Potential Economics of Nuclear Small Modular Reactor Technology for Alaska
SMR Workshop Anchorage, Alaska
December 9-10, 2010 Ginny Fay and Tobias Schwörer
Institute of Social and Economic Research
Mission Statement:
ISER enhances the well-being of Alaskans and others, through non-partisan research that helps people understand social and economic systems and supports informed public and private decision-making.
Matt Berman, professor of
economics, assesses the
economics of the petroleum
industry and other resource
industries.
Alejandra Villalobos Meléndez,
research associate, studies the
economics of renewable energy
development and sustainability.
Steve Colt, associate professor of
economics and former ISER director,
focuses on energy economics,
isolated utility systems, and the
economics of ecosystem services—
including tourism and recreation.
Tobias Schwörer, research
associate, has studied many energy
issues; he is also interested in the
economic valuation of biodiversity.
Ginny Fay, assistant professor
of economics, is a resource
economist and biologist with
special interests in energy and
natural resource economics,
tourism and recreation, and
community development.
Ben Saylor is a computer
programmer and research
associate who has done
analysis for a variety of energy
projects.
Research Area: Energy and Environment
Alaska’s Energy Use Alaska Total Energy Consumption by Source
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
Bil
lio
n B
TU
s p
er
ye
ar
Biomass
Hydro
Other Petro
Resid
Motor Gasoline
Lubricants
LPG
Kerosene
Jet Fuel
DFO
Av Gas
Asphalt Road Oil
Natural Gas
Coal
Electricity in Alaska
CAPACITY, KW GENERATION,
MWh
STATE 2,170,822 6,604,010
RAILBELT 1,383,512 5,056,448
RURAL 291,075 429,680
Railbelt Capacity
UTILITY TOTAL TOTAL CAPACITY KW
ANC MUNICIPAL LIGHT AND POWER 425,699
CHUGACH ELECTRIC ASSN INC 564,024
GOLDEN VALLEY ELEC ASSN INC 299,006
HOMER ELECTRIC ASSN INC 55,420
MATANUSKA ELECTRIC UTILITY 24,803
SEWARD, CITY OF 14,560
GRAND TOTAL 1,383,512
Utility Share of Installed Capacity in Railbelt Area
30.8%
40.8%
21.6%
4.0% 1.8% 1.1% ANCHORAGEMUNICIPAL LIGHTAND POWER
CHUGACHELECTRIC ASSNINC
GOLDEN VALLEYELEC ASSN INC
HOMER ELECTRICASSN INC
Utility Share of Power Generation in the Railbelt Area
27.5%
48.8%
15.6%
7.0% 1.1% 0.1% ANCHORAGEMUNICIPAL LIGHTAND POWER
CHUGACH ELECTRICASSN INC
GOLDEN VALLEY ELECASSN INC
HOMER ELECTRICASSN INC
MATANUSKA ELECTRICUTILITY
Rural Alaska Capacity UTILITY NAME CAPACITY KW
ALASKA VILLAGE ELECTRIC COOP 53,055
ALASKA POWER COMPANY 44,250
NOME JOINT UTILITY SYSTEM 21,670
KOTZEBUE ELECTRIC ASSOCIATION 21,025
BARROW UTILS & ELECT COOP, INC 20,300
NORTH SLOPE BOROUGH 18,700
OTHER 112,075
GRAND TOTAL 291,075
Rural Alaska Capacity Distribution
133, 83%
17, 10%
6, 4% 5, 3%
Communities with
capacity < 2.5 MW
Communities with
capacity 2.5 to 5
MW
Communities with
capacity 5 to 10
Communities with
capacity >10 MW
Utility Share of Power Generation in Rural Alaska
16%
11%
10%
9% 7%
7%
39%
ALASKA VILLAGEELECTRIC COOP
BARROW UTILS &ELECT COOP, INC
BETHEL UTILITIESCORPORATION
NOME JOINTUTILITY SYSTEMS
CITY OF UNALASKA
ALASKA POWERCOMPANY
OTHER
Small Modular Reactor Modeling
• Identified potential technologies and scales to fit Alaska applications
• Conducted a long-run levelized cost of energy analysis
• Primary applications: rural hubs and Railbelt
• Potential industrial loads—TAPS, military bases and mines
• Small villages: highest prices but insufficient loads
Small Modular Reactor Modeling • Rural hubs identified based on load data—
Bethel, Dillingham, Galena, Kotzebue, Naknek, Nome, Tok and Unalaska
• Rural hubs modeled primarily displaced diesel fuel
• Southeast and Southcentral locations with installed hydro capacity not considered
• Railbelt modeled SMR cost comparison with avoided costs of natural gas and diesel
Small Modular Reactor Modeling SMR costs uncertain so:
• Conducted sensitivity analysis bracketing a range of potential SMR costs
• Used low, mid and high oil price forecasts based on DOE, EIA Energy Outlook projections
• Similarly, used MIT CO2 low, mid and high price projections
Small Modular Reactor Modeling • Modeling goals:
– Determine if different SMR technologies are economic options based on identified parameters and uncertainties
– Is there a potential economic application for rural hubs?
