A reactor-level analysis of busbar costs for US nuclear plants, 1970–2005

We present a reactor-by-reactor analysis of historical busbar costs for 99 nuclear reactors in the United States, and compare those costs with recent projections for next-generation US reactors. We argue that cost projections far different from median historical costs require more justification than estimates that lie close to those medians. Our analysis suggests that some recent projections of capital costs, construction duration, and total operations and maintenance costs are quite low—far enough from the historical medians that additional scrutiny may be required to justify using such estimates in current policy discussions and planning.     

Nuclear power: Understanding the economic risks and uncertainties

This paper identifies the fundamental elements and critical research tasks of a comprehensive analysis of the costs and benefits of nuclear power relative to investments in alternative baseload technologies. The proposed framework seeks to: (i) identify the set of expected parameter values under which nuclear power becomes cost competitive relative to alternative generating technologies; (ii) identify the main risk drivers and quantify their impacts on the costs of nuclear power; (iii) estimate the nuclear power option value; (iv) assess the nexus between electricity market structure and the commercial attractiveness of nuclear power; (v) evaluate the economics of smaller sized nuclear reactors; (vi) identify options for strengthening the institutional underpinnings of the international safeguards regime; and (vii) evaluate the proliferation resistance of new generation reactors and fuel cycles.     

Increasing marginal costs and the efficiency of differentiated feed-in tariffs

We study optimal subsidies for renewable energy (RE) generation to internalize external benefits from inter-temporal learning-by-doing spillovers, taking into account increasing marginal costs at the industry level due to limited availability of sites suitable for RE. We find that the optimal RE subsidy is differentiated according to productivity and derive a condition on production and spillovers under which less efficient, i.e. more costly, technologies should receive higher support, as common in actual policy-making. We show that such a support of technological diversification is optimal if (i) productive sites are scarce, which limits future utilization of knowledge and if (ii) technologies mature rapidly with little further scope for learning. Prima facie evidence for these elasticities for Germany, Denmark and UK suggests that support for technology diversification is the optimal approach for these countries.     

Nuclear power, coal and energy conservation (with a note on the costs of a nuclear moratorium)

A programming model is used to explore some of the options by which the United States may realistically move away from its present heavy dependence on oil and gas to a more diversified energy economy, based on nuclear power and/or coal. The model incorporates both own- and cross-price elasticities. In this way it allows for price-induced interfuel substitution and price-induced energy conservation.Among the supply options considered are: the direct combustion of coal to generate electricity; the conversion of coal to synthetic fuels; the limited petroleum, natural gas, and shale oil resources; nuclear energy from light water reactors and, later, from fast breeder reactors; hydrogen via electrolysis; and such distant future technical options as central station solar power and fusion (aggregated and described only as “advanced technology”).Each of these energy sources is discussed in terms of its own costs and the probable date of its commercial introduction. We then quantify the sensitivity of the benefits from research and development to assumptions with respect to: the discount rate; the future (undiscovered) domestic resource bases of oil, gas and low-cost uranium; and the cost at which large future supplies of coal can be utilized.Under a plausible set of assumptions (the base case), we find that the present value of the benefits from both the fast breeder and coal-based synthetic fuels well exceeds their anticipated research and development costs. In an optimum mix, the combined benefits would be nearly $50 billion (in 1975 dollars) discounted at 10% annually over the 75-year span of our study, and $450 billion at a 5% annual discount rate. Under the same conditions, we also find that if a nuclear moratorium prohibiting the construction of additional plants throughout the country were to come into effect, the direct cost to the United States economy would be approximately $300 billion at a 10% discount rate and $2500 billion at a 5% rate.     

Steps toward passively safe, proliferation-resistant nuclear power

After about a 30-year hiatus of construction in the US but not in all involved countries, the designs for an improved water-cooled nuclear reactor will hopefully be developed by a consortium of nuclear reactor builders and users under an agreement with the US Department of Energy (DOE) and review by the Nuclear Regulatory Commission (NRC). The construction of high-temperature, helium-cooled pebble-bed or prismatic reactors may herald the entry of new, safer, and less costly types of reactors to replace the water-cooled reactors of the past and current types. Nuclear breeder reactors hold the promise of limitless energy supplies without the use of fossil fuels or renewables at acceptable costs but this development program has been stalled periodically, especially in the US, when abundant low-cost uranium sources were added to the supply side.     

