Rising steel prices, interest rates could push NuScale Utah project to $100/MWh

https://www.utilitydive.com/news/nuscale-nuclear-reactor-smr-uamps-rising-steel-prices-interest-rates/636619/

23 109 4 years ago

ars2• 4 years ago

With solar and wind being so competitive on price (both per MW and MWh) I don't understand why there's not more of it.

Wouldn't investors build massive amount and undercut other plants? Is it simply because the capital costs are already sunk, and the running costs are still competitive?

$100 for this is really bad, other energy sources are 1/3 of this. To me this spells the end of this project.

BuffaloBagel• 4 years ago

Dispatchable energy sir.

kragen2• 4 years ago

conventional nuclear isn't dispatchable

ramp times are measured not in hours but in days

epistasis4• 4 years ago

There are very few locations where renewables have high enough penetration for dispatchability to be the slightest concern for new additions.

In locations with lots of renewables already, new projects are including storage, cost-effectively, which turns non-disparchable power into dispatchable.

I think it's pretty clear that $58/MWh was never going to be achieved, and as with most nuclear projects, reality is 1.5x-3x of what the boosters promise. But even $58/MWh is not cheap enough to match the bids seen for dispatchable renewables+storage.

beefield• 4 years ago

With solar and wind being so competitive on price (both per MW and MWh) I don't understand why there's not more of it.

You need to be a bit more patient. solar / wind have been growing double digit percentages (from the top of my head something like 20-30%) p.a. now for some time. Just to compare, iPhone had never two consecutive full production years that would have had triple digit growth. And arguably increasing production capacity for energy infrastructure is more difficult than for a phone. So the 20-30% p.a. growth is likely the best we can have, and I'd argue even that is explosive. Given current growth rates, majority of electricity production should be solar/wind within the next decade or so.

Gibbon1• 4 years ago

California appears to building the solar equivalent of a 1GW nuke per year with no end in sight. Total electricity currently from solar is 26%. Likely to increase to 40% in five years. Lest one think that's just California being hippy dippy, Texas is on a similar trajectory.

lostlogin4• 4 years ago

If we stopped buying all those phones, we might need less of those solar panels.

It’s amazing to think how much power usage must be controlled by Apple. Any power saving they achieve on iOS has a hundreds of millions of units in the wild.

Schroedingersat35• 4 years ago

Renewables are limited in some areas by hostile legislation and in other areas by reaching saturation for non-dispatchable energy.

There's also a paradoxical cost risk created by such rapid improvements because faster deployment and plummeting prices can mean projects started after yours could finish sooner and cheaper.

In spite of this, PV is selling out as fast as it can be made, wind is being built as fast as it can be permitted, and demand is so high that prices decreases have slowed in spite of manufactuing continuing to get more efficient.

Batteries are a bit of a bottleneck (flow batteries are lagging a bit, but getting there), but sodium ion is here next year and lithium capacity is increasing at record pace.

Policy is kinda lacking in most areas for building out the necessary non-battery storage, but off river and blue field pumped hydro is picking up, and china is advancing the state of the art on concentrating solar (which is dispatchable over ~12-36 hours) and compressed air storage. Europe is also starting to build out thermal storage (which is dirt cheap in the most literal sense because it's made out of the sand that is worthless for other purposes).

AtlasBarfed3• 4 years ago

That 150 wh/kg sodium ion going into mass production is going to be a revolution.

morninglight2• 4 years ago

Maybe try decommissioning some of the old reactors that are beyond their safe lifetime and use the steel from them. Much of that steel cannot be used for conventional projects because it poses a radiation hazard. That should devalue it.

https://www.epa.gov/radtown/radioactive-material-scrap-metal

https://en.wikipedia.org/wiki/Radioactive_scrap_metal

Schroedingersat35• 4 years ago

Interesting concept. It reduces decomissioning costs and building costs.

Would the extra handling precautions cost more than you saved though?

KingOfCoders• 4 years ago

"That should devalue it."

Only if the other party wants to sell.

morninglight2• 4 years ago

Reactors from nuclear subs might be a good place to start. Now we bury them for a period of at least 600 years. And there is plenty more from conventional nuclear power stations.

https://virtualglobetrotting.com/map/disposal-site-for-nucle...

ragebol• 4 years ago

Interesting idea. Though I doubt working with(slightly?) radioactive steel during construction makes things cheaper. It cannot be used conventionally for a reason, it needs special handling I suppose.

myself248• 4 years ago

There's a sliding scale of special handling, and of how unsuitable it is for other things, though. It's interesting to ponder whether there might be a sweet spot of "too radioactive to be reused as warehouse beams" but "foundry workers making a new reactor vessel out of it would only need minimal protection for the few days they'd be around it".

jnsaff2• 4 years ago

And how would you rework that radioactive metal into a new high-precision containment vessel and piping?

