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IAEA Kicks off Work on a Framework to Analyse Nuclear Power Costs

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(Video: A. Silva and J. Weilguny/IAEA)

Participants from countries considering building nuclear power plants discussed the issue of costs and timeframes at the first-ever Technical Meeting on Nuclear Power Cost Estimation and Analysis Methodologies in Vienna from 24 to 26 April. The recommendations from this meeting will provide important input into the development of a new IAEA guidance document on calculating the costs of new plants, said David Shropshire, Head of the IAEA’s Planning and Economic Studies Section.

Representing both embarking and operating countries, 46 participants from 26 Member States discussed the economics of long-term investment, including the challenges with estimating and managing costs associated with building nuclear power plants.

“Construction of nuclear power plants is a highly complex process that requires large capital investments while ensuring economic sustainability,” said Huang Wei, Director of the IAEA Division of Planning, Information and Knowledge Management in his opening remarks. “An accurate construction cost estimate is a crucial input for decision-making on a nuclear power programme.”

Currently, around 30 countries are considering or embarking on nuclear power programmes. Analysing costs associated with pre-construction, construction and operation of new, commercial scale plants is one of the most important challenges in new build projects.

The meeting Chairperson Amir Shahkarami, President and CEO of CASe Global Partners, USA, emphasized that economic considerations affecting construction costs and delivery times are of high interest to Member States considering or embarking on a nuclear power programmes.

Good understanding for effective implementation

Projected plant construction cost estimates can be uncertain and may change during the construction phase. Estimating and comparing costs, identifying their drivers and exploring ways of optimizing cost overruns and project delays were at the core of meeting discussions and country case presentations.

Cost information is a key input for country-level macroeconomic analysis to understand the economic implications at local, regional and national levels. “A good understanding of macroeconomics and social impacts of power generation costs are important in identifying factors affecting costs for such large-scale projects,” said Evgeny Cherviakov, Deputy General Director of the Belarusian Nuclear Power Plant Enterprise. “Producing components required for the construction of new nuclear power plants locally instead of importing them from a vendor country is a potential area to conduct in-depth studies in,” he noted.

Those with direct experience in implementing reactor construction projects highlighted the challenges they faced and the lessons they learned.

“Operating countries have a vast experience and long history in both analytical and practical approaches to estimating and managing costs,” Shahkarami said. “We need to leverage this knowledge through the IAEA mechanisms and utilize it as a guidance to nuclear newcomers.”

IAEA guidance on nuclear cost basis

The IAEA is developing a framework for understanding nuclear economics by defining cost drivers and cost uncertainties.

“A Member State’s decision to use nuclear power often requires a strong economic justification, and this is particularly true for nuclear newcomers,” Shropshire said. “We are developing methods to adapt costs to a country’s unique requirements. With this support, countries can have greater confidence in their economic analysis.” 

The development of a new IAEA guidance document will provide Member States with a framework for estimation of the costs related to their nuclear projects, and for understanding the drivers of costs. The document will cover different stages of a nuclear power programme — from infrastructure development to construction, retirement and decommissioning of nuclear power plants.

“Our goal is to have a new resource for Member States to perform economic analysis of current nuclear power reactors and associated fuel cycles, with the capacity to add small and modular reactors and other innovative concepts in the near future,” Shropshire said.

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