Costs of Nuclear Power Plant Construction: Theory and New Evidence

Abstract

Studies of the cost of construction of nuclear power plants rely upon a measure of called cost, that contradicts accepted capital theory. The studies report that construction cost per megawatt of capacity decreases as plant scale increases. We employ a more correct measure of cost and compare the results of this measure versus overnight cost for Japanese nuclear power plants. Using overnight the results give evidence of economies of scale in Japanese power plants, but when the correct measure of cost is substituted, the scale variable is not statistically significant.