Past studies on the construction costs of nuclear power reactors have been considered incomplete because analysis was only done on two countries -- the U.S. and France, a new research paper said.
These previous studies analyzed a mere 26 percent of global reactors built between 1960 and 2010, painting an incomplete picture of the changing costs of nuclear power construction.
Between 1984 and 2008, construction work on 96 reactors began around the world. Researchers Jessica Lovering, Arthur Yip and Ted Nordhaus said this research on cost trends in the U.S. and France fails to include the experiences of other nuclear heavyweights such as Canada (25 completed reactors), the U.K. (45), USSR (39), Germany (36), Japan (62), India (21), the Republic of Korea (24) and China (28).
A paper published in Science Direct by Lovering, Yip and Nordhaus, titled “Historical Construction Costs of Global Nuclear Power Reactors,” took a broader approach and studied 349 reactors (58 percent of reactors built globally) in the U.S., France, Canada, West Germany, Japan, India and South Korea.
In 2014, the Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA) published studies showing the significant role nuclear power has in reducing carbon emissions. Currently, one third of global low-carbon electricity is generated by nuclear energy.
The studies further showed that nuclear and hydroelectric power are the main sources of power in countries with the lowest carbon emissions. Unfortunately, nuclear power comes at a steep price compared to cheaper fossil fuels. As a result, the use of nuclear power in the Western world hasn’t taken off, and the limited studies of nuclear cost trends in the U.S. and France have offered little hope that nuclear power will become cost-efficient anytime soon.
The problem with only studying reactors in the U.S. and France to represent global trends is that the majority of reactors in these two countries were built more than 30 years ago. In the U.S., the last reactor to come online was built in 1978. The Three Mile Island (TMI) accident in 1979 played a major role in halting the construction of reactors in the U.S. and other Western countries.
Japan, South Korea and India, however, continued to build reactors. Studies indicate these countries have a low reactor cost.
For this latest Science Direct study, researchers included cost trends for light-water reactors (80 percent of operating reactors around the world use light-water reactors), heavy-water reactors and gas-cooled reactors. After close analysis, researchers found their results did not fit the narrative in previous studies that showed rising nuclear power costs.
In the U.S., between 1954 and 1968 (during construction of reactors at Shippingport, Pennsylvania), overnight construction cost (OCC) dropped by 81 percent, from a high of $6,800/kW to a low of $1,300/kW, during the first phase of construction. During the second phase, from 1964 to 1967, which represents the era of turnkey contracts, the OCC of the reactors ranged between $1,000-$1,500 per kW.
These figures are the polar opposite of cost trends painted by previous studies, which show an 187 percent OCC rise between 1967 and 1972. The most recent study found that reactors that received their operating licenses before the Three Mile Island accident experienced mild cost escalation. For reactors that were under construction during the accident and subsequently completed, however, median costs were 2.8 times higher than they were before the accident, and the median duration was 2.2 times higher than they were before Three Mile Island.
“Post-TMI, overnight costs rise with construction duration, even though OCC excludes the costs of interest during construction,” the study said. “This suggests that other duration-related issues such as licensing, regulatory delays or back-fit requirements are a significant contributor to the rising OCC trend.”
This would suggest that the Three Mile Island accident had a significant and unprecedented effect on the U.S. nuclear industry as far as OCC is concerned.
France experienced a rise in OCC, but it was minuscule compared with the changes observed in the U.S. nuclear power industry. Some have suggested rising labor costs, the adaptation of advanced technology due to increased regulation and increased complexity as a result of larger reactors were factors that contributed to higher costs.
It’s also important to note that the Chernobyl accident in 1986 caused a small, but noticeable, increase in costs and “a steady increase in construction duration,” but the French nuclear power construction cost and duration trends were not affected as much as the U.S. trends after the Three Mile Island accident.
Canada and Germany showed a similar pattern observed in the French trend: sharply declining costs, then relatively mild cost escalation.
As mentioned earlier, Japan, India and South Korea continued constructing nuclear power plants through the 1990s and 2000s after the U.S. and European nuclear industry halted. In Japan, nuclear costs remained stable for more than 27 years (1980-2007). In India, between 2000 and 2003, following a 10-year suspension of reactor construction, the cost was approximately 10 percent lower than it was at the beginning of the suspension.
South Korea paints an entirely different picture. Since constructing its first reactor in 1971, costs fell by 50 percent, “or an annual rate of decline of 2 percent for the entire Korean nuclear construction history.”
After analyzing the seven countries, Lovering, Yip and Nordhaus concluded the following:
“The variations in trends show that the pioneering experiences of the U.S. or even France are not necessarily the best or most relevant examples of nuclear cost history. These results show that there is no single or intrinsic learning rate that we should expect for nuclear power technology, nor an expected cost trend. How costs evolve over time appears to be dependent on different regional, historical and institutional factors at play.”
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