Nuclear plant construction is often characterized as exhibiting “negative learning.” That is, instead of getting better at building plants over time, we’re getting worse. Plants have gotten radically more expensive, even as technology has improved and we understand the underlying science better.

Nuclear power currently makes up slightly less than 20% of the total electricity produced in the U.S., largely from plants built in the 1970s and 80s. People are often enthusiastic about nuclear power because of its potential to decarbonize electricity production, produce electricity extremely cheaply and reduce the risk of grid disruption from weather events.

But U.S. nuclear power has been hampered by steady and dramatic increases in nuclear power plant construction costs, frequently over the life of a single project. In the 1980s, several nuclear power plants in Washington were canceled after estimated construction costs increased from $4.1 billion to over $24 billion, resulting in a $2 billion bond default from the utility provider. Two reactors being built in Georgia (the only current nuclear reactors under construction in the U.S.) are projected to cost twice their initial estimates, and two South Carolina reactors were canceled after costs rose from $9.8 billion to $25 billion. Why are nuclear construction costs so high, and why do they so frequently increase? Let’s take a look.

Nuclear power plants cost more and more The story of nuclear power plants in the U.S. is one of steadily rising costs to build them. Commercial plants whose construction began in the late 1960s cost $1000/KWe or less (in 2010 dollars); plants started just 10 years later cost nine times that much. Today the Vogtle 3 and 4 reactors are likely to come in at around $8000/KWe in overnight costs ($6000/KWe in 2010 dollars), with an actual cost of nearly double that due to financing costs. We can roughly break the costs of operating any power plant into three categories: fuel costs, operation and maintenance costs, and capital costs – the amortized cost from building the plant itself, including any financing costs.1 Different types of power plants have different cost breakdowns. For natural gas plants, up to 70% of their electricity cost comes from the cost of fuel. With nuclear power plants, on the other hand, 60-80% of their electricity cost comes from constructing the plant itself. Decreasing the construction cost of nuclear power plants would thus drive the cost of the electricity they provide down substantially.

From Dawson 2017 The cost fractions of different types of power plants (along with their technological capabilities) shape the way they’re used. Because electricity can’t be cheaply stored, at any given moment electricity produced and electricity consumed must balance. Since electricity consumption varies over time, power plants are brought on and offline as demand changes (this is called “dispatch”). The order in which plants are dispatched is generally a function of their variable costs of production (with lower-cost plants coming on first), as well as how easily they can ramp production up or down.2

Because capital costs make up the majority of the cost of nuclear power electricity, and those costs are largely fixed, nuclear plants tend to be operated continuously to supply “baseload” power; indeed, many plants in the U.S. are not even designed to ramp up and down easily.

Nearly all nuclear reactors globally are light water reactors: radioactive material in the reactor heats a supply of normal H2O or “light water,” which then transfers its heat to a second source of water, which then drives the turbine. A major risk for this type of reactor is a “loss of cooling accident.” If a coolant pipe bursts, or the supply of cooling water is otherwise disrupted and can’t cool the nuclear fuel, the fuel can heat up to the point where it melts down, damaging the reactor and potentially releasing radioactive material. Both the Fukushima and Chernobyl power plants experienced core meltdowns, and Three Mile Island experienced a partial core meltdown.

Even after the reactor is shut down, the radioactive materials continue to generate “decay heat” for an extended period of time. Thus even a reactor that has been heavily damaged needs to keep its cooling systems operational. Constructing cooling systems that can continue to operate in a damaged plant contributes heavily to nuclear construction costs.

What’s contributing to high costs?

Inputs of plant construction costs

There are a variety of nuclear plant cost breakdowns available, but we’ll look at a breakdown done by the DOE in 1980 for a hypothetical 1100 MW plant, which should reflect the costs of U.S. plants, excluding financing, during the era when most plants were being built.

Roughly one third of the costs are “indirect” costs of the building process: engineering services, construction management, administrative overhead, etc. For the direct costs (the costs of materials, equipment, and on-site labor), the reactor, the turbine equipment, and the plant structures each make up 15-20% of overall costs, with the balance made up by additional plant systems. Also note that the plant’s engineering design cost nearly as much as the reactor itself.

Rising labor costs are the bulk of increased construction costs Most nuclear plant cost increase in the 1970s-80s can be attributed to increased labor costs. An estimate by United Engineers and Constructors found that from 1976-1988, labor costs for plant construction climbed 18.7% annually, while material costs escalated by only 7.7% annually (against an overall inflation rate of 5.5%) Of those labor costs, over half were due to expensive professionals: engineers, supervisors, quality control inspectors, and so on. /
Other estimates align with this. A 1980 estimate produced by Oak Ridge suggests that material volume increases between the early 1970s and 1980 generally ranged from 25-50%, not nearly enough to account for the total cost increases seen: / /
And a recent paper by Eash-Gates et al examined cost increases for a sample of nuclear power plants built between 1976-1988. It found that 72% of the cost increase was due to indirect costs, indicating a large increase in expensive professionals such as engineers and managers: