Uncovering Hidden Nuclear Subsidies and Other Forms of State Support

While nuclear power is often portrayed as an inexpensive and reliable energy source, it has never been able to economically compete with other technologies. Historically, the challenge has come from coal; today, it is coming increasingly from renewables. The cost of nuclear power has been increasing in OECD countries, mainly due to the escalating costs of new build projects. The expansion of competitive electricity markets has also contributed to economic challenges for nuclear power plants. While state involvement has always been a central element of the nuclear production chain, it has increased alongside rising competitive challenges. State supports are manifold, including to the fuel supply chain; new reactor funding; continued operation of existing nuclear power plants, particularly in deregulated electricity markets; and the “back end” activities such as decommissioning and waste disposal. States also backstop or fully absorb key operating risks such as accidents. While the program details differ by country, the general subsidies are common across the globe.

Recent trends in these areas are explored in the first part of this chapter. Recent economic performance of key players in the sector, many of which are public firms, are discussed next. Subsequent sections focus on the “hidden costs” of nuclear power such as accident liabilities, post-closure costs, and impacts on weapons proliferation risks. These factors are seldom accounted for in levelized cost of energy (LCOE) estimates for nuclear, skewing comparisons with alternative electricity generation technologies. Limited published data, uncertainties on the scale and timing of costs, and a lack of empirical project data make these factors challenging to quantify accurately. However, in most cases, these costs are at least partially supported by the state, and in some cases, the costs and risks are entirely shifted from the operator onto the government. Even where commercial operators are financially responsible, contributions are often insufficient.

This chapter is updated from a longer chapter on nuclear economics and finance written by the author in the 2023 edition of the World Nuclear Industry Status Report. 

The full volume published by Springer can be accessed here.