Navigant report wades into nuclear economics

New advanced nuclear reactors that come online in 2018 are expected to have a levelized cost of electricity (LOCE) of 10.46 cents/KWh, Navigant Consulting said in a new report on nuclear power.

That estimate is less expensive than an advanced pulverized coal plant, even one without carbon capture and storage (CCS) equipment. On the other hand, the figure is more expensive than combined-cycle natural gas plants.

Advanced reactors include the Westinghouse Electric AP 1000 design that is being employed by subsidiaries of both Southern (NYSE:SO) and SCANA (NYSE:SCG) in Georgia and South Carolina respectively.

The best estimates for small modular reactors (SMRs) of no more than 300 MW are not expected to be materially different on a per-MW basis than the large units, Navigant said.

The average levelized cost for plants entering service in 2018 is based on EIA’s 2013 Annual Energy Outlook. EIA added 3% to the cost of capital for non-sequestrated coal technology to illustrate the impact of a $15/metric ton CO2 emissions fee. All values are in 2011 dollars, Navigant said.

By comparison, an advanced pulverized coal plant going online in 2018 is seen as having a LOCE of 12.3 cents. An advanced pulverized coal plant with CCS is expected to have a LOCE of 13.55 cents.

Natural gas combined-cycle (NGCC) units, however, will have a LOCE of only 6.71 cents. The levelized cost of onshore wind is expected to be 8.66 cents, which is cheaper than nuclear. The levelized cost of offshore wind, however, is expected to be 22.15 cents.

The LOCE chart can be found on page 81 of the Navigant report.

As for the capital cost of building new generation, the Navigant report says advanced nuclear carries a cost of $5,525/KW. By comparison an integrated gasification combined-cycle (IGCC) coal plant with carbon capture would carry a capital cost of $6,599/KW.

As was the case with levelized cost of electricity, the capital cost of building a natural gas plant was cheaper than either coal or nuclear generation. A natural gas combined-cycle plant would cost only $917/KW to build while an “advanced” combined-cycle plant would cost only $1,023/KW to build, Navigant said.

In addition, the report notes there is a big difference in the operations and maintenance (O&M) costs of a single-unit nuclear plant and a dual-reactor nuclear plant.

“The best run single-unit plant in the country spends slightly more in O&M dollars than one of the units in the best performing dual-unit plant,” Navigant said. “This difference in cost diverges to more than $50 million in O&M costs for the lower ranked units and explains why some single-unit plants may be financially vulnerable in deregulated markets,” Navigant said in the report.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.