The added faff of dealing with irradiated materials will surely be orders of magnitude more expensive then the price increase in raw clean steel.

All of your machinery will be contaminated, really bad for the fabricators, installers, maintainers.

locallost• 4 years ago

And even that price is subsidized.

Hughes explained to the Hurricane City Power Board that the new cost projections take into account approximately 30% in savings through the Inflation Reduction Act, which includes billions in tax credits to support clean energy projects. Otherwise, the project cost could be $120/MWh, he said.

And they don't say it explicitly, but I think it gets worse than that. It wouldn't be unusual for new technology, especially nuclear technology, to offer things at a below market price. It's basically a demo.

The Department of Energy in 2020 approved a multi-year cost share award of about $1.4 billion to help demonstrate NuScale reactors at Idaho National Laboratory.

Teknoman117• 4 years ago

Dumb question, but wouldn't rising steel prices and interest rates affect any large construction project? How are the prices of new construction of other energy sources affected by this?

Schroedingersat35• 4 years ago

At a guess, new wind would be affected about the same because it uses about the same amount of steel as a traditional large reactor (although you can and some projects do use other materials like concrete). Chromium prices would only effect the nuclear plants.

PV has a completely different supply chain. Steel quantities for a racking system like PEG https://pv-magazine-usa.com/2022/11/14/peg-racking-system-su... are minimal. The limitation is polysilicon (which it is riding fairly hard right now, but production is being increased rapidly). Silver is the only critical resource, but metallization improvements are keeping the inputs required flat in spite of mid 20s percent growth.

jlarocco• 4 years ago

Yeah, probably:

Webb said prices are rising for all energy projects. At their October meeting, Hurricane City Power Board members discussed other project price increases and whether $100/MWh would still be a good price for energy from the CFPP. Board Chair Mac Hall said he would be willing to pay the increased cost because of the guaranteed dispatchable power it would provide.

lolc• 4 years ago

The interest rates I can understand. But how are rising steel prices going to change estimates? I'd expect the cost of the steel to be less than one percent of the budget. Is this way off? Or are they just looking for excuses?

dymk• 4 years ago

What’s your prior for the cost of steel being only one percent of a major commercial construction project like this?

Schroedingersat35• 4 years ago

Steel usage is on the order of 100,000t for a GW of nuclear reactor and a decent chunk is rebar rather than low alloy stainless. If we take it on the high end, that's about $200 million. Double it for finance costs and you're around half a billion. Stainless and heavy fabrication costs more, but that's not 'steel costs' per se.

Over its lifetime a NPP including fuel and upkeep is on the order of 20 billion/GW.

Might call it 5-10% at a stretch. Certainly not enough to double it. And if nuscale reactors are claiming to be much cheaper and less resource intensive then they're either lying about the steel costs being the cause, lying about hidden subsidies, or lying about using an order of magnitude more steel. Either way you probably don't want scam artists in charge of enriched uranium.

renewiltord4• 4 years ago

Why do construction projects not buy steel futures?

varjag• 4 years ago

Can't build structures out of paper derivatives.

renewiltord4• 4 years ago

You have to transport the steel from the contract delivery point but the steel is real, not paper.

lostlogin4• 4 years ago

No cardboard derivatives. No paper, no string. No sellotape.

https://m.youtube.com/watch?v=3m5qxZm_JqM

jpgvm• 4 years ago

Probably hubris. If you are forecasting such a big expense then yeah, you should probably hedge the upside risk with futures contracts.

renewiltord4• 4 years ago

Perhaps there's no mechanism for a government project to do this without being exposed to becoming a speculative endeavour.

benj111• 4 years ago

I don't get this. If the price per mwh has basically doubled. The price of steel must have taken a huge jump.

Except if I try and get a price https://tradingeconomics.com/commodity/steel

There seems to be a recent doubling, but the price is back down.

So I guess these are just general cost overuns?

epistasis4• 4 years ago

The entire point of moving towards the more expensive form factor of SMRs was to avoid cost overruns, and maybe even get some cost decreases in the future.

I maintain hope that some of the other SMR attempts will not have the same ballooning costs problem of every single nuclear project that inspired them, but it's a hold based on the need for the tech, not a hope that could be backed with a rational reasoning. I fear that the entire nuclear industry is filled with charlatans, and nobody who isn't a charlatan would ever get funding to start working on a new reactor.

Schroedingersat35• 4 years ago

Luckily there has been an ever growing torrent of successful demos, new technologies and projects coming in on time and on budget (or before and below) from the renewable sector. There are still some missing pieces, and more policy support is needed; but more and more it's looking like completing the puzzle is possible without the charlatans, and it may even happen before 2 degrees.

Rising steel prices, interest rates could push NuScale Utah project to $100/MWh

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