Estimating the costs of nuclear power: benchmarks and uncertainties

Without evaluating the costs it is impossible to establish the cost price, required to compare electricity production using nuclear power and rival technologies. Would it be preferable to build a gas-powered plant, a nuclear reactor or a wind farm? Which technology yields the lowest cost per KWh? Under what conditions – financial terms, regulatory framework, carbon pricing – will private investors see an adequate return on nuclear power? In terms of the general interest, how does taking account of the cost of decommissioning and storing waste affect the competitiveness of nuclear power?

This paper answers these questions in three stages. We shall start by taking a close look at the various items of cost associated with nuclear power. We shall look at how sensitive they are to various factors (among others the discount rate and price of fuel) in order to understand the substantial variations they display.We shall then review changes in the cost dynamic. From a historical perspective nuclear technology has been characterized by rising costs and it seems most likely that this trend willcontinue, being largely related to concerns about safety. Finally we shall analyse the poor cost-competitiveness of nuclear power, which provides critics of this technology with a compelling argument.