Projected Costs of Generating Electricity - OECD Nuclear Energy ...

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Liberalisation Basic restructuring of the power system was realised in the frame of the liberalisation process. The legal unbundling of generation, transmission and distribution was realised as well. The electricity sector regulatory authority was established by law in 2001. SE a.s., as the dominant electricity producer in the Slovak Republic, operates about 85% of the total installed capacity. Independent electricity producers operate the other 15%, including CHP. Slovenska elektrizacná prenosova sustava a.s. is the transmission system operator (TSO) in the Slovak Republic. It is a fully independent legal entity under state ownership. The distribution networks are operated by three regional distribution companies. The private companies EON, EdF and RWE have a combined ownership share of 49%, with the remaining 51% being in state ownership. Privatisation The Ministry of Economy of the Slovak Republic is thinking about completing privatisation of all distribution power companies to the share level of 90%, during the year 2005. The government of the Slovak Republic has decided to privatise 66% of the shares of SE, a.s. The transaction documents of the SE, a.s. privatisation are planned to be signed in 2005. Legislative process By government decree, three Acts concerning the power sector were approved in October 2004: 1. The Power Act that replaces the former Act No.70 from 1998 provides the basic business frame for the power industry. The main goal of this law is compliance of the Slovak power legislation to the EU legislation mainly on Directive 2003 /54/EC and to the Regulation No. 1228/2003 from 26 June 2003. 2. The new Regulation Act applying to transmission and distribution changed and complemented the Act of No. 276/2001. 3. The Heat Power Act regulates the conditions for both heat generation and supply as well as the heat economy. Market opening Full electricity market opening in the terms of EU Directive is expected by 2007. Taxation In the Slovak Republic, the taxes or tax allowances derived from power generation do not differ from plant type to plant type, nor does the rate of depreciation. The rate of taxation of income for all types of power plants is as high as 19%. That tax is not included in the costs of accounted cost items provided for this study. In practice, there are effectively no subsidies for construction of new generation capacity nor for rehabilitation or upgrading of existing facilities. 142
Future of electricity supply The funds accumulated for decommissioning of large power plants will be given out in the Slovak Republic in 2006 to 2008. Namely, the two V-1 nuclear units of VVER 440 type 230, with a total installed capacity of 880 MW, will be decommissioned together with some thermal power plants that do not meet the emissions standards. A total of 1794 MW of electric capacity, representing 8.0 TWh of annual generation, will be decommissioned by the year 2010. In order to secure a proper balance between electricity generation and consumption, some 2 500 MW of new capacity will need to be installed by 2020. The total investment requirement for new capacity is some 106 billion SKK (2.8 billion €). In this regard, SE a.s. was requested by the Slovak Ministry of Economy to develop studies in the framework of the national economy that should evaluate different electricity supply scenarios. The goal was to design solutions that should supply, in each case, a specified amount of electricity at the minimum cost. Moreover, it was also needed to evaluate further implications for society in the form of tax payments or various reductions. These would include, for example, the impacts on the environment, employment, payments to the Fund for nuclear power station decommissioning and radioactive waste handling, impacts in the event of non-completion of the 3 rd and 4 th units at the nuclear power station at Mochovce (MO-3 & 4), etc. Seven scenarios were evaluated. These were compared to a reference scenario without investment for new power stations. This reference scenario was chosen on the grounds that it was the ‘“most inappropriate” from the point of view of cost of electricity purchases, employment, provisioning of the nuclear power station decommissioning and radioactive waste handling fund, stranded costs and security of electricity supply. The important question of electricity import is the ability to transport large amounts of electricity through the transmission network and to provide adequate capacity for the needed stability regulation and control of the Slovak power network. The study evaluated three scenarios alternatively with and without completion of the 3 rd and 4 th units of nuclear power station at Mochovce (MO-3 & 4) and at different alternatives of the V-1 nuclear power units at Jaslovske Bohunice (i.e. shutdown in 2006-2008, or lifetime extension up to 2015). All scenarios except the above-mentioned reference scenario, included also the construction of thermal power plants including gas-fired (CCGT) and renewables and cogeneration sources, the latter with a total electrical capacity of 799 MW. From the individual producers point of view, the economic evaluation process allowed the choice of an optimum scenario, based on comparison of the annual utilisation of individual technologies as well as on evaluation of the economic effectiveness of sources during their life time. The costs of all power networks were evaluated also. The present value of fixed and variable costs were calculated up to the time horizon of the evaluation. The damages to the environment, impacts on health of citizens, property, etc., were part of the analysis, including complex cost evaluations. These effects, known as “external costs”, play an important role for some fuel cycles, but are not included in the electricity price. Therefore, they need to be taken into account in the strategic decision making process of central bodies responsible for the economy and the environment. The values of the external costs, derived from results of long term research initiated by European Commission, are as follows: 143
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NUCLEAR ENERGY AGENCY INTERNATIONAL
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ORGANISATION FOR ECONOMIC CO-OPERAT
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Table of Contents Table of Contents
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Figures Figure 3.1 Specific overnig
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The introduction of liberalisation
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150 USD/MWh at a 5% discount rate a
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The technologies and plant types co
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locations and/or very favourable co
