Economic Evaluation of Dual Purpose Desalination Plants by Fuel Type in Korea

Abstract

In light of the recent rapid increase in the fossil fuel prices it is meaningful to evaluate the impact of these price changes in the economics of dual-purpose desalination projects producing electricity and fresh water simultaneously. The price of crude oil and LNG has increased by about 200% and 100% during the past three or four years. The uranium price has also increased by nearly 500% during the same period. The purpose of this paper is to analyze and compare the economics of SMART (System-integrated Modular Advanced ReacTor) which is being developed as a small size PWR type and the LNG Combine Cycle coupled with MED (Multi-Effect Distillation) which are being acknowledged as promising energy sources for the future in Korea. The methods of analysis used in this paper are the lifetime levelized cost method for the power and water cost calculation and the power credit method for the total cost allocation. DEEP (Devaluation Economic Evaluation Program) developed by IAEA was used to perform an economic comparison between the two dual-purpose desalination projects. From the results of the analysis it is found that the desalination by SMART-MED is much superior to that of LNG CC-MED under the current economic and technical situations. It is also shown that the relative superiority of SMART-MED to LNG CC-MED will be maintained even in case where an increase in the uranium price and the SMART construction cost would reach a maximum in the sensitivity analysis. In the case that the discount rate declines to 5% per year, the relative attractiveness of SMART-MED which is a capital intensive plant will be enhanced when compared to that for a 7% discount rate. In addition to this, it is thought that a nuclear energy source will be favored much more than now in the field of desalination if the regulations for the emission of greenhouse gases are to be strengthened.