Numerous studies routinely assess the current and future competitiveness of different electricity generating options under different scenario assump­tions. In a wide range of scenarios, nuclear power is a least-cost option for centralized base-load electricity generation (ENEF, 2010; NEA and IEA, 2010). The economic performance of nuclear power versus its alternatives is highly dependent on numerous factors such as the costs and availability of natural gas and coal, hydro power resources or wind availability, which allow direct comparisons only on a clearly defined case-by-case basis. Some studies question the economic competitiveness of nuclear energy usually by generalizing worst practices and denying future learning to nuclear power while assuming best practices and rapid future learning to non­nuclear alternatives, especially renewables (EREC and Greenpeace, 2010; WISE, 2009a, 2009b; Schneider et al., 2009).

In essence, because of the sometimes drastically divergent assumptions about the future driving forces of electricity demand and supply, technology and policy, the generating costs reported by these studies are unsuitable for comparisons. One exception is the already mentioned OECD report Projected Costs of Generating Electricity (NEA and IEA, 2010).

The OECD study calculates ‘levelized cost of electricity’ (LCOE) using two real discount interest rates, 5% and 10%,u applied to all technologies, harmonized generic technology performance assumptions and boundaries, and clearly specified fuel prices. For the first time, the study assessed the impact of a carbon price of $30 per tonne of carbon dioxide. The generating cost calculations, based on the simple levelized average (unit) lifetime cost approach based on the discounted cash flow (DCF) method, are summa­rized in Fig. 15.11.

The study reached two important conclusions. First, at low discount rates, capital-intensive generating technologies such as nuclear energy are among the least-cost baseload generating options. The actual merit order is location dependent and cannot be generalized.

An exception is provided by locations with lowest-cost coal availability, e. g. Australia or certain parts of the USA or (although not part of the OECD study by analogy) parts of China, India and other coal-rich develop­ing countries. Here coal, even when equipped with carbon capture, outper­forms nuclear power. A similar observation is valid for hydro power.

Second, at 10% discount rates, the competitiveness of nuclear power slips and fossil generation gains on nuclear power. In some locations, coal with and without carbon abatement as well as CCGT are least-cost generators. In others nuclear maintains its overall cost-competiveness.

The calculations highlight the paramount importance of discount rates, and to a lesser extent carbon and fuel prices when comparing different technologies (NEA and IEA, 2010).[97] [98]

15.11 Expected generating cost of different generating options (without carbon dioxide taxes): CSP=concentrating solar power, PV=photovoltaic, CCS = carbon capture and storage, IGCC = integrated gasification combined cycle. Adapted from NEA and IEA (2010).