US’ next-gen nuclear submarines suffer delay with costs soaring past $130 billion.
The US Navy’s next-generation nuclear submarines face delays and rising costs, surpassing $130 billion.
Interesting Engineering, Bojan Stojkovski Oct 05, 2024
A new report from the Government Accountability Office (GAO), a nonpartisan watchdog that reviews government operations for Congress, highlighted problems with the construction of the new submarines.
The GAO noted that both cost and schedule targets for the lead submarine have consistently been missed, according to the report released on Monday, Gizmodo reported.
“Our independent analysis calculated likely cost overruns that are more than six times higher than Electric Boat’s estimates and almost five times more than the Navy’s. As a result, the government could be responsible for hundreds of millions of dollars in additional construction costs for the lead submarine,” the GAO said in its report.Re-Timer and cold plasma, the best of IE this week
Navy plans to replace aging Ohio-class subs
The country’s nuclear weapons are deployed through three methods: intercontinental ballistic missiles launched from silos, bombs dropped from strategic bombers, and missiles fired from stealth submarines. …………………………………………………………………..
General Dynamics Electric Boat is currently building the first Columbia-class submarine, but the construction is facing significant challenges. According to the GAO report, the program has struggled with ongoing issues such as delays in materials and design products, despite efforts over the years to address these problems. The report also stated that swift and substantial action is needed to improve the construction performance.
Submarine construction faces skilled labor shortages
Some of the challenges are systemic, as there are few skilled workers in the US capable of building nuclear submarines. Between the 1980s and 2020, the submarine supplier base, which provides critical parts and materials, has drastically reduced from around 17,000 suppliers to just 3,500.
This has led Columbia-class shipbuilders to increasingly depend on single-source suppliers, limiting competition for contracts, according to the GAO.
As Defense One writes, the Navy and shipbuilders provide “supplier development funding” to support these critical suppliers. This funding is divided into two categories: “direct investments in suppliers,” which cover expenses like equipment, factory upgrades, and workforce development, and “specialized purchases to signal demand,” which involve placing orders to ensure that suppliers remain capable and motivated to produce, even when their products are not immediately required.
However, the GAO found that the Navy has not adequately assessed whether its financial investments in the supplier base are being utilized effectively. The GAO report outlined that the Navy has inconsistently defined the necessary information to evaluate whether these investments have led to increased production or cost savings and how these outcomes align with the program’s objectives https://interestingengineering.com/military/us-nuclear-submarines-delayed-exceeding-costs
NUCLEAR power is a fiscal sinkhole.
The National, Leah Gunn Barrett, Edinburgh 6 Oct 24
The Sizewell C nuclear project in Suffolk is delayed again and the UK is ponying up £5.5 billion in subsidies (but Reeves can’t afford £2bn for the Winter Fuel Allowance), and the Hinkley Point C plant’s $46bn price-tag exceeds Scotland’s entire £41bn devolved budget.
Scotland has two nuclear plants – Hunterston B in Ayrshire which ceased generating in January 2022 and Torness in East Lothian, which will stop generation in 2028, two years early, due to a rising number of cracks in its core – 46 so far. Cracks can lead to a reactor meltdown and release of radiation into the environment.
Yet Anas Sarwar, the inept English Labour northern branch supervisor, insists that Scotland must invest in nuclear power to cut bills. No kidding.
If he becomes first minister, he’ll no doubt approve the proposed nuclear plant at Ardeer in North Ayrshire that the current administration has rejected.
The private sector is running a mile from nuclear power because of its out-of-control construction costs, the propensity for plants to develop cracks and the intractable problem of what to do with tonnes of radioactive waste.
Scotland doesn’t need nuclear (power or weapons). It generates the bulk of renewable energy within the failing UK, renewables that are being siphoned off by our greedy southern neighbour with the profits lining the bulging pockets of private corporations while Scots not only freeze but pay a premium for having their own energy sold back to them. Come on, Scotland. Let’s get out of here. https://www.thenational.scot/politics/24632469.vote-scottish-labour-want-broken-nuclear-future/
Czechs take stake in Rolls-Royce vehicle in boost for SMRs.
Partnership with Rolls-Royce consortium to build SMRs in Czech Republic to be
underpinned by minority holding as engine maker vies to secure UK deal.
The Czech government is taking a minority stake in the Rolls-Royce SMR
consortium, which hopes to build and sell fleets of small nuclear reactors
to meet increasing demand for electricity in the 2030s. Last month, the
Czech Republic announced a strategic partnership with Rolls-Royce SMR to
build small modular reactors (SMRs) in the eastern European country. Rolls
beat six other companies in a selection process led by Cez, the country’s
state-backed energy group.
It has now emerged that the Czech government
will take an equity stake in the Rolls consortium via Cez for an
undisclosed sum, in a move that underlines its determination to advance SMR
technology.
Rolls-Royce SMR is majority owned by the FTSE 100 engine maker,
which has a stake of about 70 per cent. Other shareholders include the
Qatar Investment Authority, US energy firm Constellation and BNF Capital,
an investment vehicle set up by the billionaire Perrodo family of France.
It is not known how big a stake Cez will take in the SMR consortium,
although it is expected to come via Rolls selling down its holding. Last
year, Tufan Erginbilgic, the chief executive of Rolls-Royce, said his
intention was to take the company’s shareholding in the SMR business down
to about 50 per cent.
Times 6th Oct 2024, https://www.thetimes.com/business-money/companies/article/czechs-take-stake-in-rolls-royce-vehicle-in-boost-for-smrs-536q2njgb
Sizewell C nuclear project hit by fresh delays as investment talks drag on.
UK ministers have made contingency arrangements to fund the Sizewell C
nuclear power project in case a final agreement with potential investors is
delayed by as much as two years.
A £5.5 billion subsidy scheme envisages a
scenario where there is no agreement until mid-2026. Several industry and
Whitehall figures said no deal is expected before spring 2025.
FT 3rd Oct 2024
https://www.ft.com/content/2a5d9462-b921-4577-82c1-4eb508775624
US government provides $1.52 billion loan to resurrect Michigan nuclear plant
US closes $1.52 billion loan to resurrect Michigan nuclear plant, By Timothy Gardner October 1, 2024
WASHINGTON, Sept 30 (Reuters) – The U.S. on Monday said it closed a $1.52 billion loan to resurrect Holtec’s Palisades nuclear plant in Michigan, and a senior Biden administration official said it could take two years to reopen the plant, which is longer than the company predicted.
President Joe Biden’s administration has called for a tripling of U.S. nuclear power capacity as U.S. power demand surges and worries about climate change mount.
The push could include the potential reopening of some commercial reactors that have been shut for decommissioning, including one at Three Mile Island, site of the worst nuclear accident in U.S. history. Restarting shut nuclear plants is a complicated and expensive process never before accomplished in the country.
“Palisades is a climate comeback story,” Ali Zaidi, the White House climate adviser, told reporters in a call, adding that nuclear power supports high-paying union jobs
The $1.52 billion in financing from the Department of Energy’s Loan Programs Office, was accompanied by funding for nonprofit electric cooperatives to purchase power from Palisades. Deputy U.S. Energy Secretary Xochitl Torres Small announced more than $1.3 billion in public funding to power cooperatives Wolverine and Hoosier Energy.
Nuclear reactors generate virtually emissions-free power, which is valued as electricity demand soars for the first time in decades on growth in artificial intelligence, electric vehicles and cryptocurrencies. Nuclear critics, however, point out that the U.S. has not agreed on a permanent place to bury radioactive nuclear waste.
Palisades still needs licensing from regulators and the senior U.S. official said that means it could take “a couple of years to turn back on”. Holtec has estimated a comeback in the fourth quarter next year…………….
O’Brien has said Holtec does not expect delays or additional costs. https://www.reuters.com/business/energy/us-closes-152-billion-loan-resurrect-michigan-nuclear-plant-2024-09-30/
Why NuScale Power Stock Dropped Today
Motley Fool, By Rich Smith – Sep 26, 2024
NuScale’s potential growth just got smaller by exactly one country.
Shares of NuScale Power (SMR 5.55%) slipped 3.2% through 11 a.m. ET Thursday on some disconcerting news out of Great Britain. According to World Nuclear News (WNN), the British government just narrowed the list of companies competing to begin building small modular nuclear reactors (SMRs) in the U.K. to four names.
NuScale isn’t one of them.
SMRs in the U.K.
