French Reactor Cost Rises Dramatically, Wind Energy Now Cheaper than New Nuclear

Paul Gipe, Contributor
December 06, 2012 | 10 Comments

Liberation reports that for the second time in a little more than a year the cost of a new reactor under construction at Flamanville, France has risen dramatically.

Originally scheduled to be completed this year for a cost of €3.3 billion, the cost of the European Pressurized Reactor (EPR) doubled in 2011 to €6 billion and completion was delayed until 2016.

Constructors Areva and Electricité de France (EDF) have announced the cost has again risen, now to €8.5 billion ($10.6 billion) for the 1,650-MW reactor.

Similar cost overruns and completion delays have plagued Areva's EPR reactor under construction in Finland. Originally planned for operation in 2009, the Finnish reactor's start date has been extended to 2015, six years behind schedule.

With capital costs now more than €5,000 per kW ($6,400 per kW), EDF's announcement doesn't bode well for reactor proposals in Ontario, Canada, the US, and in Great Britain.

The French renewables industry was quick to denounce the cost overruns, saying that renewables are cheaper.

The Syndicat des énergies renouvelables (SER) said the situation wasn't surprising, following EDF's announcement earlier this year of similar costs for proposed reactors in Great Britain.

This summer both Reuters and Bloomberg were reporting various British estimates of the tariffs needed to make EDF's proposed reactors profitable at these installed costs. Their sources estimated that the tariffs required varied from a low of €0.12 to as much as €0.19 per kWh ($0.15 to $0.24 per kWh).

SER noted that wind in France is paid only €0.08 per kWh ($0.10 per kWh) and clearly competitive with new nuclear.

What SER didn't say was that wind generation in France is only paid €0.08 per kWh for the first ten years of operation. Following the first ten years of the contract, the tariffs paid depend upon the wind resource at the site. At the windiest sites, wind generation is paid as little as €0.03 per kWh ($0.035 per kWh) in years ten through fifteen, a fraction of the cost of new nuclear in France.

The full cost of the Flamanville reactor, whatever that might finally be, will be placed into the rate base and borne by French consumers. If regulators force EDF to absorb some of the cost overruns, as a state enterprise, EDF's loss will be passed onto French taxpayers.

Wind generation and generation from other renewables are treated differently. Under French feed-in tariffs, renewables are paid a fixed price for their generation, and only for their generation. If a renewable project costs more than projected or fails to operate as planned, the owners bear all the costs. Consumers only pay for the generation and only the price that is posted by the regulator.

The government of François Hollande campaigned on modestly reducing French reliance on nuclear from 75% to 50% by 2050. EDF's announcement may put pressure on the Hollande government to accelerate the transition to renewables.

At the current pace of development, France is unlikely to reach its 2020 renewable targets. It currently takes eight years for a wind project to navigate through the notorious French bureaucracy, in contrast to the two years needed in Germany. Solar has been plagued by inconsistent policy during the previous government of Nicolas Sarkozy that was closely aligned with EDF, Areva, and the nuclear industry.

Lead image: Eiffel tower via Shutterstock

10 Comments

ANONYMOUS
December 15, 2012

Bob writes in comment #8:
"This very large grid will bring a wide assortment of inputs from the geothermal and hydro of Iceland to the abundant solar of the Middle East. Clouds in France will not mean that France will not have solar electricity available."

It is worth noting that even in the Journal of Power Sources, 225 (2013) 60 study Bob likes, they make only modest use of solar power in their minimum cost projections with battery storage, hydrogen storage, or grid-integrated vehicle storage. If your peak demand comes at winter nights (as in France) solar PV isn't a good choice to match demand--even with very extensive storage capabilities. If we ever get serious about minimizing CO2 emissions we will have to transition to electricity for our heating needs (even geothermal heat pumps require significant amounts of electricity) and this will push the demand peak for many regions into winter nights. Seasonal variability is going to prove to be a real stumbling block for meeting future demand by solar PV.
Steven

