

What they are able to do is estimate the spent fuel storage costs. Doubling the cost of that (as high as it will go) only increases the cost per MWh by 2%. Now okay, as noted there’s a whole raft of things we are leaving out. But even so, it does suggest that its not a linear relationship between clean up costs and electricity costs. There is a fixed cost we are stuck with regardless (i.e. even if we abandoned nuclear energy tomorrow, much of that bill would still have to be paid) and some small amount for every reactor year beyond that.

However, and here’s where it gets interesting, if we switch from the once thro fuel cycle to the fast reactor based full recycle option, the baseline price jumps by 64% to a whopping $139/MWh. And again, this baseline model, isn’t really accurate. For example, it assumes a capacity factor for the fast reactor of 90%, something that no FBR has ever achieved (most struggle to exceed 40%, the best is closer to 60%). Putting in more accurate values for both the LWR and FBR costs and performance, we get a price of $264/MWh.


Figure 4: Estimated fuel inventories for different nuclear energy options, MOX reprocessing or fast reactor reprocessing means a modest reduction in HLW in exchange for a significant increase in LLW [UCUSA, 2014]

This confirms one of the arguments I’ve long made, fast reactors make no sense, unless you are allergic to money! They’ll end up greatly increasing the costs of nuclear electricity to well past the point where anyone would be willing to pay for it. Yes once-thro does mean throwing away most of the fissile material, but the cost of recovering that material is simply too high. This was essentially the conclusion of both the 2011 MIT report into the nuclear fuel cycle and the Harvard study of 2003. The only situation where either report thought fast reactors (or Thorium) would make the slightest sense would be if renewable costs failed to drop as predicted, energy costs skyrocketed and the cost of uranium soared. None of those have happened, in fact the opposite has happened in all three cases.

Finally, the baseline Bulletin model suggests that using the MOX recycle route will cost $227.5/MWh, although its closer to $254/MWh (£196/MWh) for my “adjusted” model. Some nuclear advocates see MOX recycling as a happy compromise. Yes, we know the fast reactor route isn’t really viable on a technical level, but we can at least get some reuse out the fuel rods via the MOX route and save some money in the process. Well this model suggest no, that’s not the case. Indeed, it suggests that for the UK we’ll be paying more than double the strike price for every kWh of Hinkley’s electricity. And when I say “we” keep in mind that at least half of those costs are being met by the taxpayer not EDF. Indeed, given that the strike price amounts to a subsidy rate of 68% per kWh (paid for by UK bill payers), the actual cost to EDF will be closer to 15% of the cost per MWh of Hinkley….and that still might be enough to break them!

So this model seems to confirm what I’ve heard from one or two in the nuclear industry, who see MOX as the hill on which the nuclear industry is going to die on. As they see it, if and when the dead certificate for nuclear power is written, we won’t be listing “Greenpeace” or “Hinkley” as the cause of death, no it will be “suicide by MOX”. Most of the spiralling costs we associate with nuclear are often those associated with MOX reprocessing (if you think Hinkley is bad, look up the fiasco of Throp or Rokkasho sometime!). Most of the recent accidents have been related to MOX reprocessing and most of the main flash points with protestors are MOX fuel shipments. In short MOX fuel reprocessing is a supersized crap sandwich with a side salad of BS. If the nuclear industry is to have any future this madness has to stop and MOX plants need to close and let us never talk of it again.

So all in all, what this model does show is that the nuclear industry does have some problems. But some of the proposed solutions doing the rounds e.g. making plants more efficient, building them quicker or smaller, FBR’s, MOX or alternative fuel cycles, they don’t make a lot of sense as regards the economics of nuclear energy. In many cases these would actually increase the cost of nuclear energy not reduce it. As I’ve pointed out before, the business model of the industry, that of large LWR’s with once thro fuel processing, might not look great, but there is a reason why the industry has stuck with it since the 70’s. And that because the alternatives are so much worse.


Peak Sand



An interesting video here from the Economist regarding a growing resource scarcity problem, that of a shortage of sand.

Sand is crucial for building projects, notably the production of concrete. Sand is also used for coastal defence to shore up beaches from rising sea levels (thus protecting property behind the beach from storm surges). And with a global boom in construction, as the world’s population both grows and becomes more urbanised, all this means that sand is being consumed at such a furious rate (demand has doubled since 2004, between 2011 and 2013 China used more cement than America used during the entire 21st century) that demand is exceeding supply. And in many parts of the world stocks are now being rapidly depleted.

sand-sales Qatar is one of the world’s leading importers of sand

Now at face value you might well say that this is ludicrous, how can the…

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The Hyperloop hyperbole

I discussed the hyperloop proposal sometime ago and I thought I would be worth updating on its progress. On the one hand, they have managed to build a test track and run some tests. However, the critics argue they’ve barely got started and still haven’t tackled any of the major technical challenges yet.


