I have been trying for years to help nuclear technologists understand the economics of power generation and the financial motivations of the people who make the investment decisions on the types of power plants to build. Sometimes, I have felt like a lonely voice and other times I believe that some of the people who trust my judgement on other issues simply dismiss my economic discussions, perhaps because they wonder about my business/financial background. (I have no MBA, just an MBWA – Management By Walking Around a small company as the GM for about three years plus about 18 years of building failed business plans to develop small nuclear power plants.)
There is a terrific article currently running on TheStreet.com titled Pricey Gas Is Good For Nuclear that I highly recommend. (Disclosure: I think that the article is terrific and I highly recommend it because it agrees with what I have been trying to say for years. It is human nature to like those pieces with which you already agree.) Here is a key quote that I hope will encourage you to go and read the whole article.
The merit order reveals some interesting opportunities. First, the most profitable plants, from a gross-margin perspective, will almost always be nuclear power, particularly existing nuclear power facilities. Second, efficient coal-power plants also provide profitable margins, albeit less margin than nuclear power (assuming the coal plants are reasonably efficient). Third, natural-gas power plants generally earn the lowest gross margins, because their cost structure is higher than nuclear or coal and their revenue is equal. Fourth, as long as natural gas is more expensive than nuclear power or coal, natural-gas power plants has lost any possibility of cost leadership; they must compete among themselves to secure the best position in the stack after nuclear and coal-plant power is dispatched.