> I'm not sure how well this works given that peaker plants have to pay for their fuel whereas nuclear - to a first approximation - does not; everything is factored in the building cost.
It's not about the cost of nuclear, it's about the utilization of peaker plants.
If you build 10GW of nuclear, you generate 10GW 100% of the time. If you build 10GW of peaker plants, do you use it 15% of the time or 0.5% of the time? The answer to which depends on if it's the first 10GW of peaker plants (10GW shortfall happens frequently) or the last 10GW of peaker plants (only needed if the first 80GW of installed capacity was used first; 90GW shortfall happens very rarely).
Sure, but a peaker plant is providing capacity even when it sits unused. That's a valuable service, and it gets rewarded by usual electricity-market arrangements. So the relevant question is when can this service be provided more cheaply than the same amount of nuclear-supplied capacity.
The value of the service depends on how many other peaker plants there already are.
> That's a valuable service, and it gets rewarded by usual electricity-market arrangements.
This is the bureaucracy papering over the details like an abstraction layer. You want to look at the underlying economics when you're redesigning a system like this. This is napkin math but it should be directionally accurate.
Suppose we assign rates to the relationship between supply and demand in the power grid. The price of electricity set by how much demand exceeds supply.
Then you're going to have a base rate, call it R0, essentially what electricity costs off-peak on a typical day. This is the rate which is going to prevail for around two thirds of the time. Then you have your normal day peak rate, R1, this is what it costs in the early evening when there is low renewable generation and high demand, basically the higher cost of intra-day energy storage. This might prevail for 1/6th of the hours in a year.
Two thirds plus 1/6th, you still have another 1/6th, that's when something bad is happening. It's a bit cloudy today, rate R2, happens 10% of the time. More cloudy, even higher rate R3, 3% of the time. Overcast for the whole day, rate R4, 2% of the time. Overcast for multiple days, rate R5, 1% of the time. Overcast for multiple days in the summer during peak air conditioning demand, rate R6, <1% of the time.
Now you can calculate how much value a nuclear plant has, because it generates all the time:
Solar has to recover its costs from just R0, which is the lowest rate, but it can do that by generating for a large number of hours a year relative to a peaker plant, and because it's cheap. Batteries recover their cost during R1, which isn't as many hours but the rate is higher.
The first peaker plant gets R2 through R6, because it gets turned on as soon as you hit R2, i.e. you need more than you get from current generation + energy storage. The second peaker plant only generates at R3 through R6 because it doesn't get turned on until then, since the first one was enough during R2.
The last peaker plant only generates during R6 and has to justify its entire cost by operating only 0.67% of the time. Which is why R6 is the highest rate, but even then it's a tough sell -- much harder than the other peaker plants which operate during R6 and R5, R4, etc.
Whereas the nuclear plant operates ~100% of the time, R0 through R6, replacing both renewable generation on a normal day and peaker generation during a supply crunch. But it costs more to build. So it should be worth it to replace the peaker plant that only operates during R6, but maybe not worth it to replace the peaker plant that operates from R3-R6, and definitely not worth it to replace the peaker plant that operates from R2-R6.
It's not about the cost of nuclear, it's about the utilization of peaker plants.
If you build 10GW of nuclear, you generate 10GW 100% of the time. If you build 10GW of peaker plants, do you use it 15% of the time or 0.5% of the time? The answer to which depends on if it's the first 10GW of peaker plants (10GW shortfall happens frequently) or the last 10GW of peaker plants (only needed if the first 80GW of installed capacity was used first; 90GW shortfall happens very rarely).