TABLE J.1 An Electricity Cost Calculation Method Used for Energy Supply Options (Constant Dollars)
NOTE: Capital recovery factor = 0.106 (constant
dollar based on EPRI
(1989) for a 30-year plant life and 3.6% real discount rate); CF = capacity
factor (fraction); mills = 1/10¢ = $0.001; 1 year = 8,760 hours.
EPRI estimate as the cost of building a nuclear power plant varies a great deal for a wide variety of reasons including the time it takes for licensing and construction. Recently built nuclear power plants have cost from just below EPRI's estimate to twice EPRI's figure (U.S. Department of Energy, 1990). If the nuclear power plant construction time in France, Japan, and the United Kingdom can be achieved in the United States, the cost are likely to be in the low end of the range. However, if current experience in the United States as to the licensing and construction time are evidence of what the future will be, nuclear power costs are more likely to be in the high end of the range. Therefore, a range of cost from EPRI's estimate to twice EPRI's estimate was used in the Mitigation Panel's analysis.
Although four discount rates (3, 6, 10, and 30 percent) were used for the conservation options, only one (6 percent) was used in the power generation calculations because utility accounting, as described above, differs from conventional calculation of capital recovery. To use other discount rates, assumptions on acceptable return that the panel was unwilling to make would be needed. Furthermore, in cases such as biomass, only the potential emission reduction and cost could be estimated. In short, the panel has attempted to use what it believed to be the most practical and realistic way of assessing the potential of energy supply options.