Figure 1 illustrates the cost to build various types of new central-station power plants.
While the cost to build a power plant is important, the cost to operate the facility, including repayment of the money borrowed to construct the plant, is the key to the investment. The moderate cost of the hybrid’s reactor block is more than offset by the plant’s large output, exceptional efficiency, partial use of low-cost nuclear fuel, and the low build cost of the power block, as Figure 2 demonstrates.
The argument is often made that nuclear power is an effective hedge against the variability of the price of natural gas. That is true, provided that the relative capital cost of the nuclear investment is not excessively high. As illustrated by Figure 3, the hybrid is an effective hedge while new conventional nuclear plants struggle in this regard.
Conventional wisdom suggests that the long-term operating costs of conventional nuclear power plants are low relative to other forms of generation. That is not necessarily true, as illustrated by Figure 4. Again, the high-cost of the initial investment (specifically the return on the invested equity) impacts delivered power prices throughout the life of the facility.
With the debts from building the plants are paid off, a conventional nuclear plant achieves parity with a hybrid-nuclear/NGCC plant at a natural gas price of about $11.50/MMBTU. The small nuclear (SMR) achieves parity at a gas price of about $16.75. With no debt, a conventional nuclear unit achieves parity with a NGCC plant at a gas price of about $7.1/MMBTU. The hybrid-nuclear/gasification plant is the lowest cost option at a natural gas price of about $6.25/MMBTU, once the debt is paid-off.
The hybrids’ unprecedented technology approach synergistically merges basic technology elements to significantly amplify underlying capabilities. A similar financial improvement also occurs. Relative to stand-alone parents (a gas reactor power plant and a 1x1 combined-cycle power plant), the hybrid achieves: an over 45% reduction in capital costs; an over 30% reduction in production costs; an over 10% improvement in efficiency; and a nearly 30% improvement in output. Thus the hybrid is the superior approach, by a significant margin, to separately building a gas reactor and a combined-cycle power plant.
Notes on Economic Analysis:
Natural Gas = Natural Gas Combined-cycle (NGCC) Power Plant
Coal = super-critical pulverized coal plant (SCPC)
Coal Gasification or Coal Gas = Integrated Gasification Combined-cycle (IGCC)
Nuclear = Pressurized Water Reactor (PWR)..
Gas Reactor = Next Generation Nuclear Plant (NGNP)
Key assumptions for the analysis include:
(1) Return on Owner’s Investment (ROI): 10%;
(2) Owners costs: fossil plant = 25%, nuclear = 40%;
(3) Owner’s equity investment = 35% of plant cost;
(4) Loan = 8% rate, 15 years; (5) All plant costs are based on standardized “Nth-of-a-kind” units.
©2012, 2013 Hybrid Power Technologies, LLC
Last Modified: October 12, 2013