Chapter 6: Sensitivity Analyses 113
6.4 Waste Liability 126
Chapter 4 introduced the concept of a “cost liability” intended to capture the financial commitment associated with plants operating at the end of the simulation. Because those plants will presumably continue producing electricity for their full 60-year lifetimes, a fair scenario comparison accounts for the future expenditures that the scenario will require. Similarly, we might consider a “waste liability:” the plants present at the end of the simulation will continue to produce waste, and this is unavoidable if we assume a normal next century where the plants continue to operate.
Calculating the waste the plants will produce is straightforward. For the LWRs operating at the end of the simulation, the total number of remaining reactor-years is calculated and
multiplied by the amount of SNF discharged each year. The FRs are assumed to recycle their own fuel year after year, but at the end of their lives, they will discharge their entire core (which will then be managed either in a repository or perhaps in a new FR). The future waste for each FR is thus calculated to be its total core mass. Note that both future losses from reprocessing and the final full-core discharge for LWRs are ignored; both are relatively small amounts, and the waste liability is intended to be a very rough approximation.
Far less straightforward is determining an appropriate discount rate to apply to this waste which will be discharged over a century from now. So far, waste has not been discounted at all within the 100 years of the simulation: waste that appears 100 years from now is as undesirable as waste generated next year. By so far ignoring the waste liability, the discount rate used in the above analyses could be described as a step function, which discounts simulation waste at 0% and post-simulation waste at 100%.
Caplin and Leahy (2000) argue that where societal welfare is concerned, a smaller discount rate should be used than the private (financial) discount rate in order to properly
127 account for society’s preferences.(Caplin & Leahy, 2000) Government, says Caplin and Leahy, should pursue future-oriented policies. Given that financial discount rates tend to be on the order of 10% and lower, the discount rate applied to future nuclear waste could be justified at a very low number. This section explores the effect of discounting the waste liability at 0%.
The waste liability is first applied to the results for the simple, three-decision, two-period tree with cost uncertainty (see Figure 5-5). The decision is between building TFRs, EUFRs, and LWRs at 100% their possible rates in each of two periods. Growth can be high or low for either period.
Figure 6-8 shows the resulting decision space for sensitivity over the cost weight and probability of high growth in the first period. This image should be compared with Figure 5-6, for which the yellow band is much thinner: when the waste liability is added in, TFRs become more attractive. This makes intuitive sense, because LWRs will generate waste every year throughout their lifetimes whereas FRs discharge only a single core’s worth of fuel when they are decommissioned. The more FRs present at the end of the simulation, the lower the waste liability, so FR scenarios get a boost from considering the waste liability.
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Figure 6-8: Desirable decisions for the two-period tree with waste liability incorporated
EUFR scenarios, of course, entail building the most FRs of all because they do not rely on continued building of LWRs for reactor startups.3 Building EUFRs does appear as a desirable option if fast reactors are particularly inexpensive, as shown in Figure 6-9. EUFRs are the most expensive option if the cost premium on FRs is high. If, however, the cost premium is low, EUFRs actually are cheaper because the difference in reactor construction is no longer as important, and EUFRs obviate the need for LWR SNF recycle. Note, however, that at very low cost weights (where the waste weight is high), TFRs are still the desirable option because starting with them, using some LWR SNF, and then moving to EUFRs is better from a waste perspective than building EUFRs all the way through.
3
Note that in reality, it is possible to build fewer EUFRs in addition to some LWRs (the 10% and 25% startup scenarios begin to address these options). In general, those scenarios do not reduce the waste burden enough or come in at low enough cost to be desirable (the EUFRs are “middled-out”: if cost matters, LWRs are the best option, whereas TFRs are the best option if waste is important). There may be an optimal mix of EUFRs and LWRs such that cost is not too high and enough waste is obviated by EUFRs, but finding such optima was not the aim of this analysis. The following discussion does show that increasing the importance of obviated waste favors EUFRs.
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Figure 6-9: Decision sensitivity to fast reactor cost for the two-period tree when waste liability is added
The optimal second-period decision for this tree is almost always to build EUFRs. Figure 6-10 shows the sensitivity of the decision over cost weight and probability of high growth in the second period if “build LWRs” is chosen first; the “build EUFR” space is even larger if TFRs are the chosen first-period option. Predictably, LWRs are most desirable when the cost weight is high. The stark sensitivity to growth in period 2 between the TFR and EUFR options occurs because at low growth, the same number of FRs are built regardless of which scenario is chosen (LWRs no longer limit the building of FRs in the TFR scenario: only FRs are built in the second period). The TFRs, however, are using old spent LWR fuel to start up while EUFRs are not, meaning that there is more leftover LWR SNF from early LWRs contributing to the waste liability for the EUFR scenarios. This gives TFRs the edge at low growth. At high growth, by contrast, TFRs are limited by available SNF, so LWRs must be built alongside the TFRs. This contributes to the waste liability throughout the second period because more LWRs are present at end, and gives EUFRs the advantage from the waste perspective.
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Figure 6-10: Second-period decision for simple two-period tree with waste liability
Considering the waste liability in the context of the five-option tree (where the decision maker can start with 10% TFRs or 10% EUFRs in addition to the options above) creates a more variegated decision space with similar trends. Figure 6-11 shows the decision sensitivity to the probability of high growth in period one and to the cost weight. The “build EUFRs at 10%” decision now overtakes some of the space for which LWRs were the optimal decision in the three-option tree. This happens because the EUFRs can replace some LWRs that would be built early on, reducing the ultimate waste liability for relatively little cost. The other sensitivities for the five-option tree look similar to the three-option tree in shape, with the 10% options gaining some traction for the middle range of cost weights.
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Figure 6-11: Decision sensitivity to growth probability and cost weight for 5-option tree with waste liability
Overall, inclusion of the waste liability has a strong effect on the decision results. This indicates that it is very important for decision makers to consider what the waste management strategy will be. It also means that the time horizon or discounting applied to the waste buildup will dramatically impact choices between fuel cycles. This is especially true for high-growth scenarios, where the number of reactors built, and thus the waste liability, is extremely large by the end of the century.
6.4 Key Takeaways from Sensitivity to the Nuclear Waste Liability
Considering the “waste liability,” or the final disposal of all system wastes at some point in the future when (or if) the entire nuclear system is decommissioned, has a dramatic effect on the decision results. Avoiding LWRs becomes very important, because any LWRs operating at the end of the scenario will continue to produce a large amount of waste throughout their lifetimes.
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Enriched-uranium fed fast reactors become a desirable option, because they are the only manner of ensuring that few (or no) LWRs exist by the end of the simulation.