The correlations are richer than this summary suggesrs. Based on them, 1150-Mw nuclear units should have 50 percent capacity factors, but a 5 percent allowance for design and operating improvements seems reasonable, giving 55 percent. For coal, the correlations yield 70 percent for 600-Mw units burning 2 percent-sulfur (medium-grade) coal with scrubbers.7 No addition is made for this figure, despite potential improvements. A nuclear plant with a 55 percent capacity factor makes electricity at a 22-29 percent higher cost than at the industryassumed 70-7 5 percent capacity factor. Through 1976, only 6 of the 48 commercial U.S. reactors were averaging 70 percent or better capacity factor, as seen in capacity factor tables from Reference 6, attached to testimony. Utility insistence that all nuclear plants will run at the high capacity factors achieved by just a few units is a major factor in overstating the economics of nuclear power. 6. Fuel Costs: This is the area where nuclear has an edge over coal (outside of the Mountain states), but the advantage has been diminishing as an accurate appraisal emerges of the nuclear fuel cycle. Nucleonics Week reported recently that U.S. uranium sellers are not accepting current high utility bids for as much as $45 per pound in 1977 dollars, i.e., with escalation, vs. $8/16. only three years ago.8 Uranium now accounts for over half of nuclear fuel cycle costs. Meanwhile, plutonium recycle is politically dead, and nuclear fuel produces significantly fewer kwh's than utilities project for new plants, due to premature refueling forced by fuel failure and erratic plant performance, and to poorer than anticipated thermal performance. A 1985 nuclear fuel cost of 1.1¢ per kwh is supported in the notes.9 Coal mine and transportation costs are sensitive to mining region and plant site. The nuclear fuel cost of 1.1¢/kwh projected for 1985 is equivalent to Eastern (high-grade) coal at $27.50/ton, Midwest (medium-grade) coal at $25/ton and Western (low-grade) coal at $19.50/ton. Current coal prices are generally within the range of these figures (lower in the West), but coal prices will of course rise between now and 1985. For estimating 1985 coal prices in this analysis, I have taken average delivered coal costs by region for 197 5 (last year of FPC data available),10 increased this ~y 25 percent for a one-time increase attributable to new mme costs (50 percent in West North Central and 75 p~rcent_ in ~ountain States, due to anticipated state and Indian stnp-mme severance taxes and royalties), and escalated by 6 percent per year through 1980 and 5 percent per year through 1985. California costs assume mining in Mountain States plus $13/ton transportation in 1985 (8500 BTU/lb. coal). A life-cycle cost analysis should incorporate the effect of post-1985 fuel cost escalation. Equal escalation rates for nuclear and coal fuel would imply a widening of the 1985 nuclear fuel cost advantage (except in the Mountain States, December 1977 RAIN Page 13 where coal is projected cheaper). However, I believe nuclear fuel is likely to suffer greater escalation, due to the smaller size of uranium reserves (relative to coal) and the politicization of the nuclear fuel cycle, which increases uncertainty, adding to the market power of suppliers. Exclusion of post1985 fuel cost escalation from this analysis, for simplicity, probably works to the advantage of nuclear costs, except in the Northeast, where the 1985 nuclear fuel cost advantage is very large (1.6¢/kwh) and likely to widen slightly. 7. Operating and Maintenance Costs: O&M costs include all non-fuel operating expenses: water treatment, ash and sludge disposal and limestone feed for coal scrubbers, nuclear radwaste treatment, maintenance and repair, spare parts inventory, etc. They typically account for only about 5 percent of all annualized costs, though some analysts have attempted to attribute coal scrubbing O&M costs 3-4 times nuclear O&M. Actual experience with coal scrubbers, such as at the Kansas City Power & Light La Cygne station,l 1 suggests only modestly greater per kw O&M costs for coal, despite scrubbers, than for nuclear. My costs here use a detailed analysis by the New York Power Pool,12 and assume 55 percent capacity factor for nuclear, 69-7 3 percent for coal, depending on coal grade. 8. Costs Excluded from the Analysis: In brief, this analysis makes no provision for potentially expensive reactor decommissioning following useful life; assumes equal lives for nuclear and coal plants despite evidence of reactor performance deterioration in the few reactors older than age ten; and includes only a small allowance for nuclear waste disposal (about 0.15¢/kwh in 1985) which may substantially understate actual costs. These omissions, made because the ultimate costs are unknowable at present, improve the appearance of nuclear economics. - Charles Komanoff ■-----------------------------------------.w 1260-Mw nuclear units in 1976 dollars, assuming 65 percent capacity factor. Variable costs, accounting for about 8.7 percent of total, are prorated downward for 55 percent capacity factor. All costs are reduced by 6 percent for 1150-Mw size, using AEC/ERDA scaling rule. Costs are then escalated at 6 percent per year to 1985. Coal costs are given as $25.9 million per year for three 840-Mw coal units with scrubbers (3 percent-sulfur coal), also 197 6 and 65 percent capacity factor. Limestone costs are 34 percent of total, other variable costs are 5 percent, and fixed costs are 61 percent. Limestone costs are linearly proportional to sulfur content per btu, and so have been prorated commensurate with roughly 2-1/2 percent-sulfur coal (corrected for btu differences from Kessig's assumed 3 percent-sulfur coal) in all "Central" regions, 2 percent in Northeast and South Atlantic, and 1 percent in West. All variable costs including limestone were then prorated for 69-7 3 percent capacity factor from Kessig's 65 percent. Finally, all coal O&M costs were reduced 22.8 percent based on three 600-Mw instead of 840-Mw units, using AEC/ERDA scaling ratio, and then escalated 6 percent per year to 1985. . Regional differences were ignored in O&M calculations due to small dollar quantities involved, though Kessig's New York-based limestone costs may be high for other regions, and other O&M costs may be higher as well.
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