Reference no: EM1313786

Q. The Ontario government plans to build two new reactors at the OPG site in Darlington. In 2006 AECL made a bid of $26B to build two ACR's (Advanced CANDU Reactor) there. These reactors would each have an electrical power output of 1085 MW (e). The design of the ACR is still under development and a prototype has not been built but the historically estimated capacity factor is 80 percent and the efficiency is 34%. Money would be borrowed to build the new reactors on the same terms as the gas plant in 4) above that is an interest rate of 6 percent per year giving an equalized debt charge (capital and interest) for 25 years on $10,000 of borrowed capital of $2.11/day.

a) suppose that O&M costs (staff, maintenance, decommissioning, waste handling, training, refurbishment reserve and other charges) can be approximated by 12% of the debt charge and the fuel costs for the ACR's enriched fuel is about 3 percent of the debt charge. Considering only the capital cost repayment, fuel costs and the operating costs what would be the cost ($/ kWh) of the electricity from a new Darlington nuclear plant?

b) At what natural gas price ($/GJ) would the cost of electricity from the two options be equal?

c) A "carbon tax" i.e. a levy of $X per tonne of CO2 emitted has been suggested as a means of reducing climate change. Imagine there is no carbon emissions from the nuclear plant, how large would X ($) have to be to make the gas generated cost of electricity equal to the cost of the nuclear generated electricity?