Economics of NUCLEAR POWER according GOOD WILLS AND REALITIES prof. Jurgis VILEMAS Lithuanian Academy of Sciences Vilnius, December 7, 2011
1. Nuclear power in developed world since 1990 is in prolonged stagnation 2. Even renewable energy growing much intensively then nuclear 3. Very impressive progress of renewable energy and in natural gas exploration and production diminishing the interest to nuclear power
OECD incremental power generation, 2000–2010*
* Based on estimated data for 2010.
World incremental power generation, 2000–2009*
* Based on estimated data for 2009.
4. Main reason of such stagnation – the nuclear industry can’t demonstrate than in new economical and political environment it can provide competitive power with acceptable technological and financial risk 5. The great hope of nuclear renesance was based on wrong expectations and estimations of construction cost of new nuclear power plants (~2000 $/kW) and very low capital cost (~5–8%). Majority of widely advertised IEA and IAEE studies were based on those figures. Lithuanian politicians were strongly influenced by those overoptimistic assumptions
6. Reality is quite different. Real construction cost in Western countries much higher and exceeding 5000 $/kW. Only latest cost estimations of IEA (2011 World Energy Outlook) are based on similar figures (Table) Assumptions used to calculate electricity generating levelised costs, 2015–2035 CCGT Coal Coal CCS Nuclear Wind European Union Capacity factor Thermal efficiency (gross, LHV) Capital cost ($2009 per kW) Construction lead time (years) Economic plant life (years) Unit cost of fuel (various*) Non-fuel O&M costs ($2009 per kW) United States Capacity factor Thermal efficiency (gross, LHV) Capital cost ($2009 per kW) Construction lead time (years) Economic plant life (years) Unit cost of fuel (various*) Non-fuel O&M costs ($2009 per kW)
60% 61% 900 3 25 9.8 23
75% 50% 2100 5 35 105 63
80% 41% 3 550 5 35 105 105
90% 33% 4 200 7 40 3 125
24% n.a. 1480 1.5 20 n.a. 22
55% 61% 900 3 25 6.6 23
80% 51% 2 550 5 35 55 89
80% 42% 3 800 5 35 55 130
90% 33% 4 600 7 40 3 125
28% n.a. 1550 1.5 20 n.a. 23
* Fuel cost units: gas is in $/MBtu; coal is in $/tonne; nuclear is in $/MWh. All costs in year-2009 dollars. Cost of capital is 8%
Electricity generating costs under different CO 2 prices, 2015–2035
7. For investment decision levelised cost is not sufficient indicator. Key factors affecting investment decision in market economics are: • • • • • •
required rate of return, level of upfront investment, construction time, maximum acceptable payback period, regulatory risk, other risks specific for different technologies
8. If to levelised cost add premiums related with above mention factors than we getting real production cost which is much higher than levelised cost 9. Recent information available from already approved contracts indicate that “market” based production cost of new build NPP is approaching 10 €ct/kWh (34 LTct/kWh)
10. Real decommissioning cost almost 10 times higher than in initial estimations 11. In spite that risk of sever accidents is very low the economical consequences are enormously high exceeding many tens of billions dollars (preliminary estimations for Fukushima disaster ~75 bil.$). Only large and economically strong countries can bear such burden. Small countries not able to take such high risk
Thank for Your attention