Rosatom achieves a marketing win in Finland to supply Fennovoima
Finns are pragmatic people who love their country, but also recognize its geographic limitations.
“Finland is a very cold and dark country. Electricity is very important to us. We are a kind of island in Europe, we have take care of ourselves. No one will help us if we run out of power.”
Way back in 2003, the Finns made a deal with a consortium led by Areva and Siemens to be the lead customer for the newly developed European Pressurized Reactor (EPR), an unproven design that includes the latest bells and whistles and meets all of the requirements that the EU has layered onto nuclear power plant designs during the past several decades. That new plant began construction at Olkiluoto and has experienced stridently-publicized cost and schedule problems ever since.
Some might think that such an experience would sour a small country like Finland on all nuclear energy technology, but those people would have forgotten the Finnish imperatives represented in the quote above. It is a cold, dark country where survival depends on having a reliable, affordable source of energy.
Hard nosed Finns have done the math and understand the options. They took the right lessons from Olkiluoto and did not abandon nuclear energy technology, they abandoned western European nuclear technology suppliers who had allowed their skills to atrophy and who had accepted suboptimal design requirements in an attempt to appease what they thought the EU regulators wanted them to do. Instead, the Finns chose Rosatom, a Russian nuclear power plant supplier that has been engineering and building nuclear power plants consistently for several decades.
Rosatom will supply a reactor with the model designation of AES-2006, a VVER (Russian for pressurized water reactor (PWR)) that meets all Finnish nuclear standards and also meets all international safety requirements. Here are some selected design basis bullet points of the AES-2006.
- Minimizing risks and improving operational characteristics by adopting proven technical approaches and by using equipment similar or identical to that used at existing plants
- Improving system and equipment characteristics by abandoning excessive conservatism and optimizing design margins
- Ensuring required level of safety, also in case of a beyond design basis accident, by selecting reasonable configuation of safety systems including active and passive elements to make possible more extensive use of diversity principle and to reduce the influence of human error
- using serial equipment and reducing equipment variety
- Minimizing expenditures for research and development performed to justify design solutions
In contrast with the recently announced arrangement for Hinkley Point C — a “35-year guaranteed, inflation-indexed “strike price” of £92.50 (€110) per MWh” –, which was the end result of an excruciating negotiation process, the deal that is being arranged for the new nuclear plant in Finland is expected to have a substantially lower price.
The plant will cost roughly €6 billion and will deliver electricity at “no more than €50 per MWh”, says Pekka Ottavainen, Chairman of Voimaosakeyhtiö, the cooperative of Finnish companies that own Fennovoima, in an interview with Energy Post.
Voimaosakeyhtiö is not a for-profit company; it is a uniquely Finnish energy business organization called a mankala.
The Mankala-principle denotes a company where the joint owners are obligated to answer for the costs in proportion to their ownership in the company, and the ownership gives the joint owners the right to the produced electricity. This means that the shares don’t equal dividend. Instead of making a profit, the purpose of the company is to produce affordable energy for the owners.
(Puikkonen, Ilkka, Cooperative Mankala-Companies — The Acceptability of the Company Form in EC Competition Law, Helsinki Law Review 2010, p. 140)
A mankala is similar to a cooperative that is familiar to American farming communities; it’s structure and purpose is nearly identical to the electric cooperatives that were initially developed during The Depression and remain a fixture in many American rural areas. The shareholders in a mankala are bound together in recognition that electricity can be supplied much more economically by cooperating together than by engaging in destructive competition.
In farming, infrastructure elements like grain elevators and marketplaces are often owned by a cooperative because they are subject to a recognized “economy of scale” that makes it silly for each farmer to try to run his own small scale infrastructure. Similar arguments exist in power generation; there is significant cost-saving and service-enhancing potential available by properly sizing generation systems and sharing the costs fairly among the power users.
