The Truth About Nuclear Power - Part 12

Subtitle: Nuclear plants cannot provide cheap power on small islands

This article explores the idea of using nuclear power plants to reduce the power prices on

Island in the South Pacific

numerous islands.  The evidence shows that nuclear power would increase the power prices, not decrease them. 

Previously, the articles on The Truth About Nuclear Power showed that (one) modern nuclear power plants are uneconomic to operate compared to natural gas and wind energy, (two) they produce preposterous pricing if they are the sole power source for a grid, (three) they cost far too much to construct, (four) use far more water for cooling, 4 times as much, than better alternatives, (five) nuclear fuel makes them difficult to shut down and requires very costly safeguards, (six) they are built to huge scale of 1,000 to 1,600 MWe or greater to attempt to reduce costs via economy of scale, (seven) an all-nuclear grid will lose customers to self-generation, (eight) smaller and modular nuclear plants have no benefits, (nine) large-scale plants have very long construction schedules even without lawsuits that delay construction, (ten) nuclear plants do not reach 50 or 60 years life because they require costly upgrades after 20 to 30 years that do not always perform as designed, and (eleven) France has 85 percent of its electricity produced via nuclear power but it is subsidized, is still almost twice as expensive as prices in the US, and is only viable due to exporting power at night rather than throttling back the plants during low demand.   

As written almost 5 years ago on SLB, Nuclear Plants on Islands – A Nutty Idea, see link, there are no nuclear power plants located on islands that have approximately 1 million population.  Such islands could easily support power from a 1,000 MW reactor.  The construction costs are far too high, one plant is far too inflexible in operations, and it is cheaper for islanders to import fuel oil or LNG and generate power that way.  Using fossil fuel is far safer, too.  So, how about smaller modular plants, perhaps 4 of them at 300 MW each, which allows for one to be down for maintenance.   The reason this is not done is economy of scale pushes the power price far above 60 cents per kWh.  It’s cheaper for the islands to burn fuel oil to generate power and pay 25 cents per kWh.   

Here are the 15 islands with populations from 0.8 million to 1.25 million people, and no nuclear power plants.

Island ……………….population, millions

Okinawa………………...1.25

Mauritius………………...1.245

Bohol…………………….1.23

Hong Kong……………….1.18

Mindoro…………………..1.16

Xiamen Island…………...1.08

Sao Luis Island……….…1.08

Trinidad…………………...1.03 (this island has abundant natural gas, so of course is not a candidate)

South Island (NZ)……..…1.008

Oahu……………………...0.876

Tenerife………………..…0.865

Cyprus………………..…..0.855

Grand Canary………..…..0.815

Majorca………………..…0.814

Reunion (France)…….….0.793

The same is true for the five islands with 4 to 5 million population: Singapore, Sicily, Bali, and two in the Philippines.  There, the grid could use one 1,000 MWe nuclear plant and provide roughly one-fourth or one-fifth of the total power.  Or, the utility could build multiple smaller reactors to provide 5 GW of power, 5 at 1GW, 10 at 500 MW, 15 at 333 MW, 20 at 250 MW, etc.  But, they have not.   Power prices would still be far too expensive due to economy of scale.   Larger plants provide lower-cost power, while smaller plants produce more expensive power.  

For the smaller islands listed above, multiple small reactors could also be installed but would increase prices far too much due to economy of scale.

It is notable that two contenders in the small, modular reactor market recently failed to attract any customers or any investors.  See link.  Modular reactors and their various problems were discussed at some length in part 8 of the series.  See link. 

Conclusion

Despite having to burn imported oil or LNG, the many small islands in the world have not adopted nuclear power as a means of reducing their power prices.  The island of Oahu, for example, charges approximately 25 cents per kWh for power based on oil and a small amount of imported natural gas.  Even if small modular reactors were built to provide operating flexibility, nuclear plants cannot provide cheap power on small islands.  The claim by nuclear advocates that nuclear power is cheap is simply not supported by the evidence of all the islands in the world that presently provide expensive power.  If nuclear were indeed cheaper, the islanders would likely adopt that.  

 Previous articles in the Truth About Nuclear Power series are found at the following links.  Additional articles will be linked as they are published. 

Part One – Nuclear Power Plants Cannot Compete

Part Two – Preposterous Power Pricing if Nuclear Power Proponents Prevail

Part Three – Nuclear Power Plants Cost Far Too Much to Construct

Part Four – Nuclear Power Plants Use Far More Fresh Water

Part Five – Cannot Simply Turn Off a Nuclear Power Plant

Part Six –  Nuclear Plants are Huge to Reduce Costs

Part Seven -- All Nuclear Grid Will Sell Less Power

Part Eight – No Benefits from Smaller Modular Nuclear Plants

Part Nine -- Nuclear Plants Require Long Construction Schedules

Part Ten -- Nuclear Plants Require Costly Upgrades After 20 to 30 Years

Part Eleven - Following France in Nuclear Is Not The Way To Go

Part Twelve - this article

Part Thirteen - Nuclear Plants Are Heavily Subsidized

Part Fourteen - A Few More Reasons Nuclear Cannot Compete

Part Fifteen - Nuclear Safety Compromised by Bending the Rules

Part Sixteen - Near Misses on Meltdowns Occur Every 3 Weeks

Part Seventeen - Storing Spent Fuel is Hazardous for Short or Long Term

Part Eighteen - Reprocessing Spent Fuel Is Not Safe

Part Nineteen - Nuclear Radiation Injures People and Other Living Things

Part Twenty - Chernobyl Meltdown and Explosion

Part Twenty One - Three Mile Island Unit 2 Meltdown 1979

Part Twenty Two - Fukushima The Disaster That Could Not Happen

Part Twenty Three - San Onofre Shutdown Saga

Part Twenty Four - St. Lucie Ominous Tube Wear

Part Twenty Five - Price-Anderson Act Protects Nuclear Plants Too Much

Part Twenty Six - Evacuation Plans Required at Nuclear Plants

Part Twenty Seven - Power From Nuclear Fusion

Part Twenty Eight - Thorium MSR No Better Than Uranium Process

Part Twenty Nine - High Temperature Gas Reactor Still A Dream

Part Thirty - Conclusion

Roger E. Sowell, Esq.

Marina del Rey, California

The Truth About Nuclear Power – Part Eight

Subtitle: No Benefits From Smaller Modular Nuclear Plants

Are there any benefits from small, modular nuclear power plants?    As background, this series on nuclear power has shown that large, “cathedral” nuclear power plants of 1,000 MWe or greater cost as much as $10 billion each to construct.  The high capital costs require a high power sales price, making the new generation of nuclear power plants uneconomic.  See Part Two,  Part Three, and  Part Six for particulars.   This article explores the costs that can be expected if smaller, modular nuclear power plants are installed.  There is a contingent of nuclear power proponents that insists that costs per kW can be reduced by building smaller plants, more of them, and building them in controlled factory conditions.   But, are those assertions true?

Modular Small Nuclear Plant
source: Energy.gov

The short answer is, No.  Supposedly, the benefits are shorter construction times, less inflation, less interest on loans, all of which lead to lower costs.  But, loss of economy of scale overwhelms such benefits.  Consider 1200 MWe vs 600, 400, 300, and note that Dept of Energy defines Small Modular Reactors as 300 MW or less.  Each of the smaller size plants must be delivered much more quickly to achieve any savings in materials inflation and interest on construction loans.    A shorter construction period very likely cannot be done due to fabrication and delivery of large items: the reactor, steam generators, turbines, and pumps. 

There is, perhaps, a case for some capital savings for a smaller plant if only one steam generator can do the job instead of two or more.  For example, the 1600 MW plant under construction in Finland has four steam generators for its one reactor.  The recently-closed plants in California at San Onofre each produced a bit more than 1000 MW, and each reactor has two steam generators.   Those steam generators, at approximately 500 MW per steam generator, caused problems that led to the plant shutting down.  Therefore, a 600 MW plant with one steam generator probably cannot be done, or at least, no one would take that risk.  But, a 400 MW plant could have one reactor and one steam generator and still remain within the proven size of approximately 400 to 500 MW per steam generator.  That single bit of savings, however, would not be enough to overcome the cost increase per kW created by the loss of economy of scale.

The initial premise is that a 1,000 MWe nuclear plant would cost $4,000 per KW as its overnight cost (the cost to construct if it could all be built in one month, or “overnight”), and materials and labor escalation or inflation over six years increases the cost by $3,000 per kW, and finally, interest on the construction loan increases the cost by another $3,000 per KW.  The total is then $10,000 per kW.    The sources for these costs is explained in detail in Part Three.   (Note, EIA shows 2013 overnight costs for a new nuclear plant as $5,530 per kW).  See Table 2 from  this link. 

Costs for a smaller plant can be expected to follow the “Point 6” power rule for economy of scale, such that the cost of Unit B is found by the formula 

Cost B = Cost A x (Size B / Size A) ^0.6.   

An example illustrates using overnight costs only, where Size B is 400 MW, Size A is 1200 MW, and Cost A is $4,800.  Then,

Cost B = $4,800 x (400/1200)^0.6  = $2,483 per kW overnight cost.

Then, for a total power output of 1200 MW, three of the 400 MW plants are required.   The total overnight costs for the three plants is then 3 x 2483, or $7,449 per kW.    The goal here is to have a final cost less than $12,000, which is the single-plant size of 1200 MW times the cost per kW of 10,000.   With the overnight cost already at $7,450 (rounded slightly, which is fine using such rough numbers), one is left with only 4,550 available for inflation and escalation, plus interest.   If we make the very rough allocation of escalation or inflation is the same as interest on the loan, that then results in each category being half of 4,550, or 2,275.   

