The ETI Nuclear Cost Drivers Project: Summary Report
Client: Energy Technologies Institute
The purpose of the ETI’s Nuclear Cost Drivers Project was to use a data-led approach, informed by the cost base of water-cooled power reactors, to identify the cost drivers within historic, contemporary, and advanced reactor designs.
The three principal outcomes of this Project are improved understanding of:
1) the cost drivers within contemporary UK nuclear new build projects and the identification of areas of potential technical or delivery innovation which can support cost reduction;
2) the cost drivers within advanced reactor technologies and the identification of areas of potential design, technical, or delivery innovation which can support cost reduction; and
3) the relative differences in cost base between contemporary and advanced nuclear reactor technologies and the potential to achieve a step reduction in the cost of generating electricity.
Our team examined a sample of 33 relatively recently completed (or nearly completed) projects and compared them in a standardized way alongside a historic US PWR benchmark described in the 1986 Oak Ridge National Laboratory cost study. This benchmark is based on the detailed records and learning from building nuclear power plants in the US captured in the Energy Economic Database Programme (EEDB) version 8. In this project, we accessed the knowledge and experience of senior personnel involved in the delivery of the projects recorded in the ETI NCD project database. The intent was not to analyze published costs, but to understand the project experience and context alongside these published costs.
Cited in recent Government publications including: the UK Nuclear Sector Deal and Expert Finance Working Group on Small Reactors report: Market Framework for Financing Small Nuclear.
In his review, independent project reviewer, Dr Tim Stone, said: “This report, together with the model and new database has shed a great deal of light on the factors which cause some new nuclear projects to be on time and on budget, and some not. It has assembled the best data yet collected and taken a formal analysis together with carefully gathered qualitative views of the project professionals who have led a number of different projects where anonymity has enabled a great deal of transparency and honesty. The report should be required reading for anyone involved in new nuclear projects anywhere in the world and should also help to dispel myths and educate emotional views on the practical future of new nuclear projects.”
ETI project has identified eight key drivers with the potential to reduce costs for future new nuclear power projects
Low carbon, low cost new nuclear energy is achievable in the UK, through a sector-wide, integrated cost reduction programme that builds on global best practices
An effective cost reduction programme could also reduce the duration and risk of nuclear projects, changing the perception of nuclear construction risk and reducing financial costs
Through an evidence-based study of historic, contemporary and future nuclear power projects, LC research shows that there are a small number of understandable factors that drive the cost of nuclear plants. The analysis also highlights that there are several consistent characteristics shared amongst low cost plants and different common characteristics shared across high cost power plants. If understood and addressed they can reduce the cost of new nuclear projects.
The project, led by CleanTech Catalyst, Ltd (CTC) and working with Lucid Strategy (now merged with CleanTech Catalyst to form LucidCatalyst) found that cost reductions achieved elsewhere in the world are a result of nuclear programmes focused on improving performance and delivering an integrated cost reduction programme, including the application of learning and a focus on delivering efficiencies in direct and indirect labour supporting nuclear power projects.
A key finding from the project is that there is clear potential for a cost reduction programme to materially reduce the duration and risk of nuclear projects, helping to change the perception of nuclear construction risk whilst reducing interest rates and the cost of capital.
> View the Full Technical Report, released September 2020