Gregory FishmanEconomics of Energy Markets

Nuclear Waste Policy Act of 1982 picked Yucca Mountain as the site of a geologic repository for nuclear waste.

The Nuclear Waste Fund gets .1 cents per KWh of electricity produced in nuclear power plants in order to pay for Yucca Mountain.

The DOE was charged with the task of building and operating Yucca Mountain.

The newest budget estimate quotes a waste capacity of 122,100 MTU.

There is 57,830 MTU in the United States, as of September 2008.

This leaves 64,720 MTU of storage for waste produced by nuclear reactors.

My goal is to project how long it will take for Yucca Mountain to reach capacity.

To do this, we need to project how much waste will be produced per year.

Last reactor began operation in 1996. Growing demand for electricity of 1%

per year for foreseeable future. Growing concerns about global warming

and greenhouse gas emissions. Carbon tax could make nuclear power much

more attractive. 22 applications for 33 reactors since

2007. Indicates renewed interest in nuclear power. Probably the most telling sign of where

nuclear industry is headed.

Projects 300 reactors operational by 2050. Each has 1 GWe of capacity.

Says the United States should focus research and policy on geologic repositories like Yucca Mountain.

Does not address growth path of nuclear reactors over time. Simply states how many and when.

Does not address growth path of waste over time. Apparently they should have.

Nuclear’s share of total electricity generation would be 47.8% by 2050. Based on a growth in total electricity

consumption of 1% per year. Growth rate in the number of reactors

of 2.5% per year. % change growth rate consistent with

~300 reactors in 2050. Means an average of 5 reactors are built

per year.

Rate of growth per year in number of reactors: Extreme decline: less than-1.5% Negative growth: rate between -1.5% and -.5% No growth: rate between -.5% and .5% Positive growth: rate between 0.5% and 1.5% Extreme growth: greater than 1.5%

Assumptions: Constant waste per reactor of 20 MTU per year.. Percent change growth in number of reactors at

rate indicated.

2.5%, 2222

It is extremely likely that the growth path will fall between -1.5% and 1.5%, at least through 2050.

The growth path you choose depends on your expectations.

How does 120 reactors by 2037 sound? Pretty good? Then you better have a second repository operating

by that date.▪ I don’t mean start building by 2037, I mean start receiving

waste and storing it by 2037. 104 reactors in 2039 more your speed? Fine, be pessimistic and say there are only 88 in

2042. You get the picture. Should we plan for the worst and have a

repository ready by 2034 just in case?

Yucca Mountain will reach full capacity by 2037 with only slight growth in the nuclear industry.

That’s 28 years from now. The US chose Yucca in 1982. Now it

says Yucca will be operational by 2020. If the past is any indication we should

have picked a second site ten years ago.

We can avoid a nuclear waste crisis by picking a second site NOW.

Yucca’s expected lifetime budget is $96 billion through 2133, in 2007 dollars.

NWF gets $.001/KWh for nuclear power. NWF would earn $100.8 billion during that

span. 2007 dollars, assuming zero growth in nuclear

power generation. In such a case Yucca would be full by 2039.

Cost per MTU of waste at Yucca Mountain is $782,964.78. The NWF only earns half of this per MTU

produced.

The better tax rate is .202 cents per KWh. I defined efficiency as total electricity generated

per MTU of waste produced in a given year for the whole nuclear industry.

The ideal tax is cost divided by efficiency. The current tax is wrong by a factor of 2

This is very significant because the DOE needs to build at least two repositories and can only afford one.

A second problem with the current system is that in order to tax per KWh, the tax must be generalized to all nuclear power plants.

The DOE taxes electricity generation. Electricity generation and waste production are

not perfectly correlated. The data shows that newer plants are both

more powerful and more efficient than older plants. In general, more efficient plants are being

taxed more than less efficient plants under the current plan.

The tax policy provides no incentive to improve efficiency.

The goal of the DOE’s tax plan is to fund the disposal of nuclear waste, but the tax plan does not reward power plants for reducing their production of nuclear waste.

Ideally the tax would be based on the cost of disposal of an MTU of waste. Currently, the tax is based on the government’s

attraction to arbitrary round numbers. It would be much simpler and much more fair

to tax every power plant directly for each MTU of waste they produce. The disposal cost of an MTU of waste is known, and

is $782,964.78.▪ This rate should be allowed to change over time to reflect

changes in the cost of waste disposal. The tax plan would simply stipulate that for

every MTU of waste produced in a nuclear power plant, the plant is charged an amount exactly equal to the cost of disposal of an MTU of waste at that time.

