The Energy Technologies Institute has launched a new project that will look at potential cost reductions for nuclear power stations. The project aims to find ways in which nuclear power can become an attractive industry to investors, learning lessons from renewable industries such as offshore wind, which has demonstrated workable routes to getting costs down through research and development.
The Nuclear Cost Drivers Project hopes to study and analyse historic, contemporary and future nuclear power projects to identify those areas of NPP design, construction and operation that have the greatest influence on costs and identify credible potential cost reductions.
The project is led by CleanTech Catalyst Ltd, working with Lucid Strategy. Dr Tim Stone will act as an independent reviewer. The project will run until April 2018.
ETI analysis has demonstrated that nuclear power has a potentially significant role to play in the UK’s transition to a low carbon economy as long as it is cost competitive within the overall energy mix and there is a market need.
In the UK, the initial challenge for the nuclear new build industry is to complete the commissioning and construction of new nuclear projects in the next 10 years within acceptable norms of budget and schedule variation. The subsequent challenge will be to deliver cost reductions for follow on plants which can meet the expectations of Government, investors and consumers.
Mike Middleton, strategy manager for the ETI’s nuclear programme, commented: “There are currently no evidence led projects which can illustrate whether the costs of generating electricity from new nuclear power stations can be reduced. “The renewables industry, particularly offshore wind, is able to show a meaningful route to getting costs down though research, development and deploying at scale. “The challenge for nuclear new build in the UK is to demonstrate that it can show a credible way of delivering reduced costs. The expectation for advanced reactor technologies is that they should deliver a step reduction in costs.”
Kirsty Gogan, director, CleanTech Catalyst commented: “Current new build costs vary widely around the world (high in the United States and Europe; far lower in Japan, South Korea and China) and build rates are slow. Attracting private sector investment for nuclear projects is challenging due to the quantum of investment required, and the perceived financial and construction risk. The absolute levels of capital required (and associated cost of that capital) for a meaningful share in a new build project could have a significant impact on any company’s financial performance and credit rating. Nonetheless, once built, low operating costs and high capacity factors generate reliable income for investors, security of supply and price stability for consumers.”