Nuclear Energy Is Our Friend

This video shows that, there is need we consider nuclear energy as additional resources for power distribution. We can't depend on one resources only, since there are others alternative resources should be taken into consideration. Nuclear energy is safe and its friend to us!

Reference: Youtube

Nuclear Forum Sesslon III: The Economics of Nuclear Power Generation

The purpose of this forum is to help Utahns learn about the economics of nuclear power as they relate to public policy. Topics of discussion included nuclear power's cost of electricity generated, a comparison of nuclear power and other generating assets over their useful lives, and whether or not nuclear power's economic profile works for Utah's electric needs.



Economic Specialists:

Cheri D. Collins serves as general manager of external affairs and nuclear liaison at Southern Nuclear Company, where she focuses on the first new commercial nuclear power plant in the U.S. in more than 30 years -- including impacts of the project on the community, such as the creation of technical college programs to prepare the required workforce.

Michael T. Hogue is a research analyst at the University of Utah's Bureau of Economic and Business Research, where he focuses on the economics of energy and natural resources and applied econometrics. His research areas have included the economics of fossil fuels such as coal, conventional oil and gas, and unconventional sources of oil such as oil sands and oil shale.

Edward Kee is vice president of National Economic Research Associates (NERA), where he provides strategic advice to companies and governments on the nuclear power and electricity industries. He advises on industry strategy, project procurement, due diligence, financing and loan guarantees, nuclear fuel cycle, and national nuclear infrastructure development.

Source: YouTube.com

External Costs

Another interesting cost to be highlighted when discussing nuclear power is the external costs. The external costs are defined as those actually incurred in relation to health and the environment and quantifiable but not built into the cost of the electricity.


The report of a major European study of the external costs of various fuel cycles, focusing on coal and nuclear, was released in mid 2001 - ExternE. It shows that in clear cash terms nuclear energy incurs about one tenth of the costs of coal. If these costs were in fact included, the EU price of electricity from coal would double and that from gas would increase 30%. These are without attempting to include the external costs of global warming.

The European Commission launched the project in 1991 in collaboration with the US Department of Energy, and it was the first research project of its kind "to put plausible financial figures against damage resulting from different forms of electricity production for the entire EU". The methodology considers emissions, dispersion and ultimate impact. With nuclear energy the risk of accidents is factored in along with high estimates of radiological impacts from mine tailings (waste management and decommissioning being already within the cost to the consumer). Nuclear energy averages 0.4 euro cents/kWh, much the same as hydro, coal is over 4.0 cents (4.1-7.3), gas ranges 1.3-2.3 cents and only wind shows up better than nuclear, at 0.1-0.2 cents/kWh average.  NB these are the external costs only. *Latest Exchange Rates: 1 Euro = 4.01580 Malaysian Ringgit.

Source: World Nuclear Association.

Comparing the Economics of Different Forms of Electricity Generation

It is important to distinguish between the economics of nuclear plants already in operation and those at the planning stage. Once capital investment costs are effectively “sunk”, existing plants operate at very low costs and are effectively “cash machines”. Their operations and maintenance (O&M) and fuel costs (including used fuel management) are, along with hydropower plants, at the low end of the spectrum and make them very suitable as base-load power suppliers. This is irrespective of whether the investment costs are amortized or depreciated in corporate financial accounts – assuming the forward or marginal costs of operation are below the power price, the plant will operate. 

US figures for 2008 published by NEI show the general picture, with nuclear generating power at 1.87 c/kW.
                                                            

 

Note: the above data refer to fuel plus operation and maintenance costs only, they exclude capital, since this varies greatly among utilities and states, as well as with the age of the plant. 

 A Finnish study in 2000 also quantified fuel price sensitivity to electricity costs:

 

These show that a doubling of fuel prices would result in the electricity cost for nuclear rising about 9%, for coal rising 31% and for gas 66%. Gas prices have since risen significantly.

The impact of varying the uranium price in isolation is shown below in a worked example of a typical US plant, assuming no alteration in the tails assay at the enrichment plant.

 

Doubling the uranium price (say from $25 to $50 per lb U3O8) takes the fuel cost up from 0.50 to 0.62 US cents per kWh, an increase of one quarter, and the expected cost of generation of the best US plants from 1.3 US cents per kWh to 1.42 cents per kWh (an increase of almost 10%). So while there is some impact, it is comparatively minor, especially by comparison with the impact of gas prices on the economics of gas generating plants. In these, 90% of the marginal costs can be fuel. Only if uranium prices rise to above $100 per lb U3O8 ($260 /kgU) and stay there for a prolonged period (which seems very unlikely) will the impact on nuclear generating costs be considerable. *Current exchange rate is 1 U.S. dollar = 3.06449537 Malaysian ringgits.

Nevertheless, for nuclear power plants operating in competitive power markets where it is impossible to pass on any fuel price increases (ie the utility is a price-taker), higher uranium prices will cut corporate profitability. Yet fuel costs have been relatively stable over time – the rise in the world uranium price between 2003 and 2007 added to generation costs, but conversion, enrichment and fuel fabrication costs did not followed the same trend.

For prospective new nuclear plants, the fuel element is even less significant (see below). The typical front end nuclear fuel cost is typically only 15-20% of the total, as opposed to 30-40% for operating nuclear plants.

Source: World Nuclear Association

The Cost of Fuel

From the outset the basic attraction of nuclear energy has been its low fuel costs compared with coal, oil and gas-fired plants. Uranium, however, has to be processed, enriched and fabricated into fuel elements, and about half of the cost is due to enrichment and fabrication. In the assessment of the economics of nuclear power allowances must also be made for the management of radioactive used fuel and the ultimate disposal of this used fuel or the wastes separated from it. But even with these included, the total fuel costs of a nuclear power plant in the OECD are typically about a third of those for a coal-fired plant and between a quarter and a fifth of those for a gas combined-cycle plant. The US Nuclear Energy Institute suggests that for a coal-fired plant 78% of the cost is the fuel, for a gas-fired plant the figure is 89%, and for nuclear the uranium is about 14%, or double that to include all front end costs.
 

In March 2011, the approx. US $ cost to get 1 kg of uranium as UO2 reactor fuel (at current spot uranium price):

Uranium:	8.9 kg U3O8 x $146	US$ 1300
Conversion:	7.5 kg U x $13	US$ 98
Enrichment:	7.3 SWU x $155	US$ 1132
Fuel fabrication:	per kg	US$ 240
Total, approx:		US$ 2770

At 45,000 MWd/t burn-up this gives 360,000 kWh electrical per kg, hence fuel cost: 0.77 c/kWh. 

*Current exchange rate is 1 U.S. dollar = 3.06449537 Malaysian ringgits.

Fuel costs are one area of steadily increasing efficiency and cost reduction. For instance, in Spain the nuclear electricity cost was reduced by 29% over 1995-2001. This involved boosting enrichment levels and burn-up to achieve 40% fuel cost reduction. Prospectively, a further 8% increase in burn-up will give another 5% reduction in fuel cost.

Uranium has the advantage of being a highly concentrated source of energy which is easily and cheaply transportable. The quantities needed are very much less than for coal or oil. One kilogram of natural uranium will yield about 20,000 times as much energy as the same amount of coal. It is therefore intrinsically a very portable and tradeable commodity.

The fuel's contribution to the overall cost of the electricity produced is relatively small, so even a large fuel price escalation will have relatively little effect (see below). Uranium is abundant.

There are other possible savings. For example, if used fuel is reprocessed and the recovered plutonium and uranium is used in mixed oxide (MOX) fuel, more energy can be extracted. The costs of achieving this are large, but are offset by MOX fuel not needing enrichment and particularly by the smaller amount of high-level wastes produced at the end. Seven UO2 fuel assemblies give rise to one MOX assembly plus some vitrified high-level waste, resulting in only about 35% of the volume, mass and cost of disposal.


Source: World Nuclear Association Website - The Economics of Nuclear Power Plant.

Recent Economics Performance of a Nuclear Power Plant

A quarter of nuclear plants in the world today have recorded capacity factors of more than 90%, with almost two-thirds of these plants recording better than 75% of capacity factors. This suggests a near-maximum plant utilisation, given that most nuclear plants have to shut down every 18 to 24 months for refuelling/maintenance. Despite this, majority of operating nuclear plants have been upgraded to increase their output. Even with fewer nuclear plants being built today compared to in the 1970s and 1980s, plants currently in operation around the world are generating more electricity than in the past, due to their upgraded output capacities.


In addition to improved economics arising from the upgraded plant capacities, the performance of most operating nuclear plants have also been further improved through better nuclear fuel design based on the use of higher uranium enrichment levels. This resulted in better nuclear fuel utilization.


In most cases, nuclear power is more cost competitive than other forms of electricity generation, except where there is direct access to low-cost fossil fuels. According to the World Nuclear Association, coal is, and will probably remain, economically attractive in countries such as China, the USA and Australia with abundant and accessible domestic coal resources as long as carbon emissions are cost-free. Gas is also competitive for base-load power in many places, particularly using combined-cycle plants, though rising gas prices have removed much of the advantage.


Nuclear energy is, in many places, competitive with fossil fuels for electricity generation, despite relatively high capital costs and the need to internalise all waste disposal and decommissioning costs. If the social, health and environmental costs of fossil fuels are also taken into account, the economics of nuclear power are outstanding.


Source: TNB Website - Think Nuclear, Think Green; and World Nuclear Association Website - The Economics of Nuclear Power 

Economics of Nuclear Power Plant

There are at least four types of costs linger around the implementation of a new nuclear power plant. These costs are basically:

1. Capital costs
2. Production costs
3. Levelised costs
4. Decommissioning and Waste Management costs

Of course there are some other additional costs, but at this point, the stated four are the most prominent.