Figure 1: The first Hyperloop test track [Credit: Hyperloop one]

A structural engineer for example has pointed to a host of challenges hyperloop would face in terms of building the system, protecting it from seismic events, countering the effect of thermal expansion and dealing with NVH issues. The high speeds proposed would mean the system would have to achieve some extremely high manufacturing tolerances, which might not be possible on such a large scale. Certainly if it was possible, it would likely be very expensive. Economic experts with experience of civil infrastructure projects estimate it would cost at least ten times as much as Musk has proposed, perhaps as much as $100 billion, much more expensive than the CHSR project, yet with only 10% of the capacity.

And those NVH issues will make for a very uncomfortable ride. One physicist has suggesting it will be a barf inducing ride (Hyperpuke?). Another points to the enormous technical challenges of maintaining a partial vacuum over a 600 km vacuum chamber, particularly given the needs for thermal expansion joints. And heat represents a particular problem for hyperloop. Aside from the issues of thermal expansion, the compression of air inside the tube, all of that high voltage electrical equipment and even the body of occupants will conspire to create a major cooling problem.

Now while there are solutions to all of these issues, the problem is the complexity of making it all work, while maintaining the sort of tight engineering tolerances needed to do so is going to be a significant challenge, which its likely to take a long time to develop and likely to be very expensive. So when supporters of Hyperloop talk about successful tests being a “kitty hawk” moment, they need to remember how long it took to go from Kitty hawk to reliable long distance air travel.


Figure 2: Hyperloop’s “Kitty hawk moment”….so only 30-40 years to go then….

And then there’s the thorny issue of safety. Phil Mason (aka Thunderf00t) discusses a number of the engineering challenges faced by hyperloop, but also raises concerns, particularly about the consequences if the tube were to be breached. In such an event, a catastrophic implosion across a section of the tube is likely and the shock-wave released by this down the tube would likely destroy any capsules for a considerable distance in both directions (hence why I suspect the media will be calling it the deathcoaster after the inevitable accident).

Similarly, any stray nut or bolt could destroy a capsule, in much the same way a stray piece of metal on a runway destroyed a Concorde on takeoff. Its worth remembering that the most dangerous section of a flight for a plane is during take off and landing, because the aircraft is travelling at speed in close proximity to the ground and the pilots have no time to do anything should the encounter a major problem. Some of the most deadly aircraft accidents have occurred either on the runway, or just shortly after take off. And being in a pressurised cylinder travelling in a partial vacuum raises some safety concerns as well. Not only of asphyxiation if the capsule the de-pressurizes, but the damage that might do to the hyperloop system itself.

Again, while these issues are solvable (up to a point!), the expensive of maintaining a 600 km long partial vacuum chamber at aircraft level standards is going to be horrendously expensive. My take on this is to ask what is the rather obvious question I don’t think those behind it have asked – what specific advantage does hyperloop offer? And is it worth the enormous expense, time and effort needed to achieve this?


Figure 3: The concept of a Vac-train is not a new idea, its been promoted from time to time in the past [Credit: Economist, 2013]

Its supporters claim it will be faster than aircraft. However, given the engineering challenges I mentioned earlier, I would argue that’s far from proven. And the best way of solving those challenges would be to lower the operating speed down to more reasonable levels. Given the dangers mentioned earlier, its unlikely hyperloop can be operated more cheaply, particularly given that with aircraft we only have to maintain a plane and the runways, while with hyperloop we need to develop build and maintain one of the largest machines ever built.

You’d still need to go through some sort of security check in and the current proposal for hyperloop, from LA to San Francisco, won’t actually go city centre to city centre, but from the outskirts of both, so any time gained will be thrown away on a bus crawling into town (obviously city centre to city centre would be even more expensive and raise all sorts of planning issues, given the safety issues mentioned earlier).

And besides aircraft can theoretically go faster, Concorde remember went at about Mach 2. Aircraft manufacturers have tried to revive supersonic travel, coming up with new aircraft designs that fly supersonic but with a reduced sonic boom, or fly at high subsonic speeds. However, such projects tend to falter because the feedback they get from the airlines is that there simply isn’t a huge market for such aircraft. Yes there are some people who’d pay more to get from London to New York an hour or two quicker. But the majority of travellers would prefer to just bring a good book and save some cash.


Figure 4: One of a number of proposals for new supersonic passenger planes under development [Credit Boom, 2016]

So aircraft could theoretically match hyperloop for speed. The only difference is that aircraft manufacturers reckon that the few billion in costs to achieve that wouldn’t be economically viable given the likely small size of any market for such a service. Hyperloop is based on the premise that this market (for something a bit faster than conventional planes) is sufficiently big to justify expenditure in the order of a hundred billion or so. And that hyperloop can deliver on the levels of speed advertised. Neither is likely to be true.

Of course the major down side of planes is that there’s only so many people you can squeeze on them at any one time. Although that said, there are single class versions of the A380 and 747 which can seat over 500 people. But generally, there’s only so many people you can realistically move by aircraft without seeing a rapid escalation in costs. This is where trains gain an advantage. While trains come with large fixed infrastructure costs and high maintenance costs for the track and signal infrastructure, once those have been met, the costs of running trains on it is relatively small. So they are a great way to move lots of people aroundd. And as noted earlier, hyperloop will cost significantly more and yet still only be able to support a fraction of the capacity of the CHSR system.

