Globally, new nuclear power stations are becoming one of the lowest cost sources of energy

Figure 1: Global LCOE from IEA Projected Costs of Generating Electricity, 2015 Edition

I was skeptical when I first saw the nuclear data (encompassing 11 new nuclear power stations). Being a joint venture between the IEA and the NEI, I wanted to check for pronuclear bias. And of course, any projection into the future is suspect but this one only went out to 2020, which is just three years away. So, I went looking for verification. I crosschecked the above values for the energy sources listed with those found by other sources, such as the EIA (not to be confused with the IEA) and found that they were reasonably consistent.

I then crosschecked the LCOE values for other countries from different sources and found them to also be similar in value.

Turns out that the cost to build nuclear power varies greatly from country to country. But when you look at the global range, average, and median LCOE (levelized cost of energy) for the new nuclear power stations built in the last five or so years, they're amazingly competitive. Hydro and coal are still shown to be the cheapest source at the 7% discount rate shown in Figure 1, but because hydro can't, and in my opinion, shouldn't scale up appreciably in the last remaining river ecosystems in the last biodiverse regions of the planet, I'm hoping its low cost does not lead to more of it. The study assumed a $30/tonne carbon penalty which makes coal look more expensive than it actually is ...because there is no global $30/tonne carbon penalty. The study also provided results for 3%, 5%, and 10% discount rates. 

Case in point; a South Korean company will bring on line a 1,400 MW reactor, Barakah 1, (the first of the four being built in series for the United Arab Emirates) this year after starting construction in July of 2012. All four are ahead of schedule for completion by 2020, which is an average of one nuclear reactor every two years. Two years is the same time frame used by Lazards to calculate the LCOE (levelized cost of energy) for wind and solar. The LCOE for these Korean reactors being built in the UAE is in the lower portion of the nuclear range in Figure 1.

One of the main costs of nuclear is the interest being paid on loans while it is being built (number of years without any income to start paying off debt). All else being equal, the faster you can build one, the cheaper it is. South Korea is proof that nuclear power stations can be built very rapidly and cost effectively once a company has acquired the necessary level of  engineering and manufacturing expertise (along with its suppliers).

From an article in The Economist regarding the Barakah nuclear power station:

CleanTechnica—Does Solar and Wind Really Crush Coal and Nuclear, Promote National Energy Freedom (aka Energy Independence), Improve the Economy?

Although solar and wind will be a major part of future low carbon energy grids, they have their limits. If that were not true, why would we bother with both when we could just pick one or the other? Future low carbon energy grids will be a mix of nuclear, wind, solar, hydro, biomass, etc, with just enough natural gas to stitch the various sources together.

Zachary Shahan begins his article with screenshots of the Lazards 10.0 LCOE study with two vertical lines drawn on it in an attempt to demonstrate that wind and solar are “typically cheaper than new coal, natural gas, or nuclear power plants.”

If by typical, he means cheaper regardless of where in the country they might be installed, he’s wrong.

If he meant cheaper only in the sunniest and windiest of places, then obviously, they will not always be cheaper than other energy sources. And even if they were the cheapest regardless of where they are installed, a grid using them would still require several other types of energy sources, more expensive or not, to provide the lowest overall cost to consumers. Be it the mother board in your computer or an electrical grid, some components will cost more than others to provide the lowest overall cost of the final product.

I created Figure 1 below to explain why he is wrong. Hydro, wind, and solar are natural resources and they are not equally plentiful everywhere. Lazards states that the solar prices are only for areas of high solar insolence (the Southwest) and in the case of wind, only where it blows hard enough to use 35% to 50% of rated capactiy (windy places) and that the prices don’t include things like extra transmission lines. Read the disclaimer at the top of Figure 1.

Figure 1: Explanation of the limits of the Lazards LCOE chart.

The author presents (largely incorrect) messages for “anyone wanting a better US economy …anyone wanting national energy freedom (aka energy independence), anyone wanting to advance the most cost-effective choices for electricity generation, and anyone wanting to make logical energy decisions ...[to] share with others.”

I would advise anyone reading that article to think twice before sharing it with others for the following reasons: