Projected Costs of Generating Electricity - OECD Nuclear Energy ...

International Energy Agency
The IEA has published studies that relate to many aspects of costs and value for different generation
technologies. The most recent study concerning power generation investments in electricity markets was
published in 2003 (IEA, 2003a). A study on distributed generation in liberalised electricity markets was
published in 2002 (IEA, 2002) and a study on the status and prospects of renewable energy sources
for power generation was published in 2003 (IEA, 2003b). The World Energy Outlook series presents
IEA projections for the next 20-30 years, including the projected development in electricity generation
capacity by technology (IEA, 2004).
OECD Nuclear Energy Agency
The NEA has published several studies related to the economics of nuclear power in recent years.
A report issued in 2000 (NEA, 2000), analysed the potential for reducing nuclear power plant capital
costs, which represent some 60% of the total nuclear electricity generation costs. A study on Trends in the
Nuclear Fuel Cycle which was published in 2002 (NEA, 2002) includes several sections on economic
aspects. In 2003, a booklet was issued addressing external costs of nuclear electricity and discussing
issues associated with internalisation of externalities (NEA, 2003a). Finally, a study on policies, strategies
and costs of decommissioning nuclear power plants published in 2003 (NEA, 2003b) presents data on
decommissioning costs provided by 26 participating countries and analyses the main policy and strategy
factors driving those costs.
France
The French ministry in charge of energy completed recently a study on reference generation costs in
France. The study includes two parts, one dealing with base-load, grid-connected power plants published
at the end of 2003 and one on renewable energy sources for electricity generation issued at the end of
2004. The study was carried out using the levelised lifetime cost methodology at 8% discount rate for the
reference case with sensitivity analyses on discount rate (3, 5 and 11%) and several load factors (number
of hours of operation at full power).
The main conclusion of the study for base-load power plants in the reference case is that nuclear power
is the cheapest option for 5 000 hours of operation per year (57% load factor) or more while gas is the
cheapest option for less than 5 000 hours of operation per year.
For renewable energy sources, wind power, small hydro power plants in good site conditions, and combined
heat and power are mature technologies likely to become competitive with gas-fired gas turbines
by 2015. Solar photovoltaic, although its cost is expected to decrease rapidly, is not likely to be competitive
in the medium term, up to 2015. In the longer term, beyond 2015, promising options include fuel
cells, binary geothermal plants on overseas sites and landfill gas could become competitive with gas
turbines, while hot dry rock geothermal plants are not likely to reach competitiveness.
Slovak Republic
A study on development scenarios for the power industry in the Slovak Republic prepared by the
state-owned Slovak utility Slovenske Elektrarne, a.s. (SE, a.s.) for the Ministry of Economy of the Slovak
Republic was released in May 2004. The study focused on the economics of completing the two nuclear
units VVER-440 which are half constructed as compared with alternatives, i.e., constructing new coalor
gas-fired power plants. The analysis, taking into account direct costs, security of supply and environmental
aspects, concluded that completing the nuclear units was the most attractive option. The
19