A joint study by the OECD Nuclear Energy Agency (NEA) and the International Energy Agency (IEA) concluded that the costs of nuclear energy "remain in line" with those of other baseload technologies. The report, ‘Projected Costs of Generating Electricity’, estimates the average levelised cost of electricity (LCOE) for a NPP to be comparable to a coal plant and lower than a natural gas-fired power station. LCOE is the long-term price at which the electricity produced by a nuclear station will have to be sold for the investor to cover all costs.

The report uses data for 181 plants in 22 countries, including three non-OECD countries (Brazil, China and South Africa), including natural gas, coal, nuclear, solar voltaic, onshore and offshore wind, hydro, geothermal, biomass and combined heat and power plants. It calculates the LCOE using discount rates of 3%, 7% and 10%, based on a combination of generic, country-specific and technology-specific assumptions agreed by a steering expert group to calculate costs at the plant level.

For baseload generation nuclear was the lowest cost option for all countries at a 3% discount rate. However, the higher capital cost of NPPs is reflected in increasing projected costs for nuclear at the 7% and 10% discount rates. The highest LCOE for a nuclear power station is in Hungary, where it is $69.68 per megawatt-hour (MWh) and the lowest is in South Korea, where it is $22.20 per MWh. The average is estimated at around $82 per MWh.

The LCOE from nuclear, at the 3% discount rate, ranges from $29 per MWh (Korea) to $64 per MWh (UK). At the 7% discount rate the range increases to $40-101 per MWh and at 10% to 51-136 per MWh. Assuming a 10% discount rate, the report says the average LCOE for a nuclear station increased from about $90 per MWh in 2010 to $115 per MWh in 2015.

The report says a large number of existing nuclear stations are reaching their initial design lifetimes with extensive refurbishments, safety upgrades and lifetime extension programmes expected within the next 20 years. In its reference scenario, the report estimates that the LCOE of a nuclear station which has undergone a lifetime extension programme is between $23 and $26 per MWh.

Looking at the future prospects of energy technologies, the report says that by 2030 the focus will fall on small modular reactors (SMRs) and prototypes of Generation IV reactors. "SMRs can target niche markets and countries with small electricity grids that require baseload power," the report says.

In the best-case scenario, SMRs are expected to have total electricity generation cost equal to large NPPs if all competitive advantages of SMRs are realised. Those advantages include serial production, optimised supply chains and lower up-front financing costs. The report suggests that to open up the market for SMRs, governments and industry should work together to identify target markets and accelerate the deployment of SMR prototypes in those markets.

For Generation IV technologies, the report calls on governments to assess the long-term benefits of developing such designs. Public-private partnerships should be put in place between governments and industry to develop demonstration projects for the application of co-generation (power and heat) technology in nuclear stations.

The cost drivers of the different technologies vary across the market and technology and the report urges caution over drawing broad lessons from its analysis. "As such, there is no single technology that can be said to be the cheapest under all circumstances." It concludes that "system costs, market structure, policy environment and resource endowment all continue to play an important role in determining the final levelised cost of any given investment".