Emirates Nuclear Energy Corp chooses site for first UAE nuclear power station

http://www.middle-east-online.com/english/?id=38585

Glad to see even fossil fuel rich nations looking at nuclear energy. Currently exactly 100% of UAE power comes from fossil fuels (oil & natural gas) however at peak summertime there is crippling power shortages in UAE. The simple decision would be to just build 3 or 4 more oil or natural gas turbines.

Add UAE to the long (and growing) list of nations that didn't get them memo that nuclear is dead.

:shrug:

You would need a cruise missile to even scratch the paint on the containment dome. In fact, the Japanese tested what would happen if an airliner were slammed into a reactor containment building--some concrete spalled off the inner side of the wall. That was the extent of the internal damage.

As a matter of fact, to get through the containment dome you'd need a military-grade high-speed air-dropped bomb with a steel penetrator nosecap and delayed impact detonation fuse. In other words, you would need to be a modern military force.

This PROVES Peak Oil! lol.

than those junk science "studies" proclaim.

I mean $0.30 per kWh. Really? Off the charts stupid. Nobody would be building reactors if that were true.

Of course if you assume a reactor only last 20 years, has a capacity factor of 70%, costs $10 to $15 billion per reactor, has an interest rate higher than my credit card, and takes 20 years to build then yeah it costs $0.30 per kWh. The only problem with that is that "study" doesn't resemble reality.

It simply tells you that IF all those conditions apply THEN nuclear is $0.30 per kWh.
Of course if those conditions don't apply then the conclusion doesn't apply either.

4 reactors as a loss leader. You think Korea is stupid enough to sell reactors at a loss in hopes of making it back on future sales.

Generally when you have a loss leader it needs to LEAD to something.

http://www.eia.doe.gov/emeu/cabs/UAE/Full.html

UAE latest stats I could find.
15.7 GW of installed electrical capacity
71.5 billion kWh annual generation.

Deal is for 4x 1.4 GW reactors from South Korea. 5.6GW is roughly a 36% in capacity increase.

Assumming these new reactor only have a capacity factor equal to global average (85%)
That is 5.6 * 24 * 365 * 0.85 / 1000 = 41.7 billion kWh.

This "loss leader" will supply 50% of UAE electrical demand. :rofl:

I mean this is the UAE not UK. It isn't like they are going to build 4 reactors now and suddenly need 8 more in a couple years.

They want it to lead to sales to other countries.
Get a foot in the door, promise anything to close the sale, then renegotiate later.
You think the Korean government got so involved just to make this one sale?

I didn't think so; so you really have no idea what it will cost. The cost report you try to misrepresent is one of the most comprehensive out there. It was prepared by a CPA specializing in costing out coal and nuclear plants: "Craig A. Severance, CPA is co-author of The Economics of Nuclear and Coal Power (Praeger 1976), and former Assistant to the Chairman and to Commerce Counsel, Iowa State Commerce Commission."

Let's look at your straw man:

Your claim, "I mean $0.30 per kWh. Really? Off the charts stupid".
The truth is that he gives a range of cost for delivered electricity from new nuclear plants of $0.25 - $0.30/kwh.

Your claim, "if you assume a reactor only last 20 years".
The truth is that Severence uses a 40 year payback period - the same as the MIT study you endorse.

Your claim, "if you assume ...has a capacity factor of 70%".
The truth is that he uses a lifetime capacity factor of of 80%, which is a GOOD number given that the lifetime historical average of plants in the US is 71% (a number that excludes the real failures).


Your claim, "if you assume ...costs $10 to $15 billion per reactor".
He uses an overnight cost of $4 billion for a 1GW reactor. That is from the ACTUAL estimates submitted by the vendor for the Florida Power and Light; it is mid-way between their "Low Cost Estimate" and their "Most Likely Estimate"

Your claim, "if you assume ...has an interest rate higher than my credit card".
The truth is that Severance uses the same interest rate that the MIT study you endorse uses.

Your claim, "if you assume ...takes 20 years to build".
The truth is that he doesn't make any direct assumptions regarding the time to build. What he does instead the standard accounting practice of using a "construction cost escalation factor" to predict the average amount of cost increases above the initial estimate. The number he uses is from Cambridge Energy Research Associates' Power Capital Costs Index (PCCI). This is what the PCCI is composed of:
The IHS CERA Power Capital Costs Index (PCCI) Leveraging IHS CERA's Index + Scenarios methodology, the PCCI tracks and forecasts the costs associated with the construction of a portfolio of 30 different power generation plants in North America. The PCCI tracks the costs of building coal, gas, wind and nuclear power plants, indexed to year 2000. The PCCI is a work product of the Capital Costs Analysis Forum for Power-North America, an annual renewable service managed by IHS CERA."


You wrote, "if you assume (all that) then yeah it costs $0.30 per kWh. The only problem with that is that "study" doesn't resemble reality."

The TRUTH is that the probable range of the cost of new nuclear is going to be $0.25 - $0.30 /kwh.