Voimaosakeyhtiö’s participating shareholders have committed themselves to purchasing varying amounts of the power that will be generated by the Fennovoima project. Total commitments so far cover a little more than half of the plant’s design output. Rosatom, the plant vendor, will retain an ownership stake that allows it to sell approximately 35% of the plant’s output.
It is a competitive project model that should serve as an example to other vendors. It has the potential for demonstrating the real value of nuclear fission energy to provide reliable, clean, affordable power, even in a remote, cold, dark part of Europe. The “free market” is not always the best choice for providing electricity, a manufactured product that is an essential part of modern technological living.
Russia is also taking full advantage of the characteristics of a sovereign currency. Because Russia has the complete supply chain for nuclear power plant construction, they can finance in full or in part the construction of the plant (the Russian Central Bank is not going to run out of rubles). They are only limited by capacity. The real question is the return they will get on these investments and I think it will turn out very well for them. The extreme version of this is the ‘build, own, operate’ model that they are using in Turkey, Vietnam, and Bangladesh. That is going to be a win-win proposition for all concerned.
“the Russian Central Bank is not going to run out of rubles”…Neither would the Greece run out of Drachma’s if they left the Euro. The reason they don’t leave is that they don’t have the assets in the ground like Russia.
Here’s a clip from another article on the same subject:
Quote trimmed by moderator
Read more: http://www.upi.com/Business_News/Energy-Resources/2013/09/06/Finnish-group-Rosatom-reach-agreement-on-new-nuclear-power-plant/UPI-42791378440180/#ixzz2o7Rg3dPe
Maybe,….. The Russians will be selling electricity to Germany on cloudy windless days.
With all those nuclear reactors in Finland, their electric saunas will be hot.
I trimmed your quote because it seemed a little long for “fair use”.
Often I look over the border and envy the rationality in Finland compared to what is going on here in Sweden. If the language wasn’t so horrid I would move there in an heart beat. A similar structure to the mankala was tried here by Swedish industry but they didn’t manage to get a vendor partner and only 2 current vendors (EOn and Vattenfall) are legally able to have operating permit in Sweden. I guess Swedish vendors are more interested in selling electricity at full price to industry rather than share ownership in a plant…
One of the problem in Sweden is that we do not have the right to build any new reactors without closing the old ones. The problem is political, not economical.
I have been calling Russia’s nuclear hegemony to come from a long while.
Now. Can you spell floating SMR, remote regions, water desalination and count to 2016 ?
It’s coming. Clients lined up at the gate.
Russia: only 16% of her electricity comes from nuclear power plants. Not exactly eating their own dog food, are they?
Russian Ministry of Energy expects that to increase from 16% to approximately 20% by 2030.
Russia’s Problem? The achilles heel of the nuclear industry: aging existing reactors with 30 year lifetimes that either need replacement or extension.
This means you need new reactors with a longer operational lifetime.(60 years) otherwise you cannot make the transition. This means you have to adapt aging technology from Soviet era of the 1960’s to meet modern requirements because you cannot afford to go outside the bounds of existing expertise.
End Result: Fundamentally outdated expensive reactors with long build times
Example: Only last year a Russian 950-megawatt VVER-1000 pressurized water reactor. went into operation after construction began in 1984
Bottom Line: The health of the rest of the economy determines the health of the nuke industry. If steady long term economic growth does not exist in Russia, the complex nuclear problems of decommissioning and/or extension of old plants begin to accumulate due to a lack of funding
For perspective, €6 billion at 1.37 dollar/euro is $8.22 billion. SCE&G and Georgia Power think they are building similarly sized AP1000 for $5 – $6 billion a piece. BUT
1. Finland is not southern U.S.
2. The Voimaosakeyhtiö conspiracy is building a single reactor, the U.S. units are in pairs.
3. No AP1000 has actually been completed, yet.
The €50/MWh is $68.50/MWh and not too bad at that. Current US electricity averages about $110/MWh, but varies widely. The £89.50 Hinckley C strike price is $157.60/MWh at $1.6/ £. The Hinckley EPR’s are expected to cost €9.55 billion each, but these are 1.6GW units. Scaled down that’s €7.16 per 1.2 GW capacity, 19% more than the Finns expect to pay for their Rosatom reactor.
