Few new reactors were ordered after 1986; the number coming on line from the mid-1980s little more than matched retirements. Chernobyl and electric­ity market liberalization were generally viewed as the final nails in the coffin of nuclear power. It was inconceivable for many analysts that nuclear power could survive in the absence of ‘cost plus’ pricing in a competitive market. While the number of construction starts indeed suggested an early demise of the industry, it was not lack of construction but market pressures and competition that forced it to streamline and consolidate operations. In a deregulated environment, with the rate base eliminated, revenues are based solely on the difference between a plant’s operating and fuel (or short-run marginal) costs plus the remaining debt on yet to be depreciated assets and the market price of electricity.[88] Many analysts were of the opinion that the remaining debt on nuclear power plants would make them too expensive to compete with coal — and gas-fired generation. Economic rationale sug­gests, however, that an existing plant continues operating as long as reve­nues cover marginal operating cost irrespective of any debt as even small margins above short-run costs contribute to debt repayment and profits.

For a capital-intensive technology in a competitive market such as nuclear power, it is vital to put the assets to productive, i. e. revenue, generating use. The more kWh a plant generates, the lower its total production costs per kWh as fixed costs are distributed over more kWh. Until the early 1990s, the load factor (the percentage of time a plant generates full capacity elec­tricity to the grid) of the global fleet of nuclear power plants hovered around 65%. Competition forced nuclear operators to condense mainte­nance outages, reduce overhead costs through consolidation of different plants, and implement numerous other management measures. By 2005 the global load factor reached more than 80% (see Fig. 15.2) which allowed continued growth in nuclear generation, despite aggregate capacity expand­ing only 14% over the period (see Figs 15.3 and 15.4). The vastly improved utilization of existing capacities worldwide corresponds to a virtual con­struction of more than 30 1000 MW nuclear power plants.

Variable operating costs, essentially fuel costs, are a comparative advan­tage of nuclear power, especially in competitive markets and when plants are fully depreciated, thus making licence extension highly profitable for many nuclear operators. The reason is straightforward: it costs considerably more to build any type of new generation — fossil, nuclear or renewable — than to invest in the maintenance/replacement of some nuclear components

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and run a nuclear plant for an additional 20 years.[89] These investments usually also result in improved operating safety, power uprates and/or higher output (e. g. new turbines, more efficient steam generators), all of which further improve overall economics.

Another reason for the attractiveness of licence extension is public acceptance and greatly reduced licensing procedures compared with new build. As regards public acceptance, communities hosting nuclear power plants have had a positive decade-long experience living with the technol­ogy, i. e., a better comprehension of the associated benefits exceeding the risks.