Nuclear - Energy Policy Analysis: A Conceptual Framework - page 62

per 1,000 MWe generating unit, including financing costs and expected increases in construction
costs. This would represent an average cost of more than $6,700 per kilowatt. Other independent
analysts estimated construction costs as high as $10,000 per kilowatt, excluding fuel, financing,
and cost escalations during construction, which historically have increased the total price of
nuclear units by as much as 50 percent (UCS 2009b, 3). These estimates for new generating tech-
nology construction are somewhat higher than those provided by the U.S. Department of Energy
of $3,820/kW (in 2008 dollars), but even the DOE estimate for nuclear plants is higher than for
any other energy technology except fuel cells, central station photovoltaics, solar thermal, and
offshore wind generation (USEIA 2010b, Table 8.2). Consequently, new nuclear generating units
would be the most expensive nuclear units ever built. Without government subsidies and loan
guarantees, it seems unlikely such costly investments would ever be made by profit-conscious
electric utility managers.
Costs of Uranium Fuel
Compared to the capital costs of constructing new nuclear electric generating units, fuel costs are
relatively low. U.S. consumption of uranium was about 54.8 million pounds of U 3 O 8 equivalent
in 2011. Calculating the weighted-average price for the total purchased at $55.64 per pound, the
fuel cost of uranium utilization in the United States was about $3.05 billion in 2011 (USEIA
2012c, Table S1a, S1b).
Decommissioning Costs
The costs of decommissioning nuclear power plants are probably underestimated for most facilities
that have not yet been decommissioned. Experience with a small number of sites that have been
decommissioned indicates that such costs may be higher than the capital cost to build the same
plants and may exceed funds set aside for decommissioning. For example, decommissioning costs
for the 900 MWe Maine Yankee nuclear generating unit in Maine were about $377.6 million, or
163 percent of its $231 million construction cost, and decommissioning costs for the 50 MWe Big
Rock Point nuclear unit in Michigan were about $290 million, or a little over ten times its $27.7
million construction cost. Moreover, decommissioning costs for such plants have not yet been
completely paid, as spent fuel and high-level radioactive waste continues to be stored at these
locations, increasing costs for monitoring and security while awaiting transfer of the waste to a
permanent high-level radioactive waste repository that has not yet been built.
Experience has shown that the useful lifetime of many nuclear generating plants was often
overestimated. Construction decisions for most plants were based on cost-benefit analysis anticipat-
ing a useful design life of thirty to forty years, but the average years of operation for twenty-two
commercial reactors decommissioned as of January 2008 was only about 16.2 years (calculated
from USNRC 2010). This means that nuclear generating units decommissioned to date were on
average about twice as expensive over their useful lifetimes as was expected at the time invest-
ment decisions were made.
A frequent cause of decommissioning nuclear reactors, especially pressurized water reac-
tors, before the end of their design lifetime has been embrittlement of welded steel in steam
generator tubes and the vessel surrounding the reactor core. Embrittlement is the result of
years of bombardment by neutrons, the subatomic particles that sustain a nuclear reaction,
which may produce microscopic hairline cracks. It can often be cured by annealing (a process
that tempers and strengthens the metal), but if embrittlement is widespread in older reactors,