| The Economics of Nuclear Power
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| | produced.
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| Electricity Generation
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| | The back-end of the fuel cycle, including
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| Nuclear Technology can also be used to
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| | spent fuel storage or disposal in a waste
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| produce ELECTRICITY which is very
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| | repository, contributes up to another 10%
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| important according to economical
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| | to the overall costs per kWh, - less if
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| condition of a country. Nuclear plant can
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| | there is direct disposal of spent fuel
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| produce more electricity than thermal or
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| | rather than reprocessing. The $18 billion
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| hydro electric plant.
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| | US spent fuel program is funded by a 0.1
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| Isotope produced using Nuclear Technology
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| | cent/kWh levy.
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| is used in many chemical and pharma
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| | French figures published in 2002 show
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| companies.
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| | (EUR cents/kWh): nuclear 3.20, gas
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| 1)Nuclear power is cost competitive with
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| | 3.05-4.26, coal 3.81-4.57. Nuclear is
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| other forms of electricity generation,
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| | favourable because of the large,
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| except where there is direct access to
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| | standardised plants used.
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| low-cost fossil fuels.
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| | The cost of nuclear power generation has
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| 2)Fuel costs for nuclear plants are a
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| | been dropping over the last decade. This
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| minor proportion of total generating
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| | is because declining fuel (including
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| costs, though capital costs are greater
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| | enrichment), operating and maintenance
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| than those for coal-fired plants.
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| | costs, while the plant concerned has been
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| 3)In assessing the cost competitiveness
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| | paid for, or at least is being paid off.
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| of nuclear energy, decommissioning and
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| | In general the construction costs of
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| waste disposal costs are taken into
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| | nuclear power plants are significantly
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| account.
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| | higher thanfor coal- or gas-fired plants
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| The relative costs of generating
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| | because of the need to use special
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| electricity from coal, gas and nuclear
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| | materials, and to incorporate
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| plants vary considerably depending on
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| | sophisticated safety features and back-up
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| location. Coal is, and will probably
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| | control equipment. These contribute much
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| remain, economically attractive in
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| | of the nuclear generation cost, but once
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| countries such as China, the USA and
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| | the plant is built the variables are
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| Australia with abundant and accessible
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| | minor.
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| domestic coal resources as long as carbon
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| | In the past, long construction periods
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| emissions are cost-free. Gas is also
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| | have pushed up financing costs. In Asia
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| competitive for base-load power in many
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| | construction times have tended to be
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| places, particularly using combined-cycle
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| | shorter, for instance the new-generation
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| plants, though rising gas prices have
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| | 1300 MWe Japanese reactors which began
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| removed much of the advantage.
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| | operating in 1996 and 1997 were built in
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| Nuclear energy is, in many places,
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| | a little over four years.
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| competitive with fossil fuel for
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| | Overall, OECD studies in teh 1990s showed
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| electricity generation, despite
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| | a decreasing advantage of nuclear over
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| relatively high capital costs and the
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| | coal. This trend was largely due to a
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| need to internalise all waste disposal
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| | decline in fossil fuel prices in the
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| and decommissioning costs. If the social,
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| | 1980s, and easy access to low-cost, clean
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| health and environmental costs of fossil
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| | coal, or gas. In the 1990s gas
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| fuels are also taken into account,
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| | combined-cycle technology with low fuel
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| nuclear is outstanding.
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| | prices was often the lowest cost option
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| External costs
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| | in Europe and North America. But the
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| The report of a major European study of
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| | picture is changing.
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| the external costs of various fuel
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| | Future cost competitiveness
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| cycles, focusing on coal and nuclear, was
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| | The OECD does not expect investment costs
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| released in mid 2001 - ExternE. It shows
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| | in new nuclear generating plants to rise,
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| that in clear cash terms nuclear energy
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| | as advanced reactor designs become
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| incurs about one tenth of the costs of
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| | standardised.
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| coal. The external costs are defined as
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| | The future competitiveness of nuclear
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| those actually incurred in relation to
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| | power will depend substantially on the
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| health and the environment and
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| | additional costs which may accrue to coal
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| quantifiable but not built into the cost
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| | generating plants. It is uncertain how
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| of the electricity. If these costs were
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| | the real costs of meeting targets for
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| in fact included, the EU price of
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| | reducing sulphur dioxide and greenhouse
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| electricity from coal would double and
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| | gas emissions will be attributed to
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| that from gas would increase 30%. These
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| | fossil fuel plants.
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| are without attempting to include global
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| | Overall, and under current regulatory
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| warming.
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| | measures, the OECD expects nuclear to
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| The European Commission launched the
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| | remain economically competitive with
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| project in 1991 in collaboration with the
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| | fossil fuel generation, except in regions
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| US Department of Energy, and it was the
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| | where there is direct access to low cost
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| first research project of its kind "to
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| | fossil fuels.
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| put plausible financial figures against
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| | In Australia, for example, coal-fired
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| damage resulting from different forms of
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| | generating plants are close to both the
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| electricity production for the entire
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| | mines supplying them and the main
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| EU". The methodology considers emissions,
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| | population centres, and large volumes of
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| dispersion and ultimate impact. With
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| | gas are available on low cost, long-term
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| nuclear energy the risk of accidents is
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| | contracts.
