The economic future of nuclear power in competitive markets

Nuclear Power and Public Policy

Nuclear power does offer clear advantages when it comes to public policy considerations about energy supply security and diversification, health and environmental protection (external costs) including significant greenhouse gas mitigation benefits.

Supply Security: Because of nuclear power’s low-volume fuel requirements per unit of electricity, nuclear power offers a definite level of energy security, which may be especially important in countries with high degree of energy import dependence.

External costs:Nuclear power generates minimal air pollution, making it an attractive alternative to mitigate the adverse health and environmental impacts caused by particulates, acid rain precursors or greenhouse gas (GHG) emissions. The ability to offset external cost advantages against the higher capital costs of nuclear power will depend on the willingness of environmental regulators to force the internalisation of the externalities associated with fossil fuel combustion.

Reduction of Greenhouse Gas Emissions: In the short-to-medium term, there is no economic alternative to nuclear power as a GHG mitigation option for baseload electricity generation.

Note that each of these "benefits" of nuclear power is defined by government policy, and so their importance will vary as policies change. Where governments still choose technologies, nuclear might be chosen to satisfy any number of public policy objectives.

Closing

So what is the economic future of nuclear power? Existing plants, where efficient, can be expected to thrive. Few new plants are being built and fewer can be expected unless the nuclear industry initiates clear and strong measures to change dramatically, and policy makers are ready to drastically change its regulatory context. Key to such changes will be a strong focus on cost-effective safety, on liabilities management and on innovative and competitive nuclear technologies. Finally, policy makers will have to address the question of waste disposal, and be willing to let the industry demonstrate the availability of appropriate and sufficient technology to manage nuclear waste. Such a demonstration is essential to establishing informed public perceptions about the safety of nuclear waste disposal as an industrial process.

The contents of this paper reflect the views of the authors and not the views of the International Atomic Energy Agency (IAEA) or its Member States.