New Report: Nuclear Power Economics and Project Structuring
9 January 2017
Nuclear power is an economic source of electricity generation, combining reliability, low greenhouse gas emissions and long-term cost competitiveness. The operating costs of existing plants are usually very competitive and these plants function well with a high degree of predictability. These are the conclusions of a new report Nuclear Power Economics and Project Structuring issued today by the World Nuclear Association.
However, in deregulated markets increased revenue uncertainty is hampering investment in capital intensive projects such as new nuclear build. In addition, failure to fully include the environmental costs of fossil fuels and selective subsidisation of renewables are threatening the operation of both current and new nuclear capacity.
Agneta Rising, Director General of the World Nuclear Association noted, “Without effective markets that encourage the right long term investments and fair treatment for nuclear in electricity markets the world runs a serious risk of failing to meet its needs for clean and affordable electricity.”
The report concludes that capital costs are key to nuclear competitiveness. In those countries that have maintained an active nuclear power plant programme costs have risen less, and in some cases have fallen. An important factor in managing costs is reducing the construction time for new nuclear build. Over the last 15 years the global average construction period for a new reactor has fallen from around ten years to less than six years.
The report notes that while a number of carbon pricing schemes have been implemented these still only cover about 12% of annual global greenhouse gas emissions. Elsewhere fossil fuels are gaining an unfair advantage over other generators by not having to account for the costs of their emissions. The report also notes that some schemes designed to promote renewables have resulted in reduced wholesale prices in some regions which has greatly reduced revenues for a number of nuclear plants.
Agneta Rising said, “Many governments want to encourage low carbon electricity generation to help meet their objectives of reducing greenhouse gas emissions. But too many of these policies, by supporting only renewables, are threatening the operation of low carbon nuclear generation, wiping out the environmental benefits that the policies should achieve.”
The Nuclear Power Economics and Project Structuring report is available for download from the World Nuclear Association website. A selection of high resolution charts and graphics from the report are available in the website’s gallery.
The World Nuclear Association is the industry organisation that represents the global nuclear industry. Its mission is to promote a wider understanding of nuclear energy among key international influencers by producing authoritative information, developing common industry positions, and contributing to the energy debate, as well as to pave the way for expanding nuclear business.
Jonathan Cobb: +44(0)20 7451 1536
David Hess: +44(0)20 7451 1543
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