According to WNN, the list of companies competing for this program initially numbered six, but two companies have been cut: NuScale and France’s EDF. General Electric subsidiary GE Hitachi Nuclear Energy, Rolls-Royce-owned Rolls-Royce SMR, and privately owned Holtec and Westinghouse all made the cut with reactor designs based on existing technology married to “modular production techniques.”
Britain plans to narrow its list further to two or perhaps three companies that will win co-funding contracts to complete their designs and obtain permits. Then the government will make a final decision to proceed with power plant construction in 2029.
………………….The bad news is that the closest company to a pure play in this new technology, NuScale Power, is now no longer an option in the U.K. Furthermore, Britain’s decision to pass on NuScale’s technology may give U.S. regulators second thoughts about it as well. All things considered, I’d say this is bad news for NuScale stock.
The other bad news is that the options that remain, Rolls-Royce and GE, are valued at $60 billion and $200 billion, respectively. While nuclear power may one day become a bigger part of their businesses, it’s going to be a long time before either company gets big enough in nuclear to move the needle on their revenue or earnings, or for investors to see them primarily as nuclear power stocks.
Investors seeking pure plays on nuclear power should probably look elsewhere. https://www.fool.com/investing/2024/09/26/why-nuscale-power-stock-dropped-today/
US company eliminated from race to build Britain’s first mini-nuclear plant.
NuScale Power will not proceed to the final round of the competition’s selection process
Executives at NuScale Power were told on
Wednesday afternoon that they had been eliminated from the small modular
reactor (SMR) design competition.
The decision by officials at Great
British Nuclear (GBN), a government agency, leaves four companies battling
to secure support for their proposed technologies: Rolls-Royce,
Westinghouse, GE-Hitachi and Holtec Britain. Those businesses will now
progress to the final stage of the process, which will see them submit
“final best offers” to the Government.
GBN is then expected to announce
two winners either late this year or early in 2025, with the companies then
awarded sites and funding.
Earlier this year, a sixth company, the French
state-owned energy giant EDF, effectively dropped out of the contest when
it decided not to submit a bid by the required deadline. A spokesman for
NuScale also confirmed the decision. He said the company had been told it
did not meet the criteria for the SMR competition as it had already begun
production of its reactors and did not need support getting to market.
The decision is a fresh blow to NuScale, which suffered another setback last
November when its $1.4bn (£1bn) project to build a plant for a Utah power
provider was cancelled amid spiralling costs. The Government has not yet
confirmed where the first SMRs will be built. However, GBN purchased sites
in Wylfa, on the Welsh island of Anglesey; and Oldbury, Gloucestershire,
earlier this year.
Telegraph 25th Sept 2024
Nuclear finance will rely on consumers’ stomach for risk.
Projects prove too tricky to fund through normal financing methods.
Western governments have flip-flopped on nuclear power for decades. But the current enthusiasm for atomic energy in countries such as the Czech Republic, Sweden, the US
and the UK now also appears to be spreading to the private sector.
This week, 14 of the world’s biggest banks and financial institutions pledged
to increase their support for nuclear power. Nuclear power projects prove
too tricky to fund through normal project financing methods.
Upfront costsare high and construction is lengthy. If the company set up to construct
the project defaulted, a half-built nuclear plant would be pretty worthless
as security. The interest lenders would demand for that level of risk would
simply make projects unviable, says Jens Weibezahn, assistant professor at
the Copenhagen Business School.
Projects running overtime and budget, such
as EDF’s Hinkley Point C plant in south-west England, have hit
confidence. On the French utility’s last estimate, the initial £18bn
budget for the 3.2 gigawatt plant had ballooned to £31bn-£35bn in 2015
prices (£41.6bn-£47bn in today’s money).
Several other countries are also considering models such as the regulated asset base, involving consumers paying towards the construction of nuclear power plans before
they start operating. Microsoft’s deal points to another way in which the
private sector can support a nuclear renaissance — although its agreement
is notably not for a new build.
FT 25th Sept 2024
https://www.ft.com/content/0608e36e-51cd-4ab7-bd18-62a536808536
World’s biggest banks pledge support for nuclear power
Names including Bank of America, Morgan Stanley and Goldman Sachs boost COP28 goal of
tripling capacity by 2050. Fourteen of the world’s biggest banks and
financial institutions are pledging to increase their support for nuclear
energy, a move that governments and the industry hope will unlock finance.