All of his numbers have a firm basis in fact. What they do not do is engage in data trimming designed to falsify the probable cost of the completed product.

It is the difference between listening to a dishonest used car salesman, and a CPA hired by Consumer Reports.

I strongly encourage everyone to evaluate the work of Severance for themselves. It is an original analysis, not a review of other studies based on Nuclear Industry data. You can download it with this link:
http://climateprogress.org/wp-content/uploads/2009/01/nuclear-costs-2009.pdf

A partial answer to the question of why people would support nuclear power when the costs are set to be that high can be found in the review of cost studies that was compiled by Cooper. The "Bandwagon Effect" he sees is a by-product of low-ball estimates and information control by the nuclear power industry.
You can read a brief version of Cooper's thesis here, where the full analysis is available for download.
http://www.olino.org/us/articles/2009/11/26/the-economics-of-nuclear-reactors-renaissance-or-relapse

The Bandwagon Effect



The bottom line is, "DON'T TRUST THE SALES FORCE OF THE NUCLEAR POWER INDUSTRY".

If only someday you'd learn to stop trying to obfuscate your meaning. But then, you couldn't just try and bamboozle the bystanders into thinking that you know what you're talking about.

but some people do appreciate it.

:rofl:
:rofl:
:rofl:
:rofl:

Utilities are in the business of selling power. Period. They don't give a flying crap what technology does it. If you could fire out a way to make electrical power from monkey farts and it was reliable and costs $0.05 per kWh they would buy that. They produce and sell power. MEAG for example has solar plants, wind plants, nuclear plants, combined cycle natural gas plants, even coal and oil plants. They could have chosen any form of power for their new plants. They chose nuclear.

They are in the business of creating sources of power. Somehow you figured out the "secret" that nuclear energy is 6x the wholesale rate of power in the United States. That they will lose $0.25 on every kWh they "sell". The utilities with decades of experience running reactors (and other sources of power), years of historical data, and armies of accountants/economist/demand analyst couldn't discover the secret that the power source they are building cost 600% of what they can sell power at. They all got it wrong. But Kris the completely unbiased neutral on nuclear guy discovered the best kept secret in the world (55 reactors under construction 98 planned including 4 new ones in UAE).

All your other claims are equally wrong.
MIT cost for nuclear power 6.6 cents per kWh. :rofl:

$0.30 cents per kWh. :rofl:

Up = Down
Peace = War
$0.066 = $0.30

That is why you need the loan guarantees, and the federal acceptance of liability, and the federal insurance against delays, and the loans from the federal bank, and the rate increases that occur before the plant is built, to mention a few of the tricks that hide the real costs.

You made a series of overtly dishonest claims that were just proved wrong. It was as clear an instance of dishonesty as I have seen, I mean, you didn't give even ONE accurate piece of information regarding the study. That is a clearly established pattern with you.

Why should ANYONE believe ANYTHING you write.

Let's take another look:
I didn't think so; so you really have no idea what it will cost. The cost report you try to misrepresent is one of the most comprehensive out there. It was prepared by a CPA specializing in costing out coal and nuclear plants: "Craig A. Severance, CPA is co-author of The Economics of Nuclear and Coal Power (Praeger 1976), and former Assistant to the Chairman and to Commerce Counsel, Iowa State Commerce Commission."

Let's look at your straw man:

Your claim, "I mean $0.30 per kWh. Really? Off the charts stupid".
The truth is that he gives a range of cost for delivered electricity from new nuclear plants of $0.25 - $0.30/kwh.

Your claim, "if you assume a reactor only last 20 years".
The truth is that Severence uses a 40 year payback period - the same as the MIT study you endorse.

Your claim, "if you assume ...has a capacity factor of 70%".
The truth is that he uses a lifetime capacity factor of of 80%, which is a GOOD number given that the lifetime historical average of plants in the US is 71% (a number that excludes the real failures).


Your claim, "if you assume ...costs $10 to $15 billion per reactor".
He uses an overnight cost of $4 billion for a 1GW reactor. That is from the ACTUAL estimates submitted by the vendor for the Florida Power and Light; it is mid-way between their "Low Cost Estimate" and their "Most Likely Estimate"

Your claim, "if you assume ...has an interest rate higher than my credit card".
The truth is that Severance uses the same interest rate that the MIT study you endorse uses.

Your claim, "if you assume ...takes 20 years to build".
The truth is that he doesn't make any direct assumptions regarding the time to build. What he does instead the standard accounting practice of using a "construction cost escalation factor" to predict the average amount of cost increases above the initial estimate. The number he uses is from Cambridge Energy Research Associates' Power Capital Costs Index (PCCI). This is what the PCCI is composed of:
The IHS CERA Power Capital Costs Index (PCCI) Leveraging IHS CERA's Index + Scenarios methodology, the PCCI tracks and forecasts the costs associated with the construction of a portfolio of 30 different power generation plants in North America. The PCCI tracks the costs of building coal, gas, wind and nuclear power plants, indexed to year 2000. The PCCI is a work product of the Capital Costs Analysis Forum for Power-North America, an annual renewable service managed by IHS CERA."


