1. 15 TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia1 ECONOMICS OF NUCLEAR ENERGY ECONOMICS OF NUCLEAR ENERGY IN A SUSTAINABLE DEVELOPMENT PERSPECTIVE Evelyne Bertel OECD Nuclear Energy Agency

2. 15 TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia2 Sustainable development framework Energy resources Investment in pollution reduction SOCIAL ECONOMY Health hazards Environmental awareness Labour Job opportunities/quality ENVIRONMENT

3. 15 TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia3

4. 4 Framework of the OECD study  Data provided by participants Technical characteristics Technical characteristics Construction costs and schedule (IDCs), and O&M costs Construction costs and schedule (IDCs), and O&M costs Fuel price projections Fuel price projections  Common levelised cost methodology  Common assumptions Discount rates [5%, 10%] Discount rates [5%, 10%] Economic lifetime [40 years – for most plants] Economic lifetime [40 years – for most plants] Load factor for base-load plants [85%] Load factor for base-load plants [85%]

5. 15 TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia5 Scope of the OECD study [1] State-of-the art power plants  Recently completed, or  Under construction in 2003-2004, or  Planned to be connected to grids by 2010-2015, or  Under consideration [cost estimates exist]

6. 15 TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia6 Scope of the OECD study [2]  ~ 130 power plants in 21 countries Coal, gas, nuclear Coal, gas, nuclear Wind, hydro, solar Wind, hydro, solar Cogeneration, biomass, waste incineration, … Cogeneration, biomass, waste incineration, …  Costs supported by electricity producers Investment, incl. refurbishment & decommissioning Investment, incl. refurbishment & decommissioning Interest during construction Interest during construction O&M O&M Fuel, incl. waste management and disposal Fuel, incl. waste management and disposal

7. 15 TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia7 Out of the OECD study scope  Transmission & distribution costs  Business risks  Externalities, incl. Damage from residual pollution Damage from residual pollution Positive value of security of supply Positive value of security of supply Negative value of carbon Negative value of carbon  First of a kind (FOAK) design and engineering costs

8. 15 TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia8 Issues addressed in appendices  Impact of risks on costs  Fuel price trends and projections  Wind power in electricity grids  Carbon emission trading  Generation technologies

9. 15 TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia9 Overnight construction costs [USD/kWe] Coal Gas NuclearWind

10. 15 TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia10 Nuclear investment costs [USD/kWe]

11. 15 TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia11 Generation costs at 5% [USD/MWh] Coal Nuclear Wind Gas

12. 15 TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia12 Generation costs at 10% [USD/MWh] Coal Gas Nuclear Wind

13. 15 TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia13 Generation cost structure Uranium ~ 5%

14. 15 TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia14 Cost ranges* [USD/MWh] * Excluding the 5% highest and 5% lowest values * Levelised generation costs - excluding the 5% highest and 5% lowest values

15. 15 TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia15 Ratios Gas/Nuclear

16. 15 TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia16 Ratios Coal/Nuclear

17. 15 TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia17 Main Findings of OECD study  No technology/source is always cheaper for base load electricity generation  The competitive margin of nuclear energy is increasing  Gas is losing ground owing to gas price increase  Wind power is improving but remains seldom competitive

18. 15 TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia18 Nuclear energy and externalities  Security of energy supply Nuclear energy is essentially domestic Nuclear energy is essentially domestic Fuel inventories are cheap and easy to store Fuel inventories are cheap and easy to store Natural resources are plentiful and well distributed Natural resources are plentiful and well distributed  Environmental protection Nuclear energy induces no local air pollution Nuclear energy induces no local air pollution Nuclear energy is nearly carbon free Nuclear energy is nearly carbon free Waste volumes are small and can be managed safely Waste volumes are small and can be managed safely

19. 15 TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia19 Greenhouse gas emissions from electricity production chains (gC equiv./kWh) Source: IAEA and NEA

20. 15 TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia20 Impact of carbon values on generation costs at 10% discount rate Carbon value US$/MWh

21. 15 TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia21 Concluding remarks [1]   Recent trends Good performance of NPPs Revived interest in the nuclear option Active R-D&D, national & international Slow pace of new industrial projects

22. 15 TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia22 Concluding remarks [2]   Changing decision-making landscape Sustainable development policies integrate economic, environmental and social aspects   Risk issues need attention Financing Severe accidents Long term HLW stewardship Proliferation and physical security

23. 15 TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia23 Concluding remarks [3]   Economic competitiveness is no longer an issue for nuclear energy   Oil and gas price trends increase the interest in alternatives to hydrocarbons   Internalising externalities would enhance the competitiveness of nuclear versus fossil fuels