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Cost & Benefits Analyses

Costs

The only accurate measure of economic competitiveness is the cost of electricity produced by a particular project compared to alternative sources of electricity and to the market price of electricity when the power plant starts commercial operation. This figure takes into account not only capital investment and financing costs but also the operating and maintenance costs and performance of a project.

Although new nuclear energy facilities are capital-intensive, capital costs are only the starting point for any analysis of new generating capacity. Analysis by energy companies, the academic community, government agencies, and others shows that electricity generated from nuclear energy can be competitive with other new sources of power. 

Economic Benefits

The nuclear energy industry plays an important role in job creation and economic growth, providing both near-term and lasting employment and economic benefits. The 100 reactors in the United States generate substantial domestic economic value in electricity sales and revenue—$40 billion to $50 billion each year—with more than 100,000 workers contributing to that production.

NEI has conducted economic benefits studies analyzing more than half of the nuclear energy facilities in the country. The studies show that the typical nuclear plant generates approximately $470 million in sales of goods and services in the local community and nearly $40 million in total labor income. These figures include both direct and secondary effects. The direct effects reflect the plant’s expenditures for goods, services, labor and profit—approximately $453 million. The secondary effects at the local level—approximately $17 million—include indirect and induced spending attributable to the presence of the plant and its employees as plant expenditures filter through the local economy (e.g., restaurants and shops buying goods and hiring employees). Extended to the state and national economies, secondary impacts increase by $80 million and $393 million, respectively. 

Every dollar spent by the industry at a nuclear plant results in the creation of $1.04 in the local community, $1.18 at the state level and $1.87 at the national level. Each nuclear plant generates almost $16 million in state and local tax revenue annually. These tax dollars benefit schools, roads, and other state and local infrastructure. The average nuclear plant generates federal tax payments of approximately $67 million annually.

See NEI’s paper on Nuclear Energy’s Economic Benefits – Current and Future for a detailed summary of the economic benefits studies.

Maintaining America’s Energy Diversity

Diverse energy sources enable the United States to balance the cost of electricity production, availability and environmental impacts to our best advantage. Coal, natural gas and nuclear energy are the foundation of the nation’s electricity supply system. Coal produces 37.4 percent of the country’s electricity, natural gas provides 30.4 percent and nuclear provides 19.0 percent. The rest comes from hydroelectric dams and renewable energy. Each source of electricity has unique advantages and disadvantages, and each has its place in a balanced electricity supply portfolio.

Natural gas-fired electricity generation has more than doubled since 1990 to 30 percent of all production. Natural gas fuels nearly all power plants built over the past 15 years. However, natural gas is subject to significant price fluctuations. The greater the country’s reliance on natural gas, the greater the likelihood that electricity prices will experience increased volatility in the future.

Energy supply vulnerabilities were evident in August and September 2005, when Hurricanes Katrina and Rita struck the Gulf Coast, disrupting natural gas supplies across the nation.

Uranium fuel for U.S. nuclear plants is abundant and readily available from stable allies, such as Canada and Australia. The long-term stability of fuel cost, coupled with industry success over the past 15 years in reducing operating costs, makes America’s reactors among the lowest-cost sources of electricity available.