Cross-Price Elasticity Watch: Towards Limits on King Coal (and New Nuclear)
Coal-fired generating capacity is decreasingly cheap:
The cost for Alliant Energy’s controversial proposed new coal power plant has soared to a range of $1.1 billion to $1.2 billion, the company stated in a regulatory filing.
Alliant previously said the new plant proposed to be the third unit of the Nelson Dewey Generating Station in Cassville would cost $850 million to $950 million. When initially proposed in 2007, the plant’s cost estimate was under $800 million.
That’s $1.2 billion for 300 MW. This is blamed on producer-price inflation:
Company officials said the increases stem from soaring construction costs that include big cost hikes for items such as concrete and steel.
In case you were thinking that the BLS was incapable of finding inflation, the PPI for iron and steel is up 32.6% year-over-year (NSA), and while PPI for concrete ingredients are “only” up 4.6% over 2007, the 3-year average annual rate to last month is 7.8%.
This is also an obstacle to plans for new nuclear generating capacity in electricity decarbonization a la McCain, since nuclear plants are also plenty steel-and-concrete intensive.
Wind and solar are also construction-cost intensive, but some of that can be offset by economies from mass-production of components. Were I a betting person, I’d expect that little of the projected new nuclear generation will ever show up, and that the renewables projections are low.