I thought this as well until I researched it. Here are some notes
France is the number one country in the world which generates electricity from nuclear power. France derives over 75% of its electricity from nuclear energy. Their electricity costs are very competitive in Europe. France is the world's largest net exporter of electricity and gains over EUR 3 billion per year from this. (Nuclear Power in France)
In the 1970s in the USA electricity from nuclear power was sometimes cheaper than coal. But this situation reversed itself in the 1980s which led to many planned nuclear power stations being abandoned. The reasons for this are clearly documented in an online book, published in 1990, The Nuclear Energy Option, by Bernard Cohen. Here is a brief summary of his Chapter 9:
- construction time for nuclear plants doubled from 1971 (7 yrs) to 1980 (12 yrs), which in turn doubled the costs
- labour costs also doubled with the biggest increases being professional labour
So, the cost of nuclear plants quadrupled in 10 years and as a result they were no longer built. The main reason for these increases were regulatory ratcheting (excessive) and regulatory turbulence (the latter being having to change things after the project has started and hence more expensive)
According to Cohen it was accepted wisdom by the utilities in the USA before the over regulation of the 1980s that nuclear would be cheaper than coal and would replace coal.
"Many utilities seek cost analyses from economics consulting firms, some utilities have their own in-house economists to make estimates, and banking organizations maintain expertise to aid in decisions on investments. From the early 1970s until the early 1980s, all of their reports found that nuclear power was the cheaper of the two. For example, the Tennessee Valley Authority (TVA) is the largest electric utility in the United States. Its profits, if any, are turned back to the U.S. Treasury. It maintained a large and active effort for many years in analyzing the relative cost advantages of nuclear versus coal-burning power plants, consistently finding that nuclear power was cheaper. The 1982 analysis by the Energy Information Administration, a branch of the U.S. Department of Energy, was the first to find that coal and nuclear were equal in cost; their previous analyses found nuclear to be cheaper. By 1982, these analyses were mostly discontinued, since it seemed unrealistic for a utility to consider building a nuclear power station, or even to hope that it could be done without regulatory turbulence"Tom Blees also discusses and updates answers to these questions in his book Prescription for the Planet. One of the important points he makes is that the modern reactor designs (Gen III and Gen IV) employ passive safety using molten sodium as a coolant and consequently do not have to operate under high pressure, except for the steam portion of the system in the turbine room. This means that significantly fewer valves, pumps and tanks are required compared with the older reactors. This lowers construction costs.
- Ch. 10, The Nuclear Energy Option by Bernard Cohen
The other main point made by Blees about high costs in the USA (compared with France and some other countries) is that the nuclear industry there has yet to agree on a standard design and each new design has to jump many regulatory hurdles all of which pushes the cost of the process higher.
Thanks to Barry Brook's blog I recently attended a debate in which Tom Blees participated. Subsequently, I bought a few copies of his book and have distributed them to friends who are interested in discussing these questions.
I notice that the Obama administration has just announced a loan guarantee intended to underwrite construction of two nuclear reactors in Georgia. If the project goes forward, the reactors would be the first begun in the United States since the 1970s.
From what I have read I conclude that electricity from nuclear power could be as cheap as electricity from coal.
update 4th March: After a fair bit of discussion on threads at Strange Times (Technology, development and c... c... c... climate change) and Brave NewClimate (Do climate sceptics and anti nukes matter?) I have changed my mind again. In general nuclear is not cheaper than coal unless extra costs such as a carbon tax are (in the future) added to coal.