Lovering, Yip and Nordhaus (Science Direct April 2016) reviewed construction cost data for 349 reactors in the U.S., France, Canada, West Germany, Japan, India, and South Korea, encompassing 58 percent of all reactors built globally, and concluded that there is no inherent cost escalation trend associated with nuclear technology. There is however a vast variation in construction costs from one country to another. Some countries like the U.S., Canada, Japan and W Germany responded to the Three Mile Island accident by imposing regulations that pushed construction costs through the roof, while France, S Korea and India did not. S Korea and India are still able to deliver nuclear power stations for $2 billion / GW ($2010) installed capacity which remains a small fraction of the capital cost of solar PV.
About half way down the list of articles in Blowout Week 113 was an abstract from a just-published paper entitled Historical construction costs of global nuclear power reactors , authored by Lovering, Yip and Nordhaus (hereafter LYN). It contains some interesting data which are worth summarizing in a post.
LYN reviewed cost data for “349 reactors in the U.S., France, Canada, West Germany, Japan, India, and South Korea, encompassing 58 percent of all reactors built globally”, and concluded that “there is no inherent cost escalation trend associated with nuclear technology”. Their results, however, allow us to deduce a little more than that, and here we will review them, starting with LYP’s Figure 12, reproduced below as Figure 1:
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Figure 1: Overnight construction costs of global nuclear reactors
It plots overnight construction cost in 2010 U.S. dollars against the date of construction start for all 349 reactors in the seven countries. The most prominent feature is the cluster of blue points that extends skywards after about 1970. These are the U.S. reactors that had the misfortune of being under construction at the time of the Three Mile Island accident in 1979. What happened in other countries is a little harder to see and we will look into it shortly, but first, what is overnight construction cost? I quote from LYN:
The Overnight Construction Cost (OCC) includes the costs of the direct engineering, procurement, and construction (EPC) services that the vendors and the architect-engineer team are contracted to provide, as well as the indirect owner’s costs, which include land, site preparation, project management, training, contingencies, and commissioning costs. For heavy-water reactors, the OCC includes the cost of the initial heavy-water inventory. The OCC includes back-fit costs but excludes retrofitting or capital expenditures after first operation and the cost of the initial fuel core. The OCC represents the single largest component of the total levelized cost of generating electricity with nuclear power, typically accounting for roughly 55 percent. In this study, we focus exclusively on OCC because the other lifecycle costs – approximately 15 percent for Interest During Construction (IDC), 15 percent for O&M and decommissioning provision, and 15 percent for fuel and provisions for used fuel – are more predictable and have had far less variation over time and country.
I don’t know whether this is the only way of doing it but at least LYP seem to have done their homework.
Figure 1, however, shows some apparently large differences between the countries which are nevertheless hard to pick out. Figure 2 shows overnight nuclear costs by country put together by overlaying heavy black squares over the dots shown in Figure 1 to make these trends more visible (the U.S. is not included because the trend is already clearly visible in Figure 1):
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Figure 2: Overnight costs by country
The three countries in the first row – Canada, Japan and West Germany – show significant cost escalation with time, with Canada showing an abrupt increase after 1980 and Japan and Germany showing abrupt increases in the mid-1970s. In the second row France and India show cost escalation over the same period but lower and much more stable costs overall. South Korea shows costs decreasing slightly since 1980 but has no pre-1980 data.
There are all kinds of country- and design-specific factors that will have influenced these costs, some of which are discussed by LYP, and a detailed recapitulation of them is beyond the scope of this post. Nevertheless it seems that something happened to increase costs for most reactors that began construction after about 1975, and the obvious culprit was the 1979 Three Mile Island accident, about which the IEA had this to say:
The psychological effect on the population in the neighbourhood, and eventually throughout the Western world, was immense. So was the damage to the plant itself and to the reputation of the nuclear power industry.
The effects of Three Mile Island were, however, immense only in some western countries. The U.S. and some other countries went into regulatory tailspins that effectively stopped new nuclear development in its tracks, but France continued much as if nothing had happened, as did India. And South Korea, which began its nuclear program in 1980, was clearly totally unmoved.
The next nuclear accident occurred at Chernobyl in 1986. What was its impact? Figure 2 suggests that it might have contributed to the higher costs of the four reactors that started construction in Canada in the mid-1980s, but I’m not sure about that. The data for the U.S. and Japan are scattered to the point where it’s difficult to say whether Chernobyl did anything or not, and Germany’s nuclear construction program was pretty much over by then. The impacts on India and South Korea were, however, negligible.
Chernobyl did have an impact on nuclear construction in France, although not a major one. As shown in the first graphic in Figure3, it increased construction lead times but didn’t increase costs. Contrast this with the second graphic, which shows the reaction of the U.S. to Three Mile Island:
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Figure 3: Overnight costs and construction duration before, during and after Three Mile Island accident, France and U.S.
Two important nuclear countries that are not included in the LYN analysis are Russia and China. In an attempt to fill this gap Figure 4 shows installed nuclear capacity growth in these countries with the X-scale shifted 5 years to the left to simulate a constant five-year construction lead time (data from the World Nuclear Association). Three Mile Island passed unnoticed in Russia, but new construction came almost to a halt after Chernobyl, remained depressed after the collapse of the Soviet Union in the early 1990s and is only slowly beginning to recover. China, on the other hand – well, China is China. Any annual growth rate of less than 10 percent is regarded as a result of failed economic policies.
Figure 4. Growth of installed nuclear capacity in Russia and China. To make the plot as comparable to other plots as possible the years shown are approximate “dates of construction start” estimated by subtracting five years from the year in which the plant went into operation.
And to round things off here’s a brief summary of overnight nuclear capital costs in Russia and China in comparison with other countries, again from the World Nuclear Association:
Nuclear overnight capital costs in OECD ranged from U.S.$ 1556/kW for APR-1400 in South Korea through $3009 for ABWR in Japan, $3382/kW for Gen III+ in U.S., $3860 for EPR at Flamanville in France to $5863/kW for EPR in Switzerland, with world median $4100/kW. Belgium, Netherlands, Czech Rep and Hungary were all over $5000/kW. In China overnight costs were $1748/kW for CPR-1000 and $2302/kW for AP1000, and in Russia $2933/kW for VVER-1150. EPRI (U.S.) gave $2970/kW for APWR or ABWR, Eurelectric gave $4724/kW for EPR. OECD black coal plants were costed at $807-2719/kW, those with carbon capture and compression (tabulated as CCS, but the cost not including storage) at $3223-5811/kW, brown coal $1802-3485, gas plants $635-1747/kW and onshore wind capacity $1821-3716/kW. (Overnight costs were defined here as EPC, owner’s costs and contingency, but excluding interest during construction.)
Finally, LYN’s Figure 13, which compares overnight nuclear costs with overnight solar costs as a function of total world installed capacity, is reproduced as Figure 5 below. Solar costs show a rapid decrease with increasing installed capacity but show signs of flattening out. Nuclear costs, on the other hand, show no clear trend with time, which is why LYN conclude that “there is no inherent cost escalation trend associated with nuclear technology”. The most interesting feature, however, is that solar still has no clear capital cost advantage over nuclear, which with nuclear capacity factors five or six times higher than solar capacity factors should mean that a levelized cost comparison will be a no-contest;
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Figure 5: Overnight nuclear and solar costs as a function of global installed capacity
So what’s the bottom line? Basically that nuclear power is expensive only if a country chooses to make it so.
By Roger Andrews via Euanmearns.com
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