Nuclear costs less than coal

29 January 2001

For the first time in a decade, nuclear power production costs in the USA dropped below those of coal in 1999, according to data collected by the Utility Data Institute from the US Federal Energy Regulatory Commission.

Production costs at US nuclear plants averaged 1.83 cents per kWh in 1999, the last year for which full data was available. This compared with 2.07 cents/kWh for coal-fired plants, 3.18 cents/kWh for oil-fired plants, and 3.52 cents/ kWh for natural gas plants.

“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 USA needs a diverse energy portfolio that relies in no small part on nuclear energy,” said Marvin Fertel, senior vice president at the Nuclear Energy Institute.

Average production costs at nuclear plants have not been lower than those for coal plants since the mid 1980s, when safety improvements initiated industrywide caused the nuclear industry to lose the production cost advantage that it had held for years, Fertel said.

Fertel noted that production costs do not represent the complete cost of electricity at nuclear power plants. However, low production costs position them to thrive in a competitive electricity marketpiece even after capital costs, property taxes and other expenses are added, he said.

“Assuming electricity markets average between 2.5 and 3 cents per kWh on a total cost basis, US nuclear plants are very competitive,” Fertel said.

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