Costs and Choices - Fermi 3

DTE Energy, formerly known as the Detroit Edison Electric Company, wants to build a new nuclear power plant, Fermi 3, next to Fermi 2 and the ruins of Fermi 1. The design of Fermi 3 is for approximately 1.55 billion watts of electrical energy output. It sounds like a lot of energy, and it is reasonable to wonder what this might cost.

DTE estimated in their 2008 application for an operating license for Fermi 3, that the construction cost would be $3,500 - 4,500 per kilowatt of electrical output, or $3.50 - 4.50 per watt. Applied to the design for 1.55 billion watts of electrical output, that would be a range of ~5.5 to 7 billion dollars. We can take this as a low estimate in 2008 dollars.

From the Wikipedia article "Economics of nuclear power plants":  "In Canada, cost overruns for the Darlington Nuclear Generating Station, largely due to delays and policy changes, are often cited by opponents of new reactors. Construction started in 1981 at an estimated cost of $7.4 Billion 1993-adjusted CAD, and finished in 1993 at a cost of $14.5 billion." In round figures, this would mean that taking DTE's original estimate and doubling it to $14 billion would be closer to a real figure.

From a Physicians for Social Responsibility 2008 report, "Nuclear Power Plant
Construction Costs":  "... total costs (including escalation and financing costs) will be in the range of $5,500/kW to $8,100/kW ..." Applied to the 1.55 billion watts for Fermi 3, a range of 8.5 to 12.5 billion dollars results. it is not clear if this includes the costs of financing construction, which would be paid after the plant starts operating.

A 2010 article from Greentech Media ("How Much Does Nuclear Cost? $6,000 a Kilowatt or More") discusses a cost of $6,000 per kilowatt and points to a study showing the "all-in" costs, including the costs of financing, would be in the $10-12.50 per watt range. That puts the high estimate for Fermi 3 over $19 billion.

The estimates above are from the period of 2008-2010. There's been a bit of inflation since then. There's also been a horrendous multi-reactor meltdown at Fukushima since then, which reasonably ought to result at least in additional safety requirements, which would raise the cost.

We have a range of estimates from a low of 5.5 billion 2008 dollars to over 19 billion dollars. Doubling DTE's upper figure of $7 billion 2008 dollars and allowing a bit for inflation since 2008 would result in a rough estimate of $15 billion. $15 billion, which this article uses, is a very approximate but reasonable figure to work with for the purpose of comparing building Fermi 3 to an alternative use for the money.

This is public money we are talking about, not (at least not yet) DTE's money. DTE expects to pay for construction through a combination of federally guaranteed loans and electrical rate hikes approved by the Michigan Public Service Commission. Whether it comes from federal taxes or rate hikes, that's our money, and we should decide how it will be spent.

The installed cost of solar panels for large-scale projects is now around $3.00 per rated watt. This is again a rough figure, with variations according to the scale of the project, local permitting costs, labor costs, etc., etc.

With solar panels, we can expect electrical power output equivalent to 4-6 hours of rated wattage per day in most US locations. That would be compared to an average 21-22 hours output per day for a nuclear reactor. In other words, the average daily power output from a nuclear reactor rated for 1 megawatt would be 4-6 times the power output of a solar farm rated for 1 megawatt, depending on the location of the solar farm.

I've worked up a table showing one possibility for spending $15 billion over 12 years on large-scale solar panel installations:

		installed	installed	B watt-hrs	B watt-hrs	B-watt-hrs
year	$ (B)	$/watt	B watts	per day (new)	per day (cum)	per yr, (cum)
	solar	solar	solar	solar	solar	solar
1	1	3.00	0.333	1.410	1.410	514.650
2	1	2.95	0.339	1.434	2.844	1038.023
3	1.1	2.90	0.379	1.604	4.448	1623.659
4	1.1	2.85	0.386	1.633	6.081	2219.570
5	1.2	2.80	0.429	1.813	7.894	2881.262
6	1.2	2.75	0.436	1.846	9.740	3554.986
7	1.3	2.70	0.481	2.037	11.776	4298.369
8	1.3	2.65	0.491	2.075	13.851	5055.779
9	1.4	2.60	0.538	2.278	16.129	5887.137
10	1.4	2.55	0.549	2.322	18.451	6734.795
11	1.5	2.50	0.600	2.538	20.989	7661.165
12	1.5	2.45	0.612	2.590	23.579	8606.441
	15.000		5.574		23.579	8606.441
	B$ total		B watts		B watt-hrs	B watt-hrs
			total		per day total	per yr total
	15.000		1.55	Equivalent for nuclear		12220.200
	B$ total		B watts			B watt-hrs
			total			per yr total
.	“B” is used to mean “Billion.”			“(cum)” is used to mean “cumulative.”

