Does a surge of resource and energy price make photovoltaic more cost competitive against nuclear and fossil fuel power?

Abstract

We compared the generation costs of photovoltaic (PV) with thermal and nuclear power during the period of the recent price surge of fossil fuels and raw materials by a bottom up analysis using a Japanese life cycle assessment (LCA) data for power plants.
Although the steep rise of fossil fuel price had spurred the political mood in favor for renewable energy, we found that the impacts on the cost of PV systems by the price rise were not necessarily small compared to those on the costs of thermal or nuclear power. Due to the price hike of materials from 2003 to 2008, the cost of a PV system had increased by 2.7 yen per kWh. It is close to the price increase of coal power by 3.5 yen per kWh in the same period due to fuel and material price hike. Moreover, the impacts on the cost of a nuclear power were as small as 0.4 yen per kWh in the same period, in spite of the steep rise of uranium price. We conclude that a surge of resource and energy price does not necessarily make PV more cost competitive against nuclear and fossil fuel power, since PV is more material intensive than nuclear and fossil fuel power and the material price also surges when the fuel price does.