15 TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia1 ECONOMICS OF NUCLEAR...

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


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


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%]


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]


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


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


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


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


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


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


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


Generation cost structureGeneration cost structure

17%

7%

76%

42%

17%

41%

59%

26%

15%

Gas Coal Nuclear

Fuel

O&M

Investment

Uranium ~ 5%


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


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


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


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


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


Greenhouse gas emissions from electricity Greenhouse gas emissions from electricity production chains (gC equiv./kWh)production chains (gC equiv./kWh)

Source: IAEA and NEA


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


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



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



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

15 TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia1 ECONOMICS OF NUCLEAR...

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Transcript of 15 TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia1 ECONOMICS OF NUCLEAR...