EIA: 2016 Nuclear Costs will be Lower than Renewables.

The EIA has published its latest projection of 2016 new energy costs. Little has changed since the revised estimate published in April 2009. Once again the EIA believes that conventional nuclear power is the lowest price energy option. Anti-nuclear propagandist often mention the high price of nuclear as a reason for rejecting the nuclear option, but the EIA's estimates peg the cost of nuclear, though admittedly high, as substantially lower than the cost of onshore wind, and much lower than the cost of offshore wind, Solar PV, and solar thermal. Energy costs inflation appears to be still with us and the EIA estimates have increased the cost of nuclear, and onshore wind. the estimated costs of Solar Thermal and offshore wind have dropped from the 2009 estimate, but both are still far more expensive than nuclear. In addition the EIA cost estimates do not include he hidden costs associated with renewables. The introduction yo the cost estimates states,

The duty cycle for intermittent renewable resources of wind and solar is not operator controlled, but dependent on the weather or solar cycle (that is, sunrise/sunset). The availability of wind or solar will not necessarily correspond to operator dispatched duty cycles and, as a result, their levelized costs are not directly comparable to those for other technologies (even where the average annual capacity factor may be similar). In addition, intermittent technologies do not provide the same contribution to system reliability as dispatched resources, and may require additional system investment (not shown) to achieve a desired level of reliability.

These investments would include large scale expansion of grid long range transmission infrastructure, energy storage facilities or natural gas fired generators, and redundant renewable generating capacity. Thus the levelized cost of solar and wind do not reflect the entire cost of generating electricity using renewable sources. Eastern Wind Integration and Transmission Study(EWITS) estimated that a 20% onshore wind penetration of the Eastern Interconnect would require a $93 billion grid expansion.

That report found that the annualized cost of electricity from a 20% penetrated grid would be about 10% higher than the low wind reference case. The EWITS also found that without the grid long distance transmission expansion, grid expenses would be even higher. Finally the study suggested that an aggressive attempt to expand the wind penetration to 30% which included the use of offshore wind, would increase grid annualized cost by nearly 30% above the reference case. Thus a greater grid penetration by wind lead to higher electrical costs. The added annualized cost for greater wind penetration occurred despite a considerable decline in fuel related costs associated with greater wind penetration.

The EIA estimates the total levelized cost of the common post-carbon electrical options to be,

Onshore Wind 149.3

Offshore Wind 191.1

Solar PV 396.1

Solar Thermal 256.6

Advanced Nuclear 119.0

Solar costs, and the future of electrical generation.

There is a considerable gap between the actual cost of solar thermal power generation systems and what we have been told to expect. When renewables advocates talk about ST costs, they talk about cost projects made several years ago that did not survive testing by recent cost realities. This gap between expectations and experience has been apparent in actual cost data for existing and projected solar thermal projects. I have pointed to the evidence on ST costs in a number of posts as data has become available. Solar thermal lags far behind nuclear in its ability to produce power on demand. In short, solar thermal ceases to be a bargain as soon as you want to switch the lights on.

The renewables crowd keeps telling us that this is about to be fixed. That the day of cheap solar thermal generated electricity on a 24 hour a day basis is said to be at hand. We know this must be so, because Joe Romm keeps telling us that solar thermal power is now base power. Unfortunately, many of us noticed some time ago that just because Joe Romm states something the proposition does not become fact.

Last year the sun shown on the solar thermal industry in California. PP&E handed out contracts to Solar Thermal manufacturers as fast as the applications flew though the door. This was occurring despite evidence of truly atrocious cost-to-capacity-factor ratios. The best I was able to determine facilities that generated on average 20% of their nameplate capacity were costing $4.00 a name-plate watt to construct. It is evidence of exactly how screwed up thinking about energy is in California is that there is not a ratepayers revolt against the solar thermal scam.

Last fall I called attention to Ausra, an ST business that had its origins in Australia. Ausra claims to be able to lower ST costs, including heat storage costs, through a series of low cost technological innovations. Ausra was the apparant darling of some California venture capital firms that were moving to become players in the the California renewables generating market. Ausra told the VC people that it could provide round-the-clock ST electricity at a cost that was too low to meter. That was the story, but my review of published cost data for Ausra's Barstow project was inconclusive, but suggested that matters might not be nearly as happy as Ausra claimed. Furthermore, a careful analysis of Ausra performance claims yield a remarkable amount of wiggle room, if those claims were ever brought up in court. Thus Ausra's low cost claims could be marked down as unconfirmed, pending further investigation. This judgment suggested that it would not be a good idea to invest the widows and orphans funds in Ausra just yet.

It is not surprising then that Ausra is retrenching. Ausra's chairman, president and CEO, Robert Fishman now acknowledges that Ausra cannot raise the finances for a large project on the basis of his companies performance on its 5 MW pilot project. "That's simply not reality. The finance market will not support it." Fishman has not acknowledged Ausra's cost data from its Barstow pilot project, but clearly Ausra expectations are being trimmed, as is corporate staff.