ANONYMOUS
December 15, 2012

In comment #6 Bob writes concerning the study in the Journal of Power Sources, 225 (2013) 60:
"They found that by 2030 we could obtain 90% to 99.9% of our electricity from renewable energy and storage and the remainder from fossil fuels for about what we currently pay for electricity. "

Well, their estimated production cost for 99.9% renewables the near-term cost estimate of is $0.32/kWh and includes no contributions from costs to extend the grid so that it can accommodate dramatically higher transmission needs because peak production now has to meet demand needs plus charge storage. (The estimates for 2030 involve highly questionable cost reduction estimates for wind power.) They also do not include the cost to maintain about half of our current fossil generation facilities to provide power for only a few hours a year. When I compare $0.32/kWh to the current US mean generation cost (i.e., the cost without transmission and distribution expenses) of about $0.06/kWh I don't come to the conclusion that this is "about what we currently pay". I very much doubt that it will ever be feasible to have 80+% of generation coming from wind power, even with massive storage and the willingness to overbuild capacity by a large factor and use curtailment for much of the resulting generation.
Steven

Bob Wallace
December 14, 2012

Steven - the Ambri liquid metal battery cost estimates are made, I believe, on the basis of one cycle per day. In practice batteries would often cycle twice a day, bringing wind to the morning peak and solar to the afternoon/early evening peak.

Regardless, the price would be far less than using hydrogen storage which was modeled in the Delaware study.

--

You should not look at France as an isolated grid. Europe is already buying and selling large amounts of electricity across country boundaries. Read up on "Desertec".

Work is underway to create a unified grid that stretches from Iceland, across Europe, into North Africa and the Middle East.

For example, there is already a transmission line from Europe to Morocco. New solar plants are being built in Morocco which will feed power north into Europe.

This very large grid will bring a wide assortment of inputs from the geothermal and hydro of Iceland to the abundant solar of the Middle East. Clouds in France will not mean that France will not have solar electricity available.

Bob Wallace
December 14, 2012

Continuing discussion of the "Delaware paper"...

This is, of course, a 'worst case' solution for getting rid of fossil fuels using only wind, solar and storage.

The authors did not include other renewable generation inputs such as hydro, tidal, wave, geothermal biomass/gas. More varied inputs will decrease variability, reducing cost for storage and replacing that 0.1% to 10% natural gas. Biogas, for example, would be a 1:1 replacement for NG.

Tying the PJM to surrounding grids would lower variability. There are ways to use dispatchable loads to smooth variability.

The study is based on today's technology. Each improvement in harvesting or storing renewable energy will lower the cost and replace the NG component.

---

In practice France's nuclear power may be spread across Europe as they build their "Desertec" grid. It's unlikely that new nuclear will be built due to costs and a looming cooling water problem.

As long as another reactor doesn't melt down most of the existing European reactors will likely be allowed to operate for a few decades. However if we loose one in the US or Europe then the pressure to close nuclear plants is going to be extreme.

France is already turning to wind and solar. The French can do math.

Bob Wallace
December 14, 2012

OK, new and IMHO very important study has been released. It addresses the feasibility and cost of running a very large grid on almost nothing but wind, solar and storage. Using real world numbers.

Researchers at University of Delaware used four years of weather and electricity demand data in one minute blocks which gave them actual time measurements of how much wind and solar were available and how much electricity the grid was using during each minute interval.

The data for 1999 through 2002 came from the PJM Interconnection, a large regional grid that services all or part of 13 states from New Jersey to Illinois. This is the world's largest competitive wholesale electricity market, serving 60 million customers, and it represents one-fifth of the United States' total electric grid.

They used currently available technology and its projected price in 2030 and using the historical data to determine the least expensive mix of wind, solar and storage which would keep the grid powered at least 90% of the time.

They found that by 2030 we could obtain 90% to 99.9% of our electricity from renewable energy and storage and the remainder from fossil fuels for about what we currently pay for electricity. The "all-in" price of electricity which includes coal and oil produced health costs.

During the four year period there were five brief periods when renewables plus storage were insufficient to fully power the grid and natural gas plants came into play. Even then the percentage of electricity coming from NG was small. It was simply the cheapest alternative for those few periods.