Clearly, more goes into U.K.’s strike price than final wholesale electric cost. For one, while U.K. makes loan guarantees, they don’t make the loans. Financing is up to EDF and its partners, and must eventually be recouped.
Clarification: $110/MWh is current average U.S. retail price.
A legal cooperative should not be called a conspiracy.
Rod, there was an important point in Ed’s comment, the Russian reactor is not actually per MW much cheaper than the EPR, it’s the financing that makes the difference, not really the building cost. The trouble with the EPR in France and Finland were much more related to the concrete, and soldering than any sophisticated nuclear technology. Of course maybe a simpler design wouldn’t have required such a high quality of concrete (I heard the dome was really hard to do right, and the difficulty is linked to the requirement of resisting an airplane crash).
Now the million dollar question for Xmas. Why did Fort Calhoun persisted when others folded.
They have a small reactor.
They are in a regulated market so their rates are set by the utility regulatory agency. It’s easier when you are sure of a rate of return based on your costs rather than having to compete in the wholesale market.
A little nit, Rod:
“Fins” are found on fish, airplanes and old Cadillacs.
“Finns” are found in Finland.
Thank you. Correction made. Proof reading is always appreciated here.
Then shouldn’t it be Finnland? JAT
They actually call their country Suomi
“Finland” is actually a constitutionally equal alternative as the Swedish-language version of the name of the country.
And while we’re at it, the spelling of the location of the new reactor in the UK is “Hinkley”. Lots of pelople seem to be getting this wrong.
For a while I’ve been thinking perhaps all electric distributors & to a maybe lesser extent generators should be run as consumer cooperatives. I would be interested in any study of how well the existing ones have worked & pitfalls that have led to failure.
It might also be a good idea for other natural monopolies.
As a side benefit, it would be obvious to any hypothetical cooperative that windmills and solar panels backed up by a reliable source of power would be an incredibly expensive proposition, taken as a unified system.
It was sufficiently un-obvious to the cooperative a bit south of me that they installed at 300 kW machine a bit outside the city boundaries, at some expense.
That machine is now thoroughly obsolete, and neither the parts nor the expertise to do maintenance are sufficiently available to keep it running. After only 17 years since installation (and quite a bit fewer in operation), it’s being dismantled.
Just FYI, the average lifetime of wind turbines in Denmark is 22 years, with a standard deviation of 3.7 years.
Have windmills been around that long in Denmark to really know, like in Hawaii?
Yes. Denmark got into the wind business early.
The early wind turbines in Denmark had a mean operational lifetime of about 15 years (based on data on almost 2000 turbines). However, plenty of these turbines were torn down the be replaced with newer, larger turbines. (Space in Denmark is limited.) I don’t know how many of these devices were decommissioned before they began to seriously fail or because they were simply could not compete with newer designs.
I dont know if we are ever likely to find out those costs brain. We are barely able to get concise, standardized, transparent and knowledgeable reporting on real wind energy costs and especially integration costs right up to today, as I think EP will attest to.
As is its truly a DIY endeavor despite the billions and billions spent recently installing this technology.
(Space in Denmark is limited.)
Yet they chose land-hungry windmills. How ironic. Where’s that great computer graphic of a 1000 windmills vs 1 nuclear plant?
Below is a Google Translation of a dutch Wiki article on “nutsbedrijven”, something between a cooperation and a company (nutsbedrijf is translated as utility), for those that are interested in a bit of history on this subject. They were privatised before I got interested in energy issues and I don’t remember if their rates were lower or higher than today’s commercial rates. At least at the start of the transition it must have been almost the same. I do remember that they were inflexible and had a bad reputation for ‘customer friendliness’.
“A utility is a company, often a monopoly, that operates in a sector that is considered to be of significant public interest because it provides products or services that are in the public interest.