Shifting strategies and precarious progress: Nuclear waste management in Canada

Canada has a lengthy history of trying to find a path for dealing with radioactive spent fuel and nuclear waste from its nuclear reactors. In the last decade, it has taken major strides towards this goal by evolving a process through which a site for a geological repository to sequester nuclear waste is to be selected. The Canadian Nuclear Waste Management Organization (NWMO) is in the early stages of the process of finding a community that is willing to host such a repository. Differences between the broad principles underlying siting and the processes for actually selecting the site have emerged as the NWMO proceeds with engaging local governments and specific communities. These differences and other conflicts, especially over new nuclear reactor construction, might pose hurdles in the path of successfully setting up a repository.     

Why is Brazil enriching uranium?

In Brazil construction began in 1971 on Angra 1, a 626 MW Westinghouse pressurized water reactor (PWR). It was completed in 1984. Later, Angra 2 (a Kraftwerk Union PWR) achieved commercial operation in 2000. Brazil is considering the construction of seven nuclear power plants over the next 15 years. In preparation for this nuclear industry expansion, Brazil is building a uranium enrichment facility to provide nuclear fuel for Angra 1 and 2 starting in 2010 at Resende in the state of Rio de Janeiro, and collated with nuclear fuel fabrication facilities. This paper investigates whether the Resende Enrichment Facility will be able to provide uranium enrichment services at a cost lower than the international market price. We find that while Brazil is unlikely to be internationally competitive in the enrichment market, the Resende Enrichment Facility completes the front end of Brazil's nuclear fuel cycle. This assures uninterrupted nuclear fuel to its currently operating light water reactors, while providing the option of expanding capacity, lowering cost, and competing in the international nuclear fuel market after 2020.     

Nuclear power for sustainable development: Current status and future prospects

Interest in nuclear power has been revived as a result of volatile fossil fuel prices, concerns about the security of energy supplies, and global climate change. This paper describes the current status and future plans for expansion of nuclear power, the advances in nuclear reactor technology, and their impacts on the associated risks and performance of nuclear power. Advanced nuclear reactors have been designed to be simpler and safer, and to have lower costs than currently operating reactors. By addressing many of the public health and safety risks that plagued the industry since the accidents at Three Mile Island and Chernobyl, these reactors may help break the current deadlock over nuclear power. In that case, nuclear power could make a significant contribution towards reducing greenhouse gas emissions. However, significant issues persist, fueling reservations among the public and many decision makers. Nuclear safety, disposal of radioactive wastes, and proliferation of nuclear explosives need to be addressed in an effective and credible way if the necessary public support is to be obtained.     

Projections of US GHG reductions from nuclear power new capacity based on historic levels of investment

Historical rates of capital investment in nuclear plant construction were used as a guide to estimate the potential rate of future capacity introduction. The total linear rate of capital expenditure over the entire period of historical construction from 1964 to 1990 was determined to equal $11.5 billion/yr, and that for the period of peak construction from 1973 to 1985 was computed as $17.9 billion/yr, all in 2004$. These values were used with a variety of current capital cost estimates for nuclear construction to obtain several scenarios for possible future nuclear capacity additions. These values were used to obtain the effect of projected nuclear generating capacity on GHG emissions assuming nuclear would directly replace coal-fired generation. It was concluded that actual reductions in emissions would not be experienced until 2038, yet growth in emissions from electrical production would be slowed through that period. Due to the significant time to introduce large-scale changes in the utility sector, nuclear energy cannot have a dramatic short-term effect on emissions. Nuclear power, however, can have a major positive longer term impact, particularly under more favorable cost and investment conditions.     

