Wind, Solar Prices Set to Plummet. Small Nukes, Not so Much

November 19, 2022

Utility Dive:

Wind and solar paired with battery storage is in the $20/MWh to $30/MWh range, making them competitive with natural gas-fired generation, said Matt Pawlowski, NextEra Energy Resources executive director of business management and regulatory affairs.

Later this decade, with the IRA, NextEra expects wind coupled with a 4-hour battery system will cost $14/MWh to $21/MWh, according to a Nov. 4 company presentation. Solar with batteries will cost $17/MWh to $24/MWh, the company estimates. An existing natural gas-fired power plant will cost $35/MWh to $47/MWh to operate, assuming gas is in the $4/million British thermal units to $5/MMBtu range, according to NextEra.

The prices for solar and batteries and wind and batteries are about 35% to 44% lower than cost estimates NextEra provided in a mid-June presentation before the IRA was released.

Although the IRA’s tax credits run for at least a decade, some of the law’s programs end sooner, Sam Walsh, Department of Energy general counsel, said.

“We have a once-in-a-lifetime set of incentives that are on the table. The biggest risk for ratepayers would be a failure to capitalize on that right now,” Walsh said. “Even for that 10-year tax credit window, the planning has to start now.”

Before the IRA, wind and solar were constrained by their cost-competitiveness, according to Farbes. Now, they are limited only by how fast they can be built, he said.

State utility regulators will need to change their resource planning practices, panelists said.

Instead of top-down load forecasting of modest load growth, regulators will need bottom-up forecasting to account for a pending surge in electric vehicle and building load, according to Farbes.

Since the late 2000s, load growth has been generally flat, Farbes said. However, the IRA could spur 3.1% annual load growth this decade, or about 30% growth by 2030, he said.

Electrified transportation could account for about 15% of electric demand in 2030, and electric heating could make up 5% of demand, according to the REPEAT Project modeling.

Transmission may be the biggest limit on renewable energy development, even with the IRA, according to the panelists.

“It’s probably one of the largest obstacles to building more renewables on the grid,” Pawlowski said. “We’re already behind on transmission.”

The U.S. high-voltage transmission system needs to grow 2.3% a year, up from its 1% annual growth rate over the last decade, to meet the IRA’s potential, Farbes said.

Expanding transmission at its current pace would reduce potential wind and solar deployments by 50% and reduce its emissions reduction potential by 80%, he said.

Federal and state permitting as well as structural problems with the Federal Energy Regulatory Commission’s transmission planning and cost allocation rules are major challenges to building power lines, according to Walsh.

Pending transmission planning and interconnection reforms at FERC may help spur transmission development, he said.

Meanwhile:

Utility Dive:

  • Higher steel prices and interest rates are driving up the projected cost of energy from Utah Associated Municipal Power Systems’ planned 462 MW small modular reactor project, multiple municipal utilities have reported. 
  • Previous cost estimates were for the project to generate power at a price of $58/MWh, but at least one municipal power provider says project developers told it that prices could run $90/MWh to $100/MWh. The Utah project consists of a half dozen 77 MW reactors, being developed by NuScale, with the first expected online in 2029.
  • The rise in prices likely means the UAMPS project will not hit certain engineering, procurement and construction benchmarks allowing participants to renegotiate the price they pay or abandon the project, experts said.

“It was like a punch in the gut when they told us,” Scott Hughes, power manager for Hurricane City Power, said during the utility’s Oct. 5 board meeting. 

The Idaho Falls Power Board discussed the price increases at its October meeting, according to its minutes, and Washington City Power Department Director Rick Hansen told his board on Nov. 1 that the project will “probably fail” the economic competitive test. 

Costs of more than $58/MWh could allow participating utilities to abandon or renegotiate the terms of the CFPP.

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.

But with the project start date still seven years away, materials costs and interest rates could fall, Hughes added. 

“The next question is what are we going to do instead?” he asked. “Or what if the project fails, what are we gonna do? There’s not a lot of options.”