If you want to tax the production of nuclear waste, then tax the production of nuclear waste.

This point should be obvious. It bears repeating that the DOE is

NOT doing this.They should be.

On a lighter note, was it the same dead horse?

The United States needs to build a second geologic repository by 2040 at the latest to avoid a waste crisis.

The current tax rate for the NWF will not earn enough to pay for a second repository.

The United States should charge each power plant directly for the production of radioactive waste. The amount charged at any given time should be

equal to the present cost of disposal. Only by taxing waste correctly can the US provide the

right incentives for power plants to reduce waste production.

Something has to change. The world must know my story.

Negative or No Growth in Reactors

Positive Growth in Reactors

Negative Slope for Waste per Reactor Curve

Economically unfeasible

Decreasing the amount of waste produced per reactor is more expensive per MTU than building a repository. There is no reason to do this when long term waste disposal is not an issue.

Technically unfeasible in long run

Means either fuel is being reprocessed faster than it is being created orincreasing efficiency over time.

Positive Slope for Waste per Reactor Curve

Sustainable in long run

Unwilling to accept consequences in long run

Threshold will be reached beyond which we are more willing to reprocess or build more efficient plants at higher cost than we are to build repositories.

Two factors can change total waste per reactor Wr(tot): More waste is being produced per reactor over time

[Wr(pro)].▪ In the short run Wr(pro) is decreasing because efficiency

(power/reactor) is improving. Efficiency has technical limitations and is constant in the LR. It could even be positive in LR if there is always room for improvement.

▪ In LR, power per reactor is increasing. Always room for improvement.

▪ Wr(Pro) = P/E Existing waste is being reprocessed [Wr(rep)]

Wr(tot) is the difference between the waste produced pre reactor and the waste reprocessed per reactor in a given year. Wr(tot) = Wr(pro) – Wr(rep) If either factor prevails, there is pressure for the other to

increase. The pressure is discussed in the last slide. The Wr(tot) curve is constant in the long run. In the

short run it will fluctuate. The implementation of technological developments change

the constant, not the fact that it is constant.

Largest production capacity of clean energy sources. Currently accounts for 19.6%

of total electricity generated in U.S.

No greenhouse gases. Much more pleasant than

burning coal. Technology is available now.▪ Don’t need to wait for

improvements to capitalize. Waste is limited and

manageable. Electricity can be produced

near where it is needed.

Waste has been uncorrelated with demand over the last 25 years.

This means that the growth in demand: …does not indicate that more reactors will

be built. …does indicate that if we decide to build a

new reactor, we can sell its electricity. …is completely neutral in my analysis, and

will not be used as a predictive variable.

Total waste 57,830 MTU currently being stored in U.S. as of 9/08 98.4% of this is stored on the site at which it was

produced. Number of Reactors

Reactors operational in a given year. Power

Average Electricity output per Reactor Measured in TWh of electricity produced per reactor in a

given year. Intensity

Average Waste per Reactor. Measured in MTU produced per reactor in a given year.

Efficiency Average Waste per unit of Power. Measured in MTU produced per TWh of electricity

generated in a given year.

Rate of Growth

-

1.5

%

-

0.5

%

0 .5%1.5

%

Year to Reach Yucca

Capacity2050 2042 2039 2037 2034

Reactors Operational in 2050 56 69 104 128 191

Nuclear Share 2050 9.3% 14.1% 17.3% 21.2% 31.8%

Reactors Operational in 2133 16 30 104 193 659

Yucca Mountain Equivalents Full

by 21331.44 2.06 2.60 3.42 6.64

I(pro) = 1/E * P Waste/reactor = waste/electricty* electricity/reactor Electricity/reactor will increase for foreseeable future. Electricity/waste has a technical capacity that has not

been reached. (high burnup). In the long run e/w should level off. I(pro) = P/E will increase for foreseeable future. I(rep) will begin increase if total amount of waste

becomes unreasonable. (reprocessing) In the long run, total intensity is balanced by the

increase in intensity from increasing power and the decreasing intensity from using existing waste as fuel for reactors

I(tot) = I(pro)-I(rep) I(tot) is constant in the long run and is a stable

equilibrium. If either variable strays too far, the other brings it back to baseline.