[ridgeguy]

My understanding is that nuclear power is used to serve base load, which is the demand that isn't subject to significant variation. This allows generator owners to run nuclear generators at their cost-effective maximum output.

It's true that there is great variation in electricity pricing, with peak shaving and other so-called "ancillary services" bringing as much as 100X as high a price as base rate (for a short period of time). Nuke generators aren't capable of rapid load following, reactive power correction, voltage support, or other fast-response services that bring premium power prices.

[nl]

The issue with base load contracts is that they are increasingly being undermined by power that is much cheaper, and reliable almost enough to substitute for base power.

Generally speaking most jurisdictions would have to be stupid to sign up to new long term (20 year+) base power contracts, but that's what nuclear power needs to pat for the high upfront costs.

As this article shows, new storage tech and load management tech makes it likely that base load will be less and less important over time.

[exelius]

Yeah, but the long-term outlook for fossil fuels is still rising prices. If given the choice between building a new LNG plant or a new nuclear plant, are LNG fuel prices low enough and stable enough over the long term to justify over a 20 year+ contract? This is an honest question and I'm sure the energy industry has a legion of forecasters and quant jocks on it, but I personally don't know how the economics work out.

There's also the carbon footprint aspect to consider. If the "carbon tax" is successful, nuclear could be a more cost-effective option than hydrocarbon-fired plants in areas without a more stable "natural" power source like hydroelectric or geothermal. The petrochemical industry likely has enough political pull to neuter any carbon tax law, but in theory that's how it should work.

[ghshephard]

That's my understanding as well. Nuclear Power plants are base load, and are contracted to do such, with long term guaranteed capacity. Peaker Plants take on load that exceeds the base, are paid on the margin, but aren't guaranteed any particular load.