Cost of Nuclear Generation Reaches Nearly 10-Year Low
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A new Nuclear Energy Institute study shows that the nuclear industry has reduced its total generating costs by 19 percent since their peak in 2012. These reductions in cost are so dramatic that 2017 total generating costs of $33.50 per megawatt-hour (MWh) have gone down to almost what they were nearly 10 years ago in 2008 ($32.75 per MWh).
"Through the Delivering the Nuclear Promise campaign and other initiatives, the hardworking men and women of the nuclear industry have done an amazing job reducing costs wherever they find them," NEI Vice President of Policy Development and Public Affairs John Kotek said. "As we continue to face economic headwinds in markets which do not properly compensate nuclear plants, the industry has been doing its part to reduce costs to remain competitive."
"Some things are in urgent need of change if we are to keep the nation's nuclear plants running and enjoy their contribution to a reliable, resilient and low-carbon grid. Namely, we need to put in place market reforms that fairly compensate nuclear similar to those already in place in New York, Illinois and other states."
Other findings of the Nuclear Costs in Context study include:
The report warns that despite these reduced prices, several nuclear power plants have been closed in recent years because of economic pressures. Since 2013, seven nuclear reactors (Crystal River 3 in Florida, San Onofre 2 and 3 in California, Kewaunee in Wisconsin, Vermont Yankee, Fort Calhoun in Nebraska, and Oyster Creek in New Jersey) have shut down permanently. Another 12 reactors have announced their permanent shutdown. If all these closures are taken together, they represent a massive loss of carbon-free electricity generation for the country: 55.5 million tons of carbon dioxide (CO2) avoided annually. That is the equivalent of the carbon emissions avoided by approximately 14,000 wind turbines per year or the electricity used by 8 million homes per year.
The report cites various factors as contributing to premature closure of these plants including:
Certain states have implemented plans that recognize and place a value on nuclear's contributions. New York, Illinois, New Jersey and Connecticut have enacted policies that will compensate nuclear plants for their environmental attributes, ensuring that a total of 12 reactors in these states will not be forced to shut down prematurely.
Closed nuclear plants are often replaced with natural gas power plants which produce substantial amounts of CO2 and come with a bigger price tag than existing nuclear plants. According to the U.S. Energy Information Administration, new natural gas-fired plants come with a levelized cost of $48 per MWh compared to existing nuclear's cost of $33.50 per MWh.
Cost information in the study was collected by the Electric Utility Cost Group with prior years converted to 2017 dollars for accurate historical comparison.