Economics of nuclear power plants
[10][11][12][13][14][15][16] The Intergovernmental Panel on Climate Change (IPCC) endorses nuclear technology as a low carbon, mature energy source which should be nearly quadrupled to help address soaring greenhouse gas emissions.
[18] In the United States, nuclear power faces competition from the low natural gas prices in North America.
Former Exelon CEO John Rowe said in 2012 that new nuclear plants in the United States "don’t make any sense right now" and won't be economic as long as the natural gas surplus persists.
[20] In 2016, the Governor of New York, Andrew Cuomo, directed the New York Public Service Commission to consider ratepayer-financed subsidies similar to those for renewable sources to keep nuclear power stations (which accounted for one third of the state's generation, and half of its emissions-free generation) profitable in the competition against natural gas plants, which have replaced nuclear plants when they closed in other states.
[citation needed] In Eastern Europe, a number of long-established projects are struggling to find financing, notably Belene in Bulgaria and the additional reactors at Cernavoda in Romania, and some potential backers have pulled out.
Where cheap gas is available and its future supply relatively secure, this also poses a major problem for clean energy projects.
[26] Therefore, comparison with other power generation methods is strongly dependent on assumptions about construction timescales and capital financing for nuclear plants.
To date all operating nuclear power plants were developed by state-owned or regulated utility monopolies[27][28] where many of the risks associated with political change and regulatory ratcheting were borne by consumers rather than suppliers.
[42] A further difficulty is that due to the large sunk costs but unpredictable future income from the liberalized electricity market, private capital is unlikely to be available on favourable terms, which is particularly significant for nuclear as it is capital-intensive.
[44] However, the independent MIT study (2003) which used a more sophisticated finance model distinguishing equity and debt capital had a higher 11.5% average discount rate.
In Japan and France, construction costs and delays are significantly diminished because of streamlined government licensing and certification procedures.
[48] Canada has cost overruns for the Darlington Nuclear Generating Station, largely due to delays and policy changes, that are often cited by opponents of new reactors.
In the United States these losses helped usher in energy deregulation in the mid-1990s that saw rising electricity rates and power blackouts in California.
[55] As of 2008, mining activity was growing rapidly, especially from smaller companies, but putting a uranium deposit into production takes 10 years or more.
[51] The world's present measured resources of uranium, economically recoverable at a price of US$130/kg according to the industry groups Organisation for Economic Co-operation and Development (OECD), Nuclear Energy Agency (NEA) and International Atomic Energy Agency (IAEA), are enough to last for "at least a century" at current consumption rates.
In order to pay for the cost of storing, transporting and disposing these wastes in a permanent location in the United States, a surcharge of a tenth of a cent per kilowatt-hour is added to electricity bills.
In the United States, the Nuclear Regulatory Commission (NRC) requires plants to finish the process within 60 years of closing.
[66] "Construction of the ELWR was completed in 2013 and is optimized for civilian electricity production, but it has "dual-use" potential and can be modified to produce material for nuclear weapons.
Indeed, the stronger regulation and improved safety features for nuclear reactors called for in the wake of the Japanese disaster will almost certainly require costly provisions that may price it out of the market.
Owners of nuclear power plants are required to pay a premium each year for the maximum obtainable amount of private insurance ($450 million) for each licensed reactor unit.
As it's not a physical factor, but rather economic, a choice of specific values of discount rate can double or triple the estimated cost of energy merely based on that initial assumption.
Numerous LCOE comparisons however use high discount rate values (10%) which mostly reflects preference for short-term profit by commercial investors without accounting for the decarbonization contribution.
This approach has remained remarkably consistent throughout the nuclear industry's history, and distorts market choices that would otherwise favor less risky energy investments.
The pro-nuclear studies were accused of using cost-trimming methods such as ignoring government subsidies and using industry projections above empirical evidence where ever possible.
[96] Old nuclear plants generally had a somewhat limited ability to significantly vary their output in order to match changing demand (a practice called load following).
For example, in the United Kingdom researchers have informed MPs that the government was using the Hinkley Point C project to cross-subsidise the UK military's nuclear-related activity by maintaining nuclear skills.
[114] For example, TerraPower, a company based in Bellevue, Washington and co-founded by Bill Gates, aims to build a sodium fast reactor for $1 billion with a proposed site in Kemmerer, Wyoming.
[115][116] Also in 2020, the Energy Impact Center, a Washington, D.C.–based research institute founded by Bret Kugelmass, introduced the OPEN100 project, a platform that provides open-source blueprints for a nuclear plant with a pressurized water reactor.
[114] Oklo, a Silicon Valley–based startup, aims to build micro modular reactors that run off of radioactive waste produced by conventional nuclear power plants.
[118][119] Other entities developing similar plans include, X-energy, NuScale Power,[118] General Atomics, Elysium Industries, and others.
