Integration costs are incurred by the power system and paid for by uplift charges to retail electricity rates. The consumer pays retail rates that include both the contractual price for power plant output, and the system integration costs of each generation technology.

Variable or intermittent sources like solar and wind have low contractual prices but very high system integration costs when they are used to supply either base-load or intermediate load demand.

Nuclear plants have higher contractual prices for their output but very low system integration costs when they are used to supply base-load load demand. Nuclear would have high integration costs if it were used to supply the incremental daily peak load demand. However, most utilities do not install more nuclear capacity than is required to supply the base-load demand (the round-the-clock steady electricity demand 24 hours a day and 7 days a week). Intermediate and peak load demand typically is supplied by fossil fuel and hydroelectric power plants which have lower system integration costs than variable renewables.

Which technology delivers the lowest final retail electricity price to the ultimate consumer depends on how each technology is used to supply the consumer’s demand over the entire year. Therefore nuclear can be the cheapest option with respect to the retail price consumers pay when it is used to supply the base-load electricity demand.

The USA is currently experiencing rising retail electricity prices even though more variable renewables are being added at relatively low contractual prices. This apparent contradiction can be explained by the increasing system integration costs to accommodate variable renewables which are now reaching installed capacities that are beginning to supply intermediate and base-load demand.