Economic Challenges to the Development of Nuclear Power

Chair and co chair: Adam Mclean Kiza Francis (University of Toronto, Canada)

Nuclear plants are expensive to build. They require huge investment capital, often difficult to obtain by anything but centralized government power utilities in all but the most industrialized countries. 

On the other hand, they are relatively inexpensive to operate. In strong contradiction to gas and oil based power production, minimal operations costs for nuclear power plants have been exemplified by the price of Uranium which has been at or near an all time low for the past dozen years.

Although expensive and large components of the reactor are very often purchased abroad, nuclear power programs inevitably contribute significantly and positively to the domestic professional workforce, as well as the inherent level of science and technology. NPP designers and constructors have also made steady strides to including an increasing domestic fraction of balance of plant construction. In some cases, domestic nuclear programs have evolved to a point where dependence on foreign expertise has reduced to not one of dependence at all, but one of equal partnership in technological advancement, bringing enormous benefits of national pride and worldwide prestige in the industry.

As well, in a world increasingly conscious and sensitive to inevitable environmental and human health ramifications of burning fossil fuels, the nuclear industry can point toward a long history of awareness of full cycle cost analysis in consideration for NPP construction; something that competitors for power production simply have not considered in the past.

Each of these topics were discussed in the IYNC2002 Y Notes session on economic challenges to furthering the nuclear option throughout the world. Papers from five countries gave realistic impressions of nuclear programs in each stage of development around the world; that of a pre nuclear Macedonia, considering Gen III nuclear build to satisfy projected energy demand within the next 20 years, that of Romania, Finland and China, each with considerable nuclear experience historically based on foreign construction know how but increasing domestic participation and intentions to continue projects already underway and plans for new build, and finally, that of Korea with both a strong domestic nuclear design and construction program and robust ties to international partners. 

All agree, though, that the future of nuclear operations and new nuclear build are decisions that will inevitably lay in the hands of economists and financiers, ultimately even more so than public perception regarding the addition of nuclear plants to the horizon. Delivered papers demonstrated that given intense economic consideration, new nuclear, especially that of recent Gen III designs (Westinghouse AP series reactors, Eskom's PBMR, AECL's CANDU NG, etc.), can compete with production alternatives throughout their effective production life cycle. 

Recommendations for the future of nuclear from an economics point of view were given including the following:

Effective communication on the whole cost of each kilowatt hour of electricity.

The public, and even those in the nuclear industry, have, in general, limited knowledge of economic impacts of nuclear construction and just how financing of large projects is managed nationally and internationally.  A focus on revealing these aspects of new build will be highly significant to how people perceive the nuclear industry into the 21st century. 

Gen III reactor costs are expected to be reduced, but how? 

Each of the AP600/1000, PBMB, and CANDU NG expect construction costs of less than $1200 US/kW installed, but how will this be achieved given the current level of at least $2000 US/kW?

Experience in decommissioning is building, but broad knowledge of the costs associated with the process is highly limited, as is how utilities are planning to save and pay for decommissioning of facilities when it becomes necessary.

In the current and evolving economic market, the young generation believes that although economic challenges to nuclear development exist, the future will prove that the nuclear industry is one that can compete successfully and internationally on a level playing field with any other power production scheme. More so, the many benefits of nuclear technologies, and the public's increased awareness of them, will form compelling rationale for both extension of nuclear plant lifetimes, and the promise of new nuclear build.