Unlike other forms of energy production, nuclear power plants absorb the cost of disposing waste and the future cost to decommission the plant at the end of its life. Coal, oil, and natural gas power plants do not pay to dispose of by-products of their energy production because the waste diffuses into the atmosphere.
Nuclear Waste (Used Fuel) Disposal Cost
Utility companies operating nuclear power plants pool money into the Nuclear Waste Fund (NWF). The expense of payments made to the NWF is included in the fuel subcomponent of a nuclear power plant’s operating costs. As of January 2009 the average utility company’s contribution per metric ton of nuclear used fuel was approximately $277,000. A typical nuclear power plant generates about 20 metric tons of used fuel per year. This amounts to approximately $5.5 million per plant contributed annually to the NWF. Payments to the NWF amount to about one tenth of one penny ($0.001) per kWh to the consumer.
Nuclear Power Plant Decommissioning Cost
Future decommissioning of a nuclear power plant is estimated to cost $500 million per plant. Decommissioning is generally broken down in to three categories: radiological ($300 million), used fuel ($100-150 million), and site restoration costs ($50 million). Decommissioning is not included in the operating costs of a plant. Instead, the expected future liability ($500 million) is spread across the anticipated life of the plant.
Most nuclear power plants are expected to be in service for a minimum of 40 years, so the $500 million is spread across 40 years with adjustments for discount rates. You would expect the annual charge to be about $12.5 million per year by evenly spreading the $500 million across the 40 year life of the plant. However, since the liability is in the future one can assume that the money put into the fund will be accruing interest over time. This means that the actual charge to the utility company’s income statement is substantially less than $12.5 million per year. If a company expects to earn 4% interest on average over the 40 year life of the plant on the decommissioning fund, about $2.6 million per year must be put into the fund in order to attain the $500 million target at the end of 40 years. Decommissioning costs amount to about $0.0015 per kWh to the consumer.
Dry Storage and Geological Repository
Nuclear used fuel is currently disposed of using different types of dry storage containers. This method is inexpensive in the short term, but has long term clean-up cost and security concerns. Many experts agree that a geological repository is the only viable solution for safety and security in the long run. Utilities operating nuclear plants and the US government have been financing a geological repository called Yucca Mountain in Nevada since the 1980’s. In 2009 the Obama Administration stated that Yucca Mountain is no longer an option for storing nuclear used fuel. They recommended eliminating all funding for the development of the site in the 2009 US Federal Budget. In July 2009, the US House of Representatives voted against pulling the funding for Yucca Mountain development 388 – 30. To date, utility companies have contributed $24 billion in funding for Yucca Mountain development. If the US government does not intend to finish Yucca Mountain development the funding to date should be refunded to the utilities so they can pass it back to their customers by way of rate reductions or investment in new nuclear construction to reduce financing costs.
Image Credit
Cofrentes courtesy of Flickr user Toni Rodrigo under the CC license.
9 Comments
During the restoration period, what happens to the physical structure of the plant itself?
I assume it is demolished or otherwise repurposed, if possible.
I checked into your question further and it looks like there are a couple of things that can happen. During restoration, the physical structure of the plant is usually destroyed. In the past, some sites have been reopened to visitors or other uses. It would seem that decommissioning some sites can take decades.
Dream on….the Humboldt Bay Nuclear Reactor cost $33m to build in 1963, operated for about 13 years, and put out close to 5 billion kwh of electricity. Today’s decommissioning cost estimate is “about’” $500m…that puts the price at 10 cents/kwh!!! Throw in the price of spent fuel management…this is economic insanity!
I would like to see that calculation that says $500 million is 10 cents per kWHr. I beleive you’re off by many decimal places.
Huboldt Bay was a 65 MW reactor with no relevance to the most important issues facing contemporary or advanced reactors. Anti-nuclear blog posters like mike often cite some un-sourced, cherry-picked fact (if mike’s assertion is a fact) unrelated to contemporary nuclear issues and choices, and then imply, in most cases via a statement laced with sarcasm and hyperbole (“dream on,” “!!!,” “insanity”) that the fact has some relevance.
Sarcasm and hyperbole are not the same as logic and reason. As Mark Twain wrote: “throwin’ mud ain’t arguin’”
I suppose when your position is as weak as that there is little in the way of options.
lol @ “minimum of 40 years”. The average life of a nuclear plant is 22 years.
Er … I don’t think so.
The average age of the currently operating fleet of nuclear reactors in the US is already 31.4 years, and they’re still running. Many have already received extensions to run an additional 20 years beyond the first 40 years for which they were first licensed.
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