Nuclear power Projects

Nuclear power Projects

Nuclear power plants currently account for more than 20 per cent of total UK electricity demand, 

with the majority coming from advanced gas cooled reactors (AGRs). The last of these were commissioned in the late 1980s and can be expected be decommissioned in stages over the 

next few decades. The predecessors to the AGRs, the Magnox reactors, account for a reasonable share of nuclear generation, but these are already being decommissioned and are 

expected to be phased out by 2010. The only other nuclear plant built since the AGRs is the Sizewell B pressurised water reactor (PWR) which began operation in 1996.

The nuclear industry is proposing advances on existing designs with increased safety, some standardisation to facilitate licensing, reduced costs, and greater efficiencies. It is likely that any new build in the UK would take advantage of these improvements. TVO24 has selected a European Pressurised Reactor (EPR) for the Finnish project. This has been developed by and contracted to Framatome, a joint venture company between Areva of France and Siemens of Germany. Other realistic options for the short-term include the AP1000 reactor being developed by Westinghouse which is owned by BNFL, and the Advanced CANDU Reactor (ACR), a development of the Canadian Deuterium-Uranium reactor. These three options have yet to be built, and have yet to be licensed in the UK. Even more promising technologies are being researched, such as the Pebble Bed Modular Reactor (PBMR), a high temperature reactor (HTR) benefiting from inherent safety features and small size, though these are only likely to be commercialised in the longer term.

Apart from public concern over nuclear power generation, the attractiveness of CCGT generation has also precluded new build of nuclear plant. In competitive markets, the high capital costs and long construction times of nuclear plant have made it uncompetitive. The nuclear industry has stated that costs have fallen significantly but this has been difficult to validate from the limited number of recent projects.

The capital cost of a new nuclear plant represents the majority of the total cost of generation, typically as much as 70% for a base load plant. The MIT report proposed a total cost, stated in nominal terms, excluding interest during construction (IDC) but including decommissioning, of about £1150 per kW for the base case. The capital cost seems a reasonable26 mid-point for the sources reviewed by MIT and for the additional sources we have identified. However, the range of prices proposed indicate the uncertainty there is in the market place over the costs of new-build nuclear power plants. Reasonably we would extend our level of uncertainty to be ±25 per cent.

Base case O&M costs of about 0.94 pence per kWh, has been proposed by MIT. MIT recognises that this is lower than the average cost of historical data it has reviewed but suggests that efficiency gains can be achieved. Other reports reviewed by MIT, as well as other reports reviewed by ourselves suggest that O&M costs are half this amount. On balance, we have proposed O&M costs of new nuclear plant of about 0.5 pence per kWh. 

Fuel costs for nuclear plant are less contentious. MIT proposes a range of 0.3 to 0.4 pence per kWh. This is slightly lower than data sources we have reviewed and therefore we have proposed a fuel cost of about 0.4 pence per kWh. We note that there is a separate debate in the industry about the sustainability of uranium supply and resultant prices, but the fuel cost component of the total cost of generation is relatively small.

Due to the relatively low variable costs, and the difficulty of two-shifting, new-build nuclear generation would only be considered for base-load operation. Availabilities exceeding 90 per cent should be achievable.