Here, the electricity, gas and water supply are counted. In a broader sense, the term also covers some of the communications sector: postal , telegraph and telephone, and transport: public transport and rail freight .
In the Netherlands, the social housing has long been seen as a necessary utility and developed by municipal , semi- public or non-profit organizations that received grants from the State or Municipality .
Many utility companies were founded by the government in the nineteenth and twentieth centuries in order to guarantee the supply of the goods and services are safe that way and as a tool to implement economic and social policy in the context of a mixed economy.
In the European Union, the markets in which these utilities operate since the eighties are slowly becoming partially or fully opened to competition as the pressure to privatize them (partly ) increases.”
I had a bit of discussion with my SO and the big difference is that now we pay separately for transport of electricity and gas, and that adds up to the price of the energy itself, which didn’t rise very much, if we remember correctly. But while we can choose our provider, we can’t choose the transport company, so they can ask more or less whatever they want. The bad parts of both systems: a monopoly but without the governmental or municipal moderating influence on the price.
If your kid is interested in Nuclear Engineering, may I suggest they also take Russian or Mandarin Chinese?
The chinese simply strip existing reactor designs of their safety features and voila, they are much cheaper again. USA transferred nuclear technology to china probably to sink the Russian nuke industry. Its a high stakes game for Russia.
Wrong! Chinese-built western designs DO NOT remove “safety features”. They are cheaper mainly by removing lawyer-induced delays and by using work forces that are industrious and not subject to union work rules.
And if I am not mistaken some of those skilled chinese workers are on site in the US to help out.
Thank you NRC for letting nuclear skills érode.
What happened to your love for the little worker man? You know all that stuff about the fossil fuel racket only serving the elite. What does ‘industrious’ mean? Ans. Cheap and dispensable
China’s competitive advantage is due to churning out reactor vessels at a higher rate thanks to avoiding quality assurance testing.
The suckers who buy those chinese made reactors won’t get 50 years of operation. Now we actually need 80 years for a sustainable nuclear industry.
China brings ponzi to Nuclear systems. It will litter the earth with abandoned sites.
I stand behind industrious workers and don’t even mind unions. Union “work rules” on the other hand are often imposed with the specific intent of slowing progress and adding cost.
Chinese pressure vessel manufacturing processes are not any quicker than the same process in other nations. That is not on the critical path for plant construction anyway.
The real critical path items have to do with installation, site inspection delays, changing regulatory requirements after construction starts, regulatory delays imposed before construction starts, etc.
When TMI-I was ready to start up, 100% + construction, just waiting for the NRC to give the OK, The came to management ad “requested” (they could not demand) that two safety systems (already NRC approved) be modified to comply with the newest regulations. Management knew they could beat it in court but also knew that the expedient and frugal thing to do was comply with the request. Thus 8 more weeks of interest payments, construction worker pay, lodging and overhead for the power ascension test group that was ready to begin testing. At least 10% additional cost that he MetEd rate payers got to pay for. And the net increase in safety was in the decimal points. So much for a safety benefit analysis. That same tactic (ratchet) has been used at every nuclear power plant in the USA! I hope you feel safer because that is all it does is make you feel safer there was no real measurable safety benefit from any of these last minute changes.
Being able to have the military shoot workers (or throw workers in a reeducation camp) who demand their rights is excellent for containment of project costs. It also makes said workers little better than forced labor.
On the other hand, in the US, oftentimes workers aren’t willing to share their highly skilled labor unless they’re paid the union wage under the union rules, and they can’t be shot or sent to reeducation.
I think that free labor is a lot more American than forced labor. Free labor includes the right to withhold labor unless prohibited by private contract, such as by a collective bargaining agreement.
Only a fool believes that the NRC and construction labor accounts for a significant percentage of the cost. Its 80% mafia, legalized (banking) or otherwise. This is why the mafia operators hate nuclear so much. Imagine reactors with 80 year lifetimes and reduced maintenance. Also, Reprocessing and decommissioning eliminates all the stock scams Wall Street can run. No IPO’s either. Good riddance.
A sustainable nuclear industry cannot coexist with financial hucksters. If the Russian BN-800 breeder testing in the next few years goes well, expect another mysterious financial crisis or military attack.
I follow the policy of not feeding the troll, unless to mock said troll. So, no comment on your comment as I’m not quite in the mood for mockery and I can’t quite determine what your argument is. It seems like you’re arguing from a parallel universe where you can see phenomena that others can’t and without understanding where you’re coming from, I cannot mock.
Merry Christmas and Happy Holidays!
Rod said: “Union ‘work rules’ on the other hand are often imposed with the specific intent of slowing progress and adding cost.”
Actually, union work rules are imposed to protect lazy “workers”, enrich union bosses and give fealty to liberal Democrat politicians. The result is a slowing of progress and the addition of cost.
I was at a nuclear power plant in the northeast where engineers eventually unionized. As soon as they did, everything was exactly by the clock. If they were in a training class and quitting time was 3:30 pm, out they would walk regardless of whether they had not finished their exam or other (non-union) attendees were in a Q&A with the instructor. There was no loner any sense of professional overtime or any consideration given to get the job done right. Everything was now by the clock and all that did was foster inefficiency and disrespect.
Paul, you don’t really know what you are talking about. That may be an one off incident but as a union operator for 20 years at PG&E finishing the job at hand is a point of pride. The ‘rule’ comes in because when we stay to finish the work we are paid overtime, as we should be. Operators in unionized plants as highly flexible, can work all sorts of odd hours…don’t forget, we ALL do rotating shifts, either 8 or 12 hours. Union work rules are often *safety* rules to prevent…not so much the company…but front line supervision from cutting corners. The proof: We have some of the safest nuclear plants in the world.
The Finns have the highest rate of unionization in Europe…around 90% of all wage and salary workers are union. They also have understanding that working together instead of mindless competition for the religion of “The Market” doesn’t do anyone any good. This actually dovetails with many new high tech start ups and other smaller entrepreneurial endeavors…many of which are union from the get-go.
George F. Will Opinion Writer
A dazzling bright future dawns in New Jersey
Because the fusion energy program lacks such immediacy, transparency and glamour, it poses a much more difficult test for the political process. Because of its large scale and long time horizon, the fusion project is a perfect example of a public good the private sector cannot pursue and the public sector should not slight. Most government revenues now feed the public’s unslakable appetite for transfer payments. The challenge for today’s political class is to moderate its subservience to this appetite sufficiently to enable the basic science that will earn tomorrow’s gratitude.
Same old education ivory tower ponzi screaming “innovation innovation innovation” nonsense Need another 100,000 postdocs to “solve” the problems with multiscale modeling…yeah right.
Listen to the chief engineer of the russian BN-800 fast breeder. Says they have to design safety features to deal with sodium leaks…cannot prevent them. In the ponzi banana republic called USA, they start all over from scratch. Paper engineers…paper reactor designers…all of them. carrying $100,000+ in nondischargable loans from places like MIT. Dreamers and their fusion scam, keep the ponzi going…LOL. Thats why France will bite the dust in the nuclear race…too many dreamers.
The reason the russians are getting orders for reactors is that they have a possibility of closing the fuel cycle with the BN-800. Evolutionary process, and lots of working data from pilot plants (which is what the BN-800 is), there was no “radical innovation” that came out of a university.
Isn’t it incredible that Finland of all people would allow a russian reactor on their soil. What happened to all the smarty pants Finns filling up their universities? Reminds me of all the music conservatories for piano…how many Chopins and Beethoven’s have they produced? Ans. 0
Funny how the Russian reactor technology in Finland’s soil have the best operating records of all civilian nuclear plants in the world.
Isn’t it incredible that Finland of all people would allow a russian reactor on their soil.
Why are you so amazed? Finland already has some Russian reactors.
