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Response to kristopher (Reply #21)

Fri Apr 13, 2012, 12:18 PM

43. The CBO's analysis

I got the number they used wrong, it was $2500/kw not 1500. $1500 was MIT's number.



...For this estimate, CBO assumes that the first nuclear plant built using a federal loan guarantee would have a capacity of 1,100 megawatts and have associated project costs of $2.5 billion. We expect that such a plant would be located at the site of an existing nuclear plant and would employ a reactor design certified by the NRC prior to construction. This plant would be the first to be licensed under the NRC’s new licensing procedures, which have been extensively revised over the past decade.

Based on current industry practices, CBO expects that any new nuclear construction project would be financed with 50 percent equity and 50 percent debt. The high equity participation reflects the current practice of purchasing energy assets using high equity stakes, 100 percent in some cases, used by companies likely to undertake a new nuclear construction project. Thus, we assume that the government loan guarantee would cover half the construction cost of a new plant, or $1.25 billion in 2011.

CBO considers the risk of default on such a loan guarantee to be very high—well above 50 percent. The key factor accounting for this risk is that we expect that the plant would be uneconomic to operate because of its high construction costs, relative to other electricity generation sources. In addition, this project would have significant technical risk because it would be the first of a new generation of nuclear plants, as well as project delay and interruption risk due to licensing and regulatory proceedings.


Note the price - $2.5 billion was to be only for the first plant. Future plants were, according to the assumptions provided by the nuclear industry, expected to have lower costs as economy of scale resulted in savings.

In fact, since the report was written (2003), the estimated cost has risen to numbers up nearly $8 billion/reactor in the case of Progress in Florida.

Wonder what that does to the “risk is that … the plant would be uneconomic to operate because of its high construction costs, relative to other electricity generation sources”?

Does that risk diminish or increase when the price rises from $2.5 billion to $8 billion?

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kristopher Apr 2012 OP
rhett o rick Apr 2012 #1
qb Apr 2012 #2
felix_numinous Apr 2012 #3
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madokie Apr 2012 #10
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FBaggins Apr 2012 #11
kristopher Apr 2012 #12
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kristopher Apr 2012 #17
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kristopher Apr 2012 #19
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LineLineLineLineLineLineLineLineLineLineNew Reply The CBO's analysis
kristopher Apr 2012 #43
XemaSab Apr 2012 #16
Dead_Parrot Apr 2012 #22
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joshcryer Apr 2012 #39
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