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BUSINESS OVERVIEW
06
6.1 Markets for nuclear power and renewable energies
GAS PRICE SCENARIOS
Europe
USA
Japan
0
2
4
6
8
10
12
14
16
2015
2030
2020
2040
$
2015
/ MBtu
Source:WEO 2016.
CARBON PRICE SCENARIOS
China
EU28 + South Korea
South Africa
0
10
20
30
40
50
60
$
2015
/ ton
2015*
2030
2020
2040
* For EU28.
Source:WEO 2016.
A long-term view of the energy sector shows that nuclear power is a competitive
source of electricity, offering stable and predictable costs.
The data and results of the latest assessment of nuclear power generating costs
performed jointly by the International Energy Agency and the Nuclear Energy
Agency of the OECD entitled
Projected Costs of Generating Electricity
(2015 edition)
shows varying levels of competitiveness of new nuclear projects, depending on
the region:
p
in China, new nuclear projects are clearly competitive;
p
in Europe, the total cost of new nuclear projects is comparable to that of other
baseload electricity generation technologies (gas, coal);
p
in the United States, the prices for fossil fuels and/or carbon would have to be
high to restore the competitiveness of new nuclear projects.
The amount of capital expenditure (CAPEX) required for new nuclear units is very
high, representing several billion dollars, and accounts for 60% or more of the
cost of the kilowatt-hour. Equipment costs vary as a function of their location, as
do those of labor. Such construction requires special financing, part capital and
part debt. Added to the high cost of CAPEX are interest during construction and
provisions for contingencies. The total cost is therefore sensitive to the interest rate
contracted for the debt.
For operating reactors, decisions to extend their operating period are highly
dependent on market conditions and demand forecasts, in addition to social and
political factors.
In the United States, the Nuclear Regulatory Commission has granted permission
to extend the operating life of 83 units up to 60 years. US utilities predict that fuel
and maintenance costs will go down in the coming years to cope with the reduced
market price for electricity. In fact, reactors operating in deregulated markets are
more at risk than those that operate in regulated markets. In 2013, five reactors had
already shut down in the United States due to market conditions (two in California,
two in Florida and one in Wisconsin), and a dozen others are threatened with
shutdown in the short term. Five reactor uprating projects have been cancelled.
The State of New York, however, decided to grant financial support to nuclear
power production through subsidies over a period of twelve years (six times two
years) in order to meet its reduction commitments. This will avoid the shutdown
of a few units. A similar plan is in progress in Illinois, and other states could adopt
the same approach.
In Sweden, due to the relatively low market price of electricity and despite the
recent exemption of the tax on nuclear power for the operator, 4 of the 10 reactors
will be closed by 2020.
Nuclear power improves national security of electricity
supply
Another major advantage of nuclear-generated electricity lies in the security of
supply it provides. Unlike hydrocarbon reserves, which are concentrated in certain
regions, uranium resources are well distributed around the world. The principal
proven uranium resources are located in Australia (29%), in North America (15%),
in Africa (18%), in China and Mongolia (7%), in Kazakhstan (13%) and in Russia
(9%), with the remaining 4% found in Eurasia (
source: Uranium 2016: Production
and Demand
,
IAEA
©
OECD 2016
).
With the latest generations of reactors, nuclear power offers
enhanced safety and operating performance
AREVA’s line of reactors offers a range of capacities, from1,100MWe to 1,650MWe,
and of technologies. These reactors meet the most recent requirements in terms of:
p
nuclear safety: designs that drastically reduce the possibility of a serious accident
and ensure that there would be no offsite environmental consequences by
maintaining containment integrity (corium catcher to confine the molten core,
prevention of a hydrogen explosion or steam inside the containment building,
ability to withstand a large commercial aircraft crash), as confirmed by the safety
regulators’ certification and by the necessary measures to ensure continuity of
cooling;
48
2016 AREVA
REFERENCE DOCUMENT