ECONOMICS OF NUCLEAR ENERGY IN A SUSTAINABLE DEVELOPMENT PERSPECTIVE

1. ECONOMICS OF NUCLEAR ENERGYIN A SUSTAINABLE DEVELOPMENT PERSPECTIVE Evelyne BertelOECD Nuclear Energy Agency 15TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia

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

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

4. Framework of the OECD study • Data provided by participants • Technical characteristics • Construction costs and schedule (IDCs),and O&M costs • Fuel price projections • Common levelised cost methodology • Common assumptions • Discount rates [5%, 10%] • Economic lifetime [40 years – for most plants] • Load factor for base-load plants [85%] 15TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia

5. 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 gridsby 2010-2015, or • Under consideration [cost estimates exist] 15TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia

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

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

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

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

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

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

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

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

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

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

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

17. 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 15TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia

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

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

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

21. 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 15TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia

22. 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 15TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia

23. 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 15TH Pacific Basin Nuclear Conference, 15-20 October 2006, Sydney, Australia