ABSTRACT
This chapter determines key variables that drive new nuclear’s levelised cost by calculating the elasticities of cost with respect to each input, fits these key cost drivers with probability densities, and simulates the probability distributions of advanced light water reactor (ALWR) levelised cost. It presents probabilistic models of the levelised costs of generating electricity using natural gas in combined-cycle gas turbines (CCGTs) and coal with sulphur scrubbing, respectively. The chapter compares cumulative probability distributions of ALWRs, CCGTs and COAL electricity costs, and outlines portfolio effects of combining new nuclear power with fossil-fired power plants. Some portfolios yield levelised costs above $74/MWh and are therefore inadvisable. A diversification of generating assets could reduce levelised cost risk at each value of levelised cost. Encouraging nuclear power plants construction to achieve clean emissions standards should focus on reducing the cost of capital and risks of building new nuclear.
