NuclearEconomics2ndPart

Dr.E.E.Pilat

MITNSED

CANESCenterforAdvancedNuclearEnergySystems

22.251

FuelCostRatevsBurnup

• Followingslidesshowfuelcostmillrateanditscomponentsvsburnup

• Unitcostsarelowbytoday’svalues

22.251

22.251

1.5 year3.0 region

10 20 30 40 50 60 700

1

2

3

4

5

6

Discharge burnup GWD/MTU

Fuel

cos

t mill

s/K

WH

Base CaseTails: 0.30, U: $15, SWU: $75, FAB: $200/kg, Carry 0.10, DOE: 1.0 mills

Image by MIT OpenCourseWare.

22.251

1.5 year3.0 region

10 20 30 40 50 60 700

1

2

3

4

5

6

Discharge burnup GWD/MTU

Fuel

cos

t mill

s/K

WH

Direct Only - No CarryingTails: 0.30, U: $15, SWU: $75, FAB: $200/kg, Carry 0.00, DOE: 1.0 mills

Image by MIT OpenCourseWare.

22.251

1.5 year3.0 region

10 20 30 40 50 60 700

1

2

3

4

5

6

Discharge burnup GWD/MTU

Fuel

cos

t mill

s/K

WH

Direct U308 OnlyTails: 0.30, U: $15, SWU: $0, FAB: $0/kg, Carry 0.00, DOE: 0.0 mills

Image by MIT OpenCourseWare.

22.251

1.5 year3.0 region

10 20 30 40 50 60 700

1

2

3

4

5

6

Discharge burnup GWD/MTU

Fuel

cos

t mill

s/K

WH

Total Depletion (U308+Conv+SWU+INT)Tails: 0.30, U: $15, SWU: $75, FAB: $0/kg, Carry 0.10, DOE: 0.0 mills

Image by MIT OpenCourseWare.

22.251

3.0 region

10 20 30 40 50 60 700

1

2

3

4

5

6

Discharge burnup GWD/MTU

Fuel

cos

t mill

s/K

WH

Direct FABTails: 0.30, U: $0, SWU: $0, FAB: $200/kg, Carry 0.00, DOE: 0.0 mills

Image by MIT OpenCourseWare.

22.251

1.5 year2.0 year

10 20 30 40 50 60 700

1

2

3

4

5

6

Discharge burnup GWD/MTU

Fuel

cos

t mill

s/K

WH

Tails: 0.30, U: $15, SWU: $75, FAB: $200/kg, Carry 0.10, DOE: 1.0 mills1.5 Year and 2.0 Year

Image by MIT OpenCourseWare.

22.251

10 20 30 40 50 60 701

2

3

5

4

7

6

8

10

9

12

11

Discharge burnup GWD/MTU

Fuel

cos

t mill

s/K

WH

Tails: 0.30, U: $25, SWU: $100, FAB: $900/kg, Carry 0.10, DOE: 0.0 millsDisposal at $700/KGU (EUROPE)

1.5 year3.0 region

Image by MIT OpenCourseWare.

2006FuelCostsbyPlant

22.251

FuelContractsInclude

• Productpurchase

• Termsandconditions

• Options

22.251

Terms&Conditions

• Durationofcontract– Calendartimeorreactorcycles

• Amountstobepurchased– Absoluteor%ofrequirements

• Notificationterms

• Deliveryterms– What,where,when,whatconditionit’sin

• Warranty

22.251

Terms&Conditions2

• Paymentterms– Baseprice

– Escalationterms

– Paymentdates• Calendarorrelative

• Whohastitle,insurance

• Possibilityofsuspensionofwork

• Possibilityofcancellation

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Options

• Changeamount,deliverydate,enrichmentwithsomeleadtime

• Changefuelmechanicaldesign

• Changeburnablepoison

• Havefabvendorperformcoredesignwork

• Failedfueltesting

22.251

TwoTypesofPricing

• Basepriceescalated– Escalationindexcanbeanything(gnpdeflator,SICindex,privatelypublishedindicesforanything)

• Marketbased– Somepercentagemoreorlessthanpublishedmarketpriceofthisproduct

• Bothkindscanincludefloorsandceilings

22.251

PaymentstoUSHLWFundAverage~$280/kgU

22.251Source:NUREG1350Vol22

HLWPaymentcont’d

22.251

ThereisNoSingle“Price”forU

22.251

$70.00

$60.00

$50.00

$40.00

$30.00

$20.00

$10.00

$0.002007 2008

Average price for uranium purchased by owners and operators of U.S. civilian nuclear power reactors by pricing mechanisms and delivery year, 2007-2008

Dol

lars

per

pou

nd U

2O2

equi

vale

nt

Contract-specified (Fixed and base-escalated) pricing Spot-market pricing Other pricing

Image by MIT OpenCourseWare.