You wrote, "if you assume (all that) then yeah it costs $0.30 per kWh. The only problem with that is that "study" doesn't resemble reality."

The TRUTH is that the probable range of the cost of new nuclear is going to be $0.25 - $0.30 /kwh.

All of his numbers have a firm basis in fact. What they do not do is engage in data trimming designed to falsify the probable cost of the completed product.

It is the difference between listening to a dishonest used car salesman, and a CPA hired by Consumer Reports.

I strongly encourage everyone to evaluate the work of Severance for themselves. It is an original analysis, not a review of other studies based on Nuclear Industry data. You can download it with this link:
http://climateprogress.org/wp-content/uploads/2009/01/nuclear-costs-2009.pdf

A partial answer to the question of why people would support nuclear power when the costs are set to be that high can be found in the review of cost studies that was compiled by Cooper. The "Bandwagon Effect" he sees is a by-product of low-ball estimates and information control by the nuclear power industry.
You can read a brief version of Cooper's thesis here, where the full analysis is available for download.
http://www.olino.org/us/articles/2009/11/26/the-economics-of-nuclear-reactors-renaissance-or-relapse

The Bandwagon Effect



The bottom line is, "DON'T TRUST THE SALES FORCE OF THE NUCLEAR POWER INDUSTRY".

Utilities all over the world (many who are very conservative and have existed for 70, 80, 90 years) are too stupid to figure out the reactors they are building right now (55 currently under construction) cost 600% of the power they will be able to sell.

You got it man. It just makes so much sense.

1) Build Something you can't afford
2) Go bankrupt
3) Govt takes ownership of reactor and sells it to a 3rd party (condition of loan guarantee).
4) Lose everything.
....
5) Profit

:rofl:

The analysis is for US plants, you brought it up in this thread and made 7 demonstrably false claims regarding the content of the study. Now you are flipping back and forth between US and overseas projects and markets to use whatever sounds good - you have no regard for the truth.

Your position against Severance is this:
False claims that were revealed for the fabrications they were.
Baseless ridicule.

You argument for the nuclear industry is that they have had some modest success at exploiting concerns about AGW and have landed some suckers.

I dealt with the reason entities might be making a bad decisions based on bad information on nuclear costs at the end of the post quoted below. Cooper wrote of the Bandwagon Effect and those who are interested should download the full paper for a better understanding of how initial enthusiasm based on inflated nuclear industry hype gives way to reality. The link is at the graph posted below.

MIT study is valid and MIT is well recognized as a leader in innovation & research in this country.

MIT analysis (in 2009 update) is that new nuclear has a cost of 6.6 cents per kWh. That is total life-cycle costs.

Research backed by the most prestigious research university in the United States
vs.
A nobody crank who in 1976 wrote a paper advocating the use of coal power (over the "necessary and expensive" nuclear).

$0.30 per kWh. I mean come on really? I mean nuclear is dead if it costs $0.15 per kWh. $0.30 is just off the charts laughably stupid. :rofl: None of his assumptions are valid. You might want to actually read the study and see how he pads the numbers. None of your "defenses" are valid.

Just one example:
Your claim, "if you assume ...costs $10 to $15 billion per reactor".
He uses an overnight cost of $4 billion for a 1GW reactor. That is from the ACTUAL estimates submitted by the vendor for the Florida Power and Light; it is mid-way between their "Low Cost Estimate" and their "Most Likely Estimate"

Not even close. Try $10,000 per KW. That's like $16 billion on a 1600MW reactor. Well holy crap imagine that if cars costs $150,000 each then the cost per mile will be high too. :rofl:

Same thing with cost of capital. MIT has weighted costs of capital at 10% for one scenario and 7.8% for another. Far more realistic than financing a nuclear reactor on a capitalone credit card.



so under 3 realistic scenarios:
No carbon costs + high risk premium for nuclear
Fossil Fuels: 6.35 cents per kWh
Nuclear: 8.4 cents per kWh

Carbon costs + high risk premium for nuclear
Fossil Fuels: 7.9 cents per kWh
Nuclear: 8.4 cents per kWh

Standard Cost of Capital for nuclear
Fossil Fuels: 6.35 cents (w/ no carbon tax) 7.9 cents per kWh (w/ carbon tax)
Nuclear: 6.6 cents per kWh

Under fantasy land scenario:
nuclear: 30 cents per kWh. :rofl


That last bolded part in quote has always been my belief and I have stated it many times.
What happens in GA, VA, and TX will determine if nuclear can be viable. You just want to assume it is dead now (despite all evidence to contrary).

The evidence is below. You NEVER use an all in cost for your discussions, you ALWAYS use overnight cost. Both are part of Severance's study, and the well defined overnight cost that you always use is $4k/kw. He does have an "all in Capital cost" number which is what you are now talking about.

The MIT analysis cost number is on the chart below. It is one of the lowest numbers out there. The validity of their work has been established by the nearly 400% overnight cost increase they didn't foresee in their 2003 study.

