Cost of electricity from new nuclear power stations

Current discussions about possibilities to mitigate the effects of global warming have also opened discussions about a potential revival of nuclear power. In this context, it is often argued with very low cost of electricity from nuclear power plants. This seems to be one of the strongest arguments in favor of atomic energy. To determine the future cost of electricity from nuclear power, the cost from currently operating power stations is taken into account. However this is not correct.

In the above mentioned discussions about building new nuclear power stations, the cost for electricity from new and not from already existing atomic power stations should be taken into account. This makes a huge difference as we will see further below. As a matter of fact, it is nearly impossible to estimate the cost of building new nuclear power stations. This is mainly a consequence of missing national and international safety standards. It is not clear which safety measures will have to be applied and as a consequence the investment costs can barely be estimated.

Finland is the only country in Europe, where a nuclear power plant is currently being built. In this situation, the best possible practice is, to use the costs for the plant in Finland for cost comparisons with other technologies. (An overview of the number of nuclear reactors under construction per country can be found here)

Cost of the new nuclear power reactor in Finland

The company Areva got the contract to build this nuclear reactor according to the ERP process (European Pressurized Water Reactor). The plant should have an installed power of 1.4 GW, the planned costs were 3.4 billion Euro and commissioning was scheduled for the year 2009. According to the current state of knowledge (beginning of 2008), the start-up of the plant will be delayed at least until 2011 and the costs will be at least 40% higher than originally estimated.

On this base, it is easy to calculate the cost of depreciation per kWh of electricity. Let’s assume the following:

  • 8’000 hours of operation per year, with 1.4 GW electrical power
  • Interest rate of 9%
  • Time to build the plant: 6 years
  • Time to completely depreciate the plant: 20 years

This leads to cost of depreciation of about 4 to 5 Euro-Cents (about 4 to 5 US-Cents) per kWh of electricity. Just to remember: this is only for depreciation of the investment costs. In order to get the full costs of electricity, the following costs have to be added:

  • Costs of fuel (Uranium)
  • Costs of assurances
  • Costs for discharging the hazardous, radioactive waste
  • Costs for dismantling and discharging the plant as hazardous waste after its lifetime
  • Costs for personnel operating the plant
  • Costs for protecting the plant against terror attacks, etc.

Compare the above figure of 4 to 5 Euro-cent only for cost of depreciation with the current full cost of wind power for about 6 Euro-cent (about 6 US-cents) per kWh at good locations in Germany, Scandinavia, Benelux or Austria! It becomes evident that nuclear power has lost its cost advantage. In addition, for wind power, there is a clear trend to further lower the costs within the next 10 to 20 years.

Nuclear power from new atomic power stations is too expensive

The simple calculation above makes it evident that also for pure economic reasons it does not make sense to build our future on nuclear power. In addition, there are many problems in the following areas: Discharging of hazardous waste, limited resources of usable Uranium, risk of operation, risk of nuclear proliferation, insufficient liability insurance as well as missing acceptance in the population.

The current lobbying activity of the nuclear industry has primarily the goal to prolong the lifetime of already existing nuclear power stations. However, this is very problematic, too, because the existing nuclear power stations were built according to lower safety standards than e.g. the new plant in Finland.

ΞNuclear power