Economics of electricity production and competitiveness of nuclear energy Prof. Dr.-Ing. Alfred Voß Institute of Energy Economics and the Rational Use of Energy (IER) University of Stuttgart Forum for the future of Nuclear Energy Straßburg, 18. May 2006

Subjects, to be adressed Comparative analysis of electricity generation costs based on a common cost calculation model, i.e. levelised lifetime cost Power generation economics in liberalised, competitive electricity markets

 Reference Methodology The constant-money levelised lifetime cost method was adopted to calculate the generation cost It calculates the present value of all expenditures over the life of a plant, covering the capital, O&M and fuel cost expenditures under the assumption of a given rate of return on capital The levelised lifetime cost of electricity per kWh is equivalent the constant (real) price of electricity needed to cover both operating and capital costs of the plant Marker for economic attractiveness

Reference Technologies

Range of specific overnight construction costs (IEA/NEA Study – European Countries) Reference technologies €/KW e

Fuel price assumptions FP II Constant fuel prices of the 2005 level FP I

Levelised costs of generated electricity at 5 and 10% discount rate FP I

Levelised costs of generated electricity at 5 and 10% discount rate FP I

Levelised costs of nuclear and fossil generated electricity at 7,5% discount rate FP I

Levelised costs of nuclear and fossil generated electricity at 7,5% discount rate FP II FP I

Impact of a carbon value on levelised generation costs at 7,5% discount rate FP I

Impact of a carbon value on levelised generation costs at 7,5% discount rate FP I

Impact of a carbon value on levelised generation costs at 7,5% discount rate FP I

Levelised costs of generated electricity by various full-load hours per year FP I

Power generation investment risks in liberalised markets Electricity price and volume risks Fuel price risks Political and regulatory risks and uncertainties due to market interventions due to subsidies, taxes, safety regulations or emission controls Uncertainty about controls on future carbon dioxide emissions

Uncertain and volatile electricity prices – are there higher risks for capital intensive technologies? Variable Costs

Profit Margin on Investment

Internal Rate of Return on Investment

Thank you very much for your attention!