Eugene Preston has had a long career as a power system engineer, performing generation planning, transmission planning, and distribution planning for Austin Energy. He is currently doing transmission studies for wind developers.  He wrote all his own modeling software including the current network model used to perform his consulting studies.  His PhD dissertation was in power system reliability, a composite generation and transmission probabilistic model, and is posted on his web page.

by Eugene Preston

It's the same amount as paying for the capital cost of a new nuclear plant. Here are the calculations:

  • A recent French proposed $24.74/ton CO2 tax is equivalent to an additional  electric energy cost of 3.7 cents per kWh.
  • This is determined from knowing that a 1000 MW coal plant produces 3 million lbs of CO2 per hour which is 1500 tons/h. 
  • To produce one ton per hour requires a plant size of (1e6 kW)/1500 = 667 kW. Then 2474 cents/h / 667 kW = 3.7 cents per kWh.
  • The new NRG 2700 MW plant on the Texas coast is estimated to cost $10 billion or $3.7/w. For a base loaded generator, the $/w cost is about equal to the cents/kWh energy cost.
  • Therefore these two costs are similar. However, an existing coal plant will still have to pay for the fuel cost, which will make the new nuclear plant a lower cost option than paying the CO2 tax and continuing to operate the coal plant.

Smart utilities will catch on to this fact eventually.

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