• Identify how economics shift with oil and gas and CO2 price assumptions
• Alaska SMR costs depend on first mover or nth
mover status (using high to low cost assumptions)
Technologies, Capacities, Costs MW Capacity Cost Range ($M)
Toshiba 4S small 10 $45-80
Hyperion 25 $115-200
NuScale 45 $205-360
Toshiba 4S large 50 $225-400
M-Power 125 $565-1,000
Installed capacity cost range: $4,500-$8,000/kW
(compare $7,000-$10,000/kW for Lower Watana hydro)
Site permitting cost range: $5,000-$7,000/kW
SMR Modeling Results • Economics tied to community load/population
and MW of SMR unit
• Capital costs require that all energy be used for electric generation; difficult to compete with diesel or natural gas for space heating
• Bethel and Fairbanks—SMRs cost effective solution as soon as available (assumed to be 2015, high oil prices; 2020 for mid oil prices; mid capital costs)
$-
$50
$100
$150
$200
$250
2011 2013 2015 2017 2019 2021 2023 2025 2027 2029
High Crude Price
Low Crude Price
Mid Crude Price
Unalaska
Fairbanks
Bethel
Nome
Oil
Pri
ces
20
10
$/b
arre
l
SMR Modeling Results-mid costs
Assumption: medium capital & site permitting cost
$-
$50
$100
$150
$200
$250
2011 2013 2015 2017 2019 2021 2023 2025 2027 2029
High Crude Price
Low Crude Price
Mid Crude Price
Unalaska
Fairbanks
Bethel
Nome
4S large
4S small
Oil
Pri
ces
20
10
$/b
arre
l
SMR Modeling Results, low cost
Assumption: low capital & site permitting cost
$-
$50
$100
$150
$200
$250
2011 2013 2015 2017 2019 2021 2023 2025 2027 2029
High Crude Price
Low Crude Price
Mid Crude Price
Unalaska
Fairbanks
Bethel
Nome
Oil
Pri
ces
20
10
$/b
arre
l
SMR Modeling Results, high cost
Annual Energy Cost Savings per Household
Assumptions: - Medium capital cost & site permitting, - Electric heat to max out capacity
0
100
200
300
400
500
600
M-Power Toshiba 4Slarge
NuScale Hyperion Toshiba 4Ssmall
Bethel
Fairbanks
Local Fuel Thresholds
4.80
12.10
4.20
34.75
7.75
18.75
7.00
17.60
6.70
$0
$5
$10
$15
$20
$25
$30
$35
$40
Bethel Dillingham Fairbanks Galena Kotzebue Naknek Nome Tok Unalaska
Contact
Ginny Fay, UAA, ISER
–907-786-5402
Tobias Schwörer, UAA, ISER
- 907-786-5404
website: www.iser.uaa.alaska.edu