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56 S. Green and D. Kennedy
construction in Japan and the Republic of Korea. France has announced a decision
to build a new plant, which is expected to be completed by 2012.
Outside the OECD, Russia, China and India have the most ambitious nuclear
power programs. Russia plans to increase the share of nuclear power from its
current 16% to 25% by 2030. China has a target for 40 GW of nuclear capacity by
2020. India has announced a target for its nuclear generation capacity of 30 GW
by 2030.
Finally, a number of OECD countries have passed laws that phase out nuclear
power or ban the construction of new plants, although in some of these countries
the phase-out plans are still the subject of debate.
5 . Conclusions
This chapter has looked at a wide range of analysis on the economics of nuclear
power, both in the UK and abroad. The analysis for the UK concludes that there
is a positive welfare balance from new nuclear plants in a world where there is a
continued commitment to carbon emissions reduction and where gas prices are
at or above the UK’s central projection.
Other studies look at nuclear against a range of alternative technologies and
are not always comparable with the UK cost–benefit analysis. They illustrate
that the assumptions about the capital costs of nuclear, the discount rate and the
cost of alternatives, particularly gas-fired generation, are critical in determining
the relative competitiveness of nuclear generation.
The costs of nuclear will fall with risk, and as financing costs start to fall
below 8%, nuclear becomes increasingly viable. Risk and cost may move in
this direction following successful demonstration, although it is not clear now
whether demonstration will be successful or not.
The IEA’s scenarios indicate that, while there is significant potential to
increase nuclear capacity, this will require, particularly in Europe, strong market
signals arising from long-term commitments to reduce carbon emissions. It also
points to the need for changes to the regulatory framework to provide greater
certainty for investors, while also recognizing that concerns about safety, waste
disposal and proliferation need to be addressed.
The IEA’s overall conclusion is that where governments are determined to
enhance energy security, cut carbon emissions and mitigate undue pressure
on fossil-fuel prices, they may choose to play a role in tackling the obstacles to
nuclear power. These objectives have become more explicit in recent years and
the economics have moved in favor of nuclear power, although there have been
few concrete measures to support it.
References
1.
BERR (2007). Nuclear Power Generation Cost–Benefit Analysis ( http://www.berr.gov.
uk/files/file39525.pdf ).