The Economics of the Nuclear Fuel Cycle ,1994

EXECUTIVE SUMMARY OVERVIEW

The results of this study show that a 40 per cent real terms reduction has occurred in projected fuel cycle costs for a large PWR since the previous OECD/NEA study undertaken in the early 1980s. This reduction is due to major reductions in the projected prices for the uranium and enrichment components and reductions in the prices for back-end services. Improved fuel and reactor performance contribute further to the reduction. The results indicate that there is a small cost difference between the prompt reprocessing option compared with the long-term storage and direct disposal option. Based on best estimate data, the reference cases show a difference of approximately 10 per cent of the total nuclear fuel cycle cost, the cost of the direct disposal option being lower. In light of the underlying cost uncertainties, this small cost difference between
the reprocessing and direct disposal options is considered to be insignificant, and in any event, represents a negligible difference in overall generating cost terms. It is likely that considerations of national energy strategy including reactor type, environmental impact, balance of payments and public acceptability will play a more important role in deciding a fuel cycle policy than the small economic difference identified.
A contemporary OECD/NEA study on the projected costs of generating electricity shows that for nuclear stations the proportion of the total generating cost taken up by the fuel component is, typically, 15-25 per cent at 5 per cent real discount rate. This is in contrast to fossil-fuelled generation where coal represents, typically, 40-60 per cent of the total cost and, typically, 70-80 per cent in the case of gas. Clearly, nuclear generation costs are far less sensitive to fuel price volatility compared with the fossil-fuelled alternatives.