Diablo Canyon nuclear power plant in California.The Myth:  Nuclear power is more expensive than other forms of electricity.

The Evidence:  The answer depends on what you define as “cost.” Operating cost refers to the variable costs associated with the day-to-day running of a power plant, such as fuel costs and operation and maintenance costs.  Nuclear power has lower operating costs—about 1.8 cents per kilowatt-hour—than fossil fuel power plants in the U.S.  Day-to-day marginal costs are primarily fuel costs. A large share of nuclear power operating costs come from operations and maintenance costs that do not vary much with output. Because nuclear power’s marginal costs are lower than coal’s marginal costs, nuclear power plants tend to use their full output capacity before coal plants. This gives nuclear power an advantage in base load operations and results in a higher capacity factor (close to 90%) compared to coal (about 70-75%%).

Nuclear power’s low and predictable operating costs have (1)  encouraged nuclear plant owners to seek operating license extensions for many reactors, and (2) increased requests for power “uprates”: the maximum power level at which a commercial nuclear power plant may operate.

Investment in new power generation depends on levelized cost: the present value of the total cost of building and operating a generating plant over its economic life, converted to equal annual payments. Costs are levelized in real dollars (i.e., adjusted to remove the impact of inflation).  Nuclear power has higher levelized costs than coal and combined cycle gas power plants in the U.S.,  due in part to its very high initial capital cost. This is a principal reason why no new nuclear plants have been ordered in the U.S. since the mid-1970s.  In turn, with no new plants being built we have no idea what new plants will cost, if and when that happens  Nuclear power also bears additional costs associated with the uncertainty surrounding safety risks, public support, the ultimate costs of waste disposal, and the magnitude of its connection with weapons proliferation.

Not included in the discussion thus far are costs associated with environmental externalities and subsidies, which are far more difficult to assess.  Nuclear power has relatively low atmospheric emissions, including greenhouse gases, but very large government subsidies such as insurance indemnification.  Fossil fuels have much larger environmental impacts on the atmosphere, and also benefit from government handouts.  Wind power is relatively benign from an environmental perspective, but it also receives numerous state and federal subsidies in the U.S., western Europe and India.

The Evidence:  False in the case of operating costs.  True in the case of levelized cost when compared to fossil fuels.