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Despite Gains, Nuclear Too Costly for NW
Long considered an energy resource fraught with overwhelming cost and safety problems, nuclear power may be making a comeback. Why? Higher natural gas prices, concern over global warming, and a steady drumbeat from the industry that nuclear technology is increasingly safe and cost effective all contribute to the changing perception of nuclear power. But the passage of time may be the overriding factor. Troubling events at Russia's Chernobyl and Pennsylvania's Three Mile Island reactors defined the perception of nuclear power for a vast cross-section of Americans at the time of the accidents, but are distant or nonexistent memories for the nation's younger voters.
"For a lot of people it's just been off the radar screen, and the fundamental problems with nuclear power have lapsed into obscurity a sort of social amnesia," said Robert Kahn , a Mercer Island, Washington -based energy consultant. "And as an industry, they've positioned themselves beautifully on global warming."
The Northwest's collective recall of the disastrous financial legacy of the Washington Public Power Supply System (WPPSS ) also seems to be fading. Complete with a new name, and a lot of help from the changing West Coast power market, WPPSS, now Energy Northwest (EN ), has successfully polished its image and enjoys new status as a star player in the region's energy system. News reports have repeatedly carried EN's assertion that the existence of the 1000-plus average megawatt (aMW) nuclear Columbia River Generating Station (Columbia) saved the Bonneville Power Administration (BPA ) and the region more than $1 billion during the surge in power prices over the last year. BPA buys all the output from the plant. The same logic has not been applied to the region's 20-year, 1700-plus aMW legacy of cost-effective conservation, nor to Grand Coulee Dam or any other major Northwest energy resource.
EN has legitimately improved its standing by dramatically reducing Columbia's operating costs during the 90s ‹ from a high of more than 6 cents per kilowatthour (kwh) in 1992 to an all-time low of 2.5 cents/kwh in 2000. Critics concede the plant's improved day-to-day costs make a strong economic case to keep the plant running and possibly extend its lifetime, but they also argue the operating cost of any power plant is an inadequate measure of its true cost. The debate over the financial merits of completing Columbia's sister plant (WNP-1), they say, should begin with a close look at the full, or life cycle, cost of nuclear technology and its alternatives.
The full measure of what it costs to produce a kwh of energy from a power plant consists of three basic elements: the capital cost of building the plant, the ongoing operating costs and the cost of decommissioning the plant. These three components are called life cycle cost and they range widely among different generation technologies. Nuclear has very high capital costs, between $3 million and $5 million per MW of capacity, and modest, but in theory predictable, operating and maintenance costs.
Natural gas-fired power plants cost comparatively much less to build, roughly $0.5 million per MW and operating costs are based mostly on natural gas prices. The cost of wind power is largely a function of capital costs. Wind is a free fuel and operating costs at wind facilities are very low. Decommissioning costs are difficult to measure as they occur in the future, but are almost certain to be higher for nuclear than other generation technologies due to the high cost of handling, transporting and disposing of spent nuclear fuel and equipment. And efforts to identify an acceptable method of nuclear waste disposal have been a dismal failure to date.
Olympia, Washington-based economist Jim Lazar pegs Columbia's year 2000 combined capital debt service/operating cost at just over 5 cents/kwh and at an average of 7.5 cents/kwh since the plant began operating. Lazar adds an additional "Prepaid Project Cost"(approximately 2 cents/kwh for 2000) to cover the costs BPA incurred between 1979, when the agency began incorporating debt service for the plant into it's rates, and 1984 when the plant started producing power.
Preliminary estimates by the Northwest Power Planning Council put the combined debt service/operating cost of power from a privately-built natural gas-fired plant at approximately 3.7 cents/kwh assuming no additional costs to mitigate for carbon dioxide emissions. The estimate is based on a 30-year plant lifetime and the Council's average yearly gas price projections which range from a high of $5.10 per million British thermal units (mmBTUs) in 2001 to a low of $2.27/mmBTUs in 2005. Current gas prices are in the $4/mmBTU range. But Western gas prices spiked to more than $10/mmBTU at times during the last year. Wind power is in the 3 to 4 cents/kwh range. The cost of wind power has dropped by 80 percent in the last two decades and will continue to fall.
The nuclear industry as a whole has improved its safety record. The number of shutdowns per plant dropped from 3.6 per year to 0.6 per year between 1987 and 1999 according to the Nuclear Regulatory Commission and the number of safety-system failures was cut in half to 0.8 per year. But little progress has been made on solving the nuclear waste problem. And the technology's ability to compete with other forms of generation in the Northwest remains questionable. Despite operational improvements, Columbia remains one of the Northwest's most expensive electricity resources and it is unclear whether the economics of a nuclear plant built today would be any better.
Mark Glyde