Same old strawman arguments. If it was just a question of poor reputation or people’s fears, we’d still be building reactors. PR can paper over those questions easily enough.
No, the issue was, and remains cost, more specifically massive cost overruns. Darlington was the last new plant built in Canada. It ran the equivalent of $24B in today’s money, for 3500MWe. Not cheap. Especially in light of how cheap the alternatives are.
SNC (AECL) are out of the new build business, so we’d likely end up looking at Areva EPR (or if we really want to gamble, the EPR2) or Westinhouse AP-1000. Their track records are even worse. The Vogtle-3 & 4 AP-1000s were supposed to cost $12B, but will end up running over $30B by the time they’re both up and running. The similar V.C.Summer units 2 & 3 project was supposed to run $9B, but the project was cancelled while under construction when projections had it running $23B at completion.
Areva’s track record with the EPRs is as bad. Olkiluoto-3 started construction in 2005, was supposed to finish commissioning in 2010, but only completed it in 2022. Costs went from €3B to €11B, though were limited by the contract. Flamanville-3 started construction in 2007, was supposed to complete commissioning in 2012, but it now projected for 2024. Costs have bloated from €3.3B to in excess of €20B.
Hinkley Point C is 2xEPRs . Initial budget was £16b. Currently it’s on track to hit near enough £30B.
The French government has had to bail out Areva, and is in the process of re-nationalizing Électricité de France because of the massive liabilities they’ve been accruing. The average age of a French reactor now is 38 years. The GenII plants had a design life of 30 years after which they have to undergo in depth inspections, repair deficiencies and apply for a 10 year license extension. It was during this process that they discovered cracking and erosion in process piping. Between that, low water levels, and concerns about high effluent temperatures on the low water levels, at one point in '22, 35 of 56 operational reactors were offline. The French don’t have the capacity to replace the older reactors fast enough. Their industry is in a tough spot.
The cost argument is as valid as any, in fairness though you have to consider that the delays caused by company bankruptcies, COVID etc. were not really forseeable for any long-term major project, and between 2010 and 2023 inflation was about 41% with commodity prices and lead times being all over the place.
If these projects had taken their originally scheduled 5 years, they would have been long since completed prior to COVID or the spike in inflation of the last three years. But they have been running 5 to, in some cases, 12 years beyond their original schedule. The longer a project takes, the more uncertainty enters the equation.
From 2010 to 2020 the core rate of inflation was averaging 1.7%, and 5.25 from 2020-2023. I’d be hugely surprised if any of these projects had estimated the annual inflation rate at less than 2%.
The bankruptcy of Westinghouse was directly tied to their inability to deliver on time/budget. Likewise the cash infusion to Areva to maintain solvency.
Over the history of North American reactors, budget overages have averaged 207% of their original budgets. The industry has a history of overpromising and underdelivering. Companies backing these projects are aware of the history and it’s why finance rates on these projects tends to be quite high. The initial finance rate of the Hinckley Point C project was 9%, for example. The financiers recognize the risks. Financing for gas/wind/solar, in comparison, would be at or close to prime rates typically.
The industry has a history of overpromising and underdelivering.
All of construction industry, not just nuclear power generation, has a history of overpromising and underdelivering, possibly outside of wartime when money for “national security” purposes is of no object.
Here’s a Practical Engineering video on “Why Construction Projects Always Go Overbudget”.
My working theory is that whether it’s due to the bidding process or inflation or political corruption or anything… Public projects need to be pitched to the public and stuff will never get done if people keep saying “it’s economically unviable!!!”. That’s why we would see a politician try to bring the most favourable numbers possible assuming no delays or mistakes. But you can’t always have no delays or mistakes, and once a project is started it’s way easier for a politician to stick through it than if you use engineer-produced numbers with risk overheads included or inflation adjusted to the time of commissioning.
To your point about financing… The financing rate is inherent to the length of the shelf life of a project. If you were try to buy a 1 yr. vs. a 10 yr. vs. a 30 yr. bond, you would be offered different rates. Risk is inherent over the entire lifespan of a project, and some projects are a major upfront investment that pays off 20-30 years down the line instead of in 5-10 say with a wind or solar project. We see that despite the problems, 50 year old reactors are still running and it would be a problem if we shut it down without a good replacement. Wind and solar tech from 10-15 years ago are already obsolete, but that’s not a bad thing economically because they’d already paid off their value and use. It’s just different natures of projects.
