Nuclear costs

Lord Adair Turner’s Committee on Climate Change (CCC)’s key recommendation1 is to reduce off-shore wind schemes and push ahead with substantial nuclear power in the 2020’s because nuclear ‘seems to be the most cost-effective of the low carbon technologies’. This runs counter to its own commissioned study of nuclear costs, and much international evidence.

The Committee relies solely on the cost analysis of the Department of Energy and Climate Change’s own consultant’s Mott MacDonald, who produced a report in June 20102, and another for the Committee in May 20113.

Other sources, such as The ‘World Nuclear Status Report4 prepared for the government contain plenty of material which suggest nuclear costs could be much higher, and that it is certainly not ‘the most cost -effective’ low carbon technology:

‘Because of implicit and explicit guarantees, the private cost element of nuclear is uncertain and continues to escalate, … and the public subsidy portion is generally missing entirely, so that nuclear cannot be properly compared to alternatives nor can the potentially enormous cost to taxpayers be appropriately vetted’.

Mott MacDonald’s June 2010 report contains very optimistic assumptions, on capital costs, construction times, operating efficiency etc. which run counter to the historical trend of rising nuclear costs – usually well above original estimates made by the industry. No Generation III+ reactors yet exist – so predicted cost estimates are largely theoretical.

But Mott-MacDonald’s latest (May 20113) report is much more cautious about nuclear’s cost advantage. and notes that costs have a much greater chance of exceeding initial estimates than the costs of renewables, that the long lead time and operating life of nuclear, lock in costs for many decades compared with the greater flexibility and potential for cost reduction of solar and wind.

But its most important conclusion is that the relative costs of different energy-generating technologies actually depend on which technology is given priority by policy makers – ‘pushing deployment can affect the relative costs’, and ‘it is possible to find cases where offshore wind, CCS (Carbon Capture and Storage), and nuclear are each lower cost than the other two’.

This means that if renewables are deployed extensively they may well be cheaper than nuclear – even using the existing over optimistic nuclear cost assumptions.

Why the Committee came to airbrush this vital conclusion, and chose not to point out that government itself has the responsibility for deciding whether to make renewable energy the most cost effective option, can only be guessed at.

  1. Committee on Climate Change The Renewable Energy Review. May 2011.

  2. Mott MacDonald. UK Electricity Generation Costs Update. June 2010.
  3. Mott MacDonald. Costs of Low Carbon Generation Technologies. May 2011
  4. World Nuclear Status Report 2009, 2010-11. Schneider et. al.