NCPA - National Center for Policy Analysis

Economics Of Nuclear Power

June 19, 2001

There has been considerable talk recently about once again building nuclear reactors to help satisfy growing power demand across the U.S. But that will require meeting certain economic conditions -- as well as resolving the question of where to store spent fuel.

  • Experts say the industry needs plants that are far cheaper to build than even current optimistic estimates -- although reactor developers are confident they can eventually develop facilities that will compete with natural gas.
  • The reactors might also become economical when natural gas sells for roughly $5 per million BTUs -- about $1 over the current price range.
  • The Nuclear Energy Institute figures reactors would have to sell for no more than $1,000 per kilowatt of generating capacity -- which is substantially more expensive than natural gas plants, at $500 to $600 per kilowatt capacity, although uranium is cheap compared with the energy-equivalent amount of gas.
  • Some of the 103 reactors now in service cost more than triple the $1,000 per kilowatt amount -- but nuclear proponents say more efficient building techniques and lower interest costs could make that figure realistic.

Rejuvenating the industry will also depend upon solving the waste storage problem. The Energy Department is trying to determine whether Yucca Mountain, Nevada, is suitable for a long-term repository. It would be built to accept 77,000 tons of waste in coming years -- and store them for at least 10,000 years.

Source: Matthew L. Wald, "Handicapping Reactors by the Numbers," New York Times, June 19, 2001.

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