Costs for New Nuclear Reactors

A week or two ago, FuturePundit sparked a long string of comments regarding the cost of new nuclear reactors in the United States. The blogger found it difficult to find good information on the projected costs of new nuclear units in this country, and as a result had difficulty accurately comparing future nuclear electric power costs to fossil fuel electric power costs.

To ensure a common basis for comparison, the capital costs of electric generating technologies are expressed in dollars per kilowatt of capacity. The capital costs used in such comparisons are so-called “overnight” capital costs—i.e., they assume the plant is built “overnight” and thus do not include interest charges and financing costs.

In order to provide competitive electricity, the nuclear industry has determined that the next generation of nuclear reactors must have overnight capital costs in the range of $1,000 – $1,200 per kilowatt of generating capacity for the so called “Nth-of-a-kind” nuclear plant. Nth-of-a-kind capital costs are achieved after first-time design and engineering costs have been recovered and as industry incorporates improvements in construction techniques and construction management gained during construction of the first few units.

The industry’s capital cost targets have a sound basis in rigorous estimates performed by reactor vendors. Westinghouse has invested millions of dollars evaluating its estimates for the AP1000 Advanced Light Water Reactor (ALWR), and their estimates have been verified and endorsed by the Electric Power Research Institute (EPRI), multiple utilities, and several international architect-engineers, including The Lungmen (Dragon Gate) nuclear projectin Taiwan.

Areva’s European Pressurized Water Reactor, which is currently under construction in Olkiluoto, Finland, is anticipated to be completed within 48 months; similar schedules are believed possible in the United States. The US nuclear industry is currently in the process of solidifying and streamlining the process through which new plants will be built, via early site-permitting and a combined operating and licensing procedure that will avoid delays such as those experienced by the first generation of US plants.

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