APR-1400 RPV from Doosan brochure
The United Arab Emirates' nuclear initiative has chosen its contractor, a consortium led by the Korean electric utility KEPCO. They have agreed to build four 1,400 MWe PWRs, of a Gen. 3+ design (APR-1400), in a deal worth $20 billion. From various sources:
[Al Jazeera] S Korea to build UAE nuclear plants
[The National] UAE: Korean consortium to build nuclear power stations
[Korea Times] Korea Wins $40 Bil. UAE Nuclear Deal
[Bloomberg] Korean Group Beats GE, Areva in $20 Billion U.A.E. Nuclear Deal
First off, to clarify the different contract values: it is $20 billion for construction, with an additional $20 billion in operating costs over 60 years, hence the alternative '$40 billion' figure. I think the Bloomberg journalists were confused by this. Citing Al Jazeera:
While the contract to build the reactors is worth about $20bn, the consortium expects to earn another $20bn by jointly operating the plants for 60 years.
For some background: there were three competing contractors -- the winning Korean bid, a French consortium led by EdF offering EPRs, and a GE/Westinghouse consortium. Apparently KEPCO won by a huge margin: Al Jazeera writes that
The Korean bid was $16bn lower than the bid submitted by the French group, an industry source said.
Some analysts called this a 'surprise choice', which is odd because it's been public knowledge KEPCO underbid their competitors, e.g. this WSJ article I linked to last month.
The reactor is an APR-1400 (PWR), of which none exist but two are under construction in Korea (at Shin-Kori). The vendor site is: [APR-1400]. There's also a brief history of Korean reactors at WNA.
And this is just the beginning; from Bloomberg,
The order is just part of a “fleet of power plants” the U.A.E. wants to build, Emirates Nuclear Energy Corp. Chief Executive Officer Mohammed al-Hammadi told reporters in Abu Dhabi yesterday. “We will be building more than four and those will be coming in the future.”
In the background are very interesting weapons proliferation politics. The UAE signed a treaty with the US under which both enrichment and reprocessing are banned in the UAE - they are completely dependent on foreign fuel suppliers. It seems most US commentators read this in the context of Iran (e.g.), which of course refuses to abandon domestic enrichment. But I haven't seen any counterpoint from Gen-4 advocates, which they should be making as reprocessing is essential to closed fuel cycles. Does the 123-agreement prohibit e.g., integrated recycling of actinides, as with the Integral Fast Reactor? And should this be considered a proliferation risk? (I don't know.)
The UAE currently gets 98% of its electricity from natural gas.
Update: I've found a very nice PR brochure. It is from one of the consortium members, South Korea's Doosan Heavy Industries, which makes some key components like reactor pressure vessels, steam generators. This copy is hosted by the NEA (French nuclear agency), which isn't quite were I expected to find it.
[PDF file] Doosan Heavy Industries & Construction
Excellent assessment.
ReplyDeleteI work that out to be an electricity production cost of 1.36 cents/Kw.hr. Not bad.
ReplyDeleteFinrod -
ReplyDeleteUnfortunately, it does not work that way. The timing is crucial: you pay construction costs today, and sell electricity spread over decades in the future, so the financial costs are huge. The meaningful, levelized cost would be several times higher than 1.36 c/kWh.
There's a spreadsheet of this kind of calculation in Du and Parson's 'Update on the cost of nuclear power', on MIT's CEEPR page (WP-2009-004). I think it is in the appendix. You can see how the effective value of the revenue dwindles to nothing at the end of 40 years. (It's like putting money in a bank, except in reverse.)
I recognise that my first calculation was a crude approximation not taking into account the subtleties of loans, interest, and all that fun stuff, and I recognise that financial servicing costs will indeed elevate production costs several times over... but how is it figured that the revenue stream from a 1.4GW nuclear reactor with an ongoing annual operational cost of about US$85M in 2009 dollars will be valueless? Is this the perspective from the investor prior to plant operation, or does it result from some kind of assumption concerning how the debt is managed?
ReplyDeleteIs this the perspective from the investor prior to plant operation
ReplyDeleteYes.
Thank you uvdiv.
ReplyDeleteI happen to suspect that nuclear plants can be reasonably expected to operate with regular maintenance for 80 years, possibly a century, maybe even longer. If investors require that all debt be repaid in substantially less than 40 years of operation, this suggests to me that the bulk of such a plant's operational life will be post-amortisation.
It takes a while to get there, but compared to the pitching of the circus tent of technosolar 'renewables', the nuclear industry is building cathedrals.