New nuclear power is going to be very expensive — no matter where the plants are built. The most detailed and transparent recent cost study on the new generation of plants put the cost of power at 25 to 30 cents per kilowatt-hour — triple current U.S. electricity rates (see “Exclusive analysis, Part 1: The staggering cost of new nuclear power“).
Some have suggested that other countries will fare better — in spite of Finland’s nightmarish nuclear troubles (see “Satanic nukes? Finnish plant’s cost overruns to $6.66 billion” and below). They should read the story in today’s Today’s Zaman, Turkey’s largest English-language newspaper:
The only company bidding, the Russian-Turkish JSC Atomstroyexport-JSC Inter Rao Ues-Park Teknik joint venture, offered a price of 21.16 cents per kilowatt-hour (kWh). Current electricity prices in the country vary between 4 cents and 14 cents per kWh.
[Wholesale prices in Turkey are 7.9 cents per kWh.]
That gives new meaning to the word “turkey.”
The company apparently offered a revised price “Immediately after the envelope was opened … that better reflected current market prices” (i.e. the global recession and collapse in commodity prices). But another English language news source, Hurriyet Daily News, reports today:
The tender for Turkey’s first nuclear tender is likely to be cancelled due to the high price offer and a shift in the location of the plant from the south of the country to the northern Black Sea region, Vatan daily reported on Wednesday.
Turkey’s state-run power company, TETAS will submit a “negative” report for the price bid in the nuclear tender and submit it to cabinet for approval, the daily said.
The consortium, formed by Russia’s state-run Atomstroyexport, Inter RAO and Turkish Park Teknik had offered 21.16 cents kWh for the construction and management of nuclear power plant on Monday. The consortium however revised its initial price offer in another letter, but it was returned as such a move is not allowed under tender law.
This should not really come as a shock to anyone. I detailed the escalating capital costs of nuclear power in my May 2008 report, “The Self-Limiting Future of Nuclear Power.” And in a December 31 story, Time buried in the penultimate paragraph :
Most efficiency improvements have been priced at 1Â¢ to 3Â¢ per kilowatt-hour, while new nuclear energy is on track to cost 15Â¢ to 20Â¢ per kilowatt-hour. And no nuclear plant has ever been completed on budget.
A Moody’s analysis from last May put the cost of power from new nukes at over 15 cents per kWh (see here [PDF]).
To repeat, new nuclear power is going to be very expensive — no matter where the plants are built.
And that point is underscored by a lengthy article in the current Washington Monthly, “Bad Reactors” (don’t miss the sidebar on Sub-prime Nuclear Loans). The article details Finland’s nightmare experience with its nuclear plant, especially the containment building, which was “lined with a solid layer of steel that was crisscrossed with ropy welds containment vessel” where someone had scrawled the word Titanic:
These marks are the last remaining hints of the problems that have plagued this thick outer shell, the last line of defense in case of a meltdown. The steel liner was hand forged using outdated plans by a Polish subcontractor, which had no prior nuclear experience. As a result, the holes for piping were cut in the wrong spots, and the gaps along the weld joints were too wide. Entire sections had to be ripped apart and rebuilt. And the containment liner is not unique. Virtually every stage of the construction process has been dogged by similar woes, from the nine-foot-thick foundation slab (the concrete was mixed with too much water, making it weaker than had been called for in the plans) to the stainless steel pipes that feed water through the reactor core (they had to be recast because the metal was the wrong consistency).
To date, more than 2,200 “quality deficiencies” have been detected, according to the Finnish nuclear authority, STUK. Largely as a result, the project, which was supposed to be completed in 2009, is three years behind schedule and is expected to cost $6.2 billion, 50 percent more than the original estimate. And the numbers could keep climbing. “There are still some very challenging phases ahead,” says Petteri Tiippana, STUK’s assistant director for projects and operational safety. “Things will have to go extremely well if those responsible for building the project are to hit the new targets.”
And what did this mean for Finland?
… the reactor won’t be completed before 2012, when the Kyoto treaty expires. To meet its targets, between now and then Finland will have to buy hundreds of millions of dollars’ worth of credits through the European Union’s emissions trading scheme. In the meantime, because the country expected the reactor to deliver a bounty of energy and didn’t pursue other options, it’s facing a severe electricity shortage and will have to import even more from abroad, which will drive up power bills. Elfi, a consortium of Finnish heavy industries, has calculated that the project delays will create $4 billion in indirect costs for electricity users.
This would be the story of the tortoise and the hare, I think, with energy efficiency and renewables in the role of the tortoise:
Because residents believed the new reactor in Olkiluoto would drastically cut emissions, there was little effort to promote renewable energy or boost efficiency, with the result that the country is now lagging behind its neighbors. Despite its long, windswept coast, Finland has less wind power capacity than any central European state except the tiny, landlocked countries of Luxembourg and Switzerland. It also ranks near the bottom on energy efficiency, and its record on greenhouse gas emissions is dismal: between 1990 and 2006 (the most recent year for which data is available) the nation’s carbon output leapt by ten million tons a year, or 13 percent, one of the largest spikes in any developed nation. This means that to meet the European Union goals of cutting greenhouse gas emissions by 20 percent from 1990 levels by 2020, Finland will have to either resort to austerity measures or shell out hundreds of millions more dollars for emissions credits.
“We concentrated so much on nuclear that we lost sight of everything else,” says Oras Tynkynnen, a climate policy adviser in the Finnish prime minister’s office. “And nuclear has failed to deliver. It has turned out to be a costly gamble for Finland, and for the planet.
First comes efficiency, efficiency, efficiency and then come renewables, and once you’ve tried everything else twice as hard as you ever thought possible, then and only then should you consider the the really expensive options that need a lot of technological advances, like nuclear and coal with carbon capture and storage (see “An introduction to the core climate solutions“).