Comparative Costs of Generating Electricity

Abstract

The paper presents comparative costs of generating base-load electricity by state-of-the-art power plants expected to be commercially available by 2005 or shortly after. In order to assess the competitiveness of alternative sources within an harmonised framework, lifetime constant-money levelised costs calculated using a common set of economic assumptions are compared. A detailed analysis of the different elements of nuclear electricity generation costs is provided. Beyond direct costs, the paper investigates external costs and benefits of alternative options. For example, the extent to which carbon taxes, or other policy measures for alleviating the risk of global climate change, could modify the relative costs of carbon-free electricity generation sources (such as nuclear power) as compared to fossil fuels is assessed. Finally, the relevance of including policy issues (such as long termsecurity of supply and generation cost stability) and environmental issues (such as global climate change threat) together with direct cost comparisons, in the assessment of alternative options is discussed.