The Secretary of Energy Advisory Board (SEAB) Task Force on the Future of Nuclear Power issued a draft report on September 16, 2016 calling for policy and market changes to support future deployment of nuclear power. Appointed by Energy Secretary Ernest Moniz, the Task Force was charged with developing an initiative to attain significant future deployment of nuclear technologies. The draft report finds that in order for existing and future nuclear generation to be fully cost competitive, overnight capital costs must decline, while policymakers and electricity markets must take strides to more accurately value carbon-free generation.
The Task Force reports that current overnight capital costs—the cost of building a new nuclear power plant assuming no financing costs—are estimated to be $5,000/kilowatt-electric (kWe). If overnight capital costs were reduced to $2,000/kWe, the Task Force found that the levelized cost of electricity (LCOE) for new nuclear generation should be competitive with other non-carbon-emitting generation. But the report finds that additional changes are needed if existing and future nuclear generation is to achieve full cost competitiveness, including that electricity markets must recognize the value of carbon-free electricity generation based on the social cost of carbon emissions avoided—either by charging generators for their carbon emissions, or compensating generators at $0.027 for each kilowatt-electric-hour (kWe-hr) of carbon-free electricity they generate. Finally the report highlights that current wholesale electric market rules in many parts of the U.S. make valuing base load nuclear generation difficult, including the rate structure of wholesale capacity markets and preferential dispatch for renewables.
The full SEAB will consider whether to approve the draft at its quarterly meeting on Thurday, September 22, 2016.