Capital Costs

Economically speaking, nuclear plant is indeed a highly capital intensive technology. If other factors are discounted, nuclear plants do not appear as palatable as other generation sources since big bucks have to be forked out. Actual nuclear power generation & capital costs vary considerably depending on the location, country and where the plants were built.

Techno-economics studies carried out for Tenaga Nasional Berhad (TNB) - Korea Electric Power Corporation (KEPCO) Nuclear Power Pre-Feasibility Study has concluded that there is a big range of costs associated with nuclear plants. According to IEA/NEA study, typically, 1 unit of 1000MW nuclear plant’s overnight cost ranges between USD2,000/kW to USD4,500/kW. The capital cost of a coal plant ranges between USD1,000/kW to USD1,500/kW. Meanwhile, a gas plant mostly ranges between USD400 to USD800/kW. Nuclear plant has the highest overnight construction costs. Nuclear plant construction costs are generally higher, compared to coal or gas-fired plants, because of higher level of technology, sophistication of equipment, quality of material & quality assurance standards.

Production Costs

On the other hand, operation wise, nuclear plants appear to be more favourable compared to other sources due to its lower operating costs. Once the plants are commissioned, variable or operating costs are minor. Despite the highest capital cost and Operations & Maintenance (O&M) costs among other sources, overall production cost for a nuclear plant is still the lowest. In fact, nuclear power plants have achieved the lowest production costs between coal, natural gas and oil since 2001. Production costs are the O&M and fuel costs of a power plant. Fuel costs make up 26% of the overall production costs of nuclear power plants. Fuel costs for coal, natural gas and oil, however, make up more than 80% of the production costs. Observe figure below for breakdown of production costs between various generating sources.

Doubling of fuel costs will not affect the production costs due to minor percentage of fuel cost portion. As compared to gas and coal plants, nuclear plants need refuelling only once in every 15-24 months. Hence, nuclear plants are not subject to fuel price volatility like natural gas, coal and oil power plants. The graph below shows the effect of doubling the costs of fuel.

In addition, fuel costs are one area of steadily increasing efficiency and cost reduction. For instance, in Spain, nuclear electricity cost was reduced by 29% over 1995-2001. The success is attributed to boosting enrichment levels and burn-up to achieve 40% fuel cost reduction. Prospectively, a further 8% increase in burn-up will give another 5% reduction in fuel cost.

Levelised Costs

Levelised cost is another important factor in determining and comparing the economic cost of energy produced by a nuclear plant with similar base-load alternatives. Levelised cost is the minimum price at which a technology option produces electricity. It is an economic assessment of the cost of the technology over its lifetime which includes initial investment, operations and maintenance, cost of fuel and cost of capital. Levelised costs vary accordingly with figures used for discount rate, fuel price assumption, plant life, construction period as well as capacity factor. Based on the TNB-KEPCO Nuclear Power Pre-Feasibility study, by using certain assumptions for parameters mentioned above, the cost is as follows:

Economic Levelised Cost of Energy (sen/kWh)	Nuclear (Case I)	Nuclear (Case II)	Conventional Coal	Gas Combined Cycle
Without Carbon Tax	17.2	10.9	15.8	17.9
With Carbon Tax (USD 10/tCO2)	17.2	10.9	17.6	18.7

From the table, in comparison with coal and gas plants, the economic levelised cost of energy from nuclear is almost comparable to coal, and 9% lower than gas with natural gas at economic market price. Note that with added tax on carbon, the economic levelised cost of energy from nuclear plant is lower than both alternative and nuclear is economically feasible based on the assumptions in the Case I and Case II. Case I uses the nuclear capital costs of USD4,000/kW while Case II uses the nuclear capital cost of USD2,300/kW. Nuclear becomes more economically favourable when climate change mitigation method such as carbon tax is considered.

Decommissioning and Waste Management Costs

Another cost associated with nuclear plants is decommissioning costs. For nuclear power plants, any cost figure normally includes spent fuel management, plant decommissioning and final waste disposal. These costs, while usually external for other technologies, are internal for nuclear power (i.e. they have to be paid or set aside securely by the utility generating the power, and the cost passed on to the customer in the actual tariff). Decommissioning costs are about 9-15% of the initial capital cost of a nuclear power plant. But when discounted, they contribute only a few percent to the investment cost and even less to the generation cost. In the USA, they account for no more than 5% of the cost of the electricity produced. Total cost for spent fuel management and final nuclear or radioactive waste disposal, or back-end costs of the nuclear fuel cycle usually accounts for an additional 10% of the nuclear electricity cost. However, if the spent fuel is to be directly disposed of, instead of being reprocessed to extract the unused uranium and plutonium produced in routine nuclear power plant operation, the costs may be less.

Source: TNB Website - Think Nuclear, Think Green.