If other cities walk away, the project “might just fail anyway,” Hughes said.

“They didn’t say 100%, but most likely this is going to cause the [enginnering, procurement and construction] contract to fail, which gives us an out,” he said.

UAMPS spokesperson LaVarr Webb said the developer is reviewing all project costs. Final numbers are not yet in but project costs have risen, mostly due to inflation and interest rate increases, he said.

Utility Dive:

Cost is a key component in the development of new nuclear resources, and critics points to recent overruns at traditional reactor projects in South Carolina and Georgia as cautionary tales amid falling renewables prices.

Santee Cooper and SCANA Corp. eventually abandoned their South Carolina project when cost estimates topped $25 billion. In Georgia, with Southern Co. subsidiary Georgia Power as the primary owner, Vogtle units 3 and 4 are years behind schedule and billions of dollars over their initial budget.

Meanwhile, the costs of renewables and storage are falling. Utility-scale solar-plus-storage costs are about $45/MWh; wind power costs are $30/MWh; and stand-alone utility-scale solar costs are at $32/MWh, according to the Institute for Energy Economics and Financial Analysis. And that group has doubts that SMRs can be developed as cheaply as their backers claim.

SMRs are a new technology, and “if you look at the cost of the first one that rolls off, it’s going to be fairly high,” U.S. Nuclear Industry Council President and CEO Bud Albright said at the USEA event Friday. But, he added, “we’re counting on volume, and volume is predicted. And so that should bring costs down.”

GE Hitachi’s Ball called the $60/MWh cost “achievable.”

“We believe that the future of nuclear is in small modular reactors,” he said. “The industry’s focus for decades has been on large reactors, but you’ve seen what has occurred in terms of these projects going over budget, way past schedule. … The reason we pivoted was to create a design that could be cost-competitive with all forms of generation.”

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10 Responses to “Wind, Solar Prices Set to Plummet. Small Nukes, Not so Much”

  1. Brent Jensen-Schmidt Says:

    How about spending effort in finding solutions other than replacing nukes with coal and gas!

  2. Jim Torson Says:

    For years I have been telling anyone who would listen that a nuclear power renaissance for addressing climate change is an economic disaster (in addition to a health and safety disaster). OK. One more time… DO NOT BE FOOLED BY THE BOGUS HYPE ABOUT NEW NUCLEAR TECHNOLOGIES. In Nov. 2015 I sent this to some correspondents:

    Awhile ago I went through a box of stuff and found a magazine I had saved because inside it includes an interesting interview with John Bell on quantum mechanics. However, the main article is highlighted on the cover with the headline “Nuclear Renaissance: Reactors Are Back and Reactions are Good.” This article discusses “the reactor design of the future – the dream machine that’s simple, small, efficient, and, most important, safe enough to convince the American public, once again, to vote nuclear.” The discussion includes “an advanced version of the light water reactor,” “smaller reactors with more passive safety features,” the newest designs – “inherently safe” reactors, “new ALWRs [advanced light water reactors] would be assembled from shop-fabricated modular components, making them cheaper for utility companies to buy,” “three other types of reactors that proponents claim to be ‘inherently safe’ go by the names of integral fast reactor (IFR), high-temperature gas-cooled reactor (HTGR), and process inherent ultimate safe reactor (PIUS),” “Rockwell International and General Electric have already developed two commercial designs for ‘inherently safe’ sodium-cooled reactors,” “engineers agree that PIUS is an elegant design, but that’s all – only a design. It’s still on the drawing boards.”

    OK… The thing is… That article on the “nuclear renaissance” is not recent. It’s in an Omni magazine dated May 1988. (1988 was the year of James Hansen’s famous testimony to congress warning about climate change.) Today – more than 30 years later – we are hearing pretty much the same sort of delusional fantasies from the nuclear proponents. Now, the hype is about so-called Small Modular Nuclear Reactors (SMNRs). After decades of failures from the nuclear industry, we should be extremely cautious about falling for this latest hype.

