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The costs for new nuclear power plants are uncertain

We don’t know what it will cost to build a new nuclear power plant in the US today, because no new plants have been constructed in recent decades.  Three recent studies have tried to estimate what the costs might be.

A report from the Keystone Center estimates that new nuclear construction costs today might be $3,600 to $4,000 per kilowatt (kW) of generating capacity (including interest during construction, in year-2007 dollars), with a corresponding total cost of generating electricity of 8 to 11 cents per kilowatt-hour (kWh). Loan guarantees, such as those now being offered for a few plants by the US Department of Energy, would reduce the cost of borrowing money to build the plant. With such guarantees, the estimated costs would fall to between 6 and 7.5 cents/kWh. 

A 2009 study commissioned by the National Research Council estimated similar cost levels: 8 to 13 cents per kWh (in 2007 dollars) without loan guarantees, and 6 to 8 cents/kWh with them.

Finally, the MIT study, which is the most optimistic among the three, estimated that generating costs would be about 8.5 cents/kWh without loan guarantees and about 6.5 cents/kWh with loan guarantees (again, in 2007 dollars).

How do these estimated generating costs compare with costs estimated for other low-CO2 emitting electricity? The NRC study estimates the cost of nuclear power may not be much different from that for other low-carbon sources of baseload electricity, such as coal power plants using CO2 capture and storage (see graph below). (Baseload electricity is the electricity that needs to be available around the clock, all year.) Wind power, a huge potential resource for the US, would be less costly than nuclear, but since it is an intermittent source, it would require back-up in the form of electricity storage or natural gas power plants (which can be started and stopped easily) to be able to supply baseload electricity. The added costs may negate all or some of wind’s advantage.

The average generating cost for all plants on the US grid is about 6 cents/kWh today, so any of the low-GHG options would be more costly than this if the NRC study is correct.

In the case of nuclear, we won’t really know what the costs are until some new plants are constructed in the US. The NRC study sums it up pretty well: “…if the first new plants are constructed on budget and on schedule, and if the generated electricity is competitive in the marketplace, (we) judge that it is likely that many more plants could follow these first plants. Otherwise, few new plants are likely to follow.”

Electricity generating cost estimates in the America’s Energy Future study for electricity sources with low greenhouse gas emissions.