The problem of used nuclear fuel: lessons for interim solutions from a comparative cost analysis

An acceptable long-term solution for used (spent) fuel from nuclear power reactors has evaded all countries engaged in the civilian nuclear fuel cycle. Furthermore, many countries are trying to develop interim storage solutions that address the shortage of storage in the spent fuel cooling pools at reactors. The United States has a particularly acute problem due to its adherence to an open fuel cycle and its large number of reactors. Two main options are available to address the spent fuel problem: dry storage on-site at reactors and centralized storage at a facility away from reactors. Key to deciding which option makes better policy sense is the comparative economics of the two options. This paper provides one of the few comprehensive comparisons of costs for the two alternatives and discusses implications for other schemes and possible alternative solutions to the spent fuel problem for the United States.     

Cost estimates for nuclear power in the UK

Current UK Government support for nuclear power has in part been informed by cost estimates that suggest that electricity from new nuclear power stations will be competitive with alternative low carbon generation options. The evidence and analysis presented in this paper suggests that the capital cost estimates for nuclear power that are being used to inform these projections rely on costs escalating over the pre-construction and construction phase of the new build programme at a level significantly below those that have been experienced by past US and European programmes. This paper applies observed construction time and cost escalation rates to the published estimates of capital costs for new nuclear plant in the UK and calculates the potential impact on levelised cost per unit of electricity produced. The results suggest that levelised cost may turn out to be significantly higher than expected which in turn has important implications for policy, both in general terms of the potential costs to consumers and more specifically for negotiations around the level of policy support and contractual arrangements offered to individual projects through the proposed contract for difference strike price.     

New nuclear power generation in the UK: Cost benefit analysis

This paper provides an economic analysis of possible nuclear new build in the UK. It compares costs and benefits of nuclear new build against conventional gas-fired generation and low carbon technologies (CCS, wind, etc.). A range of scenarios are considered to allow for uncertainty as regards nuclear and other technology costs, gas prices and carbon prices.     

US nuclear power performance

During the past decade there has been a steady diminution in the economic expectations and public support for nuclear power in the USA. An increasing number of nuclear plants have been delayed, deferred, or cancelled, and those being completed face unforeseen rising costs. As a result, both the electric utility industry and the public generally perceive nuclear power, based on light water reactor technology, as intrinsically uneconomic and troublesome as a future option for power generation. The authors believe that this is not because of the inherent nature of nuclear power in general or light water reactors in particular. It arises mainly from the adverse regulatory and institutional framework in which electrical utilities and power plant constructors have to operate in the USA.     

Economics of nuclear power: Past record,present trends and future prospects

We examine the economic record of operating U.S. reactors, factors affecting the economics of nuclear plants under construction and opportunites for nuclear energy to escape from the predicament it faces today. The records of the 80 operating reactors indicate that they represent an indispensable asset, generating power at a lower cost than fossil-fueled alternatives. Yet many reactors under construction have suffered so much delay and cost escalation that they have become a financial burden to utilities and their customers. The technical, economic, and institutional reasons for this grotesque contrast between nuclear energy's potential and the problems it faces today are discussed. Changes necessary to improve the economics of nuclear power are also discussed. It is argued that the deployment of a meltproof reactor design, several of which are now under development, may solve the multifaceted problems of over-regulation, long schedules, and financial risks.     

An assessment of Turkey’s nuclear energy policy in light of South Korea’s nuclear experience

Nuclear energy, which was once considered as the fuel of future and was abandoned after Chernobyl accident, has emerged recently in developed and developing countries as an option to combat climate change, to secure supply and to achieve sustainable development. Turkey, a developing country where most of the electricity is produced from fossil fuels and which has energy security problems, has adopted a new legislation giving financial incentives for nuclear power plant construction, along with a tender in 2008. However, the tender ended in a stalemate after the Council of State’s decision in November 2009. An evaluation of Turkey’s nuclear policy in light of South Korea’s nuclear experience gives us an explanation as to why Turkey failed in the last tender. Basically it was due to lack of a long term nuclear energy policy that comprehends social, economical, technical and political aspects of nuclear energy. Thus, it is argued that Turkey can benefit from nuclear energy if it formulates a comprehensive nuclear energy plan clearly interwoven with its economic development plans, establishes a proper legal framework and has domestic industry participation in nuclear technology development.     

