December 1977 RAIN Page 11 Nuclear Rathole Table 1: Excess Cost of Nuclear Power Relative to Coal Power, Estimated for New Plants Installed in 198 5, per kwh Region Northeast East North Central South Atlantic South Central West North Central Mountain & Pacific NW California Cost (in cents per kwh) Coal Nuclear 5.5¢ 5.6¢ 4.6 5.4 4.6 5.2 4.2 5.2 4.3 5.4 3 .6 5 .4 4.5 5.6 Excess Nuclear Cost 1% 18 11 23 25 49 25 Note: Breakdown of costs and geographical definitions are provided in Table 2, which is available from Komanoff Energy Associates at their address above. Percentages in last column were computed prior to rounding cost figures. Unfortunately, many people among the electric utilities, reactor manufacturers and federal energy agencies have not yet gotten the message of Table 1. They are blinded by the occasional reactor that meets its targeted capital cost or the rare plant that operates at or close to its design capacity. They fail to see that the golden age of nuclear economics-the period from roughly 1968 to 1975, when reactors were cheap to buy, cheaper still to run, and sometimes reliable to operateis over. Comparing mid-1980s-installation reactors with 1968197 5-installation reactors, capital costs and fuel costs have tripled (in constant dollars), and reactor performance is likely to fall as large, unwieldy reactors replace the smaller, less complex units which are easier to run. Coal costs have risen too, significantly, but not nearly as much as nuclear. Overall, I agree with Lovins and others who point to conservation and cogeneration as more effective investments than new central-station power plants, but if we are to have such plants, coal appears to be the more economic choice. The figures in Table 1 are not precise-they cannot be, in view of the uncertainties in coal, and especially nuclear costsbut they are probably good guesses of average power plant costs in particular regions. I offer them from the perspective of three years of full-time study of nuclear and coal generating costs, undertaken for the Council on Economic Priorities and as a consultant to the U.S. Congress and government agencies in seven states (New York, New Jersey, Connecticut, Wisconsin, Kentucky, New Mexico and California). 3. Newsday, "Nuclear Power Plant Cost Soars," by Mitchell Freedman, September 2, 1977, p. 6. 4. U.S. Atomic Energy Commission, Power Plant Capital Costs: Current Trends and Sensitivity to Economic Parameters, WASH-1345, October 1974. This report projects a 1981 capital cost of $571 per kw for twin 1150-Mw nuclear units at an average U.S. site. Adding 5 percent for single-unit station, adding 11.4 percent for ~maller Shoreham size using the AEC/ERDA 0.68-power nuclear scalmg formula, adding 5 percent for Northeast U.S., and deducting 6 percent for 1980 installation, the AEC figure of $571 per kw converts to a Shoreham estimate of $662 per kw. NUCLEAR AND COAL COST VARIABLES: A BRIEF DISCUSSION 1. Unit Sizes: The nuclear plants in my cost analysis are 1150megawatt units. This and slightly larger units are virtually the only size reactors available from U.S. vendors. In contrast, the typical reactor installed in 1970 was 600 Mw, and in 1974 800 Mw. Nuclear stations now under construction typically consist of two 1150-Mw units spaced a year or two apart, totalling 2300 megawatts. Coal plants are available in virtually any size, from 50 Mw to over 1000 Mw. Bigger plants appear to cost somewhat less per kilowatt, but are less reliable. My analysis assumes 600-Mw coal units, which can be installed with from one to four units at the same site. 2. System Reliability Parity: Utility cost planners compare alternatives with equal amounts of megawatts. Thus, "the alternative" to 2300 Mw of nuclear capacity is considered to be 2300 Mw of coal capacity. This is fallacious. Expansion of a typical utility system by 1800 Mw of coal capacity (three 690-Mw units) would achieve the same overall system reliability as would result from expansion by 2300 Mw of nuclear capacity (two 1150-Mw units). This is the result of a precise calculation which takes into account the effect of the sizes and reliabilities of individual generating units on the required amount of reserve capacity .1 The amount of required reserve decreases when units are smaller, since the number of separate plant failures necessary to exhaust the available reserve increases as unit sizes decrease. Moreover, the smaller coal units are individually more reliable than the larger nuclear units. The result is that 1800 Mw installed in three coal units is the reliability equivalent of 2300 Mw of nuclear in two units. These are the stations compared in my analysis. 3. Capital Costs: The definitive Harvard-MIT study of power plant construction costs found that nuclear costs, already higher than coal's in 1971, were increasing two to three times faster than coal costs for reactors completed and under construction during 1971-1981.2 Nuclear plants not only require more material and labor than equivalent coal plants-they are subject to greater regulatory-mandated design changes, require more potentially scarce specialized labor, and consume more expensive engineering talent. 5. Nuclear cost based on general literature survey. Coal cost assumes coal units costing 70 percent as much as twin nuclear units at 1150Mw, adding 16.1 percent to coal unit cost for their 600-Mw size using the AEC/ERDA 0.77-power coal scaling formula, and deducting 2-1/2 percent for duplication of third coal unit. 70 percent coal-nuclear c?st ratio is less than AEC's 82 percent (WASH-1345) but more than ratio from extrapolating Bupp's regressions to mid-1980s. 6. C. Komanoff, Power Plant Performance: Nuclear and Coal Capacity Factors and Economics, November 1976, and C. Komanoff and N. A. Boxer, Nuclear Plant Performance Update, May 1977, both from Council on Economic Priorities, New York, NY.
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