Taking The Long View
In today's market, with competition imminent and natural gas still cheap, nuclear generation appears dicey. The popular view tags nuclear with high costs and suspect availability, even without reaching the more fundamental issues of safety and waste disposal. One wonders: What advantages lie open to nuclear power?
Many observers see excess capacity running rampant and commodity prices falling across the board as deregulation accelerates and power flows more freely across markets and service territories. Marginal generating assets (em with most nuclear plants included in that group (em become unneeded and expendable.
Nevertheless, the debate may well hide another side. Excess capacity in electricity generation exists even today. Market prices already seem destined to fall in the short term in many high-cost regions, once retail access arrives. But for how long will prices remain low? For how long will a capacity surplus endure?
And once economic growth begins to shrink the capacity gap, and prices again start to rise, can the market find a role for nuclear assets (em expensive overall but relatively cheap to operate once investments are paid off or written off? The answer depends directly on several key factors: electric prices, cost and availability for nuclear plants, and how owners and regulators deal with nuclear investment.