The effect of economic growth,oil prices,and the benefits of reactor standardization: Duration of nuclear power plant construction revisited

The profitability of nuclear power plant investment is largely determined by the construction duration, which directly impacts discounted cash flows, debt and interest payments, as well as variable costs, such as labor. This paper analyzes the key drivers of construction duration using survival models. We focus especially on the strategic expectation formation of private and public utilities engaging in such highly risky megaprojects. Using a balanced dataset of explanatory variables and the IAEA/PRIS dataset of reactor construction starts between 1950 and 2013 we find that the expectation of rising oil prices and higher economic growth, along with the higher per capita GDP of a country tend to reduce the time needed to grid connection. We also identify the reactor models with the fastest construction duration.     

Operating performance of nuclear reactors in the non-communist world

Early expectations that the operational reliability of nuclear power plant would be good have not always been fulfilled. Further, the belief that the process of learning would be a powerful mechanism to improve technological performance also seems not to have been fulfilled. The performance of apparently similar reactors appears to vary substantially according to country of installation. A detailed examination of the operating records of reactors world-wide reveals that the contribution of the user, the electric utility, seems to be the strongest determinant of reactor performance.     

The diffusion of renewable electricity in the presence of climate policy and technology learning: The case of Sweden

The overall objective of this paper is to analyze the impact of climate policy and technology learning on future investments in the Swedish power sector. Methodologically we assess the lifetime engineering costs of different power generation technologies in Sweden, and analyze the impact of carbon pricing on the competitive cost position of these technologies under varying rate-of-return requirements. We also argue that technological learning in the Swedish power sector – not the least in the case of wind power – is strongly related to the presence of international learning and R&D spillovers, and for this reason capacity expansions abroad have important influences of the future cost of power generation in Sweden. The results suggest that renewable power will benefit from existing EU climate policy measures, but overall additional policy instruments (e.g., green certificate schemes) are also needed to stimulate the diffusion of renewable power. Moreover, under a recent European Commission scenario and using estimated learning rates for wind power and the combined cycle gas turbine (CCGT), wind power gains considerable competitive ground due to international technology learning impacts. These latter results are, however, very sensitive to the assumed learning-by-doing rates for wind power and CCGT, respectively.     

On the contribution of external cost calculations to energy system governance: The case of a potential large-scale nuclear accident

The contribution of nuclear power to a sustainable energy future is a contested issue. This paper presents a critical review of an attempt to objectify this debate through the calculation of the external costs of a potential large-scale nuclear accident in the ExternE project. A careful dissection of the ExternE approach resulted in a list of 30 calculation steps and assumptions, from which the 6 most contentious ones were selected through a stakeholder internet survey. The policy robustness and relevance of these key assumptions were then assessed in a workshop using the concept of a ‘pedigree of knowledge’. Overall, the workshop outcomes revealed the stakeholder and expert panel's scepticism about the assumptions made: generally these were considered not very plausible, subjected to disagreement, and to a large extent inspired by contextual factors. Such criticism indicates a limited validity and useability of the calculated nuclear accident externality as a trustworthy sustainability indicator. Furthermore, it is our contention that the ExternE project could benefit greatly – in terms of gaining public trust – from employing highly visible procedures of extended peer review such as the pedigree assessment applied to our specific case of the external costs of a potential large-scale nuclear accident.     

Valuing modular nuclear power plants in finite time decision horizon

Small and medium sized reactors, SMRs, (according to IAEA, ‘small’ refers to reactors with power less than 300 MWe, and ‘medium’ with power less than 700 MWe) are considered as an attractive option for investment in nuclear power plants. SMRs may benefit from flexibility of investment, reduced upfront expenditure, enhanced safety, and easy integration with small sized grids. Large reactors on the other hand have been an attractive option due to the economy of scale. In this paper we focus on the economic impact of flexibility due to modular construction of SMRs. We demonstrate, using real option analysis, the value of sequential modular SMRs. Numerical results under different considerations of decision time, uncertainty in electricity prices, and constraints on the construction of units, are reported for a single large unit and for modular SMRs.