Wow imagine that! If you double the cost of something the price goes up. What expert analysis.

If you then add 50% on top of the double cost (now tripled) in interest charges during construction it goes even higher.
Note: this isn't lifetime interest just interest during construction (once again on the Capital one card at 150% of capital costs predicted by anyone else).

So if you take something that is cost effective and then double it and then add another 50% in finance charges it is now expensive.
Give this guy the Nobel prize in economics.

He gives all his sources, can you show that the data behind his numbers is false?

Overnight cost excludes interest and rises in costs during construction. Since he is using a standard that is industry wide and incorporates not only experience with nuclear but also with coal and natural gas, I don't know where you have room to dispute the numbers.

As to the interest, that too is a standard number. Loan guarantees are intended only for the first few plants so the proper number to use is market rates. He uses the same rates that MIT used, so where is your beef there?

If you were a news station your motto would be "all bullshit, all the time."

I provided you the exact QUOTE to MIT report showing cost of capital of 7.8% and 10%. He uses a CREDIT CARD rate for financing nuclear reactors.

Here is the EXACT quote from MIT report (plus some footnotes showing more false numbers used by fake study)



Still going to keep lying and say he used same numbers as MIT.
Cost of capital 7.8% and 10%
construction time: 5 years
Capacity Factor: 85%

Real study:
6.6 cents to 8.4 cents per kWh for nuclear power (using conservative numbers).

Fantasy land anti-nuker study:
30 cents :rofl


The only thing your study "proves" is that you should never try to finance a nuclear reactor at credit card interest rates. Then again I think 99% of Americans would know that putting $10 billion on an VISA is not a good idea.

Table 5.3 Base Case Assumptions, Chapter 5, page 43


Page 134, Investor Returns

From
The Future of Nuclear Power
Copyright © 2003 Massachusetts Institute of Technology

2003 study = 7 years old and based on assumptions correct 7 years ago (interest rate, inflation, capacity factor, etc)
2009 study = 1 year old and based on current assumptions.

Strange there are two studies and you pick the one 7 years old. Very curious.

Of course MIT explains it all you just don't like the explanation.
Things like every year since 2003 has been 90%+ capacity factor making them re-evaluation capacity factor.
Things like 8 reactors getting 20 year extensions making 40 year life more likely.
Things like commodity costs are much higher but interest costs are much lower.

2009 is the updated reference from MIT unless you want to start quoting 5.5 cents per kWh for nuclear.

The combined cost of capital in 2009 MIT report is 10% & 7.2% depending on level of risk premium.

I strongly recommend you finance all your personal nuclear reactors at 10% or preferably 7.2% not credit card rates.
I absolutely agree that financing expensive things (that you then double in price) at credit cards rates is not a good idea.

and tried to salvage some of their original positive vibes by fudging different numbers.

They have been far more thoroughly discredited as legitimate analysis than the independent studies for the MIT study WAS PROVEN GROSSLY OPTIMISTIC BY TIME WHILE THE INDEPENDENT STUDIES HAVE BEEN MUCH, MUCH CLOSER TO THE MARK.

Only in your mind.

Given that no new reactors have been built in the US and no reactors even fully funded an estimates of capacity factor, capital costs, construction time, and cost per kWh are at best estimates. This they are all estimates and most follow the same model so what really matters is the input.

The one you like just happens to have all the inputs that are the far worst (almost off the charts stupid) for nuclear power. It really isn't surprising that it comes out with the highest cost. Huh?

However the one you quote is an extreme outlier. So looking at recent studies you got prices in range of 6 cents to 11 cents and then a smaller group at 13 cents to 16 cents. Then a single study at 22 cents + 8 cents operating costs = 30 cents.


So you pick the one that is two standard deviations outside the rest of the range and it just "happens" to be the MOST EXPENSIVE "study" of nuclear power. Wow that just must be a coincident huh?

It also just so happens to be written by a guy who in 1976 advocated dropping nuclear power to build MORE COAL PLANTS. Wait a second coal and nuclear compete for baseload energy guess that is just a coincidence.

I like the Severance study not because of the result, but because the approach is very comprehensive, the inputs are rock solid, and the clarity of the entire study is exceptional.

I urge everyone to look at it and make their own decisions.

http://climateprogress.org/wp-content/uploads/2009/01/nuclear-costs-2009.pdf

The predictive accuracy of the independent analysts is demonstrated with Makhijani analysis of the Texas STP deal in 2007.
http://www.ieer.org/reports/nuclearcosts.pdf

Pure coincidence?

inputs rock solid:
credit card interest rates
extended construction schedules
doubled prices
no depreciation
no early repayment of loans
too much equity stake
80% capacity factor

then as if that wasn't insultingly stupid = 22 cents. he adds 8 cents in O&M costs. 8 cents? O&M costs are reported by companies and public utilities every year. At 8 cents O&M and averaqe wholesale power of 5.5 cents they would be negative cashflow EVEN IF THE REACTOR WAS GIVEN TO THEM FOR FREE!


