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

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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 20
series. Appendix 9 summarises the findings and conclusions from a workshop organised jointly by the IEA and the NEA on economic issues raised by the integration of wind power in electricity grids. Appendix 10 analyses the expected impacts of carbon emission trading on generation costs. Appendix 11 provides a list of the abbreviations and acronyms used in the report. References DGEMP-DIDEME (Direction générale de l’Énergie et des Matières premières) (2003), Coûts de référence de la production électrique, ministère de l’Économie, des Finances et de l’Industrie, Paris, France, www.industrie.gouv.fr/cgi-bin/indusrie/f_ nrj023.pl?bandeau=energie/electric/be_elec.htm&gauche=/energie/electric/me_elec.htm&droit=energie/electric/se_ele_a10.htm. DGEMP-DIDEME (Direction générale de l’Énergie et des Matières premières) (2004), Coûts de référence de la production électrique décentralisée, ministère de l’Économie, des Finances et de l’Industrie, Paris, France, www.industrie.gouv.fr/portail/index_dgemp.html. DOE/EIA-0383 (2004), Annual Energy Outlook 2004 with Projections to 2025, Washington, DC, United States. IAEA (2002a), Market Potential for Non-electric Applications of Nuclear Energy (TRS-410), IAEA, Vienna, Austria. IAEA (2002b), Cost drivers for the economic assessment of PLEX (TECDOC-1309), IAEA, Vienna, Austria. IAEA (2002c), Nuclear Economic Performance Information System – NEPIS (TRS-406), IAEA, Vienna, Austria. IEA (2004), World Energy Outlook, IEA, Paris, France. IEA (2003a), Power Generation Investment in Electricity Markets, IEA, Paris, France. IEA (2003b), Status and Prospects for Renewables for Power Generation, IEA, Paris, France. IEA (2002), Distributed Generation in Liberalised Electricity Markets, IEA, Paris, France. IEA and NEA (1998), Projected Costs of Generating Electricity: Update 1998, OECD, Paris, France. IEA and NEA (1993), Projected Costs of Generating Electricity: Update 1992, OECD, Paris, France. IEA and NEA (1989), Projected Costs of Generating Electricity from Power Stations for Commissioning in the Period 1995- 2000, OECD, Paris, France. Massachusetts Institute of Technology (2003), The Future of Nuclear Power: An Interdisciplinary MIT Study, Cambridge, MA, United States. NEA (2003), Nuclear Electricity Generation: What Are the External Costs?, OECD, Paris, France. NEA (2002), Trends in the Nuclear Fuel Cycle, OECD, Paris, France. NEA (2000), Reduction of Capital Costs of Nuclear Power Plants, OECD, Paris, France. NEA (1986), The Costs of Generating Electricity in Nuclear and Coal-Fired Power Stations for Commissioning in 1995, OECD, Paris, France. NEA (1983), The Costs of Generating Electricity in Nuclear and Coal-Fired Power Stations, OECD, Paris, France. Office of Nuclear Energy, Science, and Technology, U.S. Department of Energy (2001), A Roadmap to Deploy New Nuclear Power Plants in the United States by 2010, Washington, DC, United States. Schully Capital (2002), Business Case for New Nuclear Power Plants: Bringing Public and Private Resources Together for Nuclear Energy, A report prepared for the Office of Nuclear Energy, Science, and Technology, U.S. Department of Energy, Washington, DC, United States. University of Chicago (2004), The Economic Future of Nuclear Power, Chicago, Il, United States. 21
Page 1: NUCLEAR ENERGY AGENCY INTERNATIONAL
Page 4: ORGANISATION FOR ECONOMIC CO-OPERAT
Page 9 and 10: Table of Contents Table of Contents
Page 11: Figures Figure 3.1 Specific overnig
Page 14 and 15: The introduction of liberalisation
Page 16 and 17: 150 USD/MWh at a 5% discount rate a
Page 18 and 19: The technologies and plant types co
Page 20 and 21: locations and/or very favourable co
Page 25 and 26: Chapter 2 Input Data and Cost Calcu
Page 27 and 28: equipped with emission control devi
Page 29 and 30: Table 2.2 - Exchange rates (as of 1
Page 31 and 32: Table 2.4 - Coal plant specificatio
Page 33 and 34: Table 2.7 - Wind and solar power pl
Page 35: Table 2.10 - Other plant specificat
Page 38 and 39: Figure 3.1 - Specific overnight con
Page 40 and 41: exchange rates, the coal prices var
Page 42 and 43: Construction time Gas-fired power p
Page 44 and 45: USD/MWh 70 60 Figure 3.5 - Levelise
Page 46 and 47: O&M costs The specific annual O&M c
Page 48 and 49: Cost ranges for coal, gas and nucle
Page 50 and 51: Ratio 1.9 Figure 3.12 - Cost ratios
Page 52 and 53: Table 3.11 - Overnight construction
Page 54 and 55: Table 3.14 - Projected generation c
Page 56 and 57: Except for the offshore plant in th
Page 58 and 59: At 10% discount rate, the levelised
Page 60 and 61: At 5% discount rate, hydroelectrici
Page 64 and 65: Table 4.6 - Projected generation co
Page 66 and 67: A CHP plant typically supplies heat
Page 70 and 71: Figure 5.2 - Levelised costs of ele
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lower unit capital and operating co
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Table 6.5 - Overnight construction
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cost calculation for some 130 power
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It should be stressed that the plan
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Concluding remarks The lowest level
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Portugal Mr. António B. Gomes EDP
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Table A2.1 - Nuclear plant investme
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Overnight Capital Costs: Constructi
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Table A2.7 - Gas-fired (including C
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Table A2.10 - Wind plant investment
