Update on the Cost of Nuclear Power

Center for Energy and Environmental Policy Research (CEEPR) No. 09-004

66 Pages Posted: 10 Sep 2009

See all articles by Yangbo Du

Yangbo Du

Massachusetts Institute of Technology (MIT)

John E. Parsons

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Date Written: May 2009

Abstract

We update the cost of nuclear power as calculated in the MIT (2003) Future of Nuclear Power study. Our main focus is on the changing cost of construction of new plants. The MIT (2003) study provided useful data on the cost of then recent builds in Japan and the Republic of Korea. We provide similar data on later builds in Japan and the Republic of Korea as well as a careful analysis of the forecasted costs on some recently proposed plants in the US. Using the updated cost of construction, we calculate a levelized cost of electricity from nuclear power. We also update the cost of electricity from coal- and gas-fired power plants and compare the levelized costs of nuclear, coal and gas. The results show that the cost of constructing a nuclear plant have approximately doubled. The cost of constructing coal-fired plants has also increased, although perhaps just as importantly, the cost of the coal itself spiked dramatically, too. Capital costs are a much smaller fraction of the cost of electricity from gas, so it is the recent spike in the price of natural gas that have contributed to the increased cost of electricity. These results document changing prices leading up to the current economic and financial crisis, and do not incorporate how this crisis may be currently affecting prices.

Keywords: nuclear power, levelized cost of electricity

JEL Classification: L94, D20, D40

Suggested Citation

Du, Yangbo and Parsons, John E., Update on the Cost of Nuclear Power (May 2009). Center for Energy and Environmental Policy Research (CEEPR) No. 09-004. Available at SSRN: https://ssrn.com/abstract=1470903 or http://dx.doi.org/10.2139/ssrn.1470903

Yangbo Du

Massachusetts Institute of Technology (MIT) ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

John E. Parsons (Contact Author)

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main Street
E62-416
Cambridge, MA 02142
United States

HOME PAGE: http://www.mit.edu/~jparsons/

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