Page 12 RAIN December 1977 Reactor costs are still exceeding utilities' upwardly revised estimates. A case in point is the Long Island Lighting Company's Shoreham reactor. Shoreham received its AEC construction permit in early 1973, thus seeming to clear the way for speedy construction by 1978. Yet almost annually, Lilco pushes back the projected completion date and pushes up the estimated cost. The next revision, due November 1 according to a recent article in Newsday,3 will increase last year's estimate of $969 million (for May 1979 completion) by 20 percent (for fall 1980 finish). The resulting $1416 per installed kw cost (based on the plant's 821 Mw capacity) will make Shoreham the most expensive co~mercial power plant ever buih. For comparison, the last (and still current) AEC capital cost study projected $662/kw for plants of Shoreham's size4 -less than half the cost now projected. Shoreham looks to be an extreme case, but the cost-overrun disease is real. In big round numbers, $1200/kw for twin nuclear 1150-Mw units, and $950/kw for 600-Mw coal units with scrubbers, look like reasonable national averages for 1985.5 Northeast plants would cost 5 percent more, South Atlantic and South Central plants 5 percent less, due to labor cost variation; California plants would cost 5 percent more due to stricter safety and environmental standards. 4. Fixed Charge Rate: This refers to the cost of capital, local taxes and federal taxes which determine the annual "fixed charges" the utility pays as a percentage of plant capital costs. Taxes are usually marginally less for nuclear than coal, due principally to accelerated depreciation permitted for nuclear, but nuclear marginal cost of capital may be considerably higher due to greater financing requirement and greater perceived risk. A reasonable assumption is 16 percent fixed charge rate, for both nuclear and coal (about 11 percent cost of capital and 5 percent taxes). 5. Capacity Factor: A power plant's actual kilowatt-hour production as a percentage of its maximum possible output, based on design capacity, is its capacity factor. A 7 5 percent capacity factor means a plant operating at full capacity 75 percent of the time (and shut down otherwise) or operating at 75 percent of capacity all of the time, or some combination. Utilities seek to maximize capacity factors of new nuclear and coal plants, especially nuclear, to minimize fixed costs per unit of output. 7. Coal capacity factors of 69 percent in Central States, 71 percent in Atlantic States and 7 3 percent in West are based on 197 5 average sulfur content of coals burned in regions (2.5 percent, under 2 percent and under 1 percent, respectively), from Reference 10. 8. Nucleonics Week, July 21, 1977, p. 1. 9. 1.1¢/kwh nuclear fuel cost assumes $60/lb. uranium, $120-$140/ SWU enrichment, no recycle, and only a 5 percent penalty for below design heat rate and burnup. Model used is from "1984 Steady-State Fuel Cycle Cost for PWR," Exhibit 10 in lecture by Prof. Michael Utilities and the Nuclear Regulatory Commission staff facilely assume equal coal and nuclear capacity factors in their economic analyses, previously assuming 80 percent, now 75 percent or 70 percent, or, in a few cases, 65 percent. Yet plant reliability is a greater problem for nuclear units, especially with new ones sized twice as large as coal units. All power plants, especially nuclear, suffer more frequent and longer breakdowns at larger sizes. Radiation and safety considerations often limit reactor output and complicate repairs. Through 1976, nuclear plants have averaged 64 percent capacity factor at units under 800 Mw, but only 50 percent at units over 800 Mw. Capacity factors vary widely for existing plants, especially nuclear, and will likely do so for new units. I think 55 percent is a reasonable average capacity factor to project for 1150-Mw nuclear units, and 70 percent for 600-Mw coal units with scrubbers. These projections are based on my two-year study of nuclear and coal power plant capacity factors and reliability, the original data base of which was bought by the Federal Energy Administration. That study cut through utility and FEA/ ERDA rhetoric to demonstrate that: capacity factors fall as plant size rises, especially for nuclear; aging improves capacity factors for coal (up to age 10) but for only one of the two U.S. nuclear plant designs; "duplicate" coal units have higher capacity factors, but duplicate nuclear units perform no better than other nuclear units; coal capacity factors rise as coal sulfur content falls, etc.6 Driscoll, July 22, 1976, MIT Summer Course, "Principles of Nuclear Fuel and Power Management." 10. Federal Power Commission, Annual Summary of Cost and Quality of Steam-Electric Plant Fuels, 1975, May 1976. 11. See J. Papamarcos, "Stack Gas Cleanup," Power Engineering, June 1977. 12. E. Kessig, Testimony for New York Power Pool, NY PSC Case 26974, Comparative Economics of Nuclear and Fossil Generation, December 1976. Kessig's costs are $20.4 million per year for twin
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