Nuclear's European Price Tag: €5-11 Billion/GW

Friday, 05 April 2024

Speaking to Euractiv, energy economist Professor Jacques Percebois highlighted substantial uncertainty in pricing regarding Europe’s nuclear capacity. At the time of writing, the estimated cost for an additional 50 GW ranges from €5 to €11 billion per GW.

Costs considerations include construction investment, operational expenses, and fuel, comprising the Levelised Cost of Energy (LCOE).

Investment represents about 70% of new reactor costs, with operation and fuel each accounting for 15%. Estimates vary, though, especially around decommissioning and waste management, and are influenced by external factors like inflation.

Financing can adjust the final cost by around 30%, with developers typically utilising equity, borrowing, and public subsidies.

Additionally, borrowing is predominant due to the scarcity of external private equity.

Innovative investment models, like Finland's cooperative approach for Olkiluoto 3 reactor, exist but are not widespread.

Meanwhile, key strategies being examined involve reducing loan sizes through public subsidies and leveraging support from entities like the European Investment Bank.

Expected electricity production rates and technology selection can also significantly affect operational costs. For instance, France's nuclear power cost is estimated at around €60/MWh, influenced by optimistic production potentials, compared to EDF's €75/MWh.

Serial production of small modular reactors (SMRs) could lower costs by 20 to 25%, with significant savings after the 5th reactor. However, the diverse factors contributing to cost estimates necessitate clearer funding figures, as the announced 58 GW of new capacity falls short of the 150 GW goal for 2050.