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7.1 Overview

7.1.1 General considerations

In the US we now emit 11% more CO2 than in 1990; and at Kyoto we promised to reduce CO2 emissions to 8% below 1990 levels in ten years for a decrease of 19% below today's levels. If all the electricity now generated by nuclear power were to be generated by coal, CO2 emissions would increase by another 8%, making it more difficult to meet our commitment if we abandon nuclear power. About 30 years ago Dr. Glenn Seaborg, then Chairman of the US Atomic Energy Commission (AEC), testified to the Joint Committee of Atomic Energy of the US Congress (JCAE) that nuclear power would be comparatively benign environmentally (in particular, not producing appreciable CO2) and also would produce electricity at a modest cost (Seaborg, 1968). This optimism was nationwide and worldwide. Since that time opposition to nuclear power has arisen, and nuclear power at the present moment is not being considered by most governments in the world as an option to meet energy and environmental aims and desires. Our purpose is to show ways in which nuclear power could help the world, and in particular the US, to meet commitments made at Kyoto. Our purpose is also to examine the causes of the changes in the fortunes of nuclear energy and to discuss the extent to which nuclear power can provide electricity worldwide safely and economically. After examining qualitatively possible scenarios for re-establishing equilibrium and ultimately to reverse the present trend in the use of nuclear energy, we end by showing examples of quantitative model results showing how nuclear energy can impact global climate change.

Table 7.1 Cost of nuclear energy in 1971 (Benedict, 1971)

Description

Coal

Nuclear

Unit investment cost of plant, dollars/kW

$202

$255

Annual capital charge rate per year

0.13

0.13

kilowatt-hours generated per year per kW capacity

5256

5256

Heat rate, million Btu/kWh

0.009

0.0104

Cost of heat from fuel, cents/million Btu

45

18

Cost of electricity, mills/kWh

Plant investment

5.00

6.31

Operation and maintenance

0.30

0.38

Fuel

4.05

1.87

Total cost

9.35

8.56

7.1.2 Nuclear electricity has been cheap

We will firstly explain that nuclear energy was in the past very competitive with fossil energy sources and presumably could be again. This position is not a matter of optimism brought on by believing results from a model, but is one of accepting historical fact. Twenty-five years ago, Maine Yankee nuclear power plant had just been completed for a total cost of $180 million, or $200 per kWe of installed capacity. The Connecticut Yankee nuclear power plant was producing electricity at 0.55 cents per kWeh bussbar cost (i.e., generation cost at the plant boundary, before costs related to transmission and distribution are added), some part of which was needed to pay for the $55 million mortgage. The production cost (primarily fuel) was perhaps only 0.4 cents per kWeh. As reproduced in Table 7.1, thirty years ago, Benedict (1971) estimated average operating costs that were a little lower than this value and capital costs that were about 25% higher than for Maine Yankee. Taking no credit for learning, we could do as well if we could return to the optimism and procedures of thirty years ago. Allowing for inflation, the production cost could be less than 1 cent per kWeh, and, by keeping construction times down, the capital cost could be less than 2 cents per kWeh.

Yet the average operating cost of nuclear plants in the US today is 1.9 cents/kWeh (McCoy, 1998) and for a well-operated plant is still 1.4 (South Texas) to 1.5 (Seabrook) and 1.7 (Palo Verde) cents per kWeh. The construction cost of a new GE reactor is $1690 per kWe being built in Taiwan in about four years, leading to a charge for the capital of about 4 cents per kWeh. These costs are still very high and could be more if construction takes longer than four years.

7.1.3 Reasons for the cost increases

As noted in the last section, nuclear electricity has been competitive with electricity generated from other technologies. What has changed? Can it be changed back? Can it be partially changed back? Can nuclear energy be put on a new economic track?

Nuclear advocates expected in 1973 that, as more nuclear power plants were built and operated, both the construction cost and the operating cost would follow the decreases predicted by a "learning curve" (Fisher and Pry, 1971). The reverse has been the case, however; the costs have followed a "forgetting curve" (Wilson, 1992).

Some people argue that the increased cost has been caused by the need for increased safety. The safety of nuclear power in 1973, however, was probably better than for other comparable industrial facilities, has been steadily improved since then, and new designs promise further improvements. It is important to realize that the safety improvements have mostly come from improved analysis - which is (in principle) cheap. A complete probabilistic safety/risk analysis (PRA) for a nuclear power plant costs about $3 million, yet such analysis can pinpoint simple ways of reducing safety concerns. For example, based on the first PRA for the Surry reactor the mere doubling of an isolation valve reduced the calculated frequency of core melting by a factor of 3 for a cost of only ~$50k.

We have seen no careful study of how much improvement in safety margins has increased cost. Indeed, in 1984 when the Energy Engineering Board of the US National Academy of Sciences proposed a study of the subject; it was opposed by the utility industry, perhaps for fear of adversely influencing pru-dency hearings that were in progress before public utility commissions. Public utility commissions of several states refuse to allow cost overruns for nuclear power plants to be included in the rate base, and thereby to be recovered; a suspicion arises that public knowledge of the reasons for cost overruns could affect these "prudency" hearings.

