Dr Buzzo argued that the cost of designing reactors to meet NRC specifications and aqnd obtaining NRC licenses is the real cost killer for new nuclear plants. This might be true for the first plant of a new reactor design, but the NRC now has a system of basing subsequent license approvals on the first license. Thus TVA is the lead constructor of the AP-1000. Subsequent AP-1000 license applicants will simply submit TVA's application and received automatic approval. Furthermore, TVA is going to have its license application subsidized by the Federal government. This subsidy would in effect lower the licensing cost of all AP-1000 reactor manufacturers.
China recently made a deal with Westinghouse to buy 4 AP-1000s. The purchase price was $5.3 Billion. That amounts to $1.325 Billion a reactor, Ut is not clear what China gets for its money, but presumable they get an unassembled "reactor kid" which they assemble on their own dime. TVA recently announced that their first two AP-1000's would cost them between $2.5 Billion and $3.0 billion each. This price is down from earlier TVA estimates which ran as high as $3.5 per reactor. Westinghouse worked hard to bring down the cost of AP-1000 assembly, but still its cost will be considerable. We also have to reckon with the cost of money as well.
It will take Wall Street a long time for forget about the legendary $2.25 Billion default of Washington Public Power Supply System (Whoops) bonds in 1983. Nor will Wall Street forget that Bonneville power administration was burdened with $7 billion in bond debt, by the WSPP fiasco, or that TVA 10 incomplete reactors in the 1980s, or that it took over 23 years to complete Watts Bar Unit 1, and will take 40 years to complete Watts Bar unit 2. Nor will Wall Street soon forget the $25 billion or so debt that TVA took on during its nuclear fiasco. Such long and unhappy memories make new reactors a hard Wall Street sell, and hence increase the cost of reactor related debt.
My thinking is that old reactor manufacturing techniques are at the root of much of the reactor cost problem, and I told Dr. Buzzo that today in a comment on his reactor cost post:
In a number of post in my blog Nuclear Green, I argue that during the 1960’s a Navy reactor developer, Milton Shaw, was placed in charge of American civilian reactor development in the mid 1960’s, his handling of those responsibilities was so disasterous that they lead to Three Mile Island, and the end of the first nuclear era.
Much of the expense related to reactor construction is related to special requirements involved in making light water reactors as safe as possible. The Navy handels safety differently than civilian reactors, and eventually the Navy will loose a ship in an accident that would be totally unacceptable in a civilian electrical generating reactor.
Light water reactors are too large and heavy to mass produce in factories, but smaller Molten Salt Reactors can be. It is possible to mass produce MSR generating systems capable of generating 100 MW of electricity. Power is used by closed cyble helium gas turbines. MSR’s can be constructed using carbon-carbon composite parts. (see http://nucleargreen.blogspot.com/2008/02/carbon-carbon-composites-in-molten.html) The parts can be manufactured by molding the composites, and then machining them to spects. Both the cost of materials and parts manufacture would far cheaper than the cost of parts manufacture for LWRs. Assembly of mass produced MSR could occur in periods as short as a few weeks, while LWR’s require rears to assemble, using long term custom manufacture methods. Mass production and the use advanced materials will mean than many smaller reactors can be constructed quickly. The manufacture of hundreds and even thousands of MSRs a year is possible, because there would be no manufacturing bottlenecks.
LWR technology requires massive forging facilities to produce huge pressure vessels. Such forges can produce a very limited number of pressure vessels. At present only one forge in Japan supplies virtually the entire world’s supply of pressure vessels, and is limitede to the production of 19 such vessels a year. In contrast, hundreds and even thousands of Molten Salt Reactors can be mass produced every year, without traditional heavy industry capacity.
MSR’s are much safer that LWRs. Even in a major accident there is far less likelihood of radiation escape, than with a LWR, even when the LWR is housed in a massive containment structure, and the MSR is not. This opens up the possibility of lower cost housing oprions, further lowering reactor set up expenses, and greatly shortening the time between the beginning of site preparation and the beginning of power production.
In 2002, R. W. Moir listed reactor costs (ca, 2000 to ca. 1980) as Land $5 million, Struct. & improvements $269 million, Reactor plant equip, $337 million, Turbine plant equip. $274 million, Electric plant equip $107 million, Misc. plant equip $32 million, Main cond. heat reject. $57 million, Total direct costs $1,077 million.
Indirect costs were Construction services $170 million, Home-office eng. Serv. $129 million, Field-office eng & serv. $73 million. Total capitol costs, S1448 Million. On top of that you have interest on borrowed money which begins accumulating as money is spent on the project. Since Mior’s paper was written construction costs have risen by 100%.
Interest does not begin to be repaid until the project is completed and electricity begins to flow. If interest rates are 10% the interest can add 50% or even more to the cost of the project. If the reactor is redesigned during the project, interest will accumulate. If contractors use substandard concrete,the structures will have to be rebuilt, and construction and interest costs will rise. The Japanese and Koreans keep costs under control by careful planning, and attention to supply details.