Trains can also make multiple stops, so that makes them much more useful for joined up journey’s. Hyperloop’s all well and good if you live in LA or the Bay area, but what if you live somewhere between the two and you’re destination is somewhere else between the two cities or further afield. For many journeys trains are better. Trains also bring economic benefits to the towns along their routes. Someone living in Milton Keynes can conceivably live there and afford a three bedroom house, yet commute into work in London. A small business who can’t effort the extortionate rents of the city centre, can base themselves out of a commuter belt town, yet still be able to get in and out of the city. This brings much needed business and tax revenue to communities along the route of a train line, which serves to counter the negative impact of having a train line in your back yard.

Hyperloop by contrast will offer no such benefits. Indeed, given the time county sheriff’s will need to devote resources to protecting it from terrorist attacks, it will likely cost communities along its route money. And given the performance issues I mentioned earlier, hyperloop will not have a lot of leeway to alter its route in order to limit planning objections (as it can’t climb slopes as steeply as a train can, nor undertake tight turns). So the likelihood is its going to be even harder to hammer through hyperloop proposals in the face of local opposition than it is to get a High speed railway line built. And ultimately that’s going to have a significant financial cost.

Would tunnelling solve some of these problems? Possibly, but it would greatly increase the expense. And it depends what we are tunnelling through. Some types of rock are porous and water leaking into the tunnel would become a problem, particularly if you are trying to maintain a partial vacuum (remember anything pumped out of the tunnel, including the air extraction to maintain a partial vacuum, must also now be pumped all the way up to the surface). Others types of rock are very difficult to drill through. Its difficult to seismically isolate a sealed tube buried underground, so it might not work in earthquake zones. Drilling tunnels underground is also going to have an impact on those living above the tunnel. And inevitably some will object and demand compensation.

Another disadvantage of planes is the high energy consumption. Hyperloop might be able to offer lower rates of energy consumption, but its difficult to say, given the thorny question of how much energy we expend making sure that air tight seal is maintained. And, as I discussed in a prior article, there are various ways the airline industry can be cleaned up. It is going to be far more technically feasible to convert aircraft to run on hydrogen or biofuels than it is to develop an entire new transportation system and built all of the infrastructure to support it. And of course, trains are generally the most energy efficient means of transport.

All in all one is forced to the conclusion that hyperloop seems to come with all the disadvantages of train travel along with all the disadvantages of air travel, plus a whole pile of other excess baggage, which does suggest it might not be a terribly viable idea. However for me what really gets my spidey senses tingling is the lack of any response to such criticisms from the designers of hyperloop. Now granted, if you went back in time and asked Wilbur Wright how he would deal with the issues of aircraft safety, he’d likely say well I’ll just let go of the controls, slide off the wing and do a tuck and roll the 4 ft to the ground. So its a bit premature to be talking about the nitty gritty. But equally, that means its a little early to be making inflated predictions as to hyperloops level of performance or costs.

But where hyperloop really jumps the shark for me, is in relation to how they plan to initially use the system for cargo delivery. I mean have these guys even done the most basic market research? You do know that freight is a highly competitive business with very tight margins?


Figure 5: Average freight revenue per ton-mile [Credit: National Transportation Statistics, 2009]

But I can order something on Amazon and have it delivered by hyperloop in under an hours its supporters say. Ya, if you’re willing to pay a small fortune for hyperloop delivery and if you live directly opposite the terminus at one end and the seller lives at the other end. Otherwise its going to have to go on a truck either end, which isn’t necessarily going to take a direct route. Likely it will take a circular route with multiple stops….so why not just sent it by truck all the way, save money and get it delivered to your door the next day. Indeed this is the whole reason why trucks are so cheap, they are flexible and can make multiple stops along a route. And aircraft can match hyperloop for speed (as discussed) but probably at a much lower cost.

Air freight is made cheaper these days by using the room in cargo holds on passenger flights for air freight. Its so competitive and cheap these days that some UK supermarkets will fly freshly picked groceries from Spain to the UK so costumers can have freshly picked fruit and veg….well until brexit happens anyway. But its difficult to see how hyperloop can compete with either. And of course for bulk cargo delivery, you can’t beat ships or trains. Its precisely why most of the major industrial areas of the world are built near waterways, ports or they are connected to them by railway lines.

So all in all, hyperloop does not live up to the hype. It doesn’t help that its achieved something of a cult following, particularly from libertarians, as they see a relationship between it and a key plot line in an Ayn Rand book. As with other technologies this is leading to a significant overselling of the proposal by those with an irrational and emotional attachment to it.

There is some potential merits to hyperloop no doubt, but at this early stage to even consider it as a realistic alternative to existing transport options is just silly. Certainly thought there is a need to resist the “grass is greener” syndrome associated with it, as there’s always a tendency to see new ideas as better than existing ones, simply because we don’t know what the real problems with the new proposal are.