The Economics of Nuclear Power: an Update
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The Economics of Nuclear Power: An Update By Steve Thomas March 2010 Edited by the Heinrich Böll Foundation Heinrich-Böll-Stiftung Schumannstraße 8 10117 Berlin Die grüne politische Stiftung Telefon 030.285 34-0 Fax 030.285 34-109 www.boell.de Public Services International Research Unit (PSIRU) www.psiru.org The Economics of Nuclear Power: An Update Steve Thomas March 2010 Edited by the Heinrich Böll Foundation PSIRU University of Greenwich – www.psiru.org Contents 1. INTRODUCTION.................................................................................................................................................... 6 2. THE WORLD MARKET FOR NUCLEAR PLANTS: EXISTING ORDERS AND PROSPECTS................ 7 3. KEY DETERMINANTS OF NUCLEAR ECONOMICS .................................................................................. 13 3.1. CONSTRUCTION COST AND TIME ...................................................................................................................... 14 3.1.1. Unreliability of data................................................................................................................................ 15 3.1.2. Difficulties of forecasting....................................................................................................................... 16 3.1.3. Learning, scale economies, and technical progress ................................................................................ 17 3.1.4. Construction time ................................................................................................................................... 19 3.2. COST OF CAPITAL............................................................................................................................................. 20 3.3. OPERATING PERFORMANCE.............................................................................................................................. 22 3.4. NON-FUEL OPERATIONS AND MAINTENANCE COST........................................................................................... 24 3.5. FUEL COST ....................................................................................................................................................... 25 3.6. ACCOUNTING LIFETIME.................................................................................................................................... 26 3.7. DECOMMISSIONING AND WASTE DISPOSAL COST AND PROVISIONS .................................................................. 27 3.8. INSURANCE AND LIABILITY .............................................................................................................................. 28 4. EXPERIENCE AT OLKILUOTO AND FLAMANVILLE............................................................................... 29 4.1. OLKILUOTO...................................................................................................................................................... 29 4.2. FLAMANVILLE.................................................................................................................................................. 31 5. THE US PROGRAMME....................................................................................................................................... 32 5.1. LIKELY OUTCOMES .......................................................................................................................................... 36 6. THE UK PROGRAMME...................................................................................................................................... 38 6.1. LIKELY OUTCOMES .......................................................................................................................................... 39 7. GERMANY ............................................................................................................................................................ 40 8. OTHER MARKETS.............................................................................................................................................. 41 8.1. UNITED ARAB EMIRATES................................................................................................................................. 41 8.2. SOUTH AFRICA................................................................................................................................................. 42 8.3. CANADA .......................................................................................................................................................... 43 8.4. TURKEY ........................................................................................................................................................... 44 2 PSIRU University of Greenwich – www.psiru.org 8.5. ITALY............................................................................................................................................................... 45 8.6. BRAZIL............................................................................................................................................................. 45 8.7. EASTERN EUROPE ............................................................................................................................................ 46 8.7.1. Slovak Republic ..................................................................................................................................... 46 8.7.2. Romania ................................................................................................................................................. 46 8.7.3. Bulgaria .................................................................................................................................................. 47 8.7.4. Other countries ....................................................................................................................................... 47 9. REVIEW OF UTILITY CONSTRUCTION COST-ESTIMATES................................................................... 48 9.1. UNITED STATES ............................................................................................................................................... 48 9.2. OTHER COUNTRIES........................................................................................................................................... 49 9.3. SUMMARY........................................................................................................................................................ 49 10. NEED FOR AND EXTENT OF PUBLIC SUBSIDIES...................................................................................... 51 11. CONCLUSIONS .................................................................................................................................................... 52 APPENDIX 1 REACTOR TECHNOLOGIES, CURRENT DESIGNS, AND VENDORS ............................... 56 APPENDIX 2 DISCOUNTING, COST OF CAPITAL, AND REQUIRED RATE OF RETURN.................... 66 APPENDIX 3 DECOMMISSIONING.................................................................................................................... 68 APPENDIX 4 STATUS OF THE US PROJECTS ................................................................................................ 72 3 Public Services International Research Unit (PSIRU) www.psiru.org Author’s note Since the following text was finalised in March 2010, there have been a number of new construction starts and completions of nuclear plants. The table below shows the seven plants on which construction has started between March 2010 and the end of August 2010. Work has also restarted on the Angra 3 plant in Brazil on which construction started in 1976 (see Table 3 for details of the plant). Four units (see Table 2 for more details) have been completed: Rajasthan 6 (India), Lingao 3 and Qinshan 2-3 (China), and Shin Kori 1 (South Korea). The net result of these changes is that by August 2010, there were 59 reactors under construction of which 37 had construction starts after 2005. Of these 37, 23 are in China, 6 are in Russia, 5 are in South Korea, 2 are in Japan and 1 is in France. The picture of new orders still being dominated by a few countries generally using home suppliers and relatively old designs remains. Table Nuclear capacity with construction starts between March 2010 and August 2010 Country Site Reactor Vendor Size type MW China Taishan 2 PWR Areva 1700 China Changjiang 1 PWR China 1000 China Haiyang 2 PWR China 1000 China Fangchenggang 1 PWR China 1000 Japan Ohma BWR Toshiba 1325 Russia Leningrad 2-2 PWR Russia 1080 Russia Rostov 4 PWR Russia 1080 Source: PRIS Data Base, http://www.iaea.org/programmes/a2/index.html PSIRU University of Greenwich – www.psiru.org 1. Introduction The severe challenge posed by the need to reduce emissions of greenhouse gases, especially in the electricity generation sector, has led to renewed interest in the construction of nuclear power plants. These would initially replace the aging stock of existing reactors, then meet electricity demand growth, and eventually replace some of the fossil-fired electricity-generating plants. They would also be built in new markets that up to now have not used nuclear power. In the longer term, the promise is that nuclear power could take over some of the energy needs currently being met by direct use of fossil fuels. For example, nuclear power plants could be used to manufacture hydrogen, which would replace