The cost of nuclear power has been much debated – some claim it’s expensive while others say it would be 'too cheap to meter'. The truth is somewhere in-between.
Nuclear plants were once built by the state and had relatively short operational lives (about 30 years). This made it difficult to generate enough electricity to pay back the high costs of construction, waste-handling and decommissioning.
The challenges of climate change means the need to shift to low-carbon electricity generation is becoming more and more urgent. Nuclear energy is among the least costly large-scale and low-carbon generating technology now available.
Most existing UK nuclear power stations are scheduled to close during the 2020s. EDF Energy anticipates that improved technology and operational lives of around 60 years will make the next generation much more cost-effective.
EDF Energy has agreed a Contract for Difference with the UK Government for Hinkley Point C (which will be the first new nuclear power station in the UK for over 25 years) under which the price of power for the first 35 years of the stations operations will be 92.5 pence/kWh (2012 prices).
The UK nuclear power industry takes construction, decommissioning and waste-handling costs fully into account when planning a new power station. This allows the operator to spread the costs of decommissioning and waste-handling across the lifetime of the facility, by paying regularly into a decommissioning fund. When the time comes to decommission the station, it is intended that the process will already be fully financed.