    >

    • Brent Jensen-Schmidt Says:

      More excuses from the past whilst the world fries. Note, James Hansen recognized the need for nukes in the 21st century.
      THE WORLD IS HEATING UP!

      • rhymeswithgoalie Says:

        James Hansen believed in nuclear power that was efficiently planned, paid for, built and managed in France. Many of the problems in existing plants didn’t turn up until after his turn toward nuclear power (too-warm cooling water, stealth cracks in reactor pipes, 2-3x cost overruns on new units, etc.), while PV, wind and solar engineering issues and production costs kept going down. Does he still promote it if it eats money that would otherwise go to faster-payback projects?

        It turns out that building nuclear power plants in the US and Europe are not cost-effective, and take too long to displace more carbon emissions than is produced in their construction.

        • Brent Jensen-Schmidt Says:

          We would all love a nice easy and cheap solution. What we must have is a reliable power supply, big one, not generated from fossil fuels. Anything else will simply be an economic and killing mess.
          Apparently, there are about 53 nukes under construction around the world. European and USA builds are not necessarily cherry picked, just all that are talked about.

          • rhymeswithgoalie Says:

            “Apparently, there are about 53 nukes under construction around the world. European and USA builds are not necessarily cherry picked, just all that are talked about.”

            If China, as a fiat government, can cost-effectively build NPPs, more power to them. The evidence for Europe and the US is that those countries can’t. Financing alone is a nightmare, as is putting together the various construction companies needed to build and certify them.

            Even without the GHG issue, I myself have long been a fan of PV and wind for their specific advantages over standard thermal plants
            – waterless
            – straightforward to maintain
            – fitting in odd spaces
            – fuelless
            – accessible to nonwealthy communities
            – quicker generational turnaround on the tech

            It seems there are a lot of embittered nuclear power fans that love to shit on PV, wind and new battery tech despite them being both more ecologically friendly and having a quicker ROI (even without subsidies) than the fossil fuel plants they are replacing. These antis recycle arguments from 20 years ago and whine about aspects of the older tech that the current generation has long surpassed and insist that it’s unreasonable for the tech to keep improving. It’s like they’re complaining how it was impossible to stream movies on a flip-phone.

          • Brent Jensen-Schmidt Says:

            I am an alternate energy lover (phile?) for the last 65 years plus. It is not about what we prefer, it is about what is needed! Accepting this is the first problem to solve.


  3. I can’t see any reason for wind and solar prices to drop. We have an energy crunch and they both require energy to make. Solar is especially suspect since polysilicon is a huge energy hog, which is why it’s mostly made in China where they have lots of coal plants.

    • rhymeswithgoalie Says:

      The metric for measuring the effectiveness of a power source in fighting global warming is GHG payback time.

      What physically matters is how long it takes for PV solar to generate more energy than it took to make the panels and install them. So if every single component is made using the worst possible energy source, it would take longer to recoup in terms of GHG, but as the energy source gets cleaner (China is expanding non-FF power plants), the payback time gets shorter.

      How much GHG is emitted in the construction of a nuclear power plant, producing and transporting steel and concrete? How long after start of the reactor does it take for the NPP to displace more GHG emissions than it produced in the first place?

      0.6 ton CO2 per ton of cement
      1.85 tons of CO2 per ton of steel

      Meanwhile, polysilicon tech is continuing to reduce its energy consumption:

      From https://onlinelibrary.wiley.com/doi/10.1002/solr.202200458

      “Over the past 8 years, the poly-Si required per watt in the PV industry has substantially reduced by a  factor of ≈2.5. These rapid reductions in poly-Si are primarily due to the reduced wafer thickness, improved diamond wire sawing to reduce kerf-loss, and continual improvements in cell efficiency/module power output.”

  4. neilrieck Says:

    Nuclear Waste: What Do We Do With It?


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