What will the new reactors proposed for Canada cost? That’s very much of a “how long is a string” type of question but I’ll try to give an answer.
The joke used to be that one should multiply by pi any cost estimate given by project proponents. This just reflects the time honoured tactic to low ball projects to get them approved.
Increases in the prices of raw materials such as steel (40% higher than last year), concrete (50% increase in last two years) and copper (a factor of four in five years) are driving up the costs of all power plants.
Reactor vendors in sales mode prefer to talk about two numbers namely the price of the electricity their machine will produce and the capital cost per kW (electrical) both are considered more palatable to buyers than the multi-billion dollar price tags that come up at contract signing.
Personally I find the projected electricity cost approach to be particularly misleading since it depends on a great many factors including the capital cost and others outside the control of the reactor vendors. Concepts such as Levelized Unit Electricity Cost (LEUC) may be useful for comparing various energy options but for a nuclear station the capital cost dominates.
The unit of dollars per kW (e) can be somewhat more helpful since they it is a way of expressing capital costs especially in this case since the proposed AREVA unit has higher power than its two rivals. However, there are fixed costs in reactor construction such as environmental assessments, site preparation, licensing, fuel storage, security arrangements and others that don’t necessarily scale with reactor power. It’s better just to look at the prices for reactors already sold.
AREVA is already constructing two EPR reactors. The EPR reactor at Olkiluoto, Finland is already 25-50% ($1.4-$2.8 billion) over budget – its initial cost was $5.5 billion (3.7 billion euro). This over run was severe enough to cause serious financial problems for AREVA particularly in 2006. The price for the second EPR at Flamanville, Normandy was $5 billion (3.3 billion). AREVA has also sold two EPR’s to be installed at Taishan, China for $12 billion (8 billion euro). Therefore, the cost of an EPR is in the $5 to 6 billion range, probably nearer the upper number in the range.
Westinghouse just sold two AP1000 reactors to South Carolina for $9.8 billion ($4.9 billion each). Two more have been sold to Georgia Power at (I assume) a similar price. Westinghouse has also sold AP1000 technology to China to build four reactors for $5.3 billion total but this is not a contract to construct complete reactors. The AP1000 price looks to be about $5 billion.
In contrast to AREVA and Westinghouse who are constructing their reactor types, the design of the ACR-1000 is not yet completed and the earliest construction start is estimated to be 2012 even if a firm sale were made tomorrow. Thus, not only will AECL be six years behind AREVA and four years behind Westinghouse before starting construction of its first ACR-1000 but also its price can only be estimated on an incomplete design basis. AECL may have some leeway in setting a price, for example, in the price assigned to the heavy water that’s been in storage at LaPrade for up to two decades. One can argue about how good their estimates might be but the price of an ACR-1000 is determined by a sale with the real cost only known at the end of construction.
Generally, I feel it’s unlikely that the ACR will cost significantly less than its competitors especially since the balance of plant will be roughly similar for all three reactor types. Therefore, I would guess around $5 billion would be a reasonable ballpark estimate.
To be realistic we also need to consider the first-of-a-kind costs involved in solving the teething problems of new reactor types, including the first environmental assessment, licensing and construction. AREVA has been going through this process with its first two EPR’s and has experienced 25-50% cost overruns particularly on the Finland project. Therefore, it’s fair to estimate similar “learning” costs for the first AP1000 and the first ACR-1000, meaning costs for the first one of either type in the order of $6 to $7 billion or more can be expected. The learning process for the AP1000 will occur in the four Chinese and four US reactors Westinghouse has already sold. However, the first reactor of the ACR type will be constructed in Canada. Perhaps the first, even the first two, will be built in New Brunswick. This is a small province which I hope will not have to bear all the learning costs on its own.
As I’ve stated before, I’m strongly in favour of nuclear power but hyping it by using unreasonably low costs is asking for future trouble. We need nuclear electricity but we should reconcile ourselves to accepting that it won’t be cheap.