Nuclear
Economics
2nd
Part
Dr.
E.
E.
Pilat
MIT
NSED
CANES
Center
for
Advanced
Nuclear
Energy
Systems
22.251
Fuel
Cost
Rate
vs
Burnup
• Following
slides
show
fuel
cost
mill
rate
and
its
components
vs
burnup
• Unit
costs
are
low
by
today’s
values
22.251
Base Case
Tails: 0.30, U: $15, SWU: $75, FAB: $200/kg, Carry 0.10, DOE: 1.0 mills
6
Fuel cost mills/KWH
5
4
3
2
1.5 year
3.0 region
1
0
10
20
30
40
50
60
70
Discharge burnup GWD/MTU
Image by MIT OpenCourseWare.
22.251
Direct Only - No Carrying
Tails: 0.30, U: $15, SWU: $75, FAB: $200/kg, Carry 0.00, DOE: 1.0 mills
6
Fuel cost mills/KWH
5
4
3
2
1.5 year
3.0 region
1
0
10
20
30
40
50
60
70
Discharge burnup GWD/MTU
Image by MIT OpenCourseWare.
22.251
Direct U308 Only
Tails: 0.30, U: $15, SWU: $0, FAB: $0/kg, Carry 0.00, DOE: 0.0 mills
6
5
Fuel cost mills/KWH
1.5 year
3.0 region
4
3
2
1
0
10
20
30
40
50
60
70
Discharge burnup GWD/MTU
Image by MIT OpenCourseWare.
22.251
Total Depletion (U308+Conv+SWU+INT)
Tails: 0.30, U: $15, SWU: $75, FAB: $0/kg, Carry 0.10, DOE: 0.0 mills
6
5
Fuel cost mills/KWH
1.5 year
3.0 region
4
3
2
1
0
10
20
30
40
50
60
70
Discharge burnup GWD/MTU
Image by MIT OpenCourseWare.
22.251
Direct FAB
Tails: 0.30, U: $0, SWU: $0, FAB: $200/kg, Carry 0.00, DOE: 0.0 mills
6
5
Fuel cost mills/KWH
3.0 region
4
3
2
1
0
10
20
30
40
50
60
70
Discharge burnup GWD/MTU
Image by MIT OpenCourseWare.
22.251
1.5 Year and 2.0 Year
Tails: 0.30, U: $15, SWU: $75, FAB: $200/kg, Carry 0.10, DOE: 1.0 mills
6
Fuel cost mills/KWH
5
4
1.5 year
2.0 year
3
2
1
0
10
20
30
40
50
60
70
Discharge burnup GWD/MTU
Image by MIT OpenCourseWare.
22.251
Disposal at $700/KGU (EUROPE)
Tails: 0.30, U: $25, SWU: $100, FAB: $900/kg, Carry 0.10, DOE: 0.0 mills
12
11
1.5 year
3.0 region
10
Fuel cost mills/KWH
9
8
7
6
5
4
3
2
1
10
20
30
40
Discharge burnup GWD/MTU
50
60
70
Image by MIT OpenCourseWare.
22.251
2006
Fuel
Costs
by
Plant
22.251
Fuel
Contracts
Include
• Product
purchase
• Terms
and
conditions
• Options
22.251
Terms
&
Conditions
• Duration
of
contract
– Calendar
time
or
reactor
cycles
• Amounts
to
be
purchased
– Absolute
or
%
of
requirements
• Notification
terms
• Delivery
terms
– What,
where,
when,
what
condition
it’s
in
• Warranty
22.251
Terms
&
Conditions
2
• Payment
terms
– Base
price
– Escalation
terms
– Payment
dates
• Calendar
or
relative
• Who
has
title,
insurance
• Possibility
of
suspension
of
work
• Possibility
of
cancellation
22.251
Options
• Change
amount,
delivery
date,
enrichment
with
some
lead
time
• Change
fuel
mechanical
design
• Change
burnable
poison
• Have
fab
vendor
perform
core
design
work
• Failed
fuel
testing
22.251
Two
Types
of
Pricing
• Base
price
escalated
– Escalation
index
can
be
anything
(gnp
deflator,
SIC
index,
privately
published
indices
for
anything)
• Market
based
– Some
percentage
more
or
less
than
published
market
price
of
this
product
• Both
kinds
can
include
floors
and
ceilings
22.251
Payments
to
US
HLW
Fund
Average
~
$280/kgU
22.251
Source:
NUREG
1350
Vol
22
HLW
Payment
cont’d
22.251
There
is
No
Single
“Price”
for
U
Dollars per pound U2O2 equivalent
$70.00
$60.00
$50.00
$40.00
$30.00
$20.00
$10.00
$0.00
2007
2008
Contract-specified (Fixed and base-escalated) pricing
Spot-market pricing
Other pricing
Average price for uranium purchased by owners and operators of U.S. civilian nuclear power reactors by pricing
mechanisms and delivery year, 2007-2008
Image by MIT OpenCourseWare.
