According to the International Energy Agency, the estimated global electricity demand is to grow at 1.9% per year in the period to 2040. Against this background to secure energy demand simultaneously with Paris Agreement target on climate change, the international body projects growth of more than 2.3% in nuclear generation in coming decades.

Despite seeming high costs of nuclear power plant construction (around $5 bl.), the real operating costs of NPPs are highly competitive in comparison with other energy sources, as constructed nuclear plants are not exposed to the financial volatility and operation cost inflation.

The reason is that after setting-up an average modern NPPs is ready to provide affordable electricity when it's needed for more than 60 years. Given the non-stop process of innovations in nuclear engineering and science, one can expect nuclear power plant to operate for approximately 80 years and even longer in the future. Also, one of the most evident advantages of nuclear energy is that their predictability of how it works.

Unlike renewable sources nuclear plants use uranium fuel. However, total fuel costs should not be compared with fossil fuels, i.e. coal or gas-fired plants. For instance, a single uranium fuel pellet, the size of a pencil eraser, contains the same amount of energy as 17,000 cubic feet of natural gas, 1,780 pounds of coal or 149 gallons of oil. In addition, five kilograms of natural uranium contain the same amount of energy as 60 tons of hard coal.

Indeed, nuclear power plant construction is not one of the cheapest options one should expect, however the lifetime exploitation of NPPs is much cheaper than other power plants, because nuclear project already includes waste disposal and decommissioning expenses. Keeping in mind environmental and social & economic benefits, NPPs construction is a great option for covering both energy needs and strategic long-term goals like tackling climate change and sustainable economic growth. The economics of nuclear power plant project includes following important aspects of capital and operating costs.

Capital costs

The major financial part of nuclear plant is dominated by initial capital cost. In general, capital costs include groundworks, components manufacturing and the plant construction. Capital costs are incurred while the generating plant is under construction and include expenditure on the necessary equipment, engineering and labor. These are often quoted as overnight costs, which include just engineering, procurement and construction (EPC).

It should be noted that the engagement of local construction companies and the involvement of local manufacturers usually help to reduce project costs. Obviously, such localization will become possible when local businesses accumulate sufficient experience of participating in nuclear plant project.

To compare different power generation technologies the capital costs must be expressed in terms of the generating capacity of the plant (in dollars USD per kilowatts). Thus, according to the OECD Nuclear Energy Agency report of 2015, nuclear power has guaranteed an average 1200 MW of net capacity with overnight cost of 4400 USD/kW. In comparison, onshore wind a solar power's overnight cost is cheaper, nearly 2 times less, but these renewables have potential of only 40 MW in average.

With high fixed costs and low running costs, average electricity costs for nuclear plants fall substantially with increased output. It is therefore vital for nuclear operators to achieve high plant capacity factors.

Operating costs

Operating costs consist of operation and maintenance, which include decommissioning and waste management. The operating costs of nuclear plants are typically low and unchangeable. The maintenance of nuclear plants of new design are much more economical than those of the previous design.

It should be noted that in the modern plants fuel use should be more economical than in older ones. Nuclear fuel costs include charges for used fuel management and disposal. These are well-identified and validated, providing a good level of predictability of long term costs. Financial contributions are usually made over the economic lifetime of the plant towards plant dismantling and eventual site restoration. Given that plants are expected to have long operating lifetimes, the contributions are not significant (usually less than 1% of the total levelised costs).

Economic effects of NPP projects

Investing in nuclear projects will stimulate revenues in the regional and national income that can surpass direct investments by a significant margin. The amount of investments actually depends directly on technologies involved.

Global experience has proved than nuclear sector is one of the major employers in industrial sector. 4% of workers in OECD countries alone (for instance France) are involved in the nuclear sphere. In general jobs in nuclear sphere are paid 30% more than average in the region. Lower electricity prices at the same time increase market competitiveness and push forward GDP growth. A rise in the electricity price has opposite effect, which results in job loss.

For instance, 1 workplace in nuclear industry creates approximately 3 others in collateral spheres like infrastructure and civil engineering. Thus, in US one nuclear plant requires up to 700 direct permanent jobs. Operation of a nuclear plant requires 400 to 700 direct permanent jobs. For international projects at least 60% of workers are filled by local specialists.

Local impacts

In average a new nuclear plant construction brings investment of $5-8 billion, including interest during construction. This implies significant benefits for local communities and industry. In US nuclear according to the Nuclear Energy Institute NPP construction provides a substantial boost to suppliers of commodities like concrete and steel, and manufacturers of hundreds of plant components. A single new nuclear power plant requires approximately 400,000 cubic yards of concrete, 66,000 tons of steel, 44 miles of piping, 300 miles of electric wiring, and 130,000 electrical components. That means boost for local manufacturers and additional job creation.

The implementation of the Kudankulam NPP construction project in India has led to the creation of more than 10,000 jobs in the region, not to mention new jobs in equipment-manufacturing companies. Tax proceeds from the plant go to neighboring towns and villages, making it possible to implement projects on the construction of schools and sports facilities. In the Czech Republic, two nuclear power plants annually allocate about USD 6 million for the development of the regional economy and infrastructure, including the food sector.

A similar pattern can be observed in other countries that have chosen nuclear power as one of the main sources of energy. Advantages gained from the implementation of NPP projects include local investments aimed at maintaining the well-being of the region and developing science, technologies, medicine and the service sector. In the long run, the continuous development of these sectors will transform the countries of the region into a major economic force on the continent and in the wider world.

In a nutshell nuclear projects are not one of the cheapest, but very competitive in a long run than other sources of energy. It should be noted that waste disposal and decommissioning costs are already included in the operating costs. Taking into consideration of social, health and environmental benefits, nuclear energy can be described as one of the most suitable for comprehensive sustainable development.