Nuclear Power Economics Nuclear Power Costs 6 30 10 1 44 AM The Economics of Nuclear Power April 2010 Nuclear power is cost competitive with other forms of electricity generation except where there is direct access to low cost fossil fuels Fuel costs for nuclear plants are a minor proportion of total generating costs though capital costs are greater than those for coal fired plants and much greater than those for gas fired plants In assessing the economics of nuclear power decommissioning and waste disposal costs are taken into account The relative costs of generating electricity from coal gas and nuclear plants vary considerably depending on location Coal is and will probably remain economically attractive in countries such as China the USA and Australia with abundant and accessible domestic coal resources as long as carbon emissions are cost free Gas is also competitive for base load power in many places particularly using combined cycle plants though rising gas prices have removed much of the advantage Nuclear energy is in many places competitive with fossil fuel for electricity generation despite relatively high capital costs and the need to internalise all waste disposal and decommissioning costs If the social health and environmental costs of fossil fuels are also taken into account the economics of nuclear power are outstanding See also the December 2005 World Nuclear Association report pdf 310 kB The New Economics of Nuclear Power External costs The report of a major European study of the external costs of various fuel cycles focusing on coal and nuclear was released in mid 2001 ExternE It shows that in clear cash terms nuclear energy incurs about one tenth of the costs of coal The external costs are defined as those actually incurred in relation to health and the environment and quantifiable but not built into the cost of the electricity If these costs were in fact included the EU price of electricity from coal would double and that from gas would increase 30 These are without attempting to include the external costs of global warming The European Commission launched the project in 1991 in collaboration with the US Department of Energy and it was the first research project of its kind to put plausible financial figures against damage resulting from different forms of electricity production for the entire EU The methodology considers emissions dispersion and ultimate impact With nuclear energy the risk of accidents is factored in along with high estimates of radiological impacts from mine tailings waste management and decommissioning being already within the cost to the consumer Nuclear energy averages 0 4 euro cents kWh much the same as hydro coal is over 4 0 cents 4 1 7 3 gas ranges 1 3 2 3 cents and only wind shows up better than nuclear at 0 1 0 2 cents kWh average NB these are the external costs only http www world nuclear org info inf02 html Page 1 of 15 Nuclear Power Economics Nuclear Power Costs 6 30 10 1 44 AM The cost of fuel From the outset the basic attraction of nuclear energy has been its low fuel costs compared with coal oil and gas fired plants Uranium however has to be processed enriched and fabricated into fuel elements and about half of the cost is due to enrichment and fabrication In the assessment of the economics of nuclear power allowances must also be made for the management of radioactive spent fuel and the ultimate disposal of this spent fuel or the wastes separated from it Areva figures early in 2008 showed 17 of the total kWh generation cost for its EPR being fuel costs and these broke down 51 natural uranium 3 conversion 32 enrichment and 14 fuel fabrication In January 2010 the approx US cost to get 1 kg of uranium as UO2 reactor fuel at likely contract price for the natural uranium from a mine Uranium 8 9 kg U3O8 x 115 50 US 1028 Conversion 7 5 kg U x 12 US 90 Enrichment 7 3 SWU x 164 US 1197 Fuel fabrication per kg US 240 Total approx US 2555 At 45 000 MWd t burn up this gives 360 000 kWh electrical per kg hence fuel cost 0 71 c kWh But even with these included the total fuel costs of a nuclear power plant in the OECD are typically about a third of those for a coal fired plant and between a quarter and a fifth of those for a gas combined cycle plant Fuel costs are one area of steadily increasing efficiency and cost reduction For instance in Spain nuclear electricity cost was reduced by 29 over 1995 2001 This involved boosting enrichment levels and burn up to achieve 40 fuel cost reduction Prospectively a further 8 increase in burn up will give another 5 reduction in fuel cost Comparing the economics of different forms of electricity generation For nuclear power plants any cost figures normally include spent fuel management plant decommissioning and final waste disposal These costs while usually external for other technologies are internal for nuclear power ie they have to be paid or set aside securely by the utility generating the power and the cost passed on to the customer in the actual tariff Decommissioning costs are about 9 15 of the initial capital cost of a nuclear power plant But when discounted they contribute only a few percent to the investment cost and even less to the generation cost In the USA they account for 0 1 0 2 cent kWh which is no more than 5 of the cost of the electricity produced The back end of the fuel cycle including used fuel storage or disposal in a waste repository http www world nuclear org info inf02 html Page 2 of 15 Nuclear Power Economics Nuclear Power Costs 6 30 10 1 44 AM contributes up to another 10 to the overall costs per kWh less if there is direct disposal of used fuel rather than reprocessing The 26 billion US used fuel program is funded by a 0 1 cent kWh levy The cost of nuclear power generation declined over the 1990s and into the new decade This was because declining fuel including enrichment operating and maintenance costs while the plant concerned has been paid for or at least is being paid off In general the construction costs of nuclear power plants are significantly higher than for coal or gas fired plants because of the need to use special materials and to incorporate sophisticated safety features and back up control equipment These contribute much of the nuclear generation cost but once the plant is built the cost variables are minor Long construction periods will push up financing costs and in the past they have done so spectacularly In Asia construction times have tended to be shorter