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Chapter 22.
Financial Issues
(The nominal power plant for this page will be a 500 MWe unit.)

 

 

Part 1   Option 1: Have the United Nations Fix the World's Supersized Power Plants.
Part 2 
 Option 2: Pay for it with Carbon Credits.
Part 3 
 Option 3: Have a State Company like Russia's Rosatom convert to nuclear in exchange for fuel contracts.
Part 4 
 Option 4: Take it out of the "Maintenance Kitty."
Further Information
 

Introduction.

Mankind's survival depends upon electricity.  The objective is upgrading a power plant to CO2-free, not to not to put it out of business.

At coal's 2 lb of CO2 per kilowatt-hour (EIA), a 500 MWe reactor will avoid making 12,000 tons of CO2 every 24 hours or almost 4.4 million tons of CO2 every year.  

http://en.wikipedia.org/wiki/Economics_of_new_nuclear_power_plants 

As of July, 2008, carbon uncertainties have driven new coal-burning power plant costs to $3.50 per watt to construct (Synapse Energy Economics, Inc.).  Florida's new Crystal River nuclear plant has estimates of $7.00 or more a watt. 

At this stage of the game any cost figure is highly speculative.  Here are some prices that fall in line with current street prices for electricity generation plants.  Nuclear repowering would have to come in at about $1.00 a watt to be competitive with a $3.00 a watt modular nuclear power plant such as a NuScale or Babcock & Wilcox mPower.  All the plants worth cleaning up are over 1,000 megaWatts in size so would have $1 billion or more available for repowering.  Repowering provides a huge cost and time savings compared to building completely new, should cost about the same as Clean Coal's "Carbon Capture" CO2 system.  Repowering's whole reason for being is economics and simplicity. 

Mass production always brings about dramatic reductions in unit costs along with substantial increases in product quality and uniformity.  Producing the large Russian BN-800 reactor as we did Liberty ships during World War II - at the rate of one every two days - and in several sizes - 200, 400, and 800 MWe seems to be a good idea at the moment.  The BN-800 is a lot smaller and simpler than even a small ocean-going tug boat.  The world builds 5,000 ocean-going vessels each year, we would need perhaps 3,000 BN-200s, 400s and 800s over 15 years.

Until we get to perhaps the tenth repowering project, any contractor worth his salt is going to fold substantial amounts of "Fear Money" into his quotes to cover his tail in the event unforeseen contingencies rear their ugly heads.  They usually do and they usually come in swarms.

Crude Costs Based Upon Crude Numbers

Coal Yard Nuke module plus reactor cost:

Putting it into perspective by first thinking about airplanes: We're talking about a nuclear reactor that will be built in the thousands, like an airplane.  The latest and greatest American passenger jet is the Boeing 787 Dreamliner.  With almost 200 orders at over $150 million each pending, it hasn't even flown and already it is a 30 billion dollar financial success.  Check it out:  http://en.wikipedia.org/wiki/Boeing_787 

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Part 1:  Financial Options.  Option 1: Have the United Nations Fix the Supersize Power Plants.

Option 1:  Have The United Nations Fix
The World's Supersized Power Plants

Establish a United Nations Corps of Engineers.
Whaat!?       http://en.wikipedia.org/wiki/United_States_Army_Corps_of_Engineers
Have them fix the world's supersize power plants
 Independent of and at  no expense to local governments.    This is the answer to China's and India's reluctance.

To pay for this program, everyone in the world who used fossil fuel electricity would pay
 a 1/2¢ per kiloWatt-hour (kWh) tax to the United Nations.

World Electricity Production: 18.58 Trillion kiloWatt-Hours (2005 Est.) according to the CIA fact book.  So, at 1/2¢ per kWh, 18.6 * .5 = 9.3 * 1012 = $93 billion, first year.  1/2 billion each should cover 200 mass-produced nuclear boilers per year.  Remember, we're just replacing the boiler, no other major machinery.  Installing 200 nuclear boilers a year should keep a small army of contractors busy since the power plants will probably be 8 unit plants and only one unit can be out of service at a time.  This means there could be contractors on site for as many as 8 years.

This would raise $93 billion.  So, for the first year, at $1.00 per watt (Hyperion's asking price for one of its 25 MWe reactors), 93 billion watts could be converted from coal to nuclear.  93 * 109 watts * 8.760 * 103 hours per year = 814.680 * 1012 watt-hours per year or 815 * 109 kiloWatt-hours (815 billion kiloWatt-hours).

