The Economics of Nuclear Power

There are many uncertainties about the economics of future nuclear generation. These are aggravated when nuclear is compared with other sources of power, because these are subject to their own uncertainties, such as fuel price rises and political manipulation such as OPEC and recent Russian gas manoeuvres. The cost of building nuclear power stations was initially very high but some countries are now building enough to develop standardised designs and blueprints which have reduced costs dramatically.

Many reports have been released in the last three years assessing power generation costs. These show a wide range of estimates of the cost of nuclear generation and alternative sources of power. The highest cost calculated is 67% higher than the lowest. Among these reports, an MIT study puts nuclear power as the most expensive of the base load sources, a Royal Academy of Engineering study as one of the cheapest among both base load and renewables, and the cheapest depending on several variations of input.

Nuclear power is a base load generating resource, unlike most renewables Its fuel source, uranium, is plentiful and secure compared with imported fossil fuels It is free of GHG emissions
The report by MIT is concerned with base load power and confines itself to a comparison of nuclear power with coal and gas. It acknowledges the cost of carbon and cites various alternatives. The RAYENG study includes the non-base load renewable technologies and evaluates nuclear, fossil fuel and renewable power, together with the cost of carbon abatement for fossil fuels and for standby generation for back up of intermittent sources.

The NERA report draws on the excellent work of the other institutes and pulls them together. It identifies a number of factors which are leading to improved prospects for nuclear power: Fossil fuel prices, especially for oil and natural gas, have continued to rise and are currently at high levels.

The industrialised countries are becoming more dependent on imported gas and oil and self-sufficiency is coming to an end, combined with concerns about the long-term reliability of major overseas sources of supply
Costs for nuclear plant could be kept down by streamlining the permitting process and keeping to construction schedules.
Nuclear investment has therefore become a reality again, and this is fuelling a revival.