UtilityBalanceSheet(NetNuclearFuel~$85million/plant)

22.251Source:EEI2008Financial

Consolidated Balance SheetU.S. Shareholder-Owned Electric Utilities

($ Millions) 12/31/2008 12/31/2007

PP&E in service, grossAccumulated depreciation

Net property in serviceConstruction work in progressNet nuclear fuelOther property

Net property & equipment

Cash & cash equivalentsAccounts receivable

Other current assetsTotal current assets

Total investmentsOther assets

Inventories

927,412320,294

868,929304,696

607,118 564,23358,9468,8021,085

675,951

19,39844,23226,86559,500

149,995

62,671216,558

47,4677,3362,465

621,502

14,15144,09123,49756,281

138,020

69,057200,180

1,028,7581,105,175Total Assets

Image by MIT OpenCourseWare.

CapitalCost

UCC= Asbuiltunitcapitalcost($perKWe)

FCR= Fixedchargerate

L= Lifetimecapacityfactor

22.251

!

CC "100 FCR( ) UCC( )

8766L

CapitalCost2

• Startwithan“overnight”costatprojectstart

• Asbuiltcostincludesescalationfromprojectstarttotimeofpaymentforcomponent

• Asbuiltcostincludesinterestduringconstruction(AFUDC)fromtimeofpaymenttostartofoperation

22.251

CapitalCost3

• FCR~x/[1–(1+x)‐n]

• x~(1–t)brb+(1‐b)rs=costofmoney

• t=incometaxrate

• b=bondfraction

• rb=returnonbonds

• rs=returnonstock

• n=booklifeofplant

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CapitalCost4

• Easiertousespreadsheet

• Todayrs~10.5%

• Todayrbvariesfrom5to15%

22.251

HowIsNukeIntegratedIntoGrid?

• Powercost=capital+production

• Production=O&M+Fuel

• Systemoperatorsdispatchplantsaccordingtocost

• Nukeshavehighcapitalcostssoliketorunathighcapacityfactor

22.251

ProductionCostsFuelissmallfractionofnuclear

22.251Source:EEI2008FinancialReview

0

20

40

60

80

100

120

140

160

180

200

Cost of fuelNon-fuel O&M

Coa

lN

atur

al G

asN

ucle

ar Oil

Hyd

ro

Coa

lN

atur

al G

asN

ucle

ar Oil

Hyd

ro

Coa

lN

atur

al G

asN

ucle

ar Oil

Hyd

ro

Coa

lN

atur

al G

asN

ucle

ar Oil

Hyd

ro

Coa

lN

atur

al G

asN

ucle

ar Oil

Hyd

ro

Coa

lN

atur

al G

asN

ucle

ar Oil

Hyd

ro

2003 2004 2005 2006 2007 2008

Average Cost to Produce Electricity 2003-2008U.S. Electric Utility and Non-Utility

$/MWh

Image by MIT OpenCourseWare.

“Load‐Duration”CurvesforNewEng.(50%oftime,load>16,000MW)

22.251Source:ISO‐NE2009Q1MarketRpt

24,000

22,000

20,000

18,000

16,000

14,000

12,000

10,000

8,0000% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Percent of Hours

Syst

em lo

ad (M

W)

New England Hourly Load Curves 2006-2009 Q1

2007

2008

2009

Image by MIT OpenCourseWare.

“Price‐Duration”CurvesforNewEng.50%oftime,price>$40/MWhin2009

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$275

$250

$225

$200

$175

$150

$125

$100

$75

$50

$25

$00% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Percent of Hours

$/M

WNew England Hourly RT System Price Duration Curves

2005-2009, Q1 Prices < $275

20072008

2009

Image by MIT OpenCourseWare.

Source: ISO-NE 2009Q1 Market Rpt

LocalMarginalPricesinNewEng.

22.251

HQ HG

Date

Real-Time LMPs for Hub and External NodesSeptember 21-27, 2009

HQ VII

NB

NY - 1385

Hub

NY N-AC

NY-CSC

21 Se

p 09

22 Se

p 09

23 Se

p 09

24 Se

p 09

25 Se

p 09

26 Se

p 09

27 Se

p 09

$/M

Wh

$150

$100

$50

$0

Image by MIT OpenCourseWare.

NewEnglandGridInfo

• NewEnglandloadflowsandmarginalcosts

DailyNewEnglandloads:http://www.cvx.com/java/NELoadGraph.htm

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22.251 Systems Analysis of the Nuclear Fuel CycleFall 2009

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