Someone can be anti nuclear and still see that it is a hit job.
Still I do agree with him.
"Never build nuclear reactors financed by your VISA card.

All you have is the same line of bullshit stats, no one is buying it.


The cost report you try to misrepresent is one of the most comprehensive out there. It was prepared by a CPA specializing in costing out coal and nuclear plants: "Craig A. Severance, CPA is co-author of The Economics of Nuclear and Coal Power (Praeger 1976), and former Assistant to the Chairman and to Commerce Counsel, Iowa State Commerce Commission."

Let's look at your straw man:

Your claim, "I mean $0.30 per kWh. Really? Off the charts stupid".
The truth is that he gives a range of cost for delivered electricity from new nuclear plants of $0.25 - $0.30/kwh.

Your claim, "if you assume a reactor only last 20 years".
The truth is that Severence uses a 40 year payback period - the same as the MIT study you endorse.

Your claim, "if you assume ...has a capacity factor of 70%".
The truth is that he uses a lifetime capacity factor of of 80%, which is a GOOD number given that the lifetime historical average of plants in the US is 71% (a number that excludes the real failures).


Your claim, "if you assume ...costs $10 to $15 billion per reactor".
He uses an overnight cost of $4 billion for a 1GW reactor. That is from the ACTUAL estimates submitted by the vendor for the Florida Power and Light; it is mid-way between their "Low Cost Estimate" and their "Most Likely Estimate"

Your claim, "if you assume ...has an interest rate higher than my credit card".
The truth is that Severance uses the same interest rate that the MIT study you endorse uses.

Your claim, "if you assume ...takes 20 years to build".
The truth is that he doesn't make any direct assumptions regarding the time to build. What he does instead the standard accounting practice of using a "construction cost escalation factor" to predict the average amount of cost increases above the initial estimate. The number he uses is from Cambridge Energy Research Associates' Power Capital Costs Index (PCCI). This is what the PCCI is composed of:
The IHS CERA Power Capital Costs Index (PCCI) Leveraging IHS CERA's Index + Scenarios methodology, the PCCI tracks and forecasts the costs associated with the construction of a portfolio of 30 different power generation plants in North America. The PCCI tracks the costs of building coal, gas, wind and nuclear power plants, indexed to year 2000. The PCCI is a work product of the Capital Costs Analysis Forum for Power-North America, an annual renewable service managed by IHS CERA."


You wrote, "if you assume (all that) then yeah it costs $0.30 per kWh. The only problem with that is that "study" doesn't resemble reality."

The TRUTH is that the probable range of the cost of new nuclear is going to be $0.25 - $0.30 /kwh.

All of his numbers have a firm basis in fact. What they do not do is engage in data trimming designed to falsify the probable cost of the completed product.

It is the difference between listening to a dishonest used car salesman, and a CPA hired by Consumer Reports.

I strongly encourage everyone to evaluate the work of Severance for themselves. It is an original analysis, not a review of other studies based on Nuclear Industry data. You can download it with this link:
http://climateprogress.org/wp-content/uploads/2009/01/nuclear-costs-2009.pdf

A partial answer to the question of why people would support nuclear power when the costs are set to be that high can be found in the review of cost studies that was compiled by Cooper. The "Bandwagon Effect" he sees is a by-product of low-ball estimates and information control by the nuclear power industry.
You can read a brief version of Cooper's thesis here, where the full analysis is available for download.
http://www.olino.org/us/articles/2009/11/26/the-economics-of-nuclear-reactors-renaissance-or-relapse

The Bandwagon Effect



The bottom line is, "DON'T TRUST THE SALES FORCE OF THE NUCLEAR POWER INDUSTRY".

Your belief that they are based on same values is 100% false.

One used real values and got 6.6 cents per kWh.
The other used anti-nukker crazy math (like financing it with a credit card) and got 30 cents per kWh.

One is right in line (although on the low end) with all the other estimates in a nice pack 6 cents to 11 cents. The other is way up in the stratosphere all by itself.

Strange that no other anti-nuclear study reached such insane conclusions. Likely they had at least some academic and professional reputation to protect. I mean overestimating the cost 20%, 50% is one thing. Overestimating it by 500% is just downright stupid.

Generally that is called an outlier. In polling a single outlier isn't taken as gospel. Even in the Olympics they disregard the lowest and highest scores to get rid of the outlier effect.

All you have is the same line of bullshit stats, no one is buying it.


The cost report you try to misrepresent is one of the most comprehensive out there. It was prepared by a CPA specializing in costing out coal and nuclear plants: "Craig A. Severance, CPA is co-author of The Economics of Nuclear and Coal Power (Praeger 1976), and former Assistant to the Chairman and to Commerce Counsel, Iowa State Commerce Commission."

Let's look at your straw man:

Your claim, "I mean $0.30 per kWh. Really? Off the charts stupid".
The truth is that he gives a range of cost for delivered electricity from new nuclear plants of $0.25 - $0.30/kwh.

