In view of companies’ recent interest in building new plants, there has been a great deal of effort expended to estimate the levelized cost of electricity (LCOE)20 and overnight construction costs21 for new nuclear power plants in the United States. There is no recent domestic experience to draw on, however. Moreover, at the time of this writing, it is not yet clear what effect the financial crisis of 2008–2009 will have on investment decisions regarding nuclear power. The committee’s analysis does not account for or explicitly address the impacts of the financial crisis.

Over the last few years, cost estimates in the open literature have varied by more than a factor of two. Recent estimates of the overnight cost for new construction have ranged from $2400/kW to as much as $6000/kW (NEI, 2008; Moody’s Investor’s Service, 2008). This range can be explained by several factors:

  • Recent cost escalation of commodities, which affects all new construction;

  • Uncertainty due to lack of recent builds; and

  • Different assumptions made in estimating these costs.

Based on a range of overnight costs drawn from the open literature, the AEF Committee has produced an estimate22 of the range for the LCOE for nuclear power plants deployed in the United States before 2020.23 These estimates were produced using the financial model developed for the Keystone Nuclear Power


The “levelized cost of electricity” at the busbar encompasses the cost to the utility of producing the power on a per-kilowatt-hour basis over the lifetime of the facility, including interest on outstanding capital investments, fuel, ongoing operating and maintenance (O&M) costs, and other expenses. See Box 2.3 in Chapter 2.


“Overnight cost” is the cost of a construction project if no interest is incurred during construction. Several of the cost estimates discussed were originally expressed in terms of an all-in cost, which includes the interest incurred during construction and some owners’ costs (e.g., costs of preparing the site). For purposes of comparison, all-in estimates were converted to overnight costs by multiplying by a factor of 0.8, derived from the Keystone financial model (Keystone Center, 2007).


Note that as with all projections, the committee’s are unavoidably based on assumptions that cannot be validated. In addition, the costs are rapidly changing and may go up and down; these numbers are not predictions or forecasts.


Transmission costs are not included in the cost estimates discussed here. An average estimate of transmission costs for three deregulated utility districts is estimated at about 4¢/kwh (Newcomer et al., 2008).

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