I know next to nothing to Power Generation Bid, but I am always puzzled that these articles always mention cost estimation coming from the bidder. Are we sure the lowest bidder can actually deliver at that cost point down the line ?
The price they pitch is the price they are paid per mwh. If they can't produce it that cheaply they can choose to either sell at a loss or shut down. People do sometimes sell at a loss - but that is a business decision.
Basically the contracts say - for every mwh supplied, this is what we will pay for you for this period. So it is self governing - no point in lying, as you simply won't get paid any more.
those "estimates" likely get written as hard promises into contracts in the form of long-term power purchase agreements.
The bidding, assuming it is competitive, drives down the current price in favor of the utilities. The long-term agreements provide stability in favor of the suppliers in case market prices plunging even further than estimated.
I have not followed all EPR nuclear reactor project, but it seems some project have a hard time to deliver. So is there somewhere an example of catastrophic failure ? or on the contrary, wind/solar project tend to be completed on time, with the expected cost for the provider ? Naively I would think that latter kind of project are much lower risks.
A 500 megawatt solar project is, approximately, 100 5-megawatt solar projects tiled together and sharing a transmission line. There are large parts of the project that can be built in parallel without scheduling dependencies. There are multiple vendors available for each equipment component (racking, tracking, inverters, modules) and there's a lot of mix-and-match flexibility. You don't have to buy Panasonic inverters and monitoring software just because you went with Panasonic modules. Large projects usually start generating power before their official commission date, because you can energize completed subsections as soon as they're connected to transmission.
Nuclear projects are pretty much the complete opposite. There are tightly coupled dependencies. A delay in one component (like a coolant pump) means that the entire project timeline slips. You can't play mix-and-match with reactor components -- no Westinghouse core plus Mitsubishi containment system. Unlike a large solar farm, a large reactor can't start generating partial power when the project is only 50% (or even 85%) complete, so financing weighs more heavily on the project economics.
Reactors that are up and running are great, and I deplore their premature retirement. But building new reactors is a slow process where the payoff comes only at the end.
Nuclear (from what I understand) usually has both far higher bid/pitched costs, plus an agreement to pay those over a longer period. Plus they usually come with finance or arranged finance.
The risk is in the building, but once built they are (in theory) a cash cow. But govt seem to find all sorts of ways to subsidise them - offering the clean up etc. P
