In general, the construction costs of nuclear power plants are significantly higher than those of coal- or gas-fired power plants due to the need to use special materials and incorporate sophisticated safety features and backup control equipment. Although some say nuclear energy is a low-cost, low-carbon source of energy, nuclear waste can harm future generations. New research has shown that the true costs of nuclear energy are much higher than many previous studies have indicated. Nuclear reactors can cost twice as much in the United States and Europe as in Asian countries where industry is flourishing, according to a new analysis by the Massachusetts Institute of Technology.
Because the capital costs of nuclear energy are so important, the most effective way to reduce the total price of nuclear energy is to design and build plants more efficiently. However, the future of nuclear power in Russia will depend on how well Rosatom manages current nuclear projects, especially whether construction deadlines and contract costs will be met. A Foreign Relations Council report on nuclear energy argues that a rapid expansion of nuclear power can create shortages of construction materials, such as reactor-grade concrete and steel, skilled workers and engineers, and safety checks by qualified inspectors. The cost of capital, construction and financing of nuclear power plants, represents a large percentage of the cost of nuclear electricity.
Jacopo Buongiorno, professor of nuclear science and engineering at MIT, led a group of scientists who recently completed a two-year study examining the future of nuclear energy in the United States. Nuclear opponents point to this latest disappointment as yet another example of why nuclear energy is not up to the task. This is important, because nuclear power plants and nuclear waste will remain dangerously radioactive for hundreds, if not thousands, of years after their creation. Several dozen electric utility companies, nuclear equipment vendors, and engineering companies were involved in the construction of U.S.
nuclear plants, and therefore very little standardization was achieved. Despite a reduction in the global deployment rate of nuclear energy, nuclear energy remains a promising solution both to the growing demand for electricity and to the growing challenge of climate change. Rosatom is expanding exports by offering attractive financing and a construction, ownership and operation model, which is especially attractive to newcomers to the nuclear industry who would otherwise not accept the financial risk of developing nuclear power on their own. According to Anthonie Cilliers, a nuclear academic and engineer, because of the large capital investment and the low variable cost of operations, nuclear plants are more profitable when they can operate all the time to provide a return on investment.
The discount rate for nuclear construction projects in the United States is generally about 12.5 percent, higher than in many other countries, especially those where the nuclear industry is at least partially subsidized by the government. Nuclear contractors in the United States and Europe have tended to begin construction before completing the design phase. In the United States, there is a general understanding that dominance in the nuclear arena has enabled the United States to set nuclear safety standards around the world. In addition to six reactors under construction in Russia, the current foreign portfolio of state-owned nuclear power company Rosatom includes 36 nuclear reactors planned or under construction.