Learning to love accountants

Engineering, Procurement and Construction (EPC) costs for different types of power station. The abbreviations are explained in the text and listed at the foot of the blog. The red bars show the basic cost estimate and the blue bars indicate the range of possibilities. To find the cost of a 1 GW power station multiply the costs shown by one million. So the cost to build a 1 GW nuclear power station is roughly 2.5 billion pounds.

What are the relative costs of generating electricity in using the different technologies? This is a simple question to ask, but a difficult one to answer. If we make the wrong decision we end up spending more money than we needed to – and we are all the poorer for it. But how does one compare, for example,  the high capital costs of a nuclear power station with the higher carbon emissions from gas-fired plant?

To get answers to questions like this we need someone in the pay zone above scientists: accountants.

Accounting is difficult and dull and boring. But it is the only way to answer questions like this. While searching the DECC web site to find out how much UK taxpayers subsidise electricity generation from Wind Turbines, I came across this report on electricity generation costs. It is simultaneously fascinating and tedious in the extreme. I will spare you the details and just share with you what I consider the highlights. There are but two!

Highlight#1:Engineering, Procurement and Construction (EPC) costs for different types of power station. The chart at the head of  article shows the range of possibilities. The red bars show the basic cost estimate and the blue bars indicate the range of possibilities. To find the cost of a 1 GW power station – the UK requires around 60 such stations – one multiplies the costs shown by one million: So a 1 GW nuclear power station costs roughly £2,500 x 1,000,000 = £2.5 billion, while the same generating capacity using gas (CCGT) costs only £0.5 billion. Capturing the carbon from a gas station (CCGT +CCS) adds an estimated £0.25 billion to the cost – but no one has actually achieved that yet.

Highlight#2: Lifetime costs.What if carbon fuel prices increase? What about the cost of decommissioning nuclear plant? It is very tricky to compare this scenarios quantitatively but one way is to show all the costs of the plant over its lifetime divided by the number of units of electricity that it will generate (kWh or MWh) over its lifetime.

FEC

Costs of different electricity generating technologies expressed per unit of electricity produced over the lifetime of the plant. £100 per MWh is equivalent to 10 pence per kWh - the standard unit of electricity on a domestic bill. (Click for larger version)

This is a fascinating chart showing estimated costs for projects starting in 2013, some of which are the first of a kind (FOAK) and some of which are the nth of a kind (NOAK).  £100 per MWh – the mid-line on the chart – is equivalent to 10 pence per kilowatt-hour. A kilowatt-hour (kWh) is the standard unit of electricity on a domestic bill. I find three facts astonishing on this

  • The costs are similar! Look for example at CCGT with or without CCS and compare it with Onshore wind. The costs are around 10 pence per kilowatt hour – two or three times current costs for gas (CCGT) generation. If this is true, then for heaven’s sake, let’s start making low carbon electricity now!
  • The decommissioning costs of nuclear plant – when averaged over the amount of electricity produced – is tiny!
  • Do the anti-wind campaigners - who are forcing nearly all wind development offshore – really want to pay TWICE as much for the electricity they produce?
So there you have it: two astonishing charts. With data like this, I could learn to love accountants!

Abbreviations

CCGT

Combined Cycle Gas Turbine

Burns the gas in a turbine and then exploits waste heat in a second steam turbine

CCGT +CCS

CCGT with added Carbon Capture and Storage

CCS is an untried and undemonstrated technology

ASC Coal

Advanced Super Critical Coal

Coal plant operating at higher temperatures. Explained here

ASC + CCS

ASC with added Carbon Capture and Storage

CCS is an untried and undemonstrated technology

IGCC

Integrated gasification combined cycle

Converts coal to gas and then burns gas and recovers waste heat in a second steam turbine

IGCC +CCS

IGCC with added Carbon Capture and Storage

CCS is an untried and undemonstrated technology

Onshore Wind

Wind turbines on Land

Offshore Wind

Wind turbines in the Sea

EPC costs and running costs are higher than for land based turbines

Offshore Wind R3

Wind turbines in the Sea in Release 3 of available areas

These represent more difficult engineering challenges

3rd Generation PWR

Next generation Nuclear Power: Pressurised Water Reactor

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3 Responses to “Learning to love accountants”

  1. sahmeepee Says:

    Thanks for the article.

    This seems to explain supercritical coal power quite well:

    http://www.scribd.com/doc/18792215/Super-Critical-CoalFired-Power-Plant

    It looks to be mainly an increase in temperature and pressure to improve the overall efficiency at the expense of needing a better engineered power station.

  2. protonsforbreakfast Says:

    Thank you for that. I have added a link to the site in the table at the end of the article. My guess is that operating a steam turbine in this regime will be very challenging from a corrosion point of view.

  3. Henners Says:

    Glad you like the report, a couple of updates ate now on the DECC website. Not to say that accountants don’t deserve to be loved but the report was commissioned and largely written by economists so maybe you should edit the title of your post.

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