The two approaches are really two sides of the same coin. In both it is necessary to make assumptions about the utilization or load factor of the plant —how many kilowatt-hours can be generated in a year for each kilowatt of installed capacity. Both require assumptions about plant lifetime, although in either method and at the discount rates typically employed, there is relatively little difference in outcome among assumptions on life that vary from 30 to 40 to 50 years. Most utilities evaluate new generating facilities on the basis of mills per kilowatt-hour. However, they also are sensitive to, and think in terms of, “dollars per kilowatt” for the initial plant. Before nuclear plants were a viable alternative, the “dollars per kilowatt” parameter would just about by itself rank alternative fossil plant offerings; the fuel costs for all of them would be about the same. Even in the early days of nuclear plants, the fuel costs (thought of in terms of cents per million Btu's) were somewhat comparable or could be translated into rules of thumb that would say a nuclear plant could justify an additional $50-100 per kilowatt in initial cost. While dollars per kilowatt* gave a quick shorthand way of appraising the relative merits of different plants and also gave insight into the amount of capital that would have to be raised to finance new plant construction, the final comparison was usually made on the basis of mills per kilowatt-hour (or, alternatively but less frequently, on a present value calculation) that considered all the factors. New technologies such as SSPS, fusion reactors, and breeder reactors, may have near-zero operating costs. Thus the simple rule-of-thumb “dollars per kilowatt” becomes less significant, and it is increasingly desirable to think about mills per kilowatt-hour. Virtually all of the AEC analyses of different reactor technologies (there are perhaps about a dozen —including the high-temperature gas reactor, molten salt, and various types of breeder other than liquid metal) have been based on mills-per-killowatt-hour calculations. The numbers presented below are generally consistent with the analyses of the AEC. Typical fixed charge rate£ have run 13-15% per year. 5) The Role of the Load Factor Most reactor evaluations are done on the basis of an 80% annual load factor - actual kilowatt-hours delivered per year are 80% of theoretical capacity. Eighty percent is achievable with light-water reactors which must be down for several weeks each year for refueling; indeed, it lets a reactor otherwise run at 100% capacity be “down” 10.4 weeks per year. More elaborate analyses** use a sliding scale of availability that more closely reflects utilities' experience with fossil fuel plants *The doilars-per-kilowatt figure includes payments to equipment vendors, payments for design and construction services (and escalation experienced during construction), and interest during construction. In essence, the utility looks at the cost it would hypothetically pay to a third party who had borrowed money to make the necessary progress payments and had thereby incurred interest charges as one of his costs of doing business. These are the dollars per kilowatt that the public utility commissions "allow" in the rate base. This practice equalizes the differences among utilities, some of which have their own design and construction operations and most of which finance construction themselves, using new bonds and stock financing. **For instance, the widely circulated "Report on Economic Analysis for Oyster Creek Nuclear Generating Station" issued by Jersey Central Power and Light Company in late 1963. This elaborate, detailed analysis used load factors of 88% for the first 15 years, 83% for the next five years, 67% for the next five years, and 56% for the next five years — a weighted average load factor of 78.3%.
RkJQdWJsaXNoZXIy MTU5NjU0Mg==