15 th pacific basin nuclear conference, 15-20 october 2006, sydney, australia1 economics of nuclear...
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15TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia 11
ECONOMICS OF NUCLEAR ENERGYECONOMICS OF NUCLEAR ENERGY
IN A SUSTAINABLE DEVELOPMENT PERSPECTIVE
Evelyne BertelEvelyne BertelOECD Nuclear Energy AgencyOECD Nuclear Energy Agency
15TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia 22
Sustainable development frameworkSustainable development framework
Energy resources
Investment in pollution reduction
SOCIALSOCIAL
ECONOMYECONOMY
Hea
lth h
azar
dsEn
viro
nmen
tal
awar
enes
s
Labour
Job opportunities/quality
ENVIRONMENTENVIRONMENT
15TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia 33
15TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia 44
Framework of the OECD studyFramework of the OECD study Data provided by participantsData provided by participants
Technical characteristicsTechnical characteristics Construction costs and schedule (IDCs),Construction costs and schedule (IDCs),
and O&M costsand O&M costs Fuel price projectionsFuel price projections
Common levelised cost methodologyCommon levelised cost methodology Common assumptionsCommon assumptions
Discount rates [5%, 10%]Discount rates [5%, 10%] Economic lifetime [40 years – for most plants]Economic lifetime [40 years – for most plants] Load factor for base-load plants [85%]Load factor for base-load plants [85%]
15TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia 55
Scope of the OECD study [1]Scope of the OECD study [1]
State-of-the art power plantsState-of-the art power plants Recently completed, or Recently completed, or
Under construction in 2003-2004, orUnder construction in 2003-2004, or
Planned to be connected to gridsPlanned to be connected to gridsby 2010-2015, orby 2010-2015, or
Under consideration [cost estimates exist] Under consideration [cost estimates exist]
15TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia 66
Scope of the OECD study [2]Scope of the OECD study [2] ~ 130 power plants in 21 countries~ 130 power plants in 21 countries
Coal, gas, nuclearCoal, gas, nuclear Wind, hydro, solarWind, hydro, solar Cogeneration, biomass, waste incineration, …Cogeneration, biomass, waste incineration, …
Costs supported by electricity producersCosts supported by electricity producers Investment, incl. refurbishment & decommissioningInvestment, incl. refurbishment & decommissioning Interest during constructionInterest during construction O&MO&M Fuel, incl. waste management and disposal Fuel, incl. waste management and disposal
15TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia 77
Out of the OECD study scopeOut of the OECD study scope Transmission & distribution costsTransmission & distribution costs Business risksBusiness risks Externalities, incl.Externalities, incl.
Damage from residual pollutionDamage from residual pollution Positive value of security of supplyPositive value of security of supply Negative value of carbonNegative value of carbon
First of a kind (FOAK) design and First of a kind (FOAK) design and engineering costs engineering costs
15TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia 88
Issues Issues addressedaddressed in appendices in appendices
Impact of risks on costsImpact of risks on costs Fuel price trends and projectionsFuel price trends and projections Wind power in electricity gridsWind power in electricity grids Carbon emission tradingCarbon emission trading Generation technologiesGeneration technologies
15TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia 99
0
500
1000
1500
2000
2500
CA
N-C
US
A-C
1
US
A-C
2
CZ
E-C
1
CZ
E-C
2
CZ
E-C
3
CZ
E-C
4
DN
K-C
