Publication Laka-library:
The economics of new nuclear power plants (2003)
| Author | K.Kosonen, Greenpeace |
 | - |
| Date | 2003* |
| Classification | 2.09.0.00/05 (FINLAND - GENERAL) |
| Front | 
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From the publication:
The economics of new nuclear power plants Kaisa Kosonen, Greenpeace In more than a decade no new nuclear power plants have been ordered to western countries. One obvious reason for this is that out of the 9 countries in the EU that have nuclear energy, five have ruled out new nuclear by legislation. The other reason for the absence of new orders is the fact that nuclear isn't seen as an attractive investment in the liberalised electricity market. The cost structure of nuclear power plants Nuclear power plants are normally expected to be expensive to build but cheap to run: high fixed costs, but low variable costs. The key to economically attractive nuclear power plants is as low construction costs as possible and high reliability so that the fixed costs are low and can be spread over a large number of kWh of output. In the past three decades construction costs of nuclear power plants have increased dramatically. Individual projects turned out to be much higher than forecasted. This development has been an important factor in the worldwide decline in interest in building new nuclear plants. In many countries, reliability has also been disappointing with the result that the fixed costs have been spread over much fewer units of output than expected. Among the variable costs, fuel costs remain low, but the non-fuel cost of operation and maintenance is much higher than was expected. By around 1990, when the extent of these costs became apparent in Britain and the USA, the future of many nuclear power plants was put into question. The operating cost of many nuclear power plants was often so high it would have been cheaper to close the plant and build a new conventional power plant. (Thomas 2002) The impact of competition The introduction of competition to electricity generation has had two important impacts on the economics of nuclear energy. Firstly, consumers are no longer bound to a monopolist supplier, it cannot be assumed that all costs incurred in building and operating power plants can be passed on to consumers. Uneconomic power plants will not be able to sell their electricity or will have to sell the electricity for a price below fixed costs. If a company is not able to cross-subsidize these plants, the additional costs will fall on shareholders as lost profits. In short, building new power plants of any type is a big risk to shareholders in a de-regulated electricity market.*) Estimated date
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