FT 23rd Sept 2024, https://www.ft.com/content/96aa8d1a-bbf1-4b35-8680-d1fef36ef067
Western, Russian nuclear industries still intertwined, report says
By Reuters, September 19, 2024, https://www.reuters.com/business/energy/western-russian-nuclear-industries-still-intertwined-report-says-2024-09-19/
VIENNA, – The Russian and Western nuclear industries remain dependent on each other, a situation that has shielded Russia from European sanctions, an industry report said on Thursday.
Cutting the West’s dependence would likely drive up costs, the annual World Nuclear Industry Status Report said.
Since Russia’s 2022 full-scale invasion of Ukraine, some of the five European Union countries with Russia-designed VVER reactors, which use Russian fuel, have sought alternative fuel sources, particularly U.S. company Westinghouse Electric.
Several of those countries, however, stockpiled Russian fuel last year, driving up imports.
Some Western companies rely heavily on Russian state company Rosatom’s construction of new reactors abroad to sell their parts, the report said.
“Interdependence between Russia and its Western partners remains significant,” the report said.
“With Rosatom implementing all 13 nuclear-power reactor construction sites started outside China over the past five years, providers of parts, e.g. France’s Arabelle turbines, do not have any other foreign customer besides Rosatom,” it said, referring to a unit of French state power utility EDF.
Call for banks to back nuclear energy projects
The global nuclear industry
is asking major banks to fund nuclear projects to [?] meet net zero goals and
improve energy security. Nuclear energy is increasingly being discussed as
a key component in global efforts to improve energy security. At the
“Roadmaps to New Nuclear” conference in Paris, nuclear industry
associations from various countries, including the US, UK, Canada and
France, urged international financial institutions to support new nuclear
projects.
The call was directed at organisations such as the World Bank,
asking them to include nuclear energy in their funding portfolios to help
nations meet their low carbon energy goals. This push aims to expand
nuclear energy capacity alongside renewable energy by 2050,
Industry groups also highlighted the potential to decrease reliance on
Russian nuclear technology.
Energy Live News 20th Sept 2024
Global status report highlights parlous state of nuclear power sector
“the industry is essentially running to stand still.”
Jim Green, 20 Sept 2024, https://reneweconomy.com.au/global-status-report-highlights-parlous-state-of-nuclear-power-sector/
Two new reports have undermined the Dutton Coalition’s claims about nuclear power.
A report by the Institute for Energy Economics and Financial Analysis (IEEFA) undermines claims that nuclear power would reduce power bills, and the latest edition of the World Nuclear Industry Status Report undermines claims that nuclear power is on a growth trajectory and Australia risks being left behind.
The IEEFA report’s key findings are as follows:
– Under the Coalition’s nuclear plans, electricity bills could rise by $665 per year on average across jurisdictions and scenarios, for households using a median amount of electricity.
– The bill impact would be more acute for larger households, given their higher electricity consumption. For example, for 4-person households the average annual bill increase across regions and nuclear scenarios would be $972 and for 5+ person households it would be $1,182.
– The cost of electricity generated from nuclear plants would likely be 1.5 to 3.8 times the current cost of electricity generation in eastern Australia.
– Overnight capital costs (excluding financing costs) of recent nuclear power station builds analysed by IEEFA have blown out by a factor of between 1.7 and 3.4, creating significant financial difficulties for the companies involved.
World Nuclear Industry Status Report 2024
The World Nuclear Industry Status Report 2024 (WNISR-2024) was released yesterday. Since 1992, these reports have provided a wealth of factual information about the status and trajectory of nuclear power worldwide.
WNISR-2024 notes that as of 1 July 2024, a total of 408 nuclear power reactors were operating in 32 countries, 30 below the 2002 peak of 438 reactors.
At the end of 2023, nuclear capacity stood at 365 gigawatts (GW). As of mid-2024, operating capacity reached 367.3 GW, 0.2 GW more than the previous 2006 end-of-year record of 367.1 GW.
That’s something for the nuclear boosters to cheer about: record nuclear capacity. But some context is needed. Nuclear power has been stagnant for the past 30 years and a fleet of mostly young reactors is now a fleet of old reactors.
In 1990, the mean age of the global power reactor fleet was just 11.3 years. WNISR-2024 notes that the average age of the world’s operating reactor fleet has been increasing since 1984 and stands at 32 years as of mid-2024, up from 31.4 years in mid-2023.
As the rate of closure of ageing reactors increases, it will become increasingly difficult for the industry to maintain its 30-year pattern of stagnation by matching closures with start-ups, let alone achieving any growth.
Former World Nuclear Association executive Steve Kidd spoke to this problem in 2016, noting that “the industry is essentially running to stand still.”
In 2023, WNISR-2024 notes, there were five reactor start-ups (5 GW) and five permanent closures (6 GW) with a net decline of 1 GW in capacity. (This year has also been underwhelming: a net gain of 2 GW of nuclear capacity compared to several hundred GW of new renewable capacity.)
Nuclear’s share of global electricity generation declined from 9.2 percent to 9.1 percent in 2023, little more than half of its peak of 17.5 percent in 1996.
In the 20 years from 2004 to 2023, there were 102 startups and 104 reactor closures worldwide. Of these, 49 startups were in China with no closures. Outside China, there has been a net decline of 51 reactors over the same period, and net capacity declined by 26.4 GW.
As of mid-2024, 59 reactors were under construction worldwide, 10 fewer than in 2013. China had the most reactors under construction (27) but none abroad. Russia dominates the international market with 26 units under construction as of mid-2024, six of them in Russia and 20 in seven other countries.
WNISR-2024 states: “It remains uncertain to what extent these projects have been or will be impacted by sanctions imposed on Russia and other consequential geopolitical developments following Russia’s invasion of Ukraine.”
Construction started on six reactors in 2023 — down from 10 in 2022 — including five in China.
Chinese and Russian government-controlled companies launched all 35 reactor constructions in the world from December 2019 to mid-2024. Besides Russia’s Rosatom, only France’s EDF is currently building nuclear power plants abroad (two reactors in the UK) as lead-contractor.
Potential nuclear ‘newcomer’ countries
Peter Dutton claims that “50 countries are exploring or investing in next-generation nuclear technology for the first time.” That’s nonsense. WNISR-2024 notes that the number of countries building reactors fell by three from mid-2023 to mid-2024.
Reactors are under construction in 13 countries, down from 16 countries the previous year as the UAE and the US completed their last construction projects and Brazil suspended its only reactor construction project. Only three countries — China, India, and Russia — are building reactors at more than one site.
Just three potential nuclear newcomer countries had reactors under construction as of mid-2024: Egypt, Bangladesh and Turkiye.
WNISR-2024 notes that of 18 African countries analysed, only four would have grid systems large enough to meet minimum capacity criteria to host a large nuclear reactor (based on the rule of thumb that the largest unit in a grid system should not exceed 10 percent of total system capacity).
Small modular reactors might find a niche — but they don’t exist.
Small modular reactors
WNISR-2024 states: “The gap between hype about Small Modular Reactors (SMRs) and industrial reality continues to grow. The nuclear industry and multiple governments are doubling down on their investments into SMRs, both in monetary and political terms. So far, reality on the ground does not reflect those efforts.
“SMR projects continue to be delayed or canceled. Costs for nuclear projects in general and SMRs in particular are surging. The few available cost estimates for SMRs, especially when weighted by their electrical power generation capacities, show how expensive these are.”
Two developments over the past year have punctured the hype around SMRs. The first was NuScale’s decision to abandon its flagship project in Idaho after cost estimates rose to an absurd A$30,000 per kilowatt (A$14 billion for a 462 megawatt plant).
Then, French utility EDF announced that it had suspended the development of its Nuward SMR and reoriented the project “to a design based on proven technological building blocks.”
The two operating SMRs — a twin-reactor plant in China and a twin-reactor floating plant in Russia — weren’t built using serial factory construction methods so can’t be called SMRs. Nor are there plans to mass-produce these reactors types using serial factory construction methods, so the so-called SMRs in China and Russia can’t even be called prototype SMRs.
Dutton wants taxpayers to fund the construction of large reactors in the eastern states and SMRs in SA and WA. SA aims to reach 100 percent net renewable electricity generation as soon as 2027. Presumably Dutton wants to replace some of that renewable power generation with SMRs, for some unfathomable reason.
Nuclear vs renewables
Total investment in non-hydro renewable electricity capacity in 2023 was estimated by Bloomberg New Energy Finance (BNEF) at $US623 billion, up 8 per cent compared to the previous year. According to a WNISR estimate, this represents 27 times the reported global investment decisions for the construction of nuclear power plants of about $US23 billion for 6.7GW.
BNEF estimated investments in stationary storage capacity at around US$36 billion in 2023, which, for the first time, exceeded investments into new nuclear. Globally, utility-scale storage additions jumped from just over 10 GW added in 2022 to more than 25 GW in 2023.
In 2023, annual additions of solar and wind power grew by 73 per cent and 51 per cent, respectively, resulting in nearly 460 GW of combined new capacity, according to the International Renewable Energy Agency.
The solar PV market saw China alone adding around 217 GW — a 150-percent increase over 2022-additions — and the rest of the world 129 GW for a total of 346 GW or about 1 GW per day.
The Global Wind Energy Council reported a record of 117 GW of new wind installations, a 50 per cent year-on-year increase, with China accounting for 65 percent of total added onshore capacity and 58 per cent of total added offshore capacity. These numbers compare with a net addition of 1 GW nuclear capacity in China and a global decline of 1 GW in 2023.
WNISR 2024 states: “In 2021, the combined output of solar and wind plants surpassed nuclear power generation for the first time. In 2023, wind and solar facilities generated 50 percent more electricity than nuclear plants.
“Wind power alone generated 2,300 terawatt-hours (TWh) and is getting close to nuclear’s 2,600 TWh. Since 2013, non-hydro renewables added 3,500 TWh to the world’s power generation, 14 times more than nuclear’s roughly 250 TWh, and generated 80 percent more power than nuclear in 2023.”
In 2023, the European Union achieved its largest renewable capacity additions ever and the renewable share in total electricity generation reached a record 44 percent. Solar and wind plants together produced 721 TWh compared to nuclear’s 588 TWh.
For the first time ever, non-hydro renewables generated more power than all fossil fuels combined in 2023. Fossil fuel power generation dropped by a record 19 percent, reaching its lowest level ever and accounting for less than one-third of the EU’s electricity generation.
In China, solar PV produced a total of 578 TWh of electricity in 2023, 40 percent more than nuclear’s 413 TWh. Wind power generation first exceeded nuclear in 2012: in 2023, wind produced 877 TWh, more than doubling nuclear generation. Adding other non-hydro renewables like biomass to solar and wind, the net total generation of 1,643 TWh in 2023 was four times the nuclear output.
Keep in mind that China is the only country in the world with a significant nuclear power expansion program. It might be a stretch for WNISR-2024 to state that “nuclear power remains irrelevant in the international market for electricity generating technologies”, but it is heading in that direction.
Dr Jim Green is the national nuclear campaigner with Friends of the Earth Australia and a member of the Nuclear Consulting Group.
MIT Coalition for Palestine Announces Major Divestment Win
09/17/2024, https://nlgmass.org/mit-coalition-for-palestine-announces-major-divestment-win/
The MIT Coalition For Palestine announces a major divestment win for its Scientists Against Genocide (SAGE) movement : MIT has ended the MISTI-Israel Lockheed Martin Fund. This is the first known shutdown of an American-Israeli weapons manufacturer partnership at a U.S. university since the war on Gaza has begun, and MIT has chosen to end this partnership despite renewing its other MISTI projects. The Fund had been a project by MIT International Science and Technology Initiative Israel (MISTI-Israel) to connect students and researchers at MIT to the global arms manufacturer’s Israeli offices.
Lockheed Martin has unquestionably profited from the genocide in Gaza, supplying the Israeli government with Hellfire missiles, attack aircraft, and heavy artillery directly used in destroying Palestinian lives, homes, and society, as well as enabling torture camps and a regime of apartheid. This win is a testament to the sustained pressure from activists, including MIT labor’s refusal to abet the apartheid state via contributing to its weapons research. NLG is proud to have supported and represented MIT SAGE via legal representation and legal observation, especially when they were under threat of police violence and unlawful arrests during the encampment of Apr-May 2024.
Israeli forces continue to escalate in their terror, and MIT maintains ongoing, direct research funding links to the Israeli military supply chain. MIT Coalition for Palestine will continue to fight and resist against the genocidal regime: the NLG will continue to support that fight. No science for apartheid, and free Palestine
Nuclear in Australia would increase household power bills
Report Nuclear Electric Grid Energy Policy Australia
September 20, 2024, Johanna Bowyer and Tristan Edis, https://ieefa.org/resources/nuclear-australia-would-increase-household-power-bills
Key Findings
Typical Australian households could see electricity bills rise by AUD665/year on average under the opposition Coalition’s plans to introduce nuclear to the country’s energy mix.
IEEFA analysed six scenarios based on relevant international examples of nuclear power construction projects; in every scenario, bills increased by hundreds of dollars.
For households that use more electricity, bills could rise more – for a four-person household, the bill rise was found to be AUD972/year on average across nuclear scenarios and regions.
The cost of electricity generated from nuclear plants would likely be 1.5 to 3.8 times the current cost of electricity generation in eastern Australia.
Australia’s main federal opposition, the Liberal-National Coalition, has proposed building seven nuclear power plants across the country, including both large-scale reactors and small modular reactors (SMRs). This report seeks to detail the likely impact on household consumers’ electricity bills from such a plan, based on recent real-world experience from construction costs for nuclear power plants around the world.
Rather than use theoretical projected costs, we have calculated the potential electricity bill impact for a range of nuclear cost recovery scenarios, based on the following real-world examples:
Finland: Olkiluoto Unit 3. France: Flamanville Unit 3. UK: Hinkley Point C. US: Vogtle Units 3 and 4.US SMR: NuScale SMR. Czech Republic: Dukovany proposed plant expansion.
The first four scenarios are based on actual, recent nuclear power plant construction costs and timeframes for countries in liberal democracies where costs are transparent. Commenting on nuclear construction cost estimates, electricity market economist Professor Paul Joskow states: “The best estimates are drawn from actual experience rather than engineering cost models.”
In the case of SMRs, no plants have been successfully completed in a democratic country, so we instead used the one example of a binding contract offer to build such a plant in the US, the now-cancelled NuScale project. We also used this approach for assessing the costs for a proposal to build South Korean APR technology (a design that the Coalition has cited for potential implementation in Australia) in a separate democratic country with laws protecting labour rights, outside of its country of origin – the Czech Republic.
Household electricity bills impact
We found that electricity bills would need to rise in order for nuclear costs to be recovered. The chart below illustrates the resulting increase in typical household power bills if nuclear power plants with similar costs and characteristics to the international examples were built in Australia. The average bill increase was AUD665/year across states and nuclear scenarios for households with a median level of electricity consumption. The lowest impact is equivalent to bill increases of AUD260-AUD353 per year, linked to estimated costs for the pre-construction project Dukovany, which is highly likely to underestimate final costs. The lowest impact from a nuclear plant successfully completed (Vogtle) is AUD383-AUD461 per year for an average household. Meanwhile, the UK experience with Hinkley Point C indicates electricity bill rises of more than AUD1,000 per year are possible.
Figure 1 [on original]: Increase in typical household electricity bill to recover cost of nuclear plants based on different countries’ experience (AUD/year)
The range of costs is wide due to the significant cost differentials for large-scale nuclear in different countries, and the significant cost uncertainty for SMR technology, which is still under development. The impact in each state can vary due to differing typical electricity consumption levels in each state, and different electricity bill cost structures.
For households using more electricity than the median level, the bill increases from nuclear would be higher. For example, for a four-person household the bill impact would be AUD972/year on average across nuclear scenarios and states, and for a five-person household AUD1,182/year.
How nuclear costs are reflected on electricity bills
These results might come as surprising to some, because large-scale nuclear is a mature technology currently in use across a wide range of countries. In addition, misinterpreted data on retail electricity prices (which also include the costs of powerlines and taxes, not just generators and so is misleading) can show some cases of nations that use nuclear who have lower retail prices than Australia.
However, in almost all cases around the world, the cost of nuclear power plant construction and financing is not fully reflected in market prices for power. This is because either nuclear power plants are very old and their costs are largely depreciated, or governments have acted to recover the costs either through taxpayers, or via levies which are independent of electricity markets – for example in France, the UK and Ontario, Canada. In other jurisdictions, such as a number of US states including Georgia where the Vogtle power plant is located, there isn’t actually an electricity market in operation, with consumers instead served by a regulated monopoly without any competitive choice.
The Coalition has outlined something different, ruling out taxpayer subsidies and stating that any government investments in nuclear plants would receive a commercial return. This implies that the Coalition expect that wholesale electricity market prices will be sufficient for nuclear power plants in each state to recover their construction costs plus a commercial level of return. The Coalition has also outlined that these nuclear power plants would operate at full capacity almost all of the time. Therefore, power prices would need to average out at the level a nuclear plant needs to be commercially viable – to recover their costs – almost all of the time.
High costs of recent nuclear projects
The reason bills increased in this study is because recent large-scale nuclear projects across Europe and North America involved very high costs. The European Pressured Reactor (EPR) program had promised to deliver more efficient, safer nuclear power. However, the three recent projects (Olkiluoto 3, Flamanville 3 and Hinkley Point C), which have either just been completed or are under construction, have all faced construction challenges, delays and cost-blowouts. If plants with similar costs and characteristics were built in Australia, they would require a levelised cost of electricity (LCOE) between AUD250 per megawatt-hour (MWh) and AUD346/MWh to recover their costs.
A few other types of reactors are being built or considered internationally of a similar design to what the Coalition indicates might be built in Australia: the South Korean APR1000 design proposed at Dukovany in the Czech Republic; and a Westinghouse AP1000 design recently completed at Vogtle in the US. The Vogtle plant experienced seven years of delays and actual capital costs (excluding financing costs) 1.7 times the original estimates. Those plants present LCOEs of between AUD197 and AUD220 per MWh in an Australian context – noting the Dukovany costs are only initial pre-construction estimates and could rise.
Based on NuScale, we estimate that the LCOE of nuclear SMR in an Australian context would be AUD289/MWh – but could be far higher if construction extends beyond the 3.25 years used in this study – as financing costs increase as construction timelines extend.
Capital costs (excluding financing costs) of recent nuclear power builds have tended to blow out by a factor of between 1.7 and 3.4, leading to financial difficulties for companies involved. All conventional nuclear projects built in recent years in the US and Europe – Vogtle, Olkiluoto 3, Hinkley Point C and Flamanville 3 – have contributed to financial difficulties for companies involved. Westinghouse, which was the technology provider for Vogtle, filed for bankruptcy protection in 2017. France’s AREVA, who was the original technology provider for Olkiluoto 3, Flamanville 3 and Hinkley Point C, came close to bankruptcy over 2015, which required a French Government-sponsored bail-out.
The chart below [on original] details the wholesale market prices required for each of the recently constructed or quoted nuclear plants to be commercially viable, relative to the current wholesale electricity costs being passed through in household electricity bills in the regions of Victoria, NSW, South East Queensland (SEQ) and South Australia (SA).
[Figure 2: Current wholesale energy cost (WEC) component of current household bills compared to commercial price to recover nuclear plant costs in Australian context (AUD/MWh)]
Australia would likely face even higher large-scale nuclear costs than these recent international examples, due to the country’s limited nuclear capability and the small size of any potential Australian nuclear build-out program. With seven nuclear power stations proposed (two of them SMR-only), all at separate sites, there will be limited scope to achieve learning-based cost reductions like those seen in a large continuous build program, for example the build program in South Korea on which CSIRO’s GenCost costings are based. South Korea has built 26 reactors since the 1970s. Further, the assumptions in this report have provided an optimistic levelised cost of electricity for nuclear, for example using a 60-year economic lifetime, 93% capacity factor, and a low discount rate.
Our analysis suggests household power bills would need to rise significantly for nuclear power plants to become a commercially viable investment in the absence of substantial, taxpayer-funded government subsidies. In IEEFA’s opinion, any plan to introduce nuclear energy in Australia – such as that proposed by the Coalition – should be examined thoroughly, with particular focus on the potential impact on electricity system costs and household bills, and with detailed analysis of alternative technologies such as renewables and firming.
New logo for Geological Disposal Facility (GDF) represents a costly conversation
‘£4,600 excluding VAT’ was the answer to the query posed to Nuclear
Waste Services by NFLA Secretary Richard Outram who asked about the cost of
commissioning a new logo for the GDF Theddlethorpe Community Partnership.
With two speech bubbles signifying a conversation, the new logo was
conceived by House 337, who are ‘experts at building brands across many
sectors’. House 337 is an arm of NWS’s ‘contracted strategic delivery
partner’, MHP. Wags might suggest that a single speech bubble signifying
a one-sided conversation or a deaf ear signifying an inattentive NWS might
have been more appropriate.
NFLA 16th Sept 2024
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Now until to February 10, 2026 Radioactive waste storage in France: the debate is finally open! How to participate?
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