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Nuclear Power More Profitable than Coal Nuclear Africa 2014 18-20 March 2014

Nuclear Power More Profitable than Coal Nuclear Africa 2014 18-20 March 2014. Dr. Dawid E. Serfontein School of Mechanical and Nuclear Engineering, North-West University , South Africa. Introduction.

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Nuclear Power More Profitable than Coal Nuclear Africa 2014 18-20 March 2014

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  1. Nuclear Power More Profitable than CoalNuclear Africa 201418-20 March 2014 Dr. Dawid E. Serfontein School of Mechanical and Nuclear Engineering, North-West University, South Africa.

  2. Introduction • IEP and IRP Update lay an excellent foundation: very comprehensive set of data and sophisticated modelling tools. • I reviewed both documents for NIASA: • See my summary in conference booklet • + links to NIASA's website. • I found a number of serious flaws in the IEP, which have seriously skewed its results against nuclear:Implementation would impact very negatively on South Africa’s economy and energy security.

  3. Own modelling results: First show the correct way. Business case for nuclear: • Nuclear plants twice as expensive as coal, but: • Last for 60 years, vs. 25-50 years. • Much lower fuel cost than coal. • Load factor = 92%, vs. 20 - 30% for PV solar and wind. • Therefore nuclear produces cheaper power!

  4. Own modelling results (continued) • Calculate LCOE as function of the Weighted Average Cost of Capital (WACC%): Government invests 100% of the capital as equity. • Nuclear: • Expected case : Overnight cost =$5,500/kW-installed • Pessimistic case: Overnight cost =$7,000/kW-installed. • Coal: • Expected Case: External cost = Only R120/ton CO2 carbon tax. • Pessimistic case: Full external costs.

  5. Conclusions • New Nuclear will produce electricity at a much higher profit than coal. • External cost of New nuclear (R0.005/kWh) is about 50 times lower than that of coal (R0.26/kWh)!

  6. Conclusions • SA should thus deploy nuclear as long lead-time cheap base-load technology. • Add peaking technologies. • Lastly add quickly deployable technologies when shortages loom. • Develop local nuclear project management skills.

  7. Contrast with flawed IEP and IRP Update • Unrealistically high real discount rate has been used:Economic Opportunity Cost of Capital (EOCK) of 11.3%! • Nominal discount rate of 11.3 = 5.3% real discount rate, which would have produced fundamentally different optimisation results. • This massively underestimated the cost efficiency of nuclear power for reducing CO2 emissions. • We propose a real discount rate of 3%.

  8. More flaws • Intermittency costs of wind and PV solar have not been taken into account. • “Time of day” electricity selling prices have not been taken into account, which has also unfairly benefitted intermittent sources, especially PV solar.

  9. Flaws (continued) • Cooking the environmental books with imported CO2emissions. • Led to massive imports of petrol, diesel and natural gas and coal power and hydro: 90% of South Africa’s energy imported! • Would cause massive local job losses, serious problems on the balance of payments, threaten national security. • External costs were not internalised: Gas, coal and nuclear.

  10. Conclusions • Flaws decreased nuclear, gas and wind capacity and inflated solar and coal. • Easyto correct flaws in IEP and IRP Update! • Correction will: • Save massive amounts of money, • boost the economy and job creation • and promote energy security.

  11. Thank you! Any questions or comments?

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