22.251
Utility
Balance
Sheet
(Net
Nuclear
Fuel
~
$85
million/plant)
Consolidated Balance Sheet
U.S. Shareholder-Owned Electric Utilities
($ Millions)

12/31/2008
12/31/2007
PP&E in service, gross
Accumulated depreciation
Net property in service
Construction work in progress
Net nuclear fuel
Other property
927,412
320,294
607,118
58,946
8,802
1,085
868,929
304,696
564,233
47,467
7,336
2,465
Net property & equipment
675,951
621,502
Cash & cash equivalents
Accounts receivable
Inventories
Other current assets
19,398
44,232
26,865
59,500
14,151
44,091
23,497
56,281
Total current assets
149,995
138,020
Total investments
Other assets
62,671
216,558
69,057
200,180
Total Assets
1,105,175
1,028,758
Image by MIT OpenCourseWare.
22.251
Source:EEI
2008
Financial
Capital
Cost
100( FCR)(UCC)
CC "
8766L
UCC
=
As
built
unit
capital
cost
($per
KWe)
FCR
=
Fixed
charge
rate
L
=
Lifetime
capacity
factor
22.251
Capital
Cost
2
• Start
with
an
“overnight”
cost
at
project
start
• As
built
cost
includes
escalation
from
project
start
to
time
of
payment
for
component
• As
built
cost
includes
interest
during
construction
(AFUDC)
from
time
of
payment
to
start
of
operation
22.251
Capital
Cost
3
•
•
•
•
•
•
•
FCR
~
x
/
[1
–
(1
+
x)‐n]
x
~
(1
–
t)
b
rb
+
(1‐b)rs
=
cost
of
money
t
=
income
tax
rate
b
=
bond
fraction
rb
=
return
on
bonds
rs
=
return
on
stock
n
=
book
life
of
plant
22.251
Capital
Cost
4
• Easier
to
use
spreadsheet
• Today
rs
~
10.5%
• Today
rb
varies
from
5
to
15%
22.251
How
Is
Nuke
Integrated
Into
Grid?
• Power
cost
=
capital
+
production
• Production
=
O&M
+
Fuel
• System
operators
dispatch
plants
according
to
cost
• Nukes
have
high
capital
costs
so
like
to
run
at
high
capacity
factor
22.251
Production
Costs
Fuel
is
small
fraction
of
nuclear
Average Cost to Produce Electricity 2003-2008
U.S. Electric Utility and Non-Utility
$/MWh
200
180
Cost of fuel
Non-fuel O&M
160
140
120
100
80
60
40
20
Coal
Natural Gas
Nuclear
Oil
Hydro
Coal
Natural Gas
Nuclear
Oil
Hydro
Coal
Natural Gas
Nuclear
Oil
Hydro
Coal
Natural Gas
Nuclear
Oil
Hydro
Coal
Natural Gas
Nuclear
Oil
Hydro
Coal
Natural Gas
Nuclear
Oil
Hydro
0
2003
2004
2005
2006
2007
2008
Image by MIT OpenCourseWare.
22.251
Source:
EEI
2008
Financial
Review
“Load‐Duration”
Curves
for
New
Eng.
(50%
of
time,
load
>
16,000
MW)
New England Hourly Load Curves 2006-2009 Q1
24,000
22,000
2007
20,000
System load (MW)
2008
18,000
16,000
14,000
2009
12,000
10,000
8,000
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Percent of Hours
Image by MIT OpenCourseWare.
22.251
Source:
ISO‐NE
2009Q1
Market
Rpt
“Price‐Duration”
Curves
for
New
Eng.
50%
of
time,
price>
$40/MWh
in
2009
New England Hourly RT System Price Duration Curves
2005-2009, Q1 Prices < $275
$275
$250
$225
$/MW
$200
$175
$150
$125
2008
2007
$100
$75
$50
2009
$25
$0
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Percent of Hours
Image by MIT OpenCourseWare.
Source: ISO-NE 2009Q1 Market Rpt
22.251
Local
Marginal
Prices
in
New
Eng.
Real-Time LMPs for Hub and External Nodes
September 21-27, 2009
$100
$50
9
p0
Se
Se
27
26
Se
25
p0
p0
9
9
9
Se
24
23
Se
p0
p0
9
22
Se
p0
9
p0
Se
9
$0
21
$/MWh
$150
Date
HQ HG
HQ VII
NY N-AC
Hub
NB
NY-CSC
NY - 1385
Image by MIT OpenCourseWare.
22.251
New
England
Grid
Info
• New
England
load
flows
and
marginal
costs
Daily
New
England
loads:
http://www.cvx.com/java/NELoadGraph.htm
22.251
MIT OpenCourseWare
http://ocw.mit.edu
22.251 Systems Analysis of the Nuclear Fuel Cycle
Fall 2009
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