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

conclusions of the study were used to prepare the new national energy policy and the privatisation
of Slovenske Elektrarne, a.s.
United States
In the United States, five studies published over the last few years, addressed the issue of the economics
of building new nuclear power plants. Two of these studies (DOE, 2001 and 2002) either funded or undertaken
by the Office of Nuclear Energy of the US Department of Energy (DOE) concluded that electricity
generated by new built nuclear power plants is competitive. The third study (University of Chicago, 2004)
found that nuclear generated electricity could become competitive if capital costs of new nuclear power
plants would be reduced significantly as compared with present generation and if dramatic learning effects
would occur. The studies carried out by the Massachusetts Institute of Technology (MIT, 2003) and by the
Energy Information Administration (EIA, 2004) assume that building and operating nuclear power plants
would involve financial risks and conclude that nuclear generated electricity would not be competitive.
Overview of the report
The body of the report presents projected costs of generating electricity calculated with commonly
agreed generic reference assumptions. The appendices address specific issues of relevance for analysing
the economics of alternative electricity generation sources. Chapter 2 explains the data collection process,
summarises the information provided by participating experts and used to calculate generation
cost estimates, outlines the methodology adopted and describes the generic assumptions adopted in the
calculations.
Chapters 3 to 6 present results, i.e. levelised costs of generating electricity obtained in the study. The
levelised cost methodology used to obtain those results is described in Appendix 5. Chapter 3 presents
levelised generation cost estimates obtained for coal-fired, gas-fired and nuclear power plants. Chapter 4
covers costs of wind, hydro and solar power plants. Chapter 5 deals with combined heat and power (CHP)
plants and includes some development on approaches to estimate electricity generation costs from CHP
plants taking into account the benefits from heat generation and sales. A more theoretical approach to heat
and power cost allocation is provided in Appendix 7. Chapter 6 covers generation cost estimates for the
other power plants considered in the study, including distributed generation, waste incineration, combustible
renewable, geothermal and oil plants. Chapter 7 provides some findings and conclusions drawn
by the expert group from the cost estimates and their analysis.
Appendix 1 gives the list of experts who contributed directly in the study. Appendix 2 provides detailed
lists of cost elements included in or excluded from the cost data reported in responses to the questionnaire
and used to calculate generation cost estimates presented in the report. Appendix 3 is a compilation of
country statements included in the responses to the questionnaire to expand on the overall context and
specific characteristics of the electricity system in each country that may affect the economics of alternative
technologies.
Appendix 4 gives some information on generation technologies considered in the report. Appendix 5
describes the levelised cost methodology (net present value approach) used in the body of the report.
Appendix 6 elaborates on methodologies for incorporating risks into generation cost estimates.
Appendix 7 deals with methodological issues for assessing the costs of electricity and heat delivered by
cogeneration power plants.
Appendix 8 covers fossil fuel price escalation assumptions adopted by IEA in the 2004 World Energy
Outlook and projected costs of uranium and fuel cycle services drawn from previous NEA publications.
A more in-depth analysis of fossil fuel price trends may be found in an annex of the 1998 report in the
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