New US Study Points To 'Competitive' Prospects For N-Power

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A new US study into the economic competitiveness of nuclear power suggests that projected future costs associated with nuclear electricity generation are comparable with gas and coal-based generation. Details of the University of Chicago study*, published last month, were announced earlier today by the US Department of Energy (DOE). The study also says that the cost estimates for generating in the US compare favourably to the cost of generating nuclear energy worldwide. A financial model developed in the study projects that, in the absence of federal financial policies aimed at the nuclear industry, the first new nuclear plants coming on line in the US will have a levelised cost of electricity (LCOE - the price required to cover operating and capital costs) that ranges from 47 US dollars (USD) to USD 71 per megawatt hour (MWh). An abstract of the study says that this price range "exceeds projections of USD 33 to USD 41 (per MWh) for coal-fired plants and USD 35 to USD 45 (per MWh) for gas-fired plants". However, the abstract points out that, after engineering costs are paid and construction of the first few nuclear plants has been completed, "there is a good prospect that lower nuclear LCOEs can be achieved and that these lower costs would allow nuclear energy to be competitive in the marketplace". Federal financial policies that could help make early nuclear plants more competitive, according to the study, include loan guarantees, accelerated depreciation, investment tax credits, and production tax credits. In the long term, "the competitiveness of nuclear power could be further enhanced by rising concerns about greenhouse gas emissions from fossil-fuel power generation". The study points out that waste disposal issues in the US "remain to be settled" and that "US policy regarding non-proliferation goals will affect future fuel cycle decisions". It adds that: Regulatory simplification shows promise of reducing plant construction times; A transition from oil-based to hydrogen-based transportation could, in the longer run, increase the demand for nuclear power as a non-polluting way to produce hydrogen; If gas imports increase, nuclear power could substitute for gas and contribute to energy security. *The study - "The Economic Future of Nuclear Power" - was performed by professors and students of the University of Chicago's Department of Economics with support from the DOE's Argonne National Laboratory and reflects what the DOE said was "considerable contact with the investment community, the electric utility industry and other experts". The study's findings are available in full on the website of the DOE's Office of Nuclear Science & Technology (www.nuclear.gov).

 

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