The Cost Competitiveness of Nuclear Power for Electricity Generation: Evaluation Using Sandiaís Electricity Generation Cost Simulation Model (GenSim)

 

Thomas Drennen[1] and Arnold Baker[2]

 

Abstract for the International Workshop on Radiological Sciences and Applications, Peaceful Uses of Nuclear Technologies, Vienna, Austria,

March 16 18, 2005

 

Several recent studies have evaluated the economic viability of newly constructed nuclear power plants. These studies, which include The Future of Nuclear Power (Massachusetts Institute of Technology, 2003), The Economic Future of Nuclear Power (University of Chicago, 2004), and The Texas Gulf Coast Nuclear Feasibility Study (U.S. Department of Energy, 2005, currently in draft), acknowledge the economic challenges associated with constructing the next generation of nuclear facilities. Both the MIT and U. of Chicago studies conclude that without significant reductions in capital costs, projected construction times, or outright governmental support, nuclear facilities, at least in the U.S., cannot compete with the alternatives. The current draft Texas Gulf Cost Study suggests an alternative strategic approach to reducing the project capital costs.

 

Nuclearís current and future economic viability is dependent on a number of key factors, including capital, O&M, and fuel costs (for nuclear electricity generation and its competitors), as well as costs associated with delays in permitting and licensing, and decisions about climate change and other environmental policies. The purpose of this paper is to build on these recent nuclear power electricity cost studies, and to evaluate the sensitivity of key parameters to demonstrate their relative importance to the market-based success of nuclear power, using Sandiaís Electricity Generation Cost Simulation Model (GenSim).

 

GenSim (a previous version of which was cited in the University of Chicago study) was developed to provide a clear and consistent methodology for real time evaluation of the economics and environmental control costs of alternative electricity generating options, including pulverized coal, gas combustion turbine, gas combined cycle, nuclear, solar (PV and thermal), and wind. The model allows the user to quickly conduct sensitivity analysis on key variables, including: capital, O&M, and fuel costs; tax and depreciation considerations; interest rates; construction time; heat rates; and capacity factors. The model also includes consideration of a wide range of externality costs and pollution control options for carbon dioxide, nitrogen oxides, sulfur dioxide, and mercury. Two different data sets are included in the model; one from the U.S. Department of Energy (DOE) and the other from Plattís Research Group.

 

This paper will evaluate the levelized costs of nuclear power for a range of alternative economic and environmental control parameters, and compare the results with alternative choices for generating electricity. An envelop of break even conditions for cost competitive nuclear power economics will be developed, including the cost of environmental taxes and control technologies. Results will be presented in a real time demonstration, as well as in PowerPoint.