3 ms·

Those 2 reactors have had the costs to build them paid a long time ago with the money they generated. So that is truly all the costs left to operate then and th

by doikor 4y ago

Those 2 reactors have had the costs to build them paid a long time ago with the money they generated. So that is truly all the costs left to operate then and thus what TVO bills the share holders or that reactor to buy the electricity from them. So in this case the nuclear fairy is the market buying the electricity just like for all forms of electricity it should be.

pfdietz 4y ago
And that's fine. If the question being asked is "should we shut down these reactors", then operating cost is a good metric to look at (at least until major maintenance is required, then that has to be added.) But if the question being asked is "should we build more nuclear reactors", then construction and financing costs must be included.
- doikor 4y ago
  The number I gave includes both capital and operational costs. here is a newer one from Q2 this year https://www.tvo.fi/material/collections/20220713160120/7aj2cp2Hx/TVO_-_Credit_Investor_Presentation_-_June_2022.pdf https://www.tvo.fi/material/collections/20220713160120/7aj2c... On the page 8 in the graph you can see the cash costs (operational costs) in blue and capital costs in purple (pink? dunno I'm quite badly color blind). Still with both of those the total costs of all 3 reactors is projected to be sub 40€/MWh. Obviously 40€/MWh is not ideal as the market every now and then is under that but they should be able to cover that during the moments when the price is high (it averages out they hope). Basically as long as the squiggly price line is above the colored solid area at the bottom profit is being made. Also to the owners of the plant a easily predictable price is more important then the lowest so they can better predict operational costs of their billion euro+ paper pulp factories etc. This report is based on their financial reporting to their share holders so I doubt they are lying. You can find more at https://www.tvo.fi/en/index/investors/financialpublications.html https://www.tvo.fi/en/index/investors/financialpublications.... edit: The math is quite simple for example 2021 14 414 000 MWh produced at the cost of 19€/MWh and average market price of 72.2€/MWh gets you 1 040 690 800€ of sold electricity at the cost of 273 866 000€ and capital costs of 220 000 000€ (OL3) giving them a profit of (well value made to their share holders who they sold the electricity to at cost of production) 546 824 800€ Not exactly like this as OL1 and OL2 do not have the exact same investor(s) and the split as OL3 but in the ballpark. Could the investors have made a better profit by putting that 5.5 billion a decade ago in some random index fund or building wind mills? Maybe? But this is the gamble they took and seems to be profitable. Obviously not necessarily the most profitable investment as that is impossible to know at the moment you make the investment.

by doikor 4y ago

pfdietz 4y ago

And that's fine. If the question being asked is "should we shut down these reactors", then operating cost is a good metric to look at (at least until major maintenance is required, then that has to be added.) But if the question being asked is "should we build more nuclear reactors", then construction and financing costs must be included.

doikor 4y ago
The number I gave includes both capital and operational costs. here is a newer one from Q2 this year https://www.tvo.fi/material/collections/20220713160120/7aj2cp2Hx/TVO_-_Credit_Investor_Presentation_-_June_2022.pdf https://www.tvo.fi/material/collections/20220713160120/7aj2c... On the page 8 in the graph you can see the cash costs (operational costs) in blue and capital costs in purple (pink? dunno I'm quite badly color blind). Still with both of those the total costs of all 3 reactors is projected to be sub 40€/MWh. Obviously 40€/MWh is not ideal as the market every now and then is under that but they should be able to cover that during the moments when the price is high (it averages out they hope). Basically as long as the squiggly price line is above the colored solid area at the bottom profit is being made. Also to the owners of the plant a easily predictable price is more important then the lowest so they can better predict operational costs of their billion euro+ paper pulp factories etc. This report is based on their financial reporting to their share holders so I doubt they are lying. You can find more at https://www.tvo.fi/en/index/investors/financialpublications.html https://www.tvo.fi/en/index/investors/financialpublications.... edit: The math is quite simple for example 2021 14 414 000 MWh produced at the cost of 19€/MWh and average market price of 72.2€/MWh gets you 1 040 690 800€ of sold electricity at the cost of 273 866 000€ and capital costs of 220 000 000€ (OL3) giving them a profit of (well value made to their share holders who they sold the electricity to at cost of production) 546 824 800€ Not exactly like this as OL1 and OL2 do not have the exact same investor(s) and the split as OL3 but in the ballpark. Could the investors have made a better profit by putting that 5.5 billion a decade ago in some random index fund or building wind mills? Maybe? But this is the gamble they took and seems to be profitable. Obviously not necessarily the most profitable investment as that is impossible to know at the moment you make the investment.