4 ms·

Well, I looked up "Mankala model", so for TVO and Olkiluoto the investors and the consumers are largely the same - which means that the investors/consumers wil

by biehl 10y ago

Well, I looked up "Mankala model", so for TVO and Olkiluoto the investors and the consumers are largely the same - which means that the investors/consumers will just directly over-pay for the electricity, by having a larger total cost (mostly the capital costs) than what they could have paid by buying the electricity on Nordpool. Or conversely, they will never recoup their investment if they just sell the energy on Nordpool.

doikor 10y ago
Them overpaying doesn't always happen (They don't use the Mankala model for the fun of it. It adds risk due to the capital investment but has been worth it over the long term up to date at least). As I understand both Olkiluoto 1 and 2 have been cheaper then buying from Nordpool to the owners (one of the reasons they wanted the third one). They of course also sell any energy they don't use into Nordpool. These are mostly private companies. They wouldn't do it if there is no profit in it. Why take risks of billions of euros if they stand to gain nothing? In Finland 40% of energy produced is done under the Mankala model. Out of wind energy the percentage is 57% (so over the average). Also one of the reason why the price in Finnish Nordpool has been so high lately is the delays in Olkiluoto 3. The actual estimated cost of production (so cost of running) is 3€/MWh. With the price in Nordpool around 30 to 50 €/MWh they stand to make 25 to 45 €/MWh of profit. If they can offload a good chunk of the capital costs of building the reactors to the people buying from Nordpool and get their own power needs at a very big discount (basically the 3€/MWh + (whatever their share of the capital costs is - money made out of selling into the grid) it is profitable to the owners even if the plant itself didn't make money directly.
- biehl 10y ago
  Well, the Mankala model is not a problem. And most likely Olkiluoto 3 had a reasonable business case before the cost overruns. So the question is more or less: is the real price of nuclear the price that was hoped for Olkiluoto 3 or the actual price that will be paid? (maybe mostly by Areva and not TVO). The "strike price" of Hinkley makes me think that it is probably the latter. And while the trends look favorable for solar and wind, they seem less favorable for Nuclear - cf. Historical summary of EIA's LCOE projections (2010–2016) - https://en.wikipedia.org/wiki/Cost_of_electricity_by_source https://en.wikipedia.org/wiki/Cost_of_electricity_by_source

by biehl 10y ago

doikor 10y ago

Them overpaying doesn't always happen (They don't use the Mankala model for the fun of it. It adds risk due to the capital investment but has been worth it over the long term up to date at least). As I understand both Olkiluoto 1 and 2 have been cheaper then buying from Nordpool to the owners (one of the reasons they wanted the third one). They of course also sell any energy they don't use into Nordpool. These are mostly private companies. They wouldn't do it if there is no profit in it. Why take risks of billions of euros if they stand to gain nothing? In Finland 40% of energy produced is done under the Mankala model. Out of wind energy the percentage is 57% (so over the average). Also one of the reason why the price in Finnish Nordpool has been so high lately is the delays in Olkiluoto 3. The actual estimated cost of production (so cost of running) is 3€/MWh. With the price in Nordpool around 30 to 50 €/MWh they stand to make 25 to 45 €/MWh of profit. If they can offload a good chunk of the capital costs of building the reactors to the people buying from Nordpool and get their own power needs at a very big discount (basically the 3€/MWh + (whatever their share of the capital costs is - money made out of selling into the grid) it is profitable to the owners even if the plant itself didn't make money directly.

biehl 10y ago
Well, the Mankala model is not a problem. And most likely Olkiluoto 3 had a reasonable business case before the cost overruns. So the question is more or less: is the real price of nuclear the price that was hoped for Olkiluoto 3 or the actual price that will be paid? (maybe mostly by Areva and not TVO). The "strike price" of Hinkley makes me think that it is probably the latter. And while the trends look favorable for solar and wind, they seem less favorable for Nuclear - cf. Historical summary of EIA's LCOE projections (2010–2016) - https://en.wikipedia.org/wiki/Cost_of_electricity_by_source https://en.wikipedia.org/wiki/Cost_of_electricity_by_source