For investors and decision makers, it is the generating costs on a full life­cycle basis that ultimately matter. However, numerous direct and indirect factors determine these costs. Standard direct costs include investments, O&M and fuel costs. Indirect costs are overheads shared by several plants such as head office costs (billing, customer service, ancillary support ser­vices) but also external costs, i. e., costs inflicted on society at large that are not reflected in the price of electricity, thus not paid by the electricity gen­erator. Typical external costs include, but are not limited to, the costs of air, water and land pollution from generation as well as fuel extraction and transport, accidents lacking sufficient liability coverage, and exposure to physical or economic disruption of supply lines.

The economics of a particular technology such as nuclear power cannot be analysed in isolation but only in comparison with its alternatives. For a private sector utility operating in a liberalized market the question usually is not either to generate or not to generate electricity but how to generate it most profitably. While nuclear energy is often very competitive on the basis of its low levelized life-cycle generating cost, its large upfront capital cost and long construction schedule make its financing more chal­lenging compared to fossil fuel investments. Regulated utilities in quasi — monopolized markets or government-owned generators are bound by supply obligations. In both situations the do-nothing option does not exist

and rejecting one option, say nuclear power, requires the adoption of a non-nuclear alternative. Hence the actual economics of nuclear power can reasonably only be determined with regard to its alternatives (using a level playing field) under given market and local conditions.