World Energy Outlook 2006

stations, even under the higher construction cost assumption. This low carbon
price suggests that nuclear power is a cost-effective mitigation option. The
average carbon price in the EU Emissions Trading Scheme has often been
much higher. The average CO 2 price in 2005 was €18.3 per tonne (about
$23), and it rose to €22.9 ($33) in 2006 until the end of April, when the price
collapsed. From the price collapse in April 2006 to the end of August 2006,
CO 2 prices have averaged €15.5 ($19). In the high discount rate case, a carbon
price of about $10 to $25 is required to make nuclear competitive with coal
respectively in the lower and higher capital cost assumptions and $15 to
$50 to make it competitive with gas-fired plants.
Other Factors Influencing the Generating Cost of Nuclear
Power
Initial Cost
Nuclear power is much more capital-intensive than alternative baseload
fossil-fuel technologies such as gas-fired CCGT and coal-fired plants. Of the
three major components of nuclear generation cost – capital, fuel and
operation and maintenance – the capital cost component makes up
approximately three-quarters of the total. It represents only about 20% of
total costs for a CCGT. Construction costs for nuclear plant are three to
four times greater than for a CCGT. In addition, a typical nuclear unit is
much larger than a typical CCGT unit: recent nuclear technologies range
from 1 000 MW (such as Westinghouse’s AP1000) to 1 600 MW (Areva’s
EPR), while CCGTs units are typically in the range of 300 to 800 MW. 10
The greater unit size of nuclear power plants exposes investors to greater
risks as compared to smaller unit technologies such as CCGT, which can be
built faster and in series of smaller plants. Large upfront capital investment
can be more difficult to finance. The environmental characteristics of
CCGT plants make siting easier. Building large nuclear power plants is
likely to require significant investment in transmission, particularly in areas
where there is now congestion. In addition, a large increase in capacity may
create excess capacity for a period.
In the past, nuclear power plant construction faced significant cost overruns
in some countries, notably in the United States. 11 A 1986 study (EIA/US
DOE, 1986) by the US Energy Information Administration showed that
the actual costs of nuclear power plants substantially exceeded the original
10. See Box 13.1 for a description of recent reactor designs and sizes.
11. The United States is the only country to have published such detailed cost data. Some cost
estimates exist for nuclear power plants in the United Kingdom. Information about past construction
costs in other countries is not readily available.
Chapter 13 - Prospects for Nuclear Power 371
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© OECD/IEA, 2007