(The author is a Reuters market analyst. The views expressed
are his own.)
By Gerard Wynn
LONDON, July 17 The lesson from the latest delay
to Finland's planned new nuclear reactor, announced on Monday,
is either build lots of them or don't build any at all.
It is a general economic principle that costs per plant
decline the bigger a programme.
Historical data support that for nuclear, where it may apply
more acutely given its highly specialised and often unique
supply chain and engineering skills.
It makes no sense to take a suck-and-see approach, building
incrementally in a modular fashion, especially for new
technologies such as Finland's advanced pressurised water
But plans by developed countries including Britain, Finland,
Poland and the Czech Republic are for just that.
It is not surprising that developed countries are wary of
big nuclear rollouts, given the high capital cost and the
present credit squeeze for both banks and impoverished
The danger is that they are caught in an economic no man's
land, afraid to cancel programmes altogether in the face of the
falling costs of modular approaches such as wind power, biomass
or gas, or to ramp them up.
Of countries with definite plans, Britain supports industry
plans for 16 gigawatts (10 or so large power plants) by 2025.
This target looks stretched given construction has not started
on any, while developers of 6 GW have already abandoned their
The Czech Republic has immediate plans to build two new
reactors, Poland to build one by 2023, and Finland also one
more, all potentially involving advanced technology.
Contrast that with China's plans to build 50 or so new
reactors, and India's for 60 GW by 2030 (according to World
Nuclear Association estimates).
FIRST OF A KIND
Consultants Parsons Brinckerhoff estimated the capital costs
of a "first of a kind" plant (built without an established
supply chain) at nearly a fifth higher than an "nth of a kind",
in a report to the British department for energy and climate
The difference may be greater, however.
Precise estimates of the cost of nuclear power seem to go in
circles depending on the views of the advocates, given so many
variables including the discount rate applied to finance; the
present and future cost of rival technologies; and an assumed
It is useful to review the scale of actual problems faced by
first of a kind plants being built using advanced pressurised
water technology under construction in Europe.
Finnish utility Teollisuuden Voima on Monday said its
Olkiluoto 3 reactor would no longer meet its 2014 completion
date, which itself was five years behind schedule and is also
massively over-budget at about 4,125 euros ($5,200) per KW.
The Finnish new build plans follow those of France's new
Flamanville 3 reactor.
French utility EDF last year estimated the
overnight cost (excluding cost of finance) of its new reactor,
the first to be built in France in 15 years, at 3,600 euros
($4,600) per kilowatt, up from an initial estimated 2,000 euros
The Flamanville reactor will be over-due by four years.
Britain has the boldest plans for nuclear new build in the
The country will want to avoid these kinds of cost overruns
and delays, from a lack of supply chain and skills, but that is
precisely the situation the country presently faces.
A report published last November by a UK parliamentary panel
found that Britain's nuclear R&D workforce had declined from
more than 8,000 in 1980 to less than 1,000 now, following the
closure of Government nuclear laboratories.
The R&D programme received government funding of 300-350
million pounds a year in the 1980s, compared with 11 million
pounds annually now, it found.
It is hard to see how a rebuilding of such intellectual
capital can be cost-effective unless applied to more than three
or four plants, leaving it dithering between shelving its plans
or committing to a large, prescribed target.
(Reporting by Gerard Wynn; editing by Keiron Henderson)