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.
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.
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.
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.
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.