The Economics of Nuclear Power: An Update
Cost estimates for new nuclear plants have been escalating at an alarming rate, and in the past decade, construction costestimates have increased five-fold, with every expectation that costs will increase further as the designs are firmed up. In addition, there are the unsolved problems of waste disposal and the high susceptibility of the technology to failure. Up to now, nuclear power plants have been funded by massive public subsidies. For Germany the calculations roughly add up to over 100 billion Euros and this preferential treatment is still going on today. As a result the billions set aside for the disposal of nuclear waste and the dismantling of nuclear power plants represent a tax-free manoeuvre for the companies. In addition the liability of the operators is limited to 2.5 billion Euros – a tiny proportion of the costs that would result from a medium-sized
Rue d’Arlon 15, -1050 Brussels, Belgium T +32 2 743 41 00 F 32 2 743 41 09 E brussels@boell.eu W www.boell.eu
nuclear accident. Yet, in recent years, governments have become increasingly determined in their attempts to maintain existing nuclear plants in service and revive nuclear ordering, on the grounds that nuclear power is the most cost-effective way to combat climate change. Some of this apparent paradox is relatively easily explained by the difference between the running costs only of nuclear power, which are usually relatively low, and the overall cost of nuclear power – including repayment of the construction cost – which is substantially higher. The objective of this report is to identify the key economic parameters that determine the cost of nuclear electricity, commenting on their determining factors. It shows that without subsidies and guarantees from electricity consumers and taxpayers, new nuclear power plants will not be built.
The Economics of Nuclear Power: An Update By Steve Thomas