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The Economic Future of Nuclear Power

Paul L. Joskow and John E. Parsons

Daedalus, Vol. 138, No. 4, pp. 45

Paul L. Joskow and John E. Parsons, Daedalus, Vol. 138, No. 4, pp. 45-59, 2009

In the last several years we have seen what appears to be revived global interest in continuing operation of existing nuclear power plants and constructing a new generation of plants. A recent International Atomic Energy Agency report indicates that 24 countries with nuclear power plants are considering policies either to accommodate or encourage investments in new nuclear power plants, and that 20 countries without nuclear power today are considering supporting the use of nuclear power to meet future electricity needs. It projects as much as a 100 percent increase in nuclear generating capacity by 2030. This renewed interest appears to reflect a variety of considerations, including a shift toward sources of electricity that do not produce CO2; the search for lower-cost sources of electricity, stimulated by dramatic increases in fossil fuel prices prior to the current global economic contraction; and (often poorly defined) energy security concerns associated with fossil fuels, especially natural gas. The potential revival of nuclear power faces a number of risks and challenges that make the anticipated "renaissance" of nuclear power in the United States and other countries quite uncertain. The economics of maintaining the existing fleet of nuclear power plants, investment in new nuclear power plants, and the economic impacts of constraints on CO2 emissions, not to mention considerations of safety, waste disposal, proliferation, and spent-fuel reprocessing: all impact the feasibility of a nuclear power renaissance.

 

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