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conclusions of the study were used
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Chapter 2 Input Data and Cost Calcu
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equipped with emission control devi
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Table 2.2 - Exchange rates (as of 1
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Table 2.4 - Coal plant specificatio
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Table 2.7 - Wind and solar power pl
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Table 2.10 - Other plant specificat
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Figure 3.1 - Specific overnight con
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exchange rates, the coal prices var
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Construction time Gas-fired power p
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USD/MWh 70 60 Figure 3.5 - Levelise
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O&M costs The specific annual O&M c
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Cost ranges for coal, gas and nucle
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Ratio 1.9 Figure 3.12 - Cost ratios
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Table 3.11 - Overnight construction
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Table 3.14 - Projected generation c
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Except for the offshore plant in th
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At 10% discount rate, the levelised
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At 5% discount rate, hydroelectrici
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Table 4.6 - Projected generation co
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A CHP plant typically supplies heat
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Figure 5.2 - Levelised costs of ele
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lower unit capital and operating co
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cost calculation for some 130 power
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It should be stressed that the plan
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Concluding remarks The lowest level
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Portugal Mr. António B. Gomes EDP
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Table A2.1 - Nuclear plant investme
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Overnight Capital Costs: Constructi
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Table A2.7 - Gas-fired (including C
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Table A2.10 - Wind plant investment
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Overnight Capital Costs: Constructi
Page 94 and 95: Overnight Capital Costs: Constructi
Page 96 and 97: Cost structure of supported green e
Page 98 and 99: The highest investment cost arises
Page 100 and 101: The expected development of the per
Page 102 and 103: ● ● Autoproducers. These firms
Page 104 and 105: Canada The electricity market situa
Page 106 and 107: Natural gas - combined cycle gas tu
Page 108 and 109: Denmark Basic data Denmark has abou
Page 110 and 111: In the future, both an increase in
Page 112 and 113: nuclear operator Teollisuuden Voima
Page 114 and 115: these power generation methods. Two
Page 116 and 117: Figure 5 - Competitiveness of vario
Page 118 and 119: 2004. It envisages the gradual incr
Page 120 and 121: Table 4 - Gross electricity supply
Page 122 and 123: ● ● ● ● ● ● ● ● ●
Page 124 and 125: Electricity generation costs The to
Page 126 and 127: photovoltaic device. Finally the su
Page 128 and 129: Table 1 - Installed electric power
Page 130 and 131: Japan Consumers in Japan are suppli
Page 132 and 133: BPE will be established not as a bi
Page 134 and 135: Coal Coal fired power plants have b
Page 136 and 137: A new sewage treatment plant with a
Page 138 and 139: The interconnections between Portug
Page 140 and 141: In order to respond to these basic
Page 142 and 143: efficient energies and is reducing
Page 146 and 147: External costs for electricity prod
Page 148 and 149: At the beginning of plant operation
Page 150 and 151: and high ash, moisture and sulphur
Page 152 and 153: The White Paper did not contain pro
Page 154 and 155: Table 7 shows the projected load fa
Page 156 and 157: other investment options available
Page 158 and 159: The impurities contained in coal ar
Page 160 and 161: “ultra-supercritical” condition
Page 162 and 163: unmineable coal seams. All three pr
Page 164 and 165: Light water reactors require enrich
Page 166 and 167: concerns. Consequently, the natural
Page 168 and 169: generators and power electronics el
Page 170 and 171: conventional fossil-fired plants. B
Page 172 and 173: ● ● very effective and is used
Page 175 and 176: Appendix 5 Cost Estimation Methodol
Page 177: into account in the real price of g
Page 180 and 181: ● ● ● ● Factors under the c
Page 182 and 183: and small power plants. Although th
Page 184 and 185: The general approach remains useful
Page 186 and 187: Two US economic analyses of nuclear
Page 188 and 189: assume future prices follow a rando
Page 190 and 191: The effects of price risk on techno
Page 192 and 193: The option to delay is embedded in
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Appendix 7 Allocating the Costs and
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Further Fourier’s law for heat tr
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Figure A7.4 - The energy conversion
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This yields: β = 0.153 α. If α e
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It is emphasised that depending on
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1 st oil shock 2 nd oil shock Saudi
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Table A8.2 - Expected lower and upp
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Reliability in electricity systems
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is also highly dependent on the typ
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In the ILEX study 5 and in another
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an increasing share of wind is the
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able to work out the optimal operat
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Appendix 10 Impact of Carbon Emissi
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costs of generation. The introducti
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price at 3.5 €/GJ are the next fa
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Figure A10.5 - Steam coal price var
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The longer term impact on investmen
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Appendix 11 List of Main Abbreviati
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