How much CO2 will $93 billion end?  Each kiloWatt hour of coal electricity causes about 2 pounds of CO2 according to the US DOE ( CO2 emissons from various fuels.pdf - Table 4 ) so we have 2 * 815 or 1,630 * 109 pounds divided by 2 * 103 pounds per ton or 0.815 * 109 tons or 0.815 billion tons of CO2 emissions ended in one year for $93 billion.  Remember, there are only about 11 billion tons making ALL of coal's Global Warming CO2.  At this rate, it would take 13.5 years to COMPLETELY end coal's CO2 emissions.

The operators of the nuclear repowered power plants would then have to purchase nuclear fuels instead of coal.

According to CARMA, the biggest 1,200 power plants in the world make 75% of all coal CO2The money would disappear as the CO2 disappeared.

What the world is doing to end Global Warming isn't working.  It will never work.  By casting too broad a net, it has created too many culprits and too much counterproductive chaos.  Carbon limits for whole countries borders on the idiotic when most of the fixable carbon sources are easily identified stationary machines.  Everyone is trying to fix every imaginable source of CO2 simultaneously.  "Cap and Trade" and "Carbon Taxes" punish far too many relatively innocent bystanders, making it very easy to marshal strong political opposition.  The entire world needs to halt everything Global Warming and "Stand Down" on the Global Warming issue for several months to gather its thoughts.

The author is suggesting a different approach to ending Global Warming: Fix the biggest sources of CO2 first.  Once a site's fix technology is proven, the "Fix" for a specific reactor/turbine combination could then be established as a standard and mass-produced for the other examples, regardless of where in the world they are.  Don't sweat the small sources of CO2 until only small sources of CO2 remain.

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Part 2:  Financial Options.  Option 2: Pay for it with Carbon Credits.

Option 2:  Pay for it with Carbon Credits

This one is better suited to regular-sized boilers.

Jim:  Stumbled on your web site and want to congratulate you on your mission.  I have been working on a similar unsolicited proposal to convert one of our largest  coal plants in --XX-- to nuclear. The interest in the large plants  is that one saves the incredible investment in siting, cooling towers, electric generators, some of the lower pressure stages of the turbines( as you are aware the nuclear plants have lower steam pressures and temperatures but multistage turbines can be converted to salvage some of their cost), the condensing equipment, the switching yard, and most importantly the transmission lines and towers.  A very rough estimate is that half the cost of a new nuclear plant of the same size could be salvaged.  

The federal government could loan the money and the utility smart enough to make this change could return the loan in carbon credits.  Large nuclear plants are very labor intensive and we obviously need the jobs. 

Keep pounding your drum.  Solar and wind won’t hack it. --X X--

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Part 3:  Financial Options.  Option 3: Have a State Company like Russia's Rosatom convert to nuclear in exchange for fuel contracts.

Option 3:  Have a State Company like Russia's Rosatom provide,
install, and fuel the repowering reactor in exchange for the previous 20 years of the boiler's equivalent delivered coal payments paid over 20 years.

There's a hell of a zinger in this one.  A fast-neutron reactor's closed fuel cycle potential.  Rosatom is saying they think they may be able to make their fast-neutron reactor, the BN-800, run 20 years on a single load of fuel.

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Part 4:  Financial Options.  Option 4: Take it out of the "Maintenance Kitty."

Option 4:  Take it out of the "Maintenance Kitty"

Just to stay in operation, the power companies must constantly invest about $3.00 per kW-year just to keep their total capacity available as it ages.  Huge sum of money over 75 years.

A typical boiler burns out after about 20 years of hard use.  Reactor steam generators might never wear out although cracking from vibration or sub-optimal water treatment might be hazards.

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Further Information.

(From: http://www.nucleartourist.com/basics/costs.htm )

Illustrative cost comparison. The table below compares nuclear versus coal specific item costs for similar age and size plants on a $ per Megawatt-hour (10 $/Mw-hr = 1 cent/kw-hr):

Item Cost Element Nuclear Coal
   

$/Mw-hr

$/Mw-hr

1 Fuel 5.0 11.0
2 Operating & Maintenance - Labor & Materials 6.0 5.0
3 Pensions, Insurance, Taxes 1.0 1.0
4 Regulatory Fees 1.0 0.1
5 Property Taxes 2.0 2.0
6 Capital 9.0 9.0
7 Decommissioning & DOE waste costs 5.0 0.0
8 Administrative / overheads 1.0 1.0
Total   30.0 29.1

A number of factors can affect the annual costs during any given year.