Then, we can compute the number of years that the modular plant must require for construction, at inflation of 5 percent per year.   Calculations show that approximately 5.5 years at 5 percent per year yields the desired result.  To save any on the final costs, then, the modular plants must be built in less than 5.5 years.   Stated another way, savings are realized only if the plant can be brought online in 3 or 4 years from notice to proceed. 

The question is, then, can it be done?  Once again, the nuclear industry is scrambling, trying to find a way to justify itself.   Small, modern design, modular-constructed nuclear power plants have never been built in the US, indeed, they are not even approved by the NRC.   The first projects would suffer all the problems of first-of-a-kind projects, and likely have no cost reductions at all. 

The same analysis can be performed for smaller plants, such as 300 MW, where four plants would be required to produce 1200 MW of power, and 200 MW, where six plants would be required.  The results are as follows.  The 300 MW plants must be constructed in 4 years to have zero savings, with any savings produced only if construction time is 2 or 3 years.  The 200 MW plants must be constructed in 2.1 years to have zero savings over the cathedral design.    It seems highly unlikely that small, modular plants can be built on such short timescales.  

The analysis is dependent on the inflation or escalation rate for equipment, labor, and services over the life of the project.  If the inflation rate is higher, as many forecasters predict must be the case, then the situation is worse.  The amount of time required to build the plant and yield a cost savings will be less and less as the inflation rate increases.

Conclusion

There are no benefits to the smaller, modular nuclear power plants that some nuclear power proponents advocate.   The loss of economy of scale requires much shorter construction times for any savings to be had. 

Update: 4/17/14 - Modular reactor developer cuts development, funding by 90 percent due to lack of customers and lack of investors.  (Imagine that...)  "Babcock & Wilcox will slash its spending on the mPower small modular reactor project, having failed to find customers or investors."  also, from same article:   "In February this year (2014) Westinghouse announced it would scale back its development of its 225 MWe small modular reactor design, having lost out in the DoE competition."  see link from World Nuclear News, 4/14/14  -- end update

Update 2-   4/19/14: - Navy-style small reactors are mentioned by nuclear advocates as proof that smaller reactors are viable.  Those reactors do indeed function for the purpose.  However, the issue is one of cost and the price require for electric power on a grid powered by nuclear reactors.  The US Navy has many nuclear powered ships and submarines that work very well.  Those reactors are not designed like commercial power plants.  Also, the economy of scale applies here.  It appears that the largest of the military reactors are approximately 165 MWe, however the USS Ronald Reagan, a new aircraft carrier, has two nuclear reactors each producing just under 100 MW of shaft power.   Such small reactors would require very high-priced electricity.   -- end update 2

Previous articles in The Truth About Nuclear Power can be found at the following links. 

Part One – Nuclear Power Plants Cannot Compete

Part Two – Preposterous Power Pricing if Nuclear Power Proponents Prevail

Part Three – Nuclear Power Plants Cost Far Too Much to Construct

Part Four – Nuclear Power Plants Use Far More Fresh Water

Part Five – Cannot Simply Turn Off a Nuclear Power Plant

Part Six –  Nuclear Plants are Huge to Reduce Costs

Part Seven --  All Nuclear Grid Will Sell Less Power

Part Eight – this article

Part Nine -- Nuclear Plants Require Long Construction Schedules

Part Ten - Nuclear Plants Require Costly Upgrades After 20 to 30 Years

Part Eleven - Following France in Nuclear Is Not The Way To Go

Part Twelve - Nuclear Plants Cannot Provide Cheap Power on Small Islands
Part Thirteen - Nuclear Plants Are Heavily Subsidized
Part Fourteen - A Few More Reasons Nuclear Cannot Compete
Part Fifteen - Nuclear Safety Compromised by Bending the Rules
Part Sixteen - Near Misses on Meltdowns Occur Every 3 Weeks
Part Seventeen - Storing Spent Fuel is Hazardous for Short or Long Term
Part Eighteen - Reprocessing Spent Fuel Is Not Safe

Part Nineteen - Nuclear Radiation Injures People and Other Living Things
Part Twenty - Chernobyl Meltdown and Explosion
Part Twenty One - Three Mile Island Unit 2 Meltdown 1979
Part Twenty Two - Fukushima The Disaster That Could Not Happen
Part Twenty Three - San Onofre Shutdown Saga
Part Twenty Four - St. Lucie Ominous Tube Wear

Part Twenty Five - Price-Anderson Act Protects Nuclear Plants Too Much

Part Twenty Six - Evacuation Plans Required at Nuclear Plants

Part Twenty Seven - Power From Nuclear Fusion
Part Twenty Eight - Thorium MSR No Better Than Uranium Process
Part Twenty Nine - High Temperature Gas Reactor Still A Dream
Part Thirty - Conclusion

Roger E. Sowell, Esq.

Marina del Rey, California