FIN
-C
FR
A-C
1
FR
A-C
2
DE
U-C
1
DE
U -
C2
DE
U -
C3
DE
U -
C4
SV
K-C
1
SV
K-C
2
TU
R-C
1
TU
R -
C2
TU
R -
C3
JPN
-C
KO
R-C
1
KO
R-C
2
BG
R-C
*
RO
U-C
*
ZA
F-C
1
ZA
F-C
2
IGCC
IGCC + CO2 capture
Overnight construction costs Overnight construction costs [USD/kWe][USD/kWe]
0
500
1000
1500
2000
2500
CA
N-G
US
A-G
1
US
A-G
2
BE
L-G
CZ
E-G
FR
A-G
DE
U-G
GR
C-G
1
GR
C-G
2
ITA
-G1
ITA
-G2
ITA
-G3
NLD
-G
PR
T-G
SV
K-G
CH
E-G
1
CH
E -
G2
CH
E -
G3
TU
R-G
1
TU
R-G
2
JPN
-G
KO
R-G
ZA
F-G
LNG
0
500
1000
1500
2000
2500
CA
N-N
US
A-N
CZ
E-N
FIN
-N
FR
A-N
DE
U-N
NLD
-N
SV
K-N
CH
E-N
JPN
-N
KO
R-N
1
KO
R-N
2
RO
U-N
0
500
1000
1500
2000
2500
US
A-W
AU
T-W
BE
L-W
CZ
E-W
DN
K-W
1
DN
K -
W2
DN
K -
W3
DE
U-W
1
DE
U -
W2
DE
U -
W3
GR
C-W
1
GR
C -
W2
GR
C -
W3
GR
C -
W4
GR
C -
W5
ITA
-W1
ITA
-W2
NLD
-W
PR
T-W
Offshore
Coal Gas
Nuclear Wind
15TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia 1010
Nuclear investment costs Nuclear investment costs [USD/kWe][USD/kWe]
0
500
1000
1500
2000
2500
3000
3500
CzechRepublic
Finland France Germany Canada UnitedStates
Japan Republic ofKorea
Overnight construction costs
Levelised investment costs at 5% discount rateLevelised investment costs at 10% discount rate
15TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia 1111
0
10
20
30
40
50
60
70
CA
N-C
US
A-C
1
US
A-C
2
CZ
E-C
1
CZ
E-C
2
CZ
E-C
3
CZ
E-C
4
DN
K-C
FIN
-C
FR
A-C
1
FR
A-C
2
DE
U-C
1
DE
U-C
2
DE
U-C
3
DE
U-C
4
SV
K-C
1
SV
K-C
2
TU
R-C
1
TU
R-C
2
TU
R-C
3
JP
N-C
KO
R-C
1
KO
R-C
2
BG
R-C
RO
U-C
ZA
F-C
1
ZA
F-C
2
Fuel
O&M
Investment
0
10
20
30
40
50
60
70
CA
N-N
US
A-N
CZ
E-N
FIN
-N
FR
A-N
DE
U-N
NL
D-N
SV
K-N
CH
E-N
JPN
-N
KO
R-N
1
KO
R-N
2
RO
U-N
Fuel
O&M
Investment
0
20
40
60
80
100
120
140
US
A-W
AU
T-W
BE
-W
CZ
E-W
DN
K-W
1
DN
K-W
2
DN
K-W
3
DE
U-W
1
DE
U-W
2
DE
U-W
3
GR
C-W
1
GR
C-W
2
GR
C-W
3
GR
C-W
4
GR
C-W
5
ITA
-W1
ITA
-W2
NLD
-W
PR
T-W
O&M
Investment
0
10
20
30
40
50
60
70
CA
N-G
US
A-G
1
US
A-G
2
BE
L-G
CZ
E-G
FR
A-G
DE
U-G
GR
C-G
1
GR
C-G
2
ITA
-G1
ITA
-G2
ITA
-G3
NLD
-G
PR
T-G
SV
K-G
CH
E-G
1
CH
E-G
2
CH
E-G
3
TU
R-G
1
TU
R-G
2
JP
N-G
KO
R-G
ZA
F-G
1
Fuel
O&M
Investment
Generation costs at 5% Generation costs at 5% [USD/MWh][USD/MWh]
Coal
NuclearWind
Gas
15TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia 1212
Generation costs at 10% Generation costs at 10% [USD/MWh][USD/MWh]
Coal Gas
Nuclear
0
10
20
30
40
50
60
70
CA
N-C
US
A-C
1
US
A-C
2
CZ
E-C
1
CZ
E-C
2
CZ
E-C
3
CZ
E-C
4
DN
K-C
FIN
-C
FR
A-C
1
FR
A-C
2
DE
U-C
1
DE
U-C
2
DE
U-C
3
DE
U-C
4
SV
K-C
1
SV
K-C
2
TU
R-C
1
TU
R-C
2
TU
R-C
3
JPN
-C
KO
R-C
1
KO
R-C
2
BG
R-C
RO
U-C
ZA
F-C
1
ZA
F-C
2
Fuel
O&M
Investment
0
10
20
30
40
50
60
70
CA
N-G
US
A-G
1
US
A-G
2
BE
L-G
CZ
E-G
FR
A-G
DE
U-G
GR
C-G
1
GR
C-G
2
ITA
-G1
ITA
-G2
ITA
-G3
NL
D-G
PR
T-G
SV
K-G
CH
E-G
1
CH
E-G
2
CH
E-G
3
TU
R-G
1
TU
R-G
2
JPN
-G
KO
R-G
ZA
F-G
1
Fuel
O&M
Investment
0
10
20
30
40
50
60
70
CA
N-N
US
A-N
CZ
E-N
FIN
-N
FR
A-N
DE
U-N
NL
D-N
SV
K-N
CH
E-N
JPN
-N
KO
R-N
1
KO
R-N
2
RO
U-N
Fuel
O&M
Investment
0
20
40
60
80
100
120
140
US
A-W
AU
T-W
BE
-W
CZ
E-W
DN
K-W
1
DN
K-W
2
DN
K-W
3
DE
U-W
1
DE
U-W
2
DE
U-W
3
GR
C-W
1
GR
C-W
2
GR
C-W
3
GR
C-W
4
GR
C-W
5
ITA
-W1
ITA
-W2
NL
D-W
PR
T-W
O&M
InvestmentWind
15TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia 1313
Generation cost structureGeneration cost structure
17%
7%
76%
42%
17%
41%
59%
26%
15%
Gas Coal Nuclear
Fuel
O&M
Investment
Uranium ~ 5%
15TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia 1414
Cost ranges* Cost ranges* [USD/MWh][USD/MWh]
* Excluding the 5% highest and 5% lowest values
Coal 5%
Gas 5%
Nuclear 5%
Coal 10%
Gas 10%
Nuclear 10%
0
10
20
30
40
50
60
70
* Levelised generation costs - excluding the 5% highest and 5% lowest values
15TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia 1515
Ratios Gas/NuclearRatios Gas/Nuclear
0.8
1
1.2
1.4
1.6
1.8
2
2.2
2.4
CA
N
US
A-G
1
US
A-G
2
CZ
E
FR
A
DE
U
NL
D
SV
K
CH
E-G
1
CH
E-G
2
CH
E-G
3
JP
N
KO
R-N
1
KO
R-N
2
5% discount rate
10% discount rateNUCLEAR CHEAPER
GAS CHEAPER
15TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia 1616
Ratios Coal/NuclearRatios Coal/Nuclear
0.7
0.8
0.9
1
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
CA
N
US
A-C
1
US
A-C
2
CZ
E-C
1
CZ
E-C
2
CZ
E-C
3
CZ
E-C
4
FIN
FR
A-C
1
FR
A-C
2
DE
U-C
1
DE
U-C
2
DE
U-C
3
DE
U-C
4
SV
K-C
1
SV
K-C
2
JP
N
KO
R-C
1/N
1
KO
R-C
1/N
2
KO
R-C
2/N
2
KO
R-C
2/N
1
RO
U
5% discount rate
10% discout rate
NUCLEAR CHEAPER
COAL CHEAPER
15TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia 1717
Main Findings of OECD studyMain Findings of OECD study No technology/source is always cheaper for No technology/source is always cheaper for
base load electricity generationbase load electricity generation
The competitive margin of nuclear energy is The competitive margin of nuclear energy is
increasing increasing
Gas is losing ground owing to gas price Gas is losing ground owing to gas price
increaseincrease
Wind power is improving but remains seldom Wind power is improving but remains seldom
competitivecompetitive
15TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia 1818
Nuclear energy and externalitiesNuclear energy and externalities
Security of energy supplySecurity of energy supply Nuclear energy is essentially domesticNuclear energy is essentially domestic Fuel inventories are cheap and easy to storeFuel inventories are cheap and easy to store Natural resources are plentiful and well distributedNatural resources are plentiful and well distributed
Environmental protectionEnvironmental protection Nuclear energy induces no local air pollutionNuclear energy induces no local air pollution Nuclear energy is nearly carbon freeNuclear energy is nearly carbon free Waste volumes are small and can be managed safelyWaste volumes are small and can be managed safely
15TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia 1919
Greenhouse gas emissions from electricity Greenhouse gas emissions from electricity production chains (gC equiv./kWh)production chains (gC equiv./kWh)
Source: IAEA and NEA
15TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia 2020
Impact of carbon values on generation costsImpact of carbon values on generation costsat 10% discount rateat 10% discount rate
0 10 20 30 40 50 60 70 80 90 100
CoalGas
Nuclear
CoalGas
Nuclear
CoalGas
Nuclear
CoalGas
Nuclear
CoalGas
Nuclear
CoalGas
Nuclear
CoalGas
Nuclear
Ca
na
da
Un
ite
d
Sta
tes
Cze
ch
Re
pu
blic
Fra
nce
Ge
rma
ny
Ja
pa
n
Re
p. o
f
Ko
rea
0 $/tC 10 $/tC 50 $/tC 100 $/tCCarbon value
US$/MWh
15TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia 2121
Concluding remarks [1]Concluding remarks [1]
Recent trends
Good performance of NPPs
Revived interest in the nuclear option
Active R-D&D, national & international
Slow pace of new industrial projects
15TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia 2222
Concluding remarks [2]Concluding remarks [2]
Changing decision-making landscape Sustainable development policies integrate
economic, environmental and social aspects Risk issues need attention
Financing Severe accidents Long term HLW stewardship Proliferation and physical security
15TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia 2323
Concluding remarks [3]Concluding remarks [3]
Economic competitiveness is no longer an issue for nuclear energy
Oil and gas price trends increase the interest in alternatives to hydrocarbons
Internalising externalities would enhance the competitiveness of nuclear versus fossil fuels