I've assumed a steady but not spectacular drop in installed solar panel costs per watt from $3.00 to $2.45 over the period. This is a conservative estimate, in contrast to a "target" of $1.00 per watt (Google SunShot Initiative) which might prove to be unrealistic. I've also used the 4.23 hours per day annual average output factor provided by the national Renewable Energy Lab's PV Watts calculator (http://pvwatts.nrel.gov/pvwatts.php) for the Detroit area.

The result? $15 billion could give us just over 5.5 billion watts (rated) of solar electricity. In terms of power, with the conservative assumptions used, the annual average watt-hours from the new solar installations would be a bit over 2/3 of the average annual watt-hours from Fermi 3.

Now, if the assumptions were changed in favor of faster improvements in solar panel efficiency and a more rapid lowering of installation costs, the expected annual power output would increase. 5.5 billion watts of peak power is pretty near the minimum that should be expected from a program to spend $15 billion installing solar panels in Michigan. But even with this minimal expectation, the solar project is well worth doing.

It's important to note that solar panels provide peak demand watts, more valuable than middle of the night "baseload" watts. A nuclear plant needs to run night and day, regardless of demand. In other words, building Fermi 3 would increase the need for "dispatchable on-demand" electricity to cover peak periods. Solar panels would reduce this need, and indeed would reduce the need for baseload power.

It's also important to note that installing solar panels adds to the supply of electricity gradually over time, rather than adding nothing for the first ten years followed by the sudden introduction of new generating capacity. If more or less electricity is needed in a particular location than was imagined at the outset, adjustments can be made with solar construction planning. The nuclear reactor can't make that kind of adjustment.

There are also other advantages of numerous solar farms distributed over the service area, compared to a centralized nuclear reactor. The federal Energy Information Administration estimates that national electricity transmission and distribution losses average about 6% of the electricity that is transmitted and distributed in the United States each year. (See http://www.eia.gov/tools/faqs/faq.cfm?id=105&t=3)

Proper planning to site solar farms near demand for peak power would mean less transmission losses. No new high-voltage "transition corridor" leading away from the reactor would be needed. With the sources of power close to peak demand, even lower-voltage distribution line power losses could be cut.

And of course, the fuel cost for solar panels is absolutely zero. We do not have to pay the sun to shine.

The nuclear fuel for Fermi 3 would cost about $100 million per year. $100 million is a bare minimum cost, to which could be added $300 million or more if we attempt to account for the cost of disposal of spent fuel. This added amount is really impossible to quantify, because we still do not know a satisfactory method to dispose of spent nuclear fuel. It's an unsolved problem for future generations. Neither the problem nor the cost exists for solar panels.

There will be some failures in any extensive installation of solar panels. These will be distributed failures; distributed over time and space, fixable on a regular maintenance schedule. A nuclear reactor failure is a centralized failure. At a minimum it is a crisis, even if it only means the electrical output is shut off for a month or two.

And then there is the spectacular failure - the meltdown. A meltdown at Fermi 3 could also cause a meltdown at Fermi 2, and a Fermi 2 meltdown could cascade into the same at Fermi 3. Constructing Fermi 3 next to Fermi 2 makes a meltdown at Fermi 2 more likely, and it makes a meltdown at Fermi 3 more likely as well.

One or both reactors melting down could cause the permanent evacuation of a million or more people while also ruining Lake Erie, Niagra Falls and Lake Ontario with radioactive contamination. Depending on which way the wind is blowing, we may have to write off Toledo or Detroit or both. The events at Fukushima prove conclusively that such a result is possible and that assurances of safety coming from the nuclear industry are worthless.

