Nuclear Economics

💡

Once built, nuclear has the lowest variable cost of any dispatchable power source - often $15–25/MWh, cheaper than any fuel-burning plant.

⛽

Uranium fuel accounts for only ~5% of nuclear's total cost. A doubling of uranium prices would raise nuclear LCOE by just 5% - far less sensitive than gas plants to fuel price spikes.

🇨🇳

China builds nuclear reactors at roughly 40–60% lower cost than Western countries. Serial construction (standardised design, experienced workforce) is the primary reason.

⏱️

Construction time is the biggest nuclear cost driver. French reactors built in the 1970s–80s took 5–6 years. Vogtle Unit 3 took 14 years. Every extra year adds billions in interest.

♻️

Existing nuclear plants, once built, often have the lowest LCOE of any power source ($20–35/MWh) - making lifetime extensions economically compelling.

🌍

The social cost of carbon - if applied to fossil fuels - would make nuclear highly competitive even at current high new-build costs, as nuclear emits only 12g CO₂/kWh lifecycle.

⚡ Levelised Cost of Electricity (LCOE) $/MWh - 2024 estimates

☢️ Nuclear (new build)

80–180

⚫ Coal (new)

65–152

🌊 Offshore Wind (new)

84–110

💧 Hydro (new)

20–85

🔥 Gas CCGT (new)

41–74

☀️ Solar PV utility (new)

24–58

🌬️ Onshore Wind (new)

26–54

🏭 Nuclear (existing)

20–35

$0$50$100$150+/MWh

Sources: IEA Projected Costs of Generating Electricity 2020, Lazard LCOE 2023, BloombergNEF. Ranges reflect different countries and financing conditions. Note: Nuclear "existing" = operating plants with capital costs already paid.

🧩 Where Does The Cost Go? Typical new nuclear cost breakdown

60%

20%

12%

Capital (overnight construction) - 60%

Building the plant - the biggest cost driver. New nuclear is capital-intensive but has very long operating life (60+ years).

Financing (interest) - 20%

Interest on construction loans during the long build period. Lower in countries with state financing (South Korea, China).

Operations & Maintenance - 12%

Running costs: staffing, maintenance, regulatory compliance. Nuclear has high fixed O&M but very low variable costs.

Fuel costs - 5%

Uranium fuel is a tiny fraction of nuclear cost - unlike gas or coal. A 1% rise in uranium price changes nuclear LCOE by ~0.1%.

Decommissioning & waste - 3%

End-of-life costs. Usually funded by a levy on electricity sales during operation. Often underestimated historically.

🏗️ Real-World Build Costs

PlantCapacityTotal CostCost/kWNotes

🇺🇸 Vogtle 3&4 (USA) 2,234 MWe $35 billion $15,700/kW Major overruns - originally budgeted $14B. First new US nuclear in 30 years.

🇫🇷 Flamanville 3 (France) 1,630 MWe €13.2 billion €8,100/kW 12 years late, costs tripled. EPR design issues. First European EPR.

🇬🇧 Hinkley Point C (UK) 3,200 MWe £35+ billion est. ~£11,000/kW Still under construction. Strike price of £92.50/MWh (2012 prices) guaranteed.

🇦🇪 Barakah 1-4 (UAE) 5,600 MWe $24.4 billion $4,357/kW Korean APR-1400 delivered on time and near budget. Shows importance of serial construction.

🇨🇳 Tianwan 5&6 (China) 2,170 MWe ~$7 billion est. ~$3,200/kW China builds reactors at 40-60% lower cost than Western countries - serial construction key.

🇫🇮 Olkiluoto 3 (Finland) 1,600 MWe €11 billion €6,875/kW 12 years late, costs trebled. But now generating more than any other single reactor in Europe.

Note: Costs in nominal currency at time of completion. Comparison across countries is complex due to different labour costs, regulatory environments, and interest rates.

💰 How Countries Fund Nuclear

Regulated Asset Base (RAB)

Investors recoup costs during construction through consumer electricity bills. Reduces financing costs significantly. Used for Sizewell C.

✓ Lower cost of capital

✗ Consumer bears construction risk

Contract for Difference (CfD)

UK/EU

Government guarantees a "strike price" for electricity over 35 years. If market price is lower, government pays the difference; if higher, developer pays back.

✓ Revenue certainty

✗ Long-term subsidy commitment

State utility financing

France, China, Russia

State-owned utilities fund construction with cheap government-backed debt. Historically France's EDF model.

✓ Lowest financing costs

✗ Risk on public balance sheet

IPP + PPA

USA (Vogtle)

Independent power producer builds the plant and sells electricity under long-term Power Purchase Agreements to utilities.

✓ Private capital

✗ Highest financing costs - capital-intensive

Export credit / turnkey

Russia (Rosatom), South Korea

Exporter provides financing (often government-backed loans) alongside reactor technology. Rosatom has 30+ reactors on order globally.

✓ Package deal - technology + finance

✗ Geopolitical dependency on exporter

💡 The Core Economic Challenge

Nuclear's economic paradox: it has high capital cost but very low running cost - the opposite of gas plants, which are cheap to build but expensive to fuel. This makes nuclear LCOE highly sensitive to financing conditions (interest rates, construction time) but nearly immune to fuel price spikes. The countries that build nuclear most cheaply - South Korea, China, UAE - share one thing: serial construction. Building the same standardised design repeatedly, with an experienced workforce, dramatically cuts costs. Western countries lost this capability after decades without new builds. Restoring it is the central economic challenge of the nuclear renaissance.