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| factored in along with high estimates of
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| | A 1998 OECD comparative study showed that
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| radiological impacts from mine tailings
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| | at a 5% discount rate, in 7 of 13
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| (waste management and decommissioning
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| | countries considering nuclear energy, it
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| being already within the cost to the
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| | would be the preferred choice for new
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| consumer). Nuclear energy averages 0.4
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| | base-load capacity commissioned by 2010
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| euro cents/kWh, much the same as hydro,
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| | (see Table below). At a 10% discount rate
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| coal is over 4.0 cents (4.1-7.3), gas
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| | the advantage over coal would be
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| ranges 1.3-2.3 cents and only wind shows
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| | maintained in only France, Russia and
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| up better than nuclear, at 0.1-0.2 cents
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| | China.
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| kWh average.
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| | FACTORS FAVOURING URANIUM
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| Fuel costs are one area of steadily
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| | Uranium has the advantage of being a
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| increasing efficiency and cost reduction.
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| | highly concentrated source of energy
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| For instance, in Spain nuclear
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| | which is easily and cheaply
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| electricity cost has been reduced by 29%
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| | transportable. The quantities needed are
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| over 1995-2001. This involved boosting
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| | very much less than for coal or oil. One
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| enrichment levels and burn-up to achieve
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| | kilogram of natural uranium will yield
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| 40% fuel cost reduction. Prospectively, a
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| | about 20,000 times as much energy as the
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| further 8% increase in burn-up will give
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| | same amount of coal. It is therefore
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| another 5% reduction in fuel cost.
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| | intrinsically a very portable and
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| The cost of fuel
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| | tradeable commodity.
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| From the outset the basic attraction of
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| | The fuel's contribution to the overall
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| nuclear energy has been its low fuel
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| | cost of the electricity produced is
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| costs compared with coal, oil and gas
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| | relatively small, so even a large fuel
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| fired plants. Uranium, however, has to be
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| | price escalation will have relatively
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| processed, enriched and fabricated into
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| | little effect. For instance, a doubling
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| fuel elements, and about two thirds of
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| | of the 2002 U3O8 price would increase the
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| the cost is due to enrichment and
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| | fuel cost for a light water reactor by
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| fabrication. Allowances must also be made
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| | 30% and the electricity cost about 7%
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| for the management of radioactive spent
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| | (whereas doubling the gas price would add
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| fuel and the ultimate disposal of this
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| | 70% to the price of electricity).
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| spent fuel or the wastes separated from
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| | REPROCCESSING & MOX
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| it.
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| | There are other possible savings. For
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| But even with these included, the total
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| | example, if spent fuel is reprocessed and
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| fuel costs of a nuclear power plant in
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| | the recovered plutonium and uranium is
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| the OECD are typically about a third of
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| | used in mixed oxide (MOX) fuel, more
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| those for a coal-fired plant and between
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| | energy can be extracted. The costs of
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| a quarter and a fifth of those for a gas
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| | achieving this are large, but are offset
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| combined-cycle plant.
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| | by MOX fuel not needing enrichment and
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| Fuel costs are one area of steadily
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| | particularly by the smaller amount of
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| increasing efficiency and cost reduction.
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| | high-level wastes produced at the end.
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| For instance, in Spain nuclear
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| | Seven UO2 fuel assemblies give rise to
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| electricity cost was reduced by 29% over
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| | one MOX assembly plus some vitrified
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| 1995-2001. This involved boosting
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| | high-level waste, resulting in only about
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| enrichment levels and burn-up to achieve
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| | 35% of the volume, mass and cost of
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| 40% fuel cost reduction. Prospectively, a
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| | disposal.
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| further 8% increase in burn-up will give
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| | For different fuel costs (fossil fuels)
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| another 5% reduction in fuel cost.
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| | or lead time (nuclear plants). Assumes 5%
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| Comparing electricity generation
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| | discount trate, 30 year life and 70% load
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| For nuclear power plants any cost figures
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| | factor. While the figures are out of
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| normally include spent fuel management,
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| | date, the comparison remains relevant.
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| plant decommissioning and final waste
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| | Note that the key factor for fossil fuels
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| disposal. These costs, while usually
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| | is the high or low cost of fuels (top
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| external for other technologies, are
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| | portion of bars), whereas nuclear power
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| internal for nuclear power.
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| | has a low proportion of fuel cost in
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| Decommissioning costs are estimated at
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| | total electricity cost and the key factor
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| 9-15% of the initial capital cost of a
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| | is the short or long lead time in
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| nuclear power plant. But when discounted,
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| | planning and construction, hence
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| they contribute only a few percent to the
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| | investment cost (bottom portion of bars).
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| investment cost and even less to the
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| | Increasing the load factor thus benefits
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| generation cost. In the USA they account
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| | nuclear more than coal, and both these
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| for 0.1-0.2 cent/kWh, which is no more
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| | more than oil or gas.
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| than 5% of the cost of the electricity
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