Electricity Generation

Nuclear Technology can also be used to produce ELECTRICITY which is very important according to economical condition of a country. Nuclear plant can produce more electricity than thermal or hydro electric plant.

Isotope produced using Nuclear Technology is used in many chemical and pharma companies.

1) Nuclear power is cost competitive with other forms of electricity generation, except where there is direct access to low-cost fossil fuels.

2) Fuel costs for nuclear plants are a minor proportion of total generating costs, though capital costs are greater than those for coal-fired plants.

3) In assessing the cost competitiveness of nuclear energy, decommissioning and waste disposal costs are taken into account.

The relative costs of generating electricity from coal, gas and nuclear plants vary considerably depending on location. Coal is, and will probably remain, economically attractive in countries such as China, the USA and Australia with abundant and accessible domestic coal resources as long as carbon emissions are cost-free. Gas is also competitive for base-load power in many places, particularly using combined-cycle plants, though rising gas prices have removed much of the advantage.

Nuclear energy is, in many places, competitive with fossil fuel for electricity generation, despite relatively high capital costs and the need to internalise all waste disposal and decommissioning costs. If the social, health and environmental costs of fossil fuels are also taken into account, nuclear is outstanding.

External costs

The report of a major European study of the external costs of various fuel cycles, focusing on coal and nuclear, was released in mid 2001 - ExternE. It shows that in clear cash terms nuclear energy incurs about one tenth of the costs of coal. The external costs are defined as those actually incurred in relation to health and the environment and quantifiable but not built into the cost of the electricity. If these costs were in fact included, the EU price of electricity from coal would double and that from gas would increase 30%. These are without attempting to include global warming.

The European Commission launched the project in 1991 in collaboration with the US Department of Energy, and it was the first research project of its kind "to put plausible financial figures against damage resulting from different forms of electricity production for the entire EU". The methodology considers emissions, dispersion and ultimate impact. With nuclear energy the risk of accidents is factored in along with high estimates of radiological impacts from mine tailings (waste management and decommissioning being already within the cost to the consumer). Nuclear energy averages 0.4 euro cents/kWh, much the same as hydro, coal is over 4.0 cents (4.1-7.3), gas ranges 1.3-2.3 cents and only wind shows up better than nuclear, at 0.1-0.2 cents/kWh average.

Fuel costs are one area of steadily increasing efficiency and cost reduction. For instance, in Spain nuclear electricity cost has been reduced by 29% over 1995-2001. This involved boosting enrichment levels and burn-up to achieve 40% fuel cost reduction. Prospectively, a further 8% increase in burn-up will give another 5% reduction in fuel cost.

The cost of fuel

From the outset the basic attraction of nuclear energy has been its low fuel costs compared with coal, oil and gas fired plants. Uranium, however, has to be processed, enriched and fabricated into fuel elements, and about two thirds of the cost is due to enrichment and fabrication. Allowances must also be made for the management of radioactive spent fuel and the ultimate disposal of this spent fuel or the wastes separated from it.

But even with these included, the total fuel costs of a nuclear power plant in the OECD are typically about a third of those for a coal-fired plant and between a quarter and a fifth of those for a gas combined-cycle plant.

Fuel costs are one area of steadily increasing efficiency and cost reduction. For instance, in Spain nuclear electricity cost was reduced by 29% over 1995-2001. This involved boosting enrichment levels and burn-up to achieve 40% fuel cost reduction. Prospectively, a further 8% increase in burn-up will give another 5% reduction in fuel cost.

Comparing electricity generation

For nuclear power plants any cost figures normally include spent fuel management, plant decommissioning and final waste disposal. These costs, while usually external for other technologies, are internal for nuclear power.

Decommissioning costs are estimated at 9-15% of the initial capital cost of a nuclear power plant. But when discounted, they contribute only a few percent to the investment cost and even less to the generation cost. In the USA they account for 0.1-0.2 cent/kWh, which is no more than 5% of the cost of the electricity produced.

