It's the system costs, stupid
Wind and solar supporters have a nasty habit of pretending that their preferred energy sources are the “cheapest forms of energy.” The problem, of course, is that they use unrealistic Levelized Cost of Energy (LCOE) estimates—see Cooking the Books for wind and solar—and they conveniently forget to mention the large system costs needed to reliably serve electricity demand using these unreliable energy sources.
That’s why, despite its high up-front capital costs, powering an electric grid with nuclear power is cheaper than using wind, solar, and battery storage. //
Before we jump into the benefits of nuclear power, it’s important for our readers to understand that building a fleet of nuclear power plants will be very expensive, which will increase costs for ratepayers. A forced energy transition of any kind is going to increase costs inherently, and nuclear is no different.
If your main priority is reliable, low-cost power, keeping the existing coal and natural gas plants online and building new natural gas plants as needed will be the more affordable option. If decarbonizing the electric grid is your main priority, building new nuclear power plants will deliver a superior value to electricity customers, with reliable service at a lower cost than a grid powered largely by wind, solar, and battery storage.
Our definition of a reliable generator is dispatchability, meaning the unit can be turned on or off as needed.
Because nuclear plants are dispatchable, they don’t require backup generators or batteries like wind and solar facilities, and there is no need to overbuild and curtail the plants to ensure there is enough electricity available when the wind isn’t blowing very hard, or the sun isn’t shining.
In our 2022 report on the cost of Minnesota’s 100 percent carbon-free electricity mandate by 2040, we found meeting Minnesota’s electricity demand would require 100,455 megawatts (MW) of installed capacity under the renewable scenario. In contrast, this same job could be done by just 16,379 MW of new and existing nuclear plants, some battery storage, and retrofitting a North Dakota coal plant with carbon capture and storage technology. //
Nuclear plants are initially licensed for 40 years and can apply for 20-year extensions thereafter. For example, in its Integrated Resource Plan, Arizona Public Service assumes a 40-year book life for nuclear power plants. However, nuclear plants can last twice as long as this estimate, and a growing number of nuclear plants have applied to operate for 80 years, allowing them to generate very cheap electricity for decades.
The main cost for a nuclear plant is paying down the upfront capital cost of the plant. In a way, building a nuclear plant is a lot like taking out a big mortgage on a house. As you pay it off, it becomes cheaper to live there. When the mortgage is fully paid, the house is a very low-cost place to live. It’s the same with a power plant. //
FERC Form 1 data consistently show existing nuclear plants generating electricity for $20.15 per MWh in Virginia, $21.71 per MWh in North Carolina, $37 per MWh in Minnesota, and $26.19 per MWh nationwide. Even without accounting for the system cost of incorporating wind and solar onto the system, the existing nuclear fleet in America is less expensive than existing wind and solar facilities, which cost $52 per MWh and $73 per MWh, respectively, according to FERC Form 1 data.