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Cost structure of supported green e
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The highest investment cost arises
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The expected development of the per
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● ● Autoproducers. These firms
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Canada The electricity market situa
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Natural gas - combined cycle gas tu
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Denmark Basic data Denmark has abou
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In the future, both an increase in
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nuclear operator Teollisuuden Voima
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these power generation methods. Two
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Figure 5 - Competitiveness of vario
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2004. It envisages the gradual incr
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Table 4 - Gross electricity supply
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● ● ● ● ● ● ● ● ●
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Electricity generation costs The to
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photovoltaic device. Finally the su
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Table 1 - Installed electric power
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Japan Consumers in Japan are suppli
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BPE will be established not as a bi
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Coal Coal fired power plants have b
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A new sewage treatment plant with a
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The interconnections between Portug
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In order to respond to these basic
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efficient energies and is reducing
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Liberalisation Basic restructuring
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External costs for electricity prod
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At the beginning of plant operation
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and high ash, moisture and sulphur
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The White Paper did not contain pro
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Table 7 shows the projected load fa
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other investment options available
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The impurities contained in coal ar
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“ultra-supercritical” condition
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unmineable coal seams. All three pr
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Light water reactors require enrich
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concerns. Consequently, the natural
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generators and power electronics el
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conventional fossil-fired plants. B
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● ● very effective and is used
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Appendix 5 Cost Estimation Methodol
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into account in the real price of g
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● ● ● ● Factors under the c
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and small power plants. Although th
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The general approach remains useful
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Two US economic analyses of nuclear
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assume future prices follow a rando
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The effects of price risk on techno
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The option to delay is embedded in
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Appendix 7 Allocating the Costs and
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Further Fourier’s law for heat tr
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Figure A7.4 - The energy conversion
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This yields: β = 0.153 α. If α e
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It is emphasised that depending on
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1 st oil shock 2 nd oil shock Saudi
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Table A8.2 - Expected lower and upp
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Reliability in electricity systems
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is also highly dependent on the typ
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In the ILEX study 5 and in another
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an increasing share of wind is the
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able to work out the optimal operat
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Appendix 10 Impact of Carbon Emissi
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costs of generation. The introducti
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price at 3.5 €/GJ are the next fa
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Figure A10.5 - Steam coal price var
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The longer term impact on investmen
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Appendix 11 List of Main Abbreviati
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