The costs of producing electricity from nuclear power plants in the U.S. are declining at a time when some of these facilities are being shuttered and only two new ones are in the pipeline. A closer look at these trends by the Nuclear Energy Institute reveals economic pressures facing nuclear plants and the impacts of closing them prematurely. The assessment considers total generating costs encompassing capital, fuel and operating costs.

U.S. nuclear power stations generated electricity for less than $32 per MWh in 2018, about 7.1% less than in 2017 and almost 25% below the 2012 peak costs. Lower operational and capital expenditures account for this reduction. Fuel costs, which comprise 20% of total generating cost, increased during 2009 to 2013 due to rising uranium prices. The effect of the increase persists after the price hike since the fuel is purchased in advance of refueling and resides in the reactor for four to six years. Shorter fuel cycle purchase cycles are now in effect due to a recent drop in uranium prices.

Nuclear industry operations cost, 2006-2018. Source: Electric Utility Cost GroupNuclear industry operations cost, 2006-2018. Source: Electric Utility Cost Group

The 98 operating nuclear power reactors in the U.S. have achieved an average capacity factor of over 90% since 2001 and accounted for about 20% of the total electricity generated. Despite this performance record, nine reactors have been permanently shut down since 2013 and five more are scheduled for retirement by 2015. Closures are attributed to safety and reliability concerns at some facilities as well as low natural gas prices which suppress electricity prices in wholesale power markets.

How will prospective generating capacity shortfalls be remedied? Replacement capacity will likely be provided by lower cost but less efficient combined cycle gas-fired systems.

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