World Energy Outlook 2006

Figure 13.16: Uranium Oxide (U 3 O 8 ) Spot Prices and Exploration Expenditures
dollars per kg of U 3O 8
100
80
60
40
20
0
0
1970 1974 1978 1982 1986 1990 1994 1998 2002 2006
Uranium spot price
Exploration expenditures
Note: Prices are in current dollars.
Sources: TradeTech for uranium prices (www.uranium.info); NEA/IAEA (2006) for exploration expenditure.
market and the weakness of the US dollar, the currency used in many
uranium transactions. Enrichment and conversion prices have also gone up
slightly over the last few years.
Most uranium is traded under long-term contracts and consequently generators’
costs have not increased to the same extent as spot prices. Because of the relatively
moderate impact that these price increases will have on nuclear power generating
costs, there appears to be little cause for concern at the moment.
The recent price increases and the expectation that prices will remain high have
triggered significant new exploration and new production projects. Some
countries, in particular Australia, Canada and Kazakhstan, have begun to
report significant additions to planned future capacity.
Policy Issues
The analysis presented in this chapter shows that new nuclear power plants can
produce electricity at competitive prices – if gas and coal prices are high enough
and if nuclear construction and operating risks are appropriately handled by the
plant vendor, the operating company and/or the regulatory authorities (where
markets remain regulated), keeping the cost of capital or discount rate sufficiently
low (Table 13.14). Nuclear power generating costs are in the range of 4.9 cents
382 World Energy Outlook 2006 - FOCUS ON KEY TOPICS
350
300
250
200
150
100
50
million dollars