For a 500 MWe coal plant and a 75% capacity factor annual run: 

8760 hours * 0.75 = 6570 hours * 500 MWe = 3,285,000 MW-h * $5 per MW-h = $16 million per year  = Chickenfeed.

How about 20 years of coal? 

3,285,000 mw-h * $11 per MW-h = $36 million per year * 20 years = $723 million.  Maybe.  For a naked nuke tub and steam generator.

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Carbon "Sin Tax" money will hook government, prolong Global Warming.

Sin Tax:  http://en.wikipedia.org/wiki/Sin_tax    Ecotax:  http://en.wikipedia.org/wiki/Green_tax_shift   Pigovian Tax: http://en.wikipedia.org/wiki/Pigovian_tax 

Have we learned absolutely nothing from our tobacco tax experience?  Or have governments learned too much?

New York Times, April 13, 1998

Essay; The Syntax of Sin Tax

Even more addictive than nicotine is money. The anti-smoking lobby has found a way to hook the Federal Government on tobacco money.

If its latest scheme to snatch a half-trillion dollars in new cigarette taxes becomes law, Uncle Sam -- raking in a huge national sales tax -- will have a vested interest in the continuation of smoking.

Look ahead. One day there will be a recession and the budget will plunge into deficit. Popular handouts like free milk for children in prison will be dependent on the tax revenue from tobacco sales, just as education will depend on tax receipts from gambling casinos.

Result: further political dependency on ''sin taxes,'' the government's cut of profit on booze, crapshooting and smoking. What politician is now likely to cut out programs supported by tobacco billions, or raise taxes the painful way to balance a budget? No; if you depend on sin, you are inclined to protect it.

A sin tax is a tax that falls heaviest on the poor. The cause is not that the poor do more wrong than the rich, but that there are many more poor to do wrong. Under the McCain-Clinton plan, a cigar-puffing plutocrat will pay a pittance more for the pleasure of smoking while the worker earning $20,000 a year will have to pay the Government nearly one tenth of his total wages.

But it's for his own good, think liberals who have just delightedly discovered the disincentive of taxation. Because smoking is filthy and unhealthy, we are helping the poor person who dares to indulge his lust to smoke by making him pay a whopping fine. He'll stop smoking or go broke.

The tobacco-bashers don't even whisper that because 50 million bumper stickers would soon appear saying ''I smoke and I vote.'' Instead, the campaign against everybody smoking is pegged on saving the children.

Using that unassailable aim, tax-and-spend politicians would make adult smokers, who do well over 90 percent of the smoking, pay up to two bucks a pack more for their habit -- supposedly to discourage teen smokers by making the purchase too costly for those on a parental allowance.

Even if the protect-the-kids pitch were true and not just a political adman's deft mode of persuasion, it would mean that rich kids could smoke and poor kids could not.

Do we really want officialdom to introduce the horrors of economic inequity to 13-year-olds? If the Katzenjammer kids see rich Rollo taking a deep drag on a pleasure only he can afford, are they not given an incentive to steal it -- thereby creating a lifelong habit of crime? Or to buy a pack around the corner from an entrepreneur who buys tobacco in bulk and rolls it into tax-evasive, affordable coffin nails?

Not only would the smokiller's currently popular plan place a huge tax on the poor and make the Government dependent on the prolongation of the tobacco habit, it would make smoking an even greater symbol of youthful rebellion.

That's why the current cockiness among legislators in Washington -- riding a popular wave of revulsion at the past lies of tobacco executives -- is so wrongheaded. The victors won't settle for the sort of medium self-immolation negotiated out of the tobacco industry by state attorneys general; they want financial punishment to satisfy the most ardent smoker-haters and ease the way for Washington's big spenders.

Small wonder that the industry, showing prudent concern for its customers, stockholders and employees, refuses to trade away constitutional rights to advertise a dangerous product that lawmakers do not have the courage to outlaw.

The tax-'em-to-death notion is a huge hoax designed to raise regressive sales taxes painlessly. Such taxing is no good for you just as smoking is no good for you.

The difference is that taxation stunts economic growth but smoking kills. I quit smoking 30 years ago because I have the yen to survive, but I have no right to live off those foolish enough to smoke. How, then, to help others kick the habit without making Government a smoking-tax addict?

Control nicotine as the drug it is. Take the big marketing concessions squeezed out of the chastened industry before the deal-breakers waded in. And set an example for your own kids.