The cost of generating electricity is a complex issue. We get electricity from a variety of sources and have to compare apples and oranges as the saying goes. How do you cost electricity from hydro? Aside for maintenance and staff, there is not a fuel cost. On the other hand, when you have oil, coal or natural gas plants, there is a well defined cost for the fuel that you burn. Nuclear power plants also burn fuel, but it is not like an oil plant which has to constantly be fed fuel. Nuclear power plants are loaded with nuclear fuel which powers the plant for eighteen to twenty four months and then the plant has to be shut down and refueled. There are about one hundred operational nuclear power reactors in the United States. With about a two year cycle which can be lengthened if the reactor is shut down for months for repairs and upgrading, that makes the market for nuclear fuel a lot less certain than fossil fuels. There appears to be a three year cycle in nuclear refueling with 2013 at the bottom of the cycle.
The cost of fuel for nuclear reactors in 2012 was about three quarters of a penny per kilowatt hour. The cost of fuel for a natural gas power plant is about three cents per kilowatt hour. Last year, thirty U.S. power reactors were shut down for refueling. This year only twenty one will be shut down. That number is about twenty percent below the ten year average for nuclear refueling. Like dominoes falling, this low number of shutdowns will cause a chain of effect in the price of electricity in the U.S. Because there are fewer nuclear reactors being shut down this year, the demand for fossil fuels is going to drop. The futures market for natural gas is already falling. Oil and natural gas have been competing with each other but lower cost nuclear electricity is cheaper than either. Stockpiles of natural gas are increasing as demand falls.
The United States has been burning plutonium from Russian nuclear warheads for the past eighteen years but that arrangement is ending this year. The Russians are moving aggressively into nuclear fuel production. They have eight breeder reactors going that can produce more nuclear fuel than they burn. However, the cost of new nuclear fuel from the Russians will definitely be higher than the price of nuclear fuel has been in the past of U.S. power reactor operators. In addition, there have been reports that the production of uranium from global mining has reached a peak and will begin to fall. Either there will be a shortage of nuclear fuel and a sharp rise in the price which will make nuclear power generation more expensive or the Russians will begin to control the market and price which could lead to political complications.
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