1. The cost of nuclear power plants l
The cost of nuclear power plants l? Presentation at the European Parliament event on Paks NPP June 23 8:150-11:00
Steve Thomas
Emeritus Professor of Energy Policy
PSIRU ( Business School
University of Greenwich

2. Current status
444 reactors in service, 157 retired, 64 under construction
Average age of operating reactors in 2015 was 29 years
More than half under construction in China (22), Russia (8), India (6)
Others in US (5), UAE (4), Korea (3), 2 in of Japan, Slovakia, Taiwan, Ukraine, Belarus, Pakistan, 1 in Brazil, Finland, Argentina, France
10 under construction for years (Finland (11 years), India (12-14 years), US (43 years), Slovakia (30 years), Ukraine (30 years), Taiwan(17 years)
5 with work suspended & unlikely to restart (Russia (1), Japan (2), Taiwan(2))
3 small reactors (<35MW)

3. Nuclear construction costs
Several different sources of construction cost estimates
Generic forecasts by international agencies, governments, consultants, academics, reactor vendors etc. These have almost invariably been a significant underestimate of actual costs
Project specific cost estimates before construction starts. Vast majority prove to be underestimates
Outturn costs. These have historically been the best predictor of future costs
Most countries do not publish reliable outturn costs. Most reliable costs come from USA & France. In cases where the company must report the costs, useful data is available, eg Olkiluoto & Sizewell
No reliable data from China, Russia, India
For comparison purposes, prices should be ‘overnight’, excluding interest during construction. Interest during construction could add 50% to the overnight cost

4. Generation III+ designs
Promises for Gen III+ designs, especially construction cost of $1000/kW resulted in US & UK nuclear power programmes
3 or 4 Gen III+ designs under construction, none in commercial service yet: Toshiba AP1000, Areva EPR, Rosatom AES-2006 & CGN/CNNC HPR-1000?
Not clear if HPR-1000 meets European/US standards. 3 units under construction in China but for less than a year
Cost data from earlier design generations not relevant: core-catchers & air-craft protection add significantly

5. Gen III+ experience
EPR: Flamanville (Fr) & Olkiluoto (Fi) about 3X over-budget & 6-9 years late, Taishan (Ch) 3 years late. Not clear if reactor vessels for Flamanville & Taishan strong enough to allow operation
Latest Hinkley estimate ~$8000/kW, Flamanville/Olkiluoto ~$6500/kW
AP1000: Summer (US) 3-4 years late, 35% overbudget, Vogtle (US) 3 years late, 35% overbudget, Sanmen & Haiyang (Ch) 3-4 years late, ~20% overbudget 2014
Latest Summer estimate ~$6500/kW, Vogtle ~$7300/kW
AES-2006: Novovoronezh (Ru) 4-5 years late, Leningrad (Ru) 4 years late, Ostravets (Bel) on time but 70% overbudget
How can IEA say: ‘Improvements in nuclear construction times are now making climate goals more achievable than previously thought’?

6. What is needed to finance a nuclear power plant
Two risks of concern to financiers: technology risk – plant more expensive to build and/or run than expected; market risk – income from power sales less than expected
Turnkey (fixed price) contracts are not available or not credible so vendors will not (cannot) take the technology risk
Apparently cast iron guarantees electricity consumers will pay all costs incurred covers market & technology risk. This applied for Vogtle & Summer but cost overruns are straining this promise
Technology risk: Sovereign loan guarantees to cover the borrowing. Taxpayers are bearing the risk
Market risk: Long-term contract to buy the power at a pre-determined, non- market price
Predictable terms for the cost of decommissioning and waste disposal

7. AES-2006
From 2009, Russian efforts directed at export markets offering package of equipment, construction, finance, fuel services & training
By 2015, 25 export orders claimed for AES-2006 & 8 for older designs on which work had yet to start
AES-2006: India (10), Turkey (4), Bangladesh (2), Vietnam (2), Finland (1), Hungary (2), Egypt (4)
AES-91/92: India (4), Iran (2), Jordan (2)
Projects going slower than forecast. Turkey order agreed 2010 when construction expected to start , construction not expected to start before 2017

8. AES-2006
To meet this order book, Russia will need to supply about 5 reactors per year. Most are dependent on Russia providing the finance. Does Russia have the finance & the supply chain to do this?
From Russia started building 4 reactors, from , it started 10, average 1 per year. Can it increase its supply chain capacity 5-fold?
The collapse of the oil price and international sanctions have halved the value of the Rouble & severely depleted its financial reserves
What risks are customers bearing? Bulgaria paid €550m to cancel Belene, Belarus seems to be bearing the $8bn extra costs because of the fall in value of the Rouble. Dates to repay the loans are fixed whether or not the plants are complete

9. China
China did not start building reactors in large numbers till From it started building about 8 reactors per year for China. There was a pause till 2015 following Fukushima, when 6 reactors started construction
Most of these reactors used a very old design licensed from Areva
6 modern design reactors imported to be indigenised but found to be too expensive so indigenous designs being developed
Hualong One (1180MW) developed by CNNC and CGN. Construction start in China in May CAP1400 developed by SPI but no orders
Competing in S Africa, Turkey, Argentina & Romania. Early plans to export to UK
Negligible experience outside China, serious concerns about Quality Control & regulatory rigour

10. Conclusions
World market for reactors weak & largely confined to developing countries
New generation of designs have failed to meet price promises
Areva & Toshiba are in severe difficulties & struggling to survive
Russia & China have high ambitions & promise low costs, cheap finance. Promises are unproven & designs not reviewed by experienced, transparent regulators