Chapter 15: Problem 12

Discuss economic reasons that have caused many utilities to opt for coal- burning plants rather than nuclear-powered plants.

Short Answer

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Coal-burning plants are often chosen over nuclear-powered plants due to their lower initial capital cost, cheaper and abundant fuel, lower insurance cost, and fewer complexities in waste management. Despite being potentially more expensive to run and bearing additional environmental and regulatory costs, the lower upfront investment and risk often make them economically more attractive for utilities.

Step by step solution

Comparing Initial Capital Costs

Compare the initial capital costs of setting up a coal-burning plant and a nuclear power plant. Typically, the construction of nuclear power plants requires a significantly higher capital investment due to stringent safety standards, costly materials, and complex construction procedures.

Evaluate Ongoing Operational Costs

Consider the ongoing operational costs for each option. Even though nuclear power plants have high upfront costs, they are relatively inexpensive to operate. Conversely, coal-burning plants may require frequent fuel replenishment and maintenance, making them more expensive in the long run. However, the utility must also plan for the cost of safe handling, storage and disposal of nuclear waste, which is a more complex process

Discuss Fuel Availability and Costs

Discuss the fuel availability and cost for both coal-burning and nuclear plants. Coal is abundant, easy to transport, and relatively cheap, which makes coal-burning plants economically attractive. On the other hand, nuclear fuel is more efficient but more expensive to acquire and process.

Factor in Risk Management and Insurance Costs

Understand risk management and insurance related costs. Nuclear power plants are inherently riskier due to the hazardous nature of nuclear energy, leading to high insurance premiums. This significantly adds to the cost and makes nuclear power plants less favorable economically.

Evaluate Environmental and Regulatory Costs

Evaluate potential environmental and regulatory costs. With the growing emphasis on renewable energy and the fight against climate change, governments around the world are imposing stringent emission standards. Coal-burning plants often bear the brunt of these regulations, resulting in additional costs for emissions control systems and carbon offsets. In comparison, nuclear plants, which emit no greenhouse gasses, could potentially avoid such expenses.

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Discuss economic reasons that have caused many utilities to opt for coal- burning plants rather than nuclear-powered plants.

Short Answer

Step by step solution

Comparing Initial Capital Costs

Evaluate Ongoing Operational Costs

Discuss Fuel Availability and Costs

Factor in Risk Management and Insurance Costs

Evaluate Environmental and Regulatory Costs

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