You do understand that EU countries do trade with Russia, especially the countries bordering Russia. Finland is a small country and does not have the resources to undertake a nuclear power plant design and construction effort. So your remarks about Finland are naïve.
In contrast, the USA is large country and apparently no longer has the resources to build a nuclear reactor either.
Apart from the two currently under construction at SCE&G’s VC Summer plant in South Carolina, the two currently under construction at Georgia Power’s Vogtle plant, and the one currently under construction at TVA’s Watts Bar site, you would be correct…
More a lack of will than a lack of resources, I’d say.
A “lack of will” that lasts too long — say three, going on four decades — can turn into a lack of the right kind of resources.
And let us not forget. No new plant licensing on NRC’s chairman radar and budget for next few years.
No use beating a dead horse here. The authorities have spoken. Nuclear has to generate both electricity and hydrogen. Electricity welfare not allowed. Commercial readiness sometime in the future. Kick the nuclear can.
‘ I don’t know how many of these devices were decommissioned before they began to seriously fail or because they were simply could not compete with newer designs.’
A friend of mine helped install some second-hand German wind turbines for a small community-owned utility near here ( New Zealand ). The Germans were putting bigger turbines into the original site, to avoid having to get planning permission for a new site. There were a few problems with the refit, but the utility must have been happy, as they’ve subsequently put in some new wind turbines. Most of their capacity is small hydro. No subsidies involved- not at this end anyway.
This is off topic. But please share your thoughts. From what i can gather, to suggest such lumps occurring after such a short time frame is bullshit.
US Sailors, Assisting With Fukushima Clean Up, Crippled By Cancer
Submitted by Tyler Durden on 12/21/2013 – 21:29
When the USS Ronald Reagan responded to the tsunami that struck Japan in March 2011, Navy sailors including Quartermaster Maurice Enis gladly pitched in with rescue efforts. But months later, while still serving aboard the aircraft carrier, he began to notice strange lumps all over his body. Testing revealed he’d been poisoned with radiation, and his illness would get worse. And his fiance and fellow Reagan quartermaster, Jamie Plym, who also spent several months helping near the Fukushima nuclear power plant, also began to develop frightening symptoms, including chronic bronchitis and hemorrhaging. They and 49 other U.S. Navy members who served aboard the Reagan and sister ship the USS Essex now trace illnesses including thyroid and testicular cancers, leukemia and brain tumors to the time spent aboard the massive ship, whose desalination system pulled in seawater that was used for drinking, cooking and bathing.
I think most of what I need to know about that link is captured here (in the first page of comments):
“march 11 is the date of the earthquake. 3/11=33. this was a masonic hit just like jfk (11/22)”
I was thinking of writing a comment there with a bit of common sense and a link to the post from a navy radiation worker that Rod had on his blog in October.
But the comment thread there is so full of crazy (and the article itself too) that I don’t know if I want to create an account there. I’m quite sure I wouldn’t be able make a dent in the armoured opinions flying around.
Scientific American stabs nuclear in the back.
You was right Rod! Sic’em!
Toshiba to buy majority stake in UK nuclear consortium
Toshiba is keen to kickstart an ambitious reactor building programme that stalled after countries around the world – led by Germany – froze nuclear expansion plans and tightened regulations in the wake of Japan’s 2011 disaster at Fukushima.
Its domestic rival, Hitachi, has bought the Horizon project which intends to build two nuclear power stations, in Anglesey and Gloucestershire. ( http://www.theguardian.com/business/2013/dec/26/toshiba-stake-uk-nuclear-consortium )
I would not have expected this, at least not so soon. Toshiba owns a good deal of Westinghouse as well. Japanese companies seems to be pursuing a very aggressive leadership role in NPP construction despite their seemingly overly cautious approach at home.
That overt display of caution could have been more about PR and politics as well. In the end it could all work out for the better if it means more new plants are built. That would be great.
Also in the continuing San Onofre saga. The NRC issued a citation to the operator for failing to review design issues. This would seem to shift blame away from Mitsubishi – but you guys probably understand it better.
