I’ve been re-reading the CBO study from May 2008. This is probably the most current objective analysis of base load electrical generation options. Given the CBO levelized costing assumptions it appears that electric utilities will choose natural gas over 3rd generation nuclear unless they anticipate more than $45/ton CO2 carbon tax or equivalent:
Adding a carbon dioxide charge of about $45 per metric ton to the levelized cost estimates in the reference scenario would make nuclear power the least expensive source of additional base-load capacity (see the left panel of Figure 3-2). Up to that threshold, at all but the lowest level of charges, conventional natural gas technology would probably be the least costly option. Because coal is more carbon-intense than natural gas, the cost advantage of new capacity based on natural gas technology would grow in relation to coal technology as carbon dioxide charges increased; but the advantage that natural gas technology enjoyed over nuclear technology would shrink and eventually disappear as emission charges reached about $45 per metric ton. Thereafter, the levelized cost advantage of nuclear technology over conventional gas technology would grow. Although carbon dioxide charges would not change the cost of nuclear power plants at all, they would increase the cost of innovative fossil-fuel alternatives; as a result, the cost advantage that nuclear technology held over those technologies would increase with carbon dioxide charges but at a slower rate than that observed with conventional fossil-fuel technologies.
We know that construction costs for all types of generation have been going up rapidly with the increasing costs for steel, concrete etc. Nuclear is the most sensitive to construction costs, simply because nuclear fuel costs are negligible [conversely nuclear is insensitive to future fuel cost rises, but natural gas is extremely sensitive.) Here’s the relative sensitivities to lower or higher construction costs — again levelized 2006 dollars per megawatt hour:
The CBO study of course has to stick with already-built or on-order nuclear technology. But this may lead to drawing the wrong conclusions. Remember how much autos cost when each one was custom built? And the lousy quality?
That’s our experience of nuclear construction — custom design, custom built, custom approvals. But, given certainty of future CO2 charges, I believe that a competitive market will transform nuclear generation into a mass produced, modular product — and that costs will come down dramatically compared to alternatives.
We don’t know what future innovations will emerge, but as of today, the modular pebble-bed reactor [PBMR] technology looks very promising. Key advantages are safety by design (even chimps as operators can’t cause a nuclear accident), no proliferation worries, and perhaps most important – the design is MODULAR. That means industrial-scale mass production is possible, with all the attendant benefits. One of the most important benefits is the slashing of the financial risk of regulatory delays before a new plant is allowed to start up.
For more background on the Modular Pebble-bed design, see MIT’s study “The Future of Nuclear Power” , MIT prof. Andrew C. Kadak’s presentation “What Will it Take to Revive Nuclear Energy?” [PDF] , and his Pebble-bed presentation [PDF] [2a]. China is placing big bets here, see Wired’s “Let a Thousand Reactors Bloom” .
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