Nuclear a Competitive Energy Option, Study Shows

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". . .nuclear energy followed by coal with carbon capture are the most competitive solutions."

Nuclear energy is a highly competitive energy option for the production of baseload electricity, the OECD's Nuclear Energy Agency (NEA) and the International Energy Agency (IEA) have concluded in their latest joint study into generating costs.

The report, Projected Costs of Generating Electricity, is the seventh in a series of such studies and was released today in Paris by IEA executive director Nobuo Tanaka and NEA director-general Luis Echavarri. It comprises the latest data for 190 power plants from 17 OECD countries as well as from Brazil, China, Russia and South Africa on the costs of electricity generation for a wide variety of fuels and technologies, including coal (with and without carbon capture), natural gas, nuclear, hydro, on-shore and offshore wind, solar, biomass, wave, tidal and combined heat and power (CHP).

The analysis was closely overseen by an international expert group on electricity generating costs with more than 50 representatives from 19 OECD member countries, the European Commission and the International Atomic Energy Agency (IAEA). Experts from Brazil, India and Russia also participated.

Assuming a carbon price of $30 per ton of carbon dioxide (CO2), the study provides results for two real interest rates of 5% and 10%. When financing costs are low (5%), nuclear energy followed by coal with carbon capture are the most competitive solutions. With higher financing costs (10% case), coal-fired generation followed by coal with carbon capture and gas-fired combined cycle turbines (CCGTs) are the cheapest sources of electricity.

The cost of capital "is essentially a function of the risk faced by each option for generating electricity-market risk, technology risk, construction and regulatory risk," says the publication. It adds, "With their high capital costs, low-carbon technologies such as nuclear, renewables and carbon capture and storage (CCS) are particularly vulnerable. Smart government action, however, can do much to reduce these risks."

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