Your claim, "if you assume a reactor only last 20 years".
The truth is that Severence uses a 40 year payback period - the same as the MIT study you endorse.

Your claim, "if you assume ...has a capacity factor of 70%".
The truth is that he uses a lifetime capacity factor of of 80%, which is a GOOD number given that the lifetime historical average of plants in the US is 71% (a number that excludes the real failures).


Your claim, "if you assume ...costs $10 to $15 billion per reactor".
He uses an overnight cost of $4 billion for a 1GW reactor. That is from the ACTUAL estimates submitted by the vendor for the Florida Power and Light; it is mid-way between their "Low Cost Estimate" and their "Most Likely Estimate"

Your claim, "if you assume ...has an interest rate higher than my credit card".
The truth is that Severance uses the same interest rate that the MIT study you endorse uses.

Your claim, "if you assume ...takes 20 years to build".
The truth is that he doesn't make any direct assumptions regarding the time to build. What he does instead the standard accounting practice of using a "construction cost escalation factor" to predict the average amount of cost increases above the initial estimate. The number he uses is from Cambridge Energy Research Associates' Power Capital Costs Index (PCCI). This is what the PCCI is composed of:
The IHS CERA Power Capital Costs Index (PCCI) Leveraging IHS CERA's Index + Scenarios methodology, the PCCI tracks and forecasts the costs associated with the construction of a portfolio of 30 different power generation plants in North America. The PCCI tracks the costs of building coal, gas, wind and nuclear power plants, indexed to year 2000. The PCCI is a work product of the Capital Costs Analysis Forum for Power-North America, an annual renewable service managed by IHS CERA."


You wrote, "if you assume (all that) then yeah it costs $0.30 per kWh. The only problem with that is that "study" doesn't resemble reality."

The TRUTH is that the probable range of the cost of new nuclear is going to be $0.25 - $0.30 /kwh.

All of his numbers have a firm basis in fact. What they do not do is engage in data trimming designed to falsify the probable cost of the completed product.

It is the difference between listening to a dishonest used car salesman, and a CPA hired by Consumer Reports.

I strongly encourage everyone to evaluate the work of Severance for themselves. It is an original analysis, not a review of other studies based on Nuclear Industry data. You can download it with this link:
http://climateprogress.org/wp-content/uploads/2009/01/nuclear-costs-2009.pdf

A partial answer to the question of why people would support nuclear power when the costs are set to be that high can be found in the review of cost studies that was compiled by Cooper. The "Bandwagon Effect" he sees is a by-product of low-ball estimates and information control by the nuclear power industry.
You can read a brief version of Cooper's thesis here, where the full analysis is available for download.
http://www.olino.org/us/articles/2009/11/26/the-economics-of-nuclear-reactors-renaissance-or-relapse

The Bandwagon Effect



The bottom line is, "DON'T TRUST THE SALES FORCE OF THE NUCLEAR POWER INDUSTRY".

Of course with Kerry new bill the cost of coal is going up a penny or two per kWh (carbon tax) so I wonder how that will change MIT update.

Message removed by moderator. Click here to review the message board rules.

The 2009 numbers you quote:
Nuclear is financed at 50% debt, with a debt cost of capital of 8% and an equity cost of capital of 15%.

Severance:
Cost of Capital: If you wanted to build a house and it took 10 years to build it, you can easily see how the cost of interest during construction would be a major component of the construction cost. This is exactly the situation with the costs of building a new nuclear power plant. As both equity and borrowed funds are used, and both expect requisite returns, an average weighted cost of capital of 14.5% is assumed .** The Cost of Capital never goes away – money always has its cost. Some utilities propose to “lower costs” by charging financing costs to ratepayers during construction. However, “early recovery” charges simply force ratepayers to pay extra financing costs to make ends meet. You can hide, but not eliminate the Cost of Capital.

**15% after-corporate-tax ROE (As assumed by the MIT study, which includes a 3% “risk premium” on equity for nuclear utilities), payout from facility before 39% corporate taxes is thus 24.59%; 6.25% interest on debt portion; 45% equity/55% debt. Avg. Weighted Cost is thus = (.2459 x .45) + (.0625 x .55). Note the 6.25% interest rate is below recent bond rates.


So severance uses 6.25% for 55% of the debt and 15% for the other 45%.
MIT used 8% for 50% of the debt and 15% for the other 50%.

Now if I were a nuclear supporter, I'd screech about your obvious lack of math skills, but I don't think that's it; I attribute it to your lack of desire to tell the truth.

Once again here is the relevant text from MIT 2009 study & Severance "Study". Reading comprehension shouldn't be this hard.