The whole thing to me looks even more like a huge CYA kinda thing that ended up closing (AND QUICKLY DISMANTLING) a perfectly repairable nuclear asset.
NRC: San Onofre operator violated rules
Mitsubishi says a generator design team that included Edison experts believed that vibrations had been addressed by installing additional tube supports. Mitsubishi contends it could not have anticipated the unprecedented type of tube vibrations that occurred in the exceptionally large generators commissioned by Edison.
Warnings emerged as early as 1983 in research showing tube supports might not guard against the type of vibrations that turned up at San Onofre. Faults in Mitsubishi’s design code were applied at four other plants, with none showing the problems seen at San Onofre. ( http://www.utsandiego.com/news/2013/Dec/24/nrc-serves-edison-violation/ )
As I understand it these vibrations were a product of the unique generator configuration there. Not the reactor.
There is also an Improper lobbying probe ongoing in the way the operators were discussing a potential refund to electric customers.
Frankly I hope they stick it to them. I have no sympathy for the operators or the holding companies now. I think they have real problems at the top of the chain.
What surprises me is the relatively high capital cost for this project. Considering its a Russian build who have very low domestic build prices.
The project is priced at 8.2 billion USD. That’s $6800/kWe.
Not exactly cheap.
1000 people working for 10 years @ 100k/person/year is $ 1 billion. Cost of the raw materials is much less than that, according to Dr. Peterson from UCB, it is less than $50/kWe.
So how do you get 8.2 billion USD for this reactor?
Have you forgotten that the construction will be done in Finland, not in Russia? It is not an inexpensive place to do business; wage scales are generous and construction is not easy in snowy, dark climates.
Here in the US, AP1000s are requiring on site construction crews of several thousand people per unit; there are a lot of supporting engineers that are not on site. Regulators take another large chunk of money.
Finally, I suspect that the people budgeting for this project are being a little conservative and adhere to my philosophy of “under promise, over deliver.”
Customers will be happy if they are eventually told that the plant only cost $7.8 billion but was budgeted for $8.2. They would be very disappointed if told that the budget was $6 billion but the plant actually cost $7.6 billion, even though the final number in the second case is lower than in the first case.
So, several thousand onsite for a number of years plus backoffice plus regulators, this suggests that my estimate of 10000 man-years would be more or less accurate. So $1 billion at an average of $100k/man year. Raw materials should be under 0.1 billion.
So we can explain 1.1 out of 8.2 billion USD. Even if we take 200% of this value we can only explain 2.2 out of 8.2 billion.
So we can explain about a quarter of the cost at most. Who’s getting the rest? Investors with crazy interest rates? That can’t be the case, according to your information about the financing of the cooperation type.
I was not talking about “backoffice”. Where do you think all of the manufactured parts come from? Where is the engineering and management? What about moving the finished components to the site? Have you seen what it takes to move and install large components? Take a good hard look at the videos that Southern Company has published every quarter about the AP1000 construction progress and think about all of the equipment at that site that has been especially built for the task. Sure, it can be used for other similar construction projects – once those projects get financed. In the meantime, the FOAK has to pay the costs.
I assumed that already. The “several thousand people” you mentioned is a grand total. The number of people actually on site on any give time is rarely over a thousand.
Here’s a picture of the chinese build AP1000 crew.
I don’t think there are more than 1000 people there but it’s hard to say.
Cost of offsite manufacturing is reflected in the price of those components. Just like anything else that you buy. It doesn’t add up to 8 billion.
Remember that in high wage countries such as Japan, similar large LWRs like ABWR were constructed for $2/Watt fairly recently. So why is it now $7/Watt?
I just want to be able to explain and justify these high costs. Right now I can’t, and that bothers me.
Let’s take a look at the tallest building in the world, the Burj Khalifa:
$1.5 billion, 22 million man-hours. A nuclear plant requires much less material and man-hours.
How come the $8 billion nuclear plant isn’t more like $2 billion?
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