The cost of electricity under uncertainty

Electricity supply, and cost, is influenced by three major areas of uncertainty: the type and scale of generating technology, the magnitude and end use of demand, and the economic background. If nuclear electricity is to fulfil the role given it by ‘orthodox’ opinion—to capture much of the bulk heating market and become the prime marginal fuel by the year 2000—it must have a price advantage. Yet nuclear costs continue to rise rapidly. As demand growth slackens, energy planners, too often in the past exuberantly certain, should make a more flexible assessment of the true social costs and benefits of such options as renewable sources, smaller generating units, and combined heat and power.