Decommissioning costs in context

The Financial Times has focussed on the IEA World Energy Outlook comment on nuclear decommissioning costs, with a headline reading "Bill for shutting nuclear plants will reach $100bn".

To be clear the $100bn figure is for the decommissioning of almost 200 reactors, nearly half of the reactors currently operating, between now and 2040. 

This might seem to be a significant sum, but it needs to be put context. The table below lists other costs listed in the IEA World Energy Outlook

 
 Annual Cost
Global nuclear decommissioning, average per year      $4 billion
Upstream oil and gas development costs by 2030 $900 billion
Fossil fuel subsidies 2013      $550 billion
Renewables subsidies 2013      $120 billion

 

Nuclear decommissioning costs are a tiny fraction of the investment needed in upstream oil and gas development or fossil fuel or renewables subsidies. They are also a small fraction of overall generation costs, only a few tenths of a cent per kWh. 

The IEA World Energy Outlook states: "Decommissioning costs account for less than 1.5% of generation costs in all regions, on the assumption that they are accrued over the entire economic lifetime of plant operation." (IEA WEO p396).

The IEA figures are consistent with other estimates of decommissioning costs, including a much longer report produced by the OECD in 2003 (The IEA was established in the OECD framework). These costs are recognised by industry and nuclear regulators and funds are already being set aside to carry out decommissioning in the future. The commitment of the nuclear industry to properly funding decommissioning costs compares well to preparations made elsewhere in the energy sector. For more information please see our information paper on nuclear decommissioning

The Financial Times focus on nuclear decommissioning costs is disappointing, given the much greater challenges for the world's energy system the IEA's report sets out; that urgent action is needed to reduce greenhouse gas emissions to address climate change.

WNA Director General Agneta Rising said:

"The IEA's central scenario would set us on a path of a dangerous increase in global temperatures. We must act to switch to cleaner and more affordable energy sources. Nuclear is a cost-effective way of producing reliable low-carbon electricity on a large scale. Nuclear must form an increasing part of the world's energy supply if we are to get serious about addressing climate change."

WNA welcomes the report's recognition of the many benefits of nuclear energy, such as enhanced energy security, system reliability and low emissions. The report states:

"Nuclear plants can contribute to the reliability of the power system where they increase the diversity of power generation technologies in the system. For countries that import energy, it can reduce their dependence on foreign supplies and limit their exposure to fuel price movements in international markets."

"Nuclear power is one of the few options available at scale to reduce carbon-dioxide emissions while providing or displacing other forms of baseload generation.It has avoided the release of an estimated 56 gigatonnes of CO2 since 1971, or almost two years of total global emissions at current rates."


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