This is the main (and sane) reason spending our money on solar panels rather than a nuclear reactor makes so much sense. If we need the electricity, we can get it without nuclear fission. The disaster of uncontrolled fission that a nuclear reactor makes possible is not possible with solar power.

If a meltdown in Monroe, Michigan happens, all the fine cost analysis of solar versus nuclear will be meaningless. There will be nobody left in the radioactive contaminated zone to enjoy the benefits of any type of electricity.

That's our real choice. Make the possibility of a Fermi 2 disaster more extensive and more likely, or pursue the alternative. Eliminating the possibility of the Fermi 2 disaster means closing Fermi 2 in addition to never building Fermi 3. Put that way, the right choice is obvious.

Art Myatt

The Midgley Effect

The title comes from Kurt Cobb's January 11, 2015 article on http://resourceinsights.blogspot.com/. He's not addressing Fermi 3, or Fermi 2, or even nuclear power specifically. His topic - the religion of eternal progress - is quite a bit broader than that. It's still worth our time to read.

Unfortunately, this religion, if we can call it that, is one of the major obstacles to organizing an effective movement opposing nuclear reactors. Of course, it is not an organized religion, but it is a faith which allows believers to be comfortable dismissing the dangers of nuclear reactors. In that respect, it is certainly like a religion. People resent it when you challenge their faith, whether it's comes from an organized religion or not.

Here's how Mr. Cobb describes the Midgley Effect:

Chemist Thomas Midgley Jr. was heralded for his work in creating leaded gasoline and chlorofluorocarbons. The story of leaded gasoline is rehearsed every time we pull up to a gas pump and fill our automobiles with UNLEADED gasoline. Lead added to gasoline for the purpose of preventing so-called engine knocking turned out to be very bad for human health. Big surprise!

But chlorofluorocarbons were even worse. Used primarily as refrigerants from the 1930s onward and later as aerosol propellants, they escaped into the air. No one thought to track their destination until the 1970s when one scientist, F. Sherwood Rowland, asked where these compounds ended up. They were by design inert--that is, they didn't readily break down--so they must be somewhere.

That somewhere turned out to be high in the atmosphere attacking the ozone layer which protects humans and other living creatures from excessive radiation from the Sun. Had it not been for Rowland asking a very specific question and receiving a grant to fund the answer, we might well be living with little or no atmospheric protection from dangerous levels of solar radiation. Such are the perils of our technology. In this case, only one curious man stood between the human species and widespread disaster. Chlorofluorocarbons and other ozone-destroying chemicals were subsequently phased out worldwide by the Montreal Protocol.

Midgley--who believed he was doing good things for society and received many awards for his discoveries--turned out to have "had more impact on the atmosphere than any other single organism in Earth's history," according to environmental historian J. R. McNeill. And, it wasn't a good impact.

One of the pillars of our modern techno-utopian outlook is that invention is presumed to be good and should not be unduly impeded. It turns out, however, that our own science has shown that inventions can be potentially catastrophic.

There is no guaranteed effective way of overcoming an individual's faith in progress, even in a one-on-one conversation. If the person with such faith is trying to be rational, then maybe you can undermine the faith with a clear example like the Midgley Effect, but that's if and only if they are trying to be rational.

There's still no guarantee it will work. The counter-argument might be raised that lead in gasoline was eventually eliminated, and so was freon. And the counter-counter-argument naturally follows, that nuclear reactors also need to be eliminated. Certainly, we should not be building more.

Whether our arguments are immediately effective or not, we still have to keep trying. Sometimes they are effective, even though we don't necessarily get the feedback to let us know they're effective. Sometimes, the effect is months or years later.

If we can simply get people to consider the idea that nuclear reactors are both expensive and dangerous, then facts make the rest of the case for eliminating nuclear power in favor of better alternatives. As Kurt Cobb said, "... inventions can be potentially catastrophic." The history of nuclear reactors has demonstrated that several times over. Let's hope it does not have to be demonstrated yet again before people in general understand - if we don't eliminate them, they can eliminate us.

Art Myatt

Open Letter to the Michigan Public Service Commission

In January of 2007, the Michigan Public Service Commission (MPSC) issued a report with the title "Michigan's 21st Century Electric Energy Plan." This report is still (in January 2015) available on their website at http://www.dleg.state.mi.us/mpsc/electric/capacity/energyplan/index.htm. In it, they predict that demand for grid electricity in Michigan should grow at an average rate of 1.3% per year from 2006 through 2025.

If in fact demand had grown as predicted, in 2013, it would have been for approximately 123,000 Million KW-hr total for the year. In reality, demand for 2013 was around 104,000 Million KW-hr, less than the total for 2007. Actual demand for 2013 was short of predicted demand by roughly 19,000 Million KW-hr. From 2007 through 2013, demand did not grow at all. In fact, it declined, though not in a smooth fashion.

The actual pattern of Michigan's electrical demand from 2000 through 2007 was a growth trend, though not a smooth one. Some years were down; some, up. If the numbers are plotted on a graph, the trend for this period is clearly up. The MPSC prediction of continued growth was simply a projection of the recent trend into the near future. However, the financial crisis of 2008 broke a lot of trends, including that for Michigan's electrical demand.

In 2008, demand dipped. Then in 2009, when the entire year was affected by the recession, demand dipped sharply, by an additional 7«%. Since then, demand recovered to a level between the 2007 peak and the 2009 low point. For 2010, 2011, 2012 and 2013 (the last year for which we have data), it has been essentially flat, at 104,000 Million KW-hr plus or minus 1%. If the current flat trend is the new normal, the gap between expected demand (according to the 2007 plan) and actual demand will grow larger and larger.

In the year following the MPSC study, DTE Energy proposed to build Fermi 3, a new nuclear reactor to be located adjacent to their existing Fermi 2 reactor. Their original schedule called for Fermi 3 to be producing power by 2025. In their Draft Environmental Impact Statement (EIS), they relied on the 2007 MPSC projection for future electrical demand. They said that, by 2025, the generating capacity of Fermi 3 would be needed to meet that demand.

Gross divergence between actual demand and MPSC projected demand was pointed out in public comments on the Draft EIS. In the final EIS, it was admitted that the MPSC study was not an accurate prediction. However, DTE Energy argued that the general idea of increased demand was still valid because demand could still reasonably be expected to increase in the region. This supposed validation is just nonsense.

We have data, supplied by the federal Energy Information Administration (EIA), not just for the region but for the entire United States. Demand for electricity in the entire country followed the same pattern as described for Michigan. There was a trend of growth from 2000 through 2007; a decline in 2008, a sharp dip for 2009, a recovery to less than the 2007 peak in 2010, and flat plus or minus 1% of the average value through 2013. The sharp decline for 2009 was a bit more than 4% for the country as a whole, not so severe as Michigan's 7-1/2% decline.

At a utilization factor of 90% (meaning it would run at full output 90% of the time), Fermi 3 would have an annual output of about 12,000 Million KW-hr. Recall that actual demand for 2013 was already 19,000 Million KW-hr less than the projected demand , and that discrepancy is likely to be much larger by 2025.

It is clear that the capacity of Fermi 3 is not - repeat, not - actually needed to meet foreseeable electrical demand in Michigan. Regardless, DTE Energy will soon be applying to the MPSC for a "Certificate of Need" for Fermi 3.

If this Certificate of Need is granted, then DTE Energy will be able to significantly raise the rates for electricity for everyone in the DTE service area. They will then be allowed to charge for "Construction Work in Progress" for as long as it might take to build the un-needed Fermi 3 reactor. This increase is expected to amount to $5,000 - $10,000 per household in the next ten years, and more if construction takes longer.

If this amount of money were instead spent on solar panels over the same ten years, every household in the service area could have several thousand watts of solar panels installed. There would be tens of thousands more local jobs in installation. There would be no danger from handling Fermi 3's radioactive fuel rods, new or spent. There would be no danger of a meltdown - at least from an unbuilt Fermi 3. (Fermi 2 could still have a meltdown.)

Even with safety considerations put completely aside, there is no need - as DTE Energy and the MPSC defined need - to build Fermi 3. At the very least, the MPSC should deny a Certificate of Need until it comes up with a new and more realistic plan for Michigan's 21st Century electricity. The best case would be if DTE Energy never gets a Certificate of Need for Fermi 3.

[Permission is hereby granted to anyone to republish this open letter, so long as it is republished in its entirety, including this notice, and the source is credited.]

Art Myatt