It should be quite clear by now that California's most excellent renewables adventure is not going as well. Producing low cost renewable electricity in California is going to prove a tremendous bust. California is running out of good land-based wind resources and offshore wind resources will be quite expensive to exploit. The cost of Solar Thermal is quite outrageous given its truly modest capacity factor. Constructing a renewables system with adequate energy storage would carry a price tag that would be considerably higher that constructing a nuclear power generating system of similar capacity. Now conventional nuclear generating systems are hardly cheap, and conventional nuclear might not be the best long run fossil fuel replacement. A better solution is needed.

My readers by now know where this is headed. California's renewables subsidies could be better spent on LFTR technology. For what California will spend subsidizing overpriced pathetically inadequate renewables technology, California rate payers could have low cost electricity from safe, non-wasteful, sustainable generation-IV nuclear technology.

It will not happen of course. First, the renewables myth serves the interest of the fossil fuel producers. As long as there are the notion persists that renewables are the answer to peak fossil fuels and global anthropogenic global warming, the fossil fuel interests will continue see their products being burned to generate electricty. The renewbles crowd, Amory Lovins, Joe Romm, and David Roberts, may not be taking money under the table for the coal barons, but they are certainly serving the interest of coal by propounding their anti-nuclear ideology.

We are not yet ready to turn to advanced nuclear technology to do what renewables and conventional nuclear technology cannot do, that is take the world economy off its carbon habit. But the ability to do so, the ability to actually control carbon emissions while generating massive amounts of electricity, is about to be taken seriously. By 2012 low carbon power will be a matter of the most serious global concern. Athough our day has not yet arrived, it is coming. It is coming soon. The Sun probably is not going to shine on Ausra this year or the next.

Gaging Future Changes in Nuclear Construction Costs

The future inflation of construction costs would appear, at the moment seem to be impossible to project. First the great housing crash of 2008 may not be over yet.  Millions of American home owners owe more on their homes than can be recovered by the sale of the homes.  As unemployment grows, and home owners will be unable to make payments on their mortgages. With mortgage default, the homes ownership passes back to banks that will be unable to recover mortgage costs, and indeed will have difficulty finding buyers .  With the contraction of home sales, more homes will go on the rental market.  This will deflate rental cost.  As rental costs go down people who mortgages are "under water" may simply walk away from high mortgages homes and move to lower cost rental homes.  Thus there is significant potential down side leverage in the housing economy.  

A continued housing collapse would in turn would continue to put pressure on the banking sector of the national and international economies, and thus further Bank bailouts may be needed.   The insolvency of banks would make obtaining credit under any circumstances difficult if not impossible.  And the unavailability of credit would have a depressing effect on both the American and the world economy.  

A second long term impact on the economy will come from the increase of savings.  Wage earners have at the moment taken a terrific hit to their retirement savings.   There will be no easy recovery from this hit.  In addition to shortfalls for retirement plans, we can project a long term greater insecurity about asset appreciation.  Both of these factors point to a higher savings rate, with more saving going into "safe" investments.  More savings means less consumption.   Less consumption means less economic growth or an economic contraction.

Thirdly, governments world wide have created a great deal of money to deal with the economic crisis of 2008. Economists note that unless that money supply can be contracted during a recovery, the result will be significant inflation.   Given these factors we may be facing stagflation, or an outright prolonged depression at worst.   

Given the unpredictable economic outcome for the great crash of 2008, it is simply impossible to project future costs on new power generation projects.  At the moment inflationary pressures on construction costs have eased.  The price of raw materials for power plant production - steel, cement, cooper, etc. - dropped substantially in 2008.  Many future construction plans are being set aside,  and with the lowering of construction demand labor costs will go down as well.  This all would suggest a deflation construction costs for new power generation facilities, even in the face of rising over all inflation.  Thus the most likely outcome for the cost of nuclear power will be lower rather than higher construction costs.  

In addition, the probable increase in the savings rate may mean that more money is available for investment in new power facilities.    It is unlikely that the true ratio between the cost of base power and power on demand between  nuclear and renewables is unlikely to change.   At present and for the foreseeable future nuclear power will offer lower cost base power and power on demand than renewables can. 

Update: To get an idea about the magnitude of the economic events of 2008 lewd, 6.7 trillion dollars in wealth was lost to the American economy last year. The Fed government added an astonishing $8.5 trillion to the money supply. This was a major historical event, and its full implications will unfold for years.

From Dec. 2007 to Nov. 2008, 2.7 million Americans lost their jobs, raising the total number of unemployed to 10.3 million (6.7 percent), according to the US Department of Labor's November report on unemployment. Reportedly 500,000 Americans lost their jobs in November.