The back-end of the fuel cycle, including spent fuel storage or disposal in a waste repository, contributes up to another 10% to the overall costs per kWh, - less if there is direct disposal of spent fuel rather than reprocessing. The $18 billion US spent fuel program is funded by a 0.1 cent/kWh levy.

French figures published in 2002 show (EUR cents/kWh): nuclear 3.20, gas 3.05-4.26, coal 3.81-4.57. Nuclear is favourable because of the large, standardised plants used.

The cost of nuclear power generation has been dropping over the last decade. This is because declining fuel (including enrichment), operating and maintenance costs, while the plant concerned has been paid for, or at least is being paid off. In general the construction costs of nuclear power plants are significantly higher than

for coal- or gas-fired plants because of the need to use special materials, and to incorporate sophisticated safety features and back-up control equipment. These contribute much of the nuclear generation cost, but once the plant is built the variables are minor.

In the past, long construction periods have pushed up financing costs. In Asia construction times have tended to be shorter, for instance the new-generation 1300 MWe Japanese reactors which began operating in 1996 and 1997 were built in a little over four years.

Overall, OECD studies in teh 1990s showed a decreasing advantage of nuclear over coal. This trend was largely due to a decline in fossil fuel prices in the 1980s, and easy access to low-cost, clean coal, or gas. In the 1990s gas combined-cycle technology with low fuel prices was often the lowest cost option in Europe and North America. But the picture is changing.

Future cost competitiveness

The OECD does not expect investment costs in new nuclear generating plants to rise, as advanced reactor designs become standardised.

The future competitiveness of nuclear power will depend substantially on the additional costs which may accrue to coal generating plants. It is uncertain how the real costs of meeting targets for reducing sulphur dioxide and greenhouse gas emissions will be attributed to fossil fuel plants.

Overall, and under current regulatory measures, the OECD expects nuclear to remain economically competitive with fossil fuel generation, except in regions where there is direct access to low cost fossil fuels.

In Australia, for example, coal-fired generating plants are close to both the mines supplying them and the main population centres, and large volumes of gas are available on low cost, long-term contracts.

A 1998 OECD comparative study showed that at a 5% discount rate, in 7 of 13 countries considering nuclear energy, it would be the preferred choice for new base-load capacity commissioned by 2010 (see Table below). At a 10% discount rate the advantage over coal would be maintained in only France, Russia and China.

Factors favouring Uranium

Uranium has the advantage of being a highly concentrated source of energy which is easily and cheaply transportable. The quantities needed are very much less than for coal or oil. One kilogram of natural uranium will yield about 20,000 times as much energy as the same amount of coal. It is therefore intrinsically a very portable and tradeable commodity.

The fuel's contribution to the overall cost of the electricity produced is relatively small, so even a large fuel price escalation will have relatively little effect. For instance, a doubling of the 2002 U3O8 price would increase the fuel cost for a light water reactor by 30% and the electricity cost about 7% (whereas doubling the gas price would add 70% to the price of electricity).

Reprocessing & MOX

There are other possible savings. For example, if spent fuel is reprocessed and the recovered plutonium and uranium is used in mixed oxide (MOX) fuel, more energy can be extracted. The costs of achieving this are large, but are offset by MOX fuel not needing enrichment and particularly by the smaller amount of high-level wastes produced at the end. Seven UO2 fuel assemblies give rise to one MOX assembly plus some vitrified high-level waste, resulting in only about 35% of the volume, mass and cost of disposal.

For different fuel costs (fossil fuels) or lead time (nuclear plants). Assumes 5% discount trate, 30 year life and 70% load factor. While the figures are out of date, the comparison remains relevant. Note that the key factor for fossil fuels is the high or low cost of fuels (top portion of bars), whereas nuclear power has a low proportion of fuel cost in total electricity cost and the key factor is the short or long lead time in planning and construction, hence investment cost (bottom portion of bars). Increasing the load factor thus benefits nuclear more than coal, and both these more than oil or gas. (OECD IEA 1992).