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Financial History

The U.S. nuclear power industry has a chequered financial history that involves huge cost over-runs and vast financial subsidies - some estimates run as high as $500 billion over its 50-year history.

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Saturday
Nov262011

The staggering cost of replacement electricity for shutdown reactors

A neglected aspect of the astronomical costs of nuclear power is the staggering costs of replacement electricity during the frequent safety related shutdowns of large atomic reactors, which can take hundreds or even thousands of megawatts of electricity off the grid. During the 908 megawatt-electric Davis-Besse atomic reactor's 2002 to 2004 "Hole-In-the-Head-Fiasco" shutdown, FirstEnergy paid over $600 million for replacement electricity, repairs, and record fines (of $33.5 million) imposed by the U.S. Nuclear Regulatory Commission.

Another stunning example is provided by Pat McNamara in Nuclear Genocide in Canada, Part 4 on "Nuclear Costs to Date":

"Cost of Replacement Electricity

Bruce Power had to shut down reactor 6 for three months in the summer of 2002 because an accident had caused holes in the pressure and calandria tubes. As the summer is the 'peak load' time of year, Ontario was forced to buy replacement power at a cost as high as $2 per kilowatt hour instead of the normal domestic price of five cents per kilowatt hour.

It would cost $1.6 million per hour (at $2 per kilowatt hour) to replace the electricity from the 800 megawatt reactor 6 during peak demand instead of the normal price of $40,000. Assuming two hours per day of 'peak load' purchases for the duration of the three-month shutdown, Ontario would have paid $288 million for replacement electricity instead of $7.2 million at domestic rates.

The problem was worsened because of the other reactors at Bruce Power and Pickering that were on permanent or temporary shutdown. Ontario had a shortfall of up to 4000 megawatt hours of electricity during peak demand that summer which would cost $8 million per hour at $2 per kilowatt hour. It would only take 125 hours at this rate to burn up a billion dollars. To make matters worse, the replacement power they bought was from coal-fired generators, the dirtiest energy source of all.

"In New Brunswick, the provincial government has said it will incur $90- million in additional costs to replace the power lost as a result of delays in $1.4-billion project at the Point Lepreau reactor, the first Candu 6 that AECL has undertaken to refurbish." (The Globe And Mail, Friday, February 13, 2009, By: Shawn McCarthy)"

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