Various reasons for the increase in the cost of nuclear energy include the following:

• In 1970 manufacturers built turnkey plants or otherwise sold cheap reactors as loss leaders, but turnkey operations can only account for a small proportion of the capital cost.

• Construction costs generally have risen since 1970 even when corrected for inflation.

• It may be that in 1972 we had good management and good technical people; but why has management got worse when that has not been true for other technologies?

• Operating costs rose rapidly in the 1970s because the rate of expansion of nuclear energy exceeded the rate of training of good personnel.

• A sudden rise in costs came in the late 1970s after the accident at Three Mile Island Unit II.

• Although mandated retrofits have been blamed for cost increases, this applies to existing plants and not to new construction.

Most people seem to agree that the principal present limitation in nuclear power development is related to diminished public acceptance of the technology. Decreased confidence and increased risk aversion drives excessive regulation, and excessive regulation in turn increases the cost. As noted above, this increased cost often reaches a factor of three even after correction for inflation. It is highly likely that nuclear power plants are safer today than they were in 1972. It would be hard to argue, however, that the actual safety improvements that have occurred have been the cause of the threefold increase in cost. Most improvements have resulted from more careful thought, using such approaches as event-tree analysis, but without excessive hardware expense.

Many people have suggested that the problem is that the regulation is more than needed for adequate safety, and this over-regulation increases the cost (Towers Perrin, 1994). In particular, many claim that regulation is too prescriptive and not based upon performance. A few of the arguments related to over-prescriptive regulations are as follows:

• The response to many regulations is to increase staff. The staff numbers at the Dresden-II power plant went from 250 in 1975 to over 1300 today (Behnke, 1997). This increased staffing costs money - 0.8 cents per kWeh, and it is far from clear that adding personnel improves safety.

• Shut downs (always costly) for failure to meet technical specifications occur even when the technical specifications have little effect upon safety.

• Any delay in licensing can seriously increase the capital cost, as interest payments incurred during construction accrue.

• A demand for safety-grade equipment in parts of the plant that have little impact on safety are expensive.

The problem is not unique to the US. In the UK the Atomic Energy Authority had to spend a lot of money making the Thorpe plant for reprocessing spent nuclear fuel as earthquake proof as an operating reactor; yet the inventory of dangerous material in a processing plant is far less than in a reactor, and the danger of re-criticality is remote (Hill, 1997).

In another paper (Wilson, 1999) and in Congressional testimony (Wilson, 1998a,b) one of us addressed the problem of excessive regulation; reasons why it inevitably appears and what can be done to avoid the problem were

Table 7.2 Uranium supplies (Benedict, 1971); resource data plotted on Fig. 7.1b

Cost increase, Electricity generated

Table 7.2 Uranium supplies (Benedict, 1971); resource data plotted on Fig. 7.1b

Cost increase, Electricity generated

Uranium price $/lb U3O8

Resource tonnes

mills/kWeh

GWe yr

LWR

Breeder

LWR

Breeder

8 (base)

594000

0.0

0.0

3470

460000

10

940000

0.1

0.0

5500

720000

15

1450000

0.4

0.0

8480

1120000

30

2240000

1.3

0.0

13100

1720000

50

10000000

2.5

0.0

58300

7700000

100

25000000

5.5

0.0

146000

19200000

addressed. The Chairman of the Nuclear Regulatory Commission recently addressed this question (Jackson, 1998) and emphasized this area as a vital area of research and subsequent implementation. This issue is discussed further in Section 7.4.1.2.

7.1.4 Are uranium-fuel supplies sufficient?

Various opponents of nuclear power have argued that the uranium fuel supply is insufficient to make it worthwhile to face the problems (whatever they may be) with nuclear energy. We show here that this is false. Thirty years ago Benedict (1971) reported that we had 20 million tonnes of uranium at prices up to $100 per pound of U3O8 (Table 7.2); the higher prices only raised the operating cost in an LWR by 0.5 cents per kWeh, which, although an excessive increase a quarter of a century ago, would now be considered acceptable. The total quantity of uranium resources (column 2 of Table 7.2) does not seem to have changed; subsequent columns of Table 7.2 are merely physical calculations from the first two columns. Therefore, Table 7.2 is as accurate today as it was 30 years ago. The Uranium Institute reported in 1998 that we have about

18 million tonnes of uranium in ore, proven reserves, reasonably assured supplies and possible supplies at prices up to $200 per kgU, as is depicted for the variously defined categories categories in Fig. 7.1, which includes the early estimates reported by Benedict (1971). We can afford appreciably increasing the initial fuel cost without significantly increasing the bussbar cost of electricity. This would produce in a light-water-reactor (LWR) system about 4 X 1015 kWeh (4.6 X 105 GWeyr) of electricity, or enough for over a century at the postulated year 2030 demand of 2500 GWeyr/yr.

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