How will this compare with an Advanced Nuclear Power Plant (NPP)?

BWRX-300 SMR: The world’s most cost-effective NPP

·

Follow

4 min read

·

Sep 27, 2020

--

Listen

Share

Seagreen Offshore Wind Farm is a SSE project. The Website tells us the 1075 MW of installed Wind Turbine Generators (WTGs) will power 1.3 million homes, for which the current BEIS usage figure is 3,618 kWh per year, per home.

This works out at an annual generation of >4.7 million MWh per year which, over the 25 years lifespan, will supply 117.7 million MWh of intermittent electricity to the National Grid.

One of several reports describe Seagreen as “…an offshore wind farm that may cost more than £5.7 billion to develop and operate…”. Presumably, this figure covers the £3.0 billion of capital investment to get to the point of operation, plus O & M, plus decommissioning and waste disposal.

£5.7 billion divided by 117.7 million MWh works out at a Total Cost of £48.43/MWh.

But here’s the thing: Seagreen’s bid for a CfD contract settled at a price which is currently £48.09/MWh; by the time operation starts in 2025, linked to the CPI, that price might reach £53.00/MWh.

For the past 10 years, the Wholesale electricity price has hovered around the £50.00/MWh mark. So maybe by 2025, Seagreen can count on an average £60.00/MWh over its lifespan to 2050.

Per MWh, the income (£60.00) less the costs (£48.43) results in ‘profits’ of £11.57. Applied to 117.7 million MWh produces a total of £1.36 billion of ‘profit’.

Every £1.00 of capital invested yields a ‘profit’ of £0.45

— — — — — — // — — — — — —

— — — — — — // — — — — — —

So how does investing £3.0 billion in an Advanced NPP compare?

The Rolls- Royce Consortium will build factories in 2021, to start producing components for the first NPP to commence build in 2025 (Part 3) with a build programme of 4 years (Part 7). The commercial operation target date is 2029.

Within 2 or 3 years, at a capital investment rate of £1.8 billion for 440 MW, £3.0 billion of capital investment would ‘procure’ 733 MW of installed capacity.

From, say 2035, a capacity of 733 MW of would generate 5.8 million MWh each year and a total of 346.7 million MWh over the 60 years lifespan. The £3.0 billion of capital cost over 346.7 million MWh gives a capital cost content of £8.65/MWh.

As of 2017, additional costs of Operation & Maintenance; Fuel; Decommissioning; Waste Handling and Storage: €21.03/MWh.

At 2017 € to £ Exchange Rate of €0.88 to £1.00 = £18.51/MWh. Addition of 5.5% inflation to 2020 = £19.53/MWh

Including the capital cost content (£8.65/MWh) gives a Total Cost of £28.18/MWh.

When the build programme commences in 2031, the predicted UK inflation will increase that figure by 38.42%, to: £39.01/MWh

Compared to the Seagreen Windfarm figure of £48.43/MWh, for this advanced NPPs commencing operation in 2035, the figure is: £39.01/MWh.

Assuming the £60.00/MWh Wholesale Price applies from 2035 to 2050:

By 2050, the income (£60.00/MWh) less the costs (£39.01/MWh) results in ‘profits’ of £20.99/MWh. Applied to 86.68 million MWh produces a total of £1.82 billion of ‘profit’ (£460 million more than Seagreen Windfarm).

With capital investment not required until 2031, for commencement of operation in 2035, by 2050, after just 15 years of operation, nuclear power yields an extra £460 million of ‘profit’.

But the advanced NPPs will carry on generating 24/7, low-carbon electricity AND ‘profits’ for another 45 years. It would be unlikely for the average Wholesale Price to stay at £60.00/MWh over the subsequent 45 years. It could rise to an average of £62.50/MWh, or £65.00/MWh. Adding in the £1.82 billion of ‘profit’ to 2045:

At £60.00/MWh from 2045 to 2095, Total ‘Profit’: £7.28 billion.

At £62.50/MWh from 2045 to 2095, Total ‘Profit’: £7.93 billion.

At £65.00/MWh from 2045 to 2095, Total ‘Profit’: £8.58 billion.

Every £1.00 of capital invested will yield a ‘profit’ of between £2.43 and £2.86.

— — — — — — // — — — — — —

For every £1.00 invested in advanced SMRs, ‘profits’ will be in the order of 5.4X to 6.4X more than £1.00 invested in Offshore Wind.