Influence of Nuclear Investment Costs and Baseload Demand on the Optimal Energy Mix

Baseload demand is essential for industrial facilities such as aluminum smelters, steel and cement manufacturing, mining operations, and other power consumers that require a consistent electricity supply throughout the year. This paper analyzes the impact of baseload demand changes on the optimal energy mix through a simplified case study formulated with the EMPIRE capacity expansion model. It reveals that competitive low-carbon baseload power generation technologies, such as nuclear energy, can significantly shift the optimal energy mix, especially for power systems with higher shares of baseload demand. The resulting changes are characterized by a reduced share of variable renewables and natural gas. However, when low-carbon baseload technologies are not competitive, baseload demand changes have minimal impact on the optimal energy mix. Our work underscores the substantial influence that low-carbon baseload technologies can have on a power system resulting from increased electrification. Baseload sources stand to gain significant shares if they become cost-competitive, and growing baseload demand is observed, thus potentially playing a critical role in shaping a low-carbon energy future.