On Friday, March 5, 2010, NPR’s Science Friday with Ira Flatow focused on new nuclear technologies. The guest list included, John (Grizz) Deal, CEO of Hyperion Power Generation, Scott Burnell, public affairs officer of the US Nuclear Regulatory Commission, Richard Lester, professor and Department Head of Nuclear Science and Engineering at MIT and Lester Brown, the founder of the Earth Policy Institute.
Lester Brown was rather outnumbered. He appeared to be speaking from a well worn script that probably originated at the Rocky Mountain Institute. He focused on nuclear plant cost overruns, supposed lack of investor interest – attributing the phrase “sticker shock” to a Wall St. Journal article, expense of handling the waste products, a long history of federal subsidies (without computing the return on those supposed subsidies) and the rapid expansion of other alternatives like wind energy.
One of the facts that Brown mentioned is actually pretty good news, though he did not seem to understand the implications of the numbers he used. He stated that the often criticized EPR at Olkiluoto in Finland was going to end up costing $7.1 billion. Since that is a 1600 MWe plant, that means it will cost about $4400 per kilowatt capacity.
I used that capacity cost in an electricity generation cost model that includes realistic assumptions for non fuel O&M costs (1.3 cents per kw-hr), incremental capital costs ($20/kwe/yr), fuel costs (0.47 per million BTU), inflation rates (2%), interest costs (6%), capital return on investment (15%), and decommissioning costs ($2000 per kw). Using those assumptions, the model produces an electricity price of about 10.2 cents per kilowatt hour – even if the useful life of the plant is set at 40 years and the loan repayment period is set at just 15 years. The free cash flow in that model is always positive and becomes an impressive $350 million per year – after $350 million per year in income taxes – at year 16, when the loan is paid off.
No wonder there is continuing interest in additional new nuclear power plants, even in Finland, the place where the cost overruns and schedule delays are most frequently discussed,
I would have loved for Grizz Deal to have explicitly challenged Brown’s assertion that there is no private capital flowing to nuclear – if that was true, who is paying Grizz’s salary? (Here is a quote from the company’s FAQ page in response to a question about whether or not Hyperion is interested in obtaining investment capital – “Hyperion Power Generation, Inc. (HPG) is a private company and has all the capital needed for the current development phase of Hyperion.”)
Brown also brought up the often repeated issue of tritium that is associated with existing nuclear power plants in the United States. Scott Burnell, the NRC public affairs office representative, did a terrific job of responding to Brown’s assertion that there are 27 older plants in the United States with underground pipes that are leaking tritium, with the most recent instance occurring at Vermont Yankee:
Scott Burnell: Ira, I can certainly respond to that.
There have been 27 instances where there has been ground water contamination involving tritium. They are not all ongoing. (Emphasis added.)
In the case of Vermont Yankee, the situation on the ground there is that the contamination is not reaching any drinking water sources; it’s not reaching the nearby Connecticut River. So it is not presenting any (emphasis in the original) public health issue and we, at the NRC, are closely watching how Vermont Yankee is evaluating the situation to discover where the leak is coming from. We will make sure that they do identify it properly; that they fix it properly and that in every instance they are doing what is necessary to operate the plant safely and in accordance with our regulations.
Grizz Deal and Richard Lester also provided a wealth of thought-provoking information about some of the innovation that is available for exploitation in the field of atomic energy. It was pretty obvious that Lester Brown of the Earth Policy Institute did not know how to respond to Hyperion’s focused attention on solving many of the well worn objections to nuclear energy since their system is not complicated, not large, not slow to deploy, and not not too expensive for small or developing countries to consider.
Richard Lester also provided an inkling of the reasons why many innovative ideas for reactor design and waste storage/disposal have not yet been introduced into the market – they have often been specifically prohibited by congressional legislation. The era of imposing legal restrictions on scientific and engineering improvements in nuclear technology may be coming to an end, but the battle is far from over.