There are many uncertainties about the economics of future nuclear generation. These are aggravated when nuclear is compared with other sources of power, because these are subject to their own uncertainties, such as fuel price rises and political manipulation such as OPEC and recent Russian gas manoeuvres. The cost of building nuclear power stations was initially very high but some countries, especially France and Korea, are now developing standardised designs and blueprints which have reduced costs dramatically. Another problem has been the long lead time from concept to going to grid, which has lead to high discount rates because of uncertainty. Given the long lead time, and the length of time before the back end process is initiated the discount rate is crucial to the economics of nuclear power.
Many reports have been released in the last three years assessing power generation costs. These show a wide range of estimates of the cost of nuclear generation and alternative sources of power.
This emphasises the importance of externalities, the costs of benefits outside the transaction itself. Nuclear power is a base load generating resource, unlike most renewables, its fuel source, and uranium is plentiful and secure compared with imported fossil fuels, and it is free of GHG emissions.
There is a major paradox in attitudes to nuclear power. The aspect of the nuclear fuel cycle which is both the most and least appealing from the standard environmental viewpoint is that the uranium raw material is retained in one form or another throughout. This ensures that unlike electricity generated by the burning of fossil fuels, the nuclear fuel cycle contribution to the greenhouse effect, ozone depletion and acid rain is minimal. The downside is that this leaves residual materials which the general public, but not the industry, perceive as a significant problem.
The front end of the nuclear cycle encompasses uranium mining, conversion, enrichment and fuel fabrication.
The back end of the nuclear fuel cycle, mostly spent fuel rods, often contains fission products that emit beta and gamma radiation. When removed, spent fuel is hot and radioactive and it is stored under water to remove the heat and to provide shielding from radiation, pending the next step. This may be reprocessing in the case of countries such as UK, France and Japan, which have chosen to close the fuel cycle, or it may be final disposal in the case of countries such as US, Canada and Sweden, which have chosen the open fuel cycle.
