IEA & NEA report confirms nuclear as the most affordable dispatchable source of low-carbon electricity

Brussels, 9 December 2020: FORATOM welcomes the conclusions of the latest IEA and OECD NEA report entitled ‘Projected Costs of Generating Electricity 2020’. According to the report, nuclear remains the most dispatchable low-carbon technology with the lowest expected costs in 2025. Furthermore, the report shows a decline in costs for new nuclear power plants compared to the previous edition. This is thanks to lessons learnt from recent first-of-a-kind new build projects.  

“FORATOM is delighted with the IEA’s confirmation of the fact that the long-term operation of nuclear power plants remains the cheapest source of electricity across the board”, states Yves Desbazeille, FORATOM Director General. “This is something that FORATOM has been emphasizing for several months and in particular during the 2030 climate targets debate. The report demonstrates that nuclear remains a highly viable partner in the transition to an affordable decarbonised economy.”

FORATOM furthermore welcomes the decision to complement its Levelised Cost of Electricity (LCOE) approach by enabling a more system specific cost comparison.

“The IEA’s approach to system costs shows that an LCOE comparison alone is not enough to define the economics of a competitive power system”, adds Mr. Desbazeille.

By incorporating the so-called Value Adjusted LCOE (VALCOE) it has been able to capture the complexities of system analysis in a single metric. As a result, it has been able to demonstrate that the most affordable solution is one whereby future low-carbon systems include a mix of multiple flexibility options, for example storage, demand flexibility and flexible low-carbon electricity such as nuclear.

The report underlines the increasing competitiveness of low-carbon technologies for electricity generation. This applies to both variable renewables, as well as flexible and dispatchable low-carbon generators including nuclear.

“FORATOM calls for the Commission to take into consideration the conclusions of this report in its decarbonisation policies. This is the only way in which the EU is going to achieve its climate goals at an affordable cost”, concludes Mr Desbazeille.

About us: The European Atomic Forum (FORATOM) is the Brussels-based trade association for the nuclear energy industry in Europe. The membership of FORATOM is made up of 15 national nuclear associations and through these associations, FORATOM represents nearly 3,000 European companies working in the industry and supporting around 1,100,000 jobs.

For more information, please contact Jessica Johnson: jessica.johnson@foratom.org.