After billions of simulations using differing amount of wind, solar, storage and fossil fuels they found the best solution was to over-build wind and solar and at times simply "throw away" some of the produced power. Building "too much" wind and solar turns out to be cheaper than building more storage.

http://www.smartplanet.com/blog/take/coming-soon-100-renewable-power/296

ANONYMOUS
December 14, 2012

DMMELLOW writes in comment #4: "Well WIND and SOLAR POWER GENERATION in France will not need extra back up for intermuttency since they already have NUCLEAR AND NATURAL GAS plants to do that"

I think it is sheer fantasy to think that replacing a large block of base load generation with highly intermittent solar and wind would not require additional dispatchable resources. Bob from comment #2 is a big believer in battery power to address some of this intermittency, and that might help with short term intermittency (assuming it is ever affordable) but seasonal intermittency is much more problematic. Peak demand in France is often on winter nights because they use a lot of electrical heating. Solar PV generation is useless for that and even if you could store all the daytime solar power in batteries you would often find winter days with negligible solar generation. Seasonal variation for wind isn't quite as dramatic, but is still significant. You can add a few percent of intermittent resources to the grid without having to worry about stability because there is already a significant capacity for peaking generation, but at larger market penetration this is going to become a significant issue and lead to increased costs. When comparing different technologies, such as nuclear vs. wind, these complications need to be properly considered.
Steven

DANIEL MARTIN-RIOS
December 14, 2012

Well WIND and SOLAR POWER GENERATION in France will not need extra back up for intermuttency since they already have NUCLEAR AND NATURAL GAS plants to do that

ANONYMOUS
December 8, 2012

Bob: It has been 20-30 years since the US was building nuclear power plants with sufficient scale to allow a robust industry and we have learned quite a bit since then. We could surely do better now. Nuclear has a hard time competing against cheap natural gas and coal, but it would do much better against PV, wave power, biomass and the like.

I think your estimates for batteries are very optimistic. How many cycles per day are assumed when you estimate storage costs of $0.02/kWh? At small market penetrations you could get several cycles per day of use, but won't get that at scale. Losses from battery storage are probably in the ballpark of 20% and this also adds to costs. If you have enough renewables to meet peak demand conditions you are going to find that In Spring and Fall, when demand is lower, you would have to deal with a significant amount of curtailment, and this is something that also isn't factored into wind prices at current market penetrations (perhaps longer term storage as H2 or some hydrocarbon will pick up some of this slack, but you won't be using batteries for long term storage).

Wind power is an interesting technology and in some locations produces electricity at very reasonable rates provided that you don't have to deal with intermittency costs. Once you go up to ~20% market penetration (and there probably are not enough good land-based sites in France to reach that level) you are going to start to see significant intermittency costs and complications. Those need to be factored in if you want to have a fair comparison to nuclear power.

Steven

Bob Wallace
December 8, 2012

When we were building reactors in the US "scale" and experience did not bring down the price of new reactors. The price increased and increased until nuclear became too expensive to consider.

A grid fed by 75% wind would not be wise in most places. The grid needs to be fed by multiple sources including solar, geothermal, tidal, hydro, biogas/mass and (hopefully) wave. And the grid needs to be as wide spread as possible. That will minimize the amount of storage and backup generation required.

--

That said, it looks like we're going to have some very affordable storage available. Liquid metal batteries continue to get closer to reality and could give us $0.02/kWh or less storage. Wind is projected to fall to $0.03/kWh over the next few years. Stored-wind is likely to be pretty affordable.

ANONYMOUS
December 7, 2012

Wind is cheaper than new nuclear power under market conditions where very few reactors are being built and where wind supplies only a few percent of total generation. A serious shift toward new nuclear power would likely lower costs considerably as the industry gained scale. How much would wind cost if it supplied 75% of total generation as nuclear does in France today? The costs from mitigating intermittency would likely be staggering at that level of market share.
Steven

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Paul Gipe

Paul Gipe has written extensively about renewable energy for both the popular and trade press. He has also lectured widely on wind energy and how to minimize its impact on the environment and the communities of which it is a part. For his...