We are in a time today where we can no longer afford to pollute the air we breathe with inefficient and damaging electricity production techniques. Nuclear energy is viable alternative that has virtually no adverse affects against the environment. That being said, it is still a very costly and may not be the most economically feasible alternative. In countries such as the Unites States, China and Australia, coal is and will most likely remain the most economically attractive. This is because the aforementioned countries have very abundant and accessible fossil fuel reserves, but once these run out or dwindle, they will be actively searching for an appropriate alternative.
Source: http://www.world-nuclear.org/info/Economic-Aspects/Economics-of-Nuclear-Power/
The cost of producing nuclear electricity can be broken into two different classifications, operating costs and costs related to waste management. The first category contains elements such as fuel costs, operations and maintenance that combine to determine the production cost. Since 2001, nuclear power plants have achieved the lowest production costs between coal, natural gas and oil fired power plants (Nuclear Energy Institute). The figure below depicts the most widely used fuel sources and displays them as cents per kilo-watt hour since 1995, production using coal and nuclear technologies maintain very steady trends and aren’t affected too much by fuel price volatility. You can see that oil and gas are affected greatly by rising and falling fuel prices.
Another aspect that is important to consider in the cost of nuclear energy production are the costs related to waste management. Unlike many other fuel sources, the waste generated from nuclear plants is both volatile and very controversial. One way to account for these costs was by the implication of the Nuclear Waste Fund. This fund was established in 1983 as a way to have a centralized fund for mitigating the costs attributed to waste handling. Since the time of its conception, the Nuclear Waste Fund has seen $35.8 billion in contributions; $10.8 billion has been spent. Also, once a power plant can no longer be used it goes through a decommissioning process which includes radiological analysis, used fuel disposal and site restoration costs which range anywhere from $300 to $500 million.
Any form of electrical generation plant will have a high capital cost before any electricity can be generated. This capital cost includes site preparation, construction, manufacture, commissioning and financing of the project. In terms of strictly capital cost, nuclear plants are greater than those of coal-fired plants and much greater than those for gas-fired plants. This higher capital cost is outweighed by very low fuel costs, which account for a very small proportion of total production cost.
Source: http://www.world-nuclear.org/info/Economic-Aspects/Economics-of-Nuclear-Power/
In 2010 there was an OECD study conducted to compare 17 OECD as well as some data from developing countries that weighed all of the costs associated with nuclear energy and compared them to other technologies such as coal, coal with CCS, gas with CCGT and onshore wind and compared them on a cents per kilo-watt hour metric. This study included 190 power plants from around the world and instituted a discount rate of both 5% and 10% for future value comparison. What they found was that nuclear power was very competitive at $30 per tonne CO2. When calculated in terms of a 5% discount rate, nuclear energy is cheaper than coal and gas in all countries. When using a 10% discount rate the gaps narrow but nuclear is still cheaper than coal.
Source: http://www.world-nuclear.org/info/Economic-Aspects/Economics-of-Nuclear-Power/
We can also look at electricity generation across many different methods from a levelized cost of electricity (LCOE). This metric is used to measure competitiveness of different generating technologies. In this calculation made by the U.S. Energy Information Administration they took into account capital costs, fuel costs, fixed and variable operation and maintenance costs, financing costs and plant life and capacity. Percentage points are also added at the end of the calculations based on GHG intensity to realistically include a metric for costs in the future such as carbon taxes and GHG-emission-reducing projects. The table below shows varying technology and how it compares to all of the production choices available today.
U.S. average levelized costs (2012 $/MWh) for plants entering service in 2019 |
||||||||
| Plant type |
Capacity factor (%) |
Levelized capital cost |
Fixed O&M |
Variable O&M (including fuel) |
Transmission investment |
Total system LCOE |
Subsidy1 |
Total LCOE including Subsidy |
| Dispatchable Technologies | ||||||||
| Conventional Coal |
85 |
60 |
4.2 |
30.3 |
1.2 |
95.6 |
||
| Integrated Coal-Gasification Combined Cycle (IGCC) |
85 |
76.1 |
6.9 |
31.7 |
1.2 |
115.9 |
||
| IGCC with CCS |
85 |
97.8 |
9.8 |
38.6 |
1.2 |
147.4 |
||
| Conventional Combined Cycle |
87 |
14.3 |
1.7 |
49.1 |
1.2 |
66.3 |
||
| Advanced Combined Cycle |
87 |
15.7 |
2 |
45.5 |
1.2 |
64.4 |
||
| Advanced CC with CCS |
87 |
30.3 |
4.2 |
55.6 |
1.2 |
91.3 |
||
| Conventional Combustion Turbine |
30 |
40.2 |
2.8 |
82 |
3.4 |
128.4 |
||
| Advanced Combustion Turbine |
30 |
27.3 |
2.7 |
70.3 |
3.4 |
103.8 |
||
| Advanced Nuclear |
90 |
71.4 |
11.8 |
11.8 |
1.1 |
96.1 |
-10 |
86.1 |
| Geothermal |
92 |
34.2 |
12.2 |
0 |
1.4 |
47.9 |
-3.4 |
44.5 |
| Biomass |
83 |
47.4 |
14.5 |
39.5 |
1.2 |
102.6 |
||
|
Non-Dispatchable Technologies |
||||||||
| Wind |
35 |
64.1 |
13 |
0 |
3.2 |
80.3 |
||
| Wind-Offshore |
37 |
175.4 |
22.8 |
0 |
5.8 |
204.1 |
||
| Solar PV2 |
25 |
114.5 |
11.4 |
0 |
4.1 |
130 |
-11.5 |
118.6 |
| Solar Thermal |
20 |
195 |
42.1 |
0 |
6 |
243.1 |
-19.5 |
223.6 |
| Hydro3 |
53 |
72 |
4.1 |
6.4 |
2 |
84.5 |
||
Source: Unites States Energy Information Administration, Annual Energy Outlook 2014.
As we can see from the table above, nuclear is competitive in just about every category. Out of all of the current technologies it has the highest cpacity factor as well the lowest variable O&M (including fuel) in relation to technologies that use non-renewable fuel sources.
Nuclear energy production has many benefits and many drawbacks which makes a conclusion based purely on costs very difficult to formulate. The very high capital costs of building new plants and the time and money that goes into getting new construction approved by the federal government is one of the biggest economic drawbacks of new nuclear technologies. This high capital costs deters initial investors and those looking to enter the nuclear energy industry. In contrast, the fuel costs and operating and maintenance costs are lower than most of the existing technologies which makes it a sound investment in the long run.
Author: Austin Luginbuhl
Editor: Team
Works Cited: