An analysis of the economics of new nuclear
Extracts from a presentation: The economics of new nuclear build – do the benefits outweigh the risks?
Nuclear Free Local Authorities, Welsh Forum Seminar 25th, November Ceredigion County Council by Dr Paul Dorfman
Construction costs
- 10 years ago industry forecast cost $1000/kW – so cost of 1600MW plant like EPR $1.6bn
- 2004: Olkiluoto ~$3000/kW
- 2007/08: US utility estimate $5000/kW
- 2008/09: Areva/Westinghouse bid for Ontario, S Africa, UAE >$6000/kW
Costs
- 2008 White Paper & NPS assume £1250/kW or $2000/kW
- In 2008, E.ON said cost 70% higher than government
- Estimates before construction always under-estimate
- Why does government think industry will build UK reactors at 40% of price charged elsewhere?
So…
- Nuclear construction cost assumptions are gross under-estimates
- More realistic assumptions on construction cost and cost of borrowing would triple the expected kWh cost
And EPR construction experience?
- July 2010, Areva announced losses of €367m on the Olkiluoto contract, originally priced at €3bn, but now estimated at €5.7bn.
- EPR Flamanville: EDF confirmed the project was running two years late andincreased its estimate of the cost overrun from 20% to more than 50%.
US pull-out
- Withdrawal by US EdF partner Constellation Energy from their project to build a French-designed EPR reactor at Calvert Cliffs, Maryland.
- Constellation forced to withdraw because of ‘high cost of financial support from the US government’.
Waste and decommissioning very expensive
- £70bn - £100bn liability so far [this refers to liabilities already taken on by the British tax payer following the collapse of BNFLso far…
- So Government proposal for ‘fixed unit price’ at which Government takes ownership of waste - potentially a subsidy
- But we haven’t met the ‘Flowers criterion’ from 1976 – no new build until a clear route [or the recommendations of the Committee on the Management Radioactive Waste in 2006]
Geological ‘disposal’
- Nowhere in the world has intermediate or high-level radioactive waste been safely disposed.
- GDF R&D required by CoWRM have not been undertaken.
DOWNLOAD the full presentation here