Reasons for the High Development Cost for Nuclear Power Plants

Aditya Sarkar
June 7, 2016

Submitted as coursework for PH241, Stanford University, Winter 2016

Fig. 1: The Lucas Heights Nuclear Reactor being built (Source: Wikimedia Commons)

The development of nuclear power plants, as shown in Fig. 1, have always been a capital intensive process with a large amount of required investment. After the development of the plant, relatively low costs of operation and the high price of energy leads to a large surplus and therefore large profits. There are several reasons behind the exceptionally high costs that go into building a nuclear power plant and we shall explore these in the remainder of this report.

Specific and Uncommon Design

As of May 2016, there are fewer than 500 nuclear reactors built in the world. Many of these reactors are in different countries and so different environments. Therefore, every time a new reactor needs to be built, they must meet, and therefore be designed for, a set of very unique specifications that are a function of their natural environment, the political environment of the country in which they are erected, as well as the specific requirements of the company they are being built for. With so few reactors having been designed, there is little to no standardisation pertaining to the design of reactors and so many aspects are started from scratch, this equates to high costs in the design stage of nuclear power plants. [1]

Inability to Benefit From Economies of Scale

Due to the high development costs of each reactor, it is unusual for several reactors to be built at the same time. This prohibits the developer from benefiting from economies of scale. Individually, many of the items bought are expensive and will often need to be custom made. The supplier of these parts do not incur sufficiently high demand to be making the parts in bulk and hence the prices stay high.

Complex Engineering Problems

The mechanisms that coalesce to form a nuclear reactor are all individually complex. While they have been studied extensively it is always an even greater challenge to practically apply these theories. In addition to these highly complicated mechanisms however is the added complexity of radioactivity. Over time, radioactivity can change the behaviour of materials and so this needs to be taken into account. The uncertainty of radioactive behaviour makes the problem even more difficult to solve. Hiring intellectually suitable engineers needed to solve this plethora of problems, which will inevitably take a long time, increases the cost of development significantly. [2]

Uncommon Safety Measures

Unlike coal energy, or even other renewable energy sources, in the case that something goes wrong, it is impossible to immediately stop operations in order to reach a state of safety. Due to the reactors taking hours, sometimes days, to cool down, the danger can not be immediately eliminated. As there is no "fail-safe" as such, many other measures need to be taken to work around this blatant hazard. An example of the disastrous potential of what happens when the nuclear reactors are not sufficiently cooled was evident during the Fukushima Daichi Power Plant disaster. [2]

Political Biases

While not the case universally, there are countries where politicians in power have a bias against nuclear energy, often citing the dangers that have been demonstrated from historical accidents such as Chernobyl and more recently the Fukushima Daichi plant. This makes it extremely difficult for legislation that would facilitate the development of nuclear power plants to get passed through and also hinders any possibility of subsidies being given to the sector. Through all this, the legal battles that developers of nuclear plants face as well as the struggle to comply with the strict government standards leads to an already costly project being made even more expensive.


Despite often being touted as one of the most efficient forms of energy, large scale accidents that were sensationalised by the media has led to a public and political bias against the form of energy. This is the root of the issue which sees the price of development of nuclear power stations not decreasing through time, unlike other renewable energy alternatives. The price decreases which are expected due to the learning process leading to cost saving innovation is being offset by the increased cost put on by increased legislation.

In some countries however, this is not the case, a lot of the data that is cited with regards to costs of nuclear plants reference costs in the USA and France. There is hope for the nuclear energy industry as some countries such as South Korea start to find increasingly cost effective ways of developing nuclear energy. [3] Countries with fast growing populations such as Indonesia are also innovating to make nuclear energy a economically feasible solution for economically developing countries. Here due to the massive increase in demand for energy, officials are recognising that nuclear energy may be the only viable option to meet such demand. As more economically developing countries face the same issue, and some of those turn to nuclear energy as their solution, it will be interesting to see if the increase in global experience with nuclear energy and the development and upkeep of nuclear energy plants will lead to a reduction in costs.

© Aditya Sarkar. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.


[1] C. Frank, "The Net Benefits of Low and No-Carbon Electricity Technologies," Global Economy and Development, Working Paper 73, May 2014

[2] "The Future of Nuclear Power," Massachusetts Institute of Technology, 2003.

[3] J. R. Lovering, A. Yip and T. Nordhaus, "Historical Construction Costs of Global Nuclear Power Reactors," Energy Policy 91, 371 (2016).