MIT used a 50/50 split = 10% combined cost of capital
50% bond @ 8%
50% equity @ 15%

MIT reduced risk premium scenario 60/40 split = 7.8% combined cost of capital
60% bond @ 8%
40% equity @ 15%

]Severance "credit card financing" 55/45 split = 14.5% cost of capital
55% bond @ 6.25%
45% equity @ 24.59%

Please tell me which stocks have provided a 24.59% return on investor equity FOR 40 friggin years straight? Certainly no utility I have seen. Certainly not the S&P 500. Certainly not 99.999999999% of stocks. Tell me what corporation pays 39% corporate tax rate?
24.59% that is ALMOST DOUBLE the average return on shareholder equity in last 50 years (13.2%).

Lets see if any nuclear utilities are return 24.59% to shareholders annually (because if they are I will be putting my money there).
http://www.google.com/finance?q=NYSE%3ASO SO - 11.9% return on equity
http://www.google.com/finance?q=NYSE:FPL FPL - 13.2% return on equity
http://www.google.com/finance?q=NYSE%3AETR Entergy - 14.85 return on equity

So do you think maybe projecting an average shareholder return higher than any nuclear utility has achieved in the past is somewhat unrealistic. Just maybe.

As a result his cost of capital is CREDIT CARD RATES! For the last time I strongly recommend nobody try to finance a nuclear reactor on credit card.

So:
he assumes higher cost of capital - CREDIT CARD FINANCE RATES
he assume a higher construction period - 10 years
he assumes an utterly laughable 39% corporate tax rate (find me a single company that paid 39% taxes last year)
he assumes an 80% "best case" capacity factor while global average is 85% and US utilities now achieve 92%

Once again if you double the cost of a reactor, financing it on credit card, take a decade to build it, and give your shareholders the highest return ever seen for utility stock in history of the United States well then I guess nuclear power in $0.30. Then again those conditions don't exist in the real world.

Moral of the story: Don't finance multi billion purchases on credit cards.

The tactics employed by that you are responding to are typical denialist tactics. Deny-deny-deny-spin-spin-spin.

I mean really, are you on some kind of medication that causes problems with short term memory?

Perhaps this will ring a bell (from post #23):






The use of the after tax equity rate by MIT is just another case of data trimming.

Now are you completely clueless or are both the interdisciplinary team at MIT and Severance the CPA both lying.

also notice the "applied after expenses, interest and tax depreciation" your study doesn't reduce tax burden by anything simply calculates it a straight 39% of gross profit. Depreciation on a $10 billion reactor over 15 years (accelerated depreciation) is a lot of tax reduction per year. As does tens of million in interest due each quarter.

15% shareholder pre-tax return on equity is realistic. I provided you examples on actual utilities with returns in that ballpark. 24.59% is simply not even in the ballpark of realistic. No utility ever in the history of the United States has provided a 24.59% return compounded over 40 years. 24.59% compounded over 40 years is about 659,671%. $10K invested in 1970 in this hypothetical nuclear utility would be worth $65 million. :rofl:

So the mistakes is compounded. First an unrealistically high level of return (for low beta utility stocks) is assumed. Then the pre-tax profit required to create that return is amplified by "assuming" company had 39% tax rate when in reality they might have a 39% tax rate AFTER THEIR LARGEST EXPENSES (depreciation & interest) which would be more like 18%-22% effective tax rate.

However for the sake of argument find me a utility (and utility) that:
a) returned 24.59% or more to shareholders
b) had gross tax rate of 39% (taxes 39% of gross earnings)

I don't need to continue to hammer the point home.

Severance is a CPA, and you are a dishonest broker as evidenced by the ceaseless stream of proven false statements on this thread. Your assertions have no merit on their face.

The TRUTH is that the probable range of the cost of new nuclear is going to be $0.25 - $0.30 /kwh.

All of his numbers have a firm basis in fact. What they do not do is engage in data trimming designed to falsify the probable cost of the completed product.

It is the difference between listening to a dishonest used car salesman, and a CPA hired by Consumer Reports.

I strongly encourage everyone to evaluate the work of Severance for themselves. It is an original analysis, not a review of other studies based on Nuclear Industry data. You can download it with this link:
http://climateprogress.org/wp-content/uploads/2009/01/nuclear-costs-2009.pdf

A partial answer to the question of why people would support nuclear power when the costs are set to be that high can be found in the review of cost studies that was compiled by Cooper. The "Bandwagon Effect" he sees is a by-product of low-ball estimates and information control by the nuclear power industry.
You can read a brief version of Cooper's thesis here, where the full analysis is available for download.
http://www.olino.org/us/articles/2009/11/26/the-economics-of-nuclear-reactors-renaissance-or-relapse

The Bandwagon Effect

Until you do you are irrelevant.

You've recognized that all are using the same math and that it's the assumptions that make the difference... now you've claimed that Severance used lower numbers.

You do recognize that if both were true he would have come up with lower results, right?

Did he?

But they MUST be right be this time - they're VALID!
Suckers!
:rofl:

Copper:


Stainless Steel:
?24f7e361-93e5-48d5-9d3f-edde7f28034d

I don't have a easy to find chart of high carbon steel or rebarb but they doubled and tripled respectively.

Commodity prices aren't a nuclear specific cost. Price of everything that was commodity dependent rose also. Of course MIT addressed this in 2009 report.

