Nuclear Drops Cost Below Coal

For the first time in more than a decade, production costs at U.S. nuclear power plants are the lowest of any electricity source and have dropped below coal-fired power plants, according to figures from the Utility Data Institute.

WASHINGTON, DC – In 1999, production costs for fuel, operations and maintenance at nuclear reactors averaged 1.83¢/kWh, lower than coal at 2.07¢ or oil-fired plants at 3.18¢ and natural gas plants at 3.52¢/kWh. In 1998, average production costs for coal plants were 2.07¢ with nuclear at 2.13¢, oil-fired units at 3.24¢ and natural gas plants at 3.3¢/kWh, says UDI. Recent spikes in the price for oil and natural gas are not reflected in these data. “At a time when the eyes of the nation are on energy prices, nuclear power’s re-emergence as the low production-cost leader is a reminder that the United States needs a diverse energy portfolio that relies in no small part on nuclear energy,” says Marvin Fertel of the Nuclear Energy Institute. “Electricity consumers of all kinds, as well as state and federal lawmakers, should take notice that nuclear power plants provide tremendous value-economically, environmentally and with regard to reliability, energy security and stable electricity price.” NEI qualifies its claim by limiting its comparison to the “major reliable” sources of electricity, and does not consider renewables to be competitive. Average production costs at nuclear plants have not been lower than those at coal-fired facilities since the mid-1980s, when safety improvements caused the nuclear industry to lose its long- standing cost advantage. Production costs do not represent the complete cost of electricity at nuclear reactors, concedes Fertel, but low production costs allow facilities to compete in the market after capital costs, property taxes and other expenses are considered. “Assuming electricity markets average between 2.5 and 3 cents per kilowatt-hour on a total cost basis, U.S. nuclear power plants already are very competitive,” he says. “They are stabilizing the electrical grid and helping to avert brownouts and blackouts, and they are doing so economically and without emitting any pollutants into the atmosphere.” A NEI survey released on January 23 indicates that the energy crisis in California has increased recognition of the value of nuclear power plants across the U.S. Support for building new nuclear reactors has increased in all regions, especially in the west, with 51 percent of participants stating that “we should definitely build more nuclear energy plants in the future,” compared to 42 percent last October.