Electricity generation now costs USD 100 per megawatt-hour or more in most countries, particularly for low-carbon technologies, according to a new report from the Nuclear Energy Agency and the Electric Power Research Institute. The analysis, titled The Costs of Generating Electricity 2025, is the 10th edition in a series published since 1983 and examines levelised costs across 21 NEA member countries and 23 different technologies. Only a handful of options can deliver power for less than that $100 threshold: the long-term operation of existing nuclear plants, hydroelectricity, and onshore wind and solar photovoltaic systems—as long as their broader system costs aren't factored in.
The report reveals that while utility-scale onshore wind and solar photovoltaic continue to offer attractive plant-level costs in many countries, no significant further cost reductions were observed—a departure from previous editions. Offshore wind continues to face relatively high costs despite strong capacity factors, while geothermal energy shows promising results where suitable resources are available. Nuclear energy data submitted for the analysis covered large-scale reactors, small modular reactors, and long-term operation of existing plants, with a key contrast emerging between near-term projects and more mature "Nth-of-a-kind" deployments. While first projects face higher costs linked to supply-chain rebuilding, workforce shortages, and limited recent construction experience, costs decline significantly as designs are standardised and projects are repeated. Technologies once considered niche—including geothermal energy, biomass, battery storage, hydrogen-fired gas turbines, and fossil-fuel plants equipped with carbon capture—are receiving growing attention across member countries.
"There is no single technology that can meet every country's energy needs in every circumstance," said William D. Magwood, IV, NEA Director-General. The report emphasises that electricity technologies can't be assessed solely on their plant-level costs at a given capacity factor. While levelised costs with an 85% capacity factor for baseload technologies remain a transparent and widely understood indicator of generation costs, they don't capture how technologies interact within a broader electricity system or their contribution to reliability, flexibility, security of supply, and decarbonisation objectives. The analysis also highlights how the interaction of variable renewables such as wind and solar with dispatchable baseload technologies such as nuclear power, coal, and gas significantly affects the latter's capacity factors and hence their unit costs.
The complexity stems from electricity systems facing rising demand, evolving energy security concerns, and efforts to reduce carbon emissions simultaneously. The diversity of technologies now receiving attention reflects the increasingly complex challenge of balancing affordability, energy security, reliability, and environmental goals. Rather than relying heavily on a single technology, many countries will benefit from a diversity of complementary technologies, according to the report. In many cases, combinations of nuclear energy and renewables, supported by sources of flexibility such as battery storage, hydroelectricity, gas-fired power generation—possibly with carbon capture or based on hydrogen—demand response, and interconnections, can provide lower-cost, more resilient electricity systems and strengthen energy security. The optimal mix, however, remains specific to each country and electricity system, making one-size-fits-all solutions increasingly obsolete in the low-carbon transition.