MIT 2003 reports wasn't to suggest the price was static and would never change. 6 years passed since it was published and price of commodities doubled and in some cases tripled. Crazy of them to release an updated report when commodity prices have gone up.

It came out 3 years ago.

THINGS CHANGED IN 6 YEARS. Namely commodities doubled (and in some cases tripled) in price.
CRAZY how that might affect something like a nuclear reactor which is thousands of tons of steel, copper, and concrete.

When keystone 2007 report estimated costs of nuclear reactors because of rising commodity prices you accept that.
When MIT does the same exact thing somehow that makes them a bad research organization.

Crazy people those MIT researchers. When facts change they update their model to reflect the current facts. I know it is a crazy concept for anti-nukkers who want to live in the past and use reactor lifespans and capacity factors from 3 decades ago but things do change especially over 6 years.

They don't update their model to reflect changing facts because facts are irrelevant to them.

they update models only when changing facts are worse.

For example:
capital (interest) costs are lower = not included
reactor build times have been accelerating overseas = not included
regulatory structure improved = not included
rising energy costs means the marginal for profitability improves = not included
rising capacity factor = not included
rising plant lifespan = not included

rising commodity costs raise material cost of reactors = included


See it is a cost ratchet. It can only go one way. No fact that would lower the cost of nuclear energy is included.

Dude, after all this isn't it time you faced the fact that you don't know WTF you are talking about?

According to Kidd in “Escalating Costs of New Build: What Does It Mean?” Nuclear Engineering International, 22 August 2008,
"Rising commodity prices seem to have taken a lot of the blame for the increased cost estimates, but this seems rather unfair. Steel, cement, copper and other important components have indeed risen rapidly in price, but these only account for a small proportion of the costs of a modern nuclear power plant, perhaps less than 5% of the total. What really matters is the competence and capability of the manufacturers and vendors in the supply chain, where there is huge value added."

You have zero credibility when it comes to nuclear power.

Or rather... to limit it to nuclear power. :)

Stats: commodity prices are the cause of the 4X increase in nuclear costs in the past decade.

ME: No, Steve Kidd from the World Nuclear Association says in the journal Nuclear Engineering International that commodity prices only account for about 5% of the price of new plants. Cite and quote provided:
According to Kidd in “Escalating Costs of New Build: What Does It Mean?” Nuclear Engineering International, 22 August 2008,
"Rising commodity prices seem to have taken a lot of the blame for the increased cost estimates, but this seems rather unfair. Steel, cement, copper and other important components have indeed risen rapidly in price, but these only account for a small proportion of the costs of a modern nuclear power plant, perhaps less than 5% of the total. What really matters is the competence and capability of the manufacturers and vendors in the supply chain, where there is huge value added.""

You and socks:
I think it is you who does not know what they are talking about.
You have zero credibility when it comes to nuclear power.

Priceless....

MIT 2003: $2000 per KW overnight cost
MIT 2009: $4000 per KW overnight cost

between 2003 and 2009 commodity prices doubled (and in some cases tripled).
You don't think it was a contributing factor at all.

That somehow material costs doubled and that didn't affect final cost of a reactor at all?

I never made the claim that commodity prices are the only reason nuclear energy has gotten more expensive.
It is a contributing factor.

Dude, after all this isn't it time you faced the fact that you don't know WTF you are talking about?

According to Kidd in “Escalating Costs of New Build: What Does It Mean?” Nuclear Engineering International, 22 August 2008,


"Rising commodity prices seem to have taken a lot of the blame for the increased cost estimates, but this seems rather unfair.

Steel, cement, copper and other important components have indeed risen rapidly in price, but these only account for a small proportion of the costs of a modern nuclear power plant, perhaps less than 5% of the total.

What really matters is the competence and capability of the manufacturers and vendors in the supply chain, where there is huge value added."

:)

We will find out exactly what they cost together! Our party is finally supporting nuclear power after 30 years of the same old lies.

You love to make it personal.

Is the seat still warm?

:rofl:

This thread is off to a typical start...

It's less painful than a sledgehammer to the forehead, anyway.

:shrug:

Including that image. Right click Adblock this image! :)

Plus it is environmentally friendly. Saves bandwidth which reduces energy consumption. :)

Kris only uses about 4-5 images so once you adblock them well it cleans up the majority of the graphical spam.

Hey, thanks for the edjumacashun. :toast:

And you're right. These threads are just a little more tolerable now, since I refuse to use Ignore on so much potential entertainment.

Should speed up browsing the E/E forum by quite a bit now!
:toast:

(Hmmm ... wonder if I can customise a filter to remove the MZJ block insert
that is so beloved of the readers here?)

There is a cool add on for ABP called "Ad block Plus : Element Hiding Tool".

It is useful for hiding "ad blocks - blocks of text ads inside their own element /div etc.

The problem is it looks for html code to identify which elements to block not the actual text. Maybe someone will make a new add on someday that blocks spammed text.

Thanks for saving me the time! :hi: