IEEJ Reviews Report on Nuclear Cost-Competitiveness by Japanese Government

In May 2012, Yuji Matsuo of the Institute of Energy Economics, Japan, released an analysis of a December 2011 report by the Energy and Environmental Council’s “Cost Estimation and Review Committee.” Matsuo’s review praises the government report for its transparency in terms of calculation methods, summarizes the findings, and addresses some questions raised about the report. The analysis explains that the December 2011 report, which updates an earlier 2004 report, accounts for all relevant costs associated with the various energy supply sources, including “hidden costs,” post-Fukushima safety measures and nuclear fuel cycle costs.

Significantly, nuclear still showed itself to be cost competitive and in some cases more cost-effective than thermal and renewable sources. The revised 2011 estimates show a higher cost for nuclear (¥8.9/kWh) than the 2004 calculation (¥5.9/kWh) as this new calculation includes the added costs of accident-related cleanup, a lower capacity factor, and an increase in capital costs and operating and maintenance costs. By comparison, new calculations for geo-thermal changed from ¥8.9/kWh to between ¥9.2 and ¥11.6/kWh, with coal costs on the lower end and LNG costs at the higher end. Renewable energy energy ranges in cost from ¥9.9/kWh to ¥17.3/kWh. As such, even taking into account additional costs, Matsuo states, “the profitability of nuclear power generation ‘is not inferior in comparison with other power sources’.”

>>Read the full report.

>>Related post: The World Watches as Japan Grapples with Nuclear Restarts.