Nuclear-paper4-Economics

Nuclear-paper4-Economics - sustainable development...

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sustainable development commission The role of nuclear power in a low carbon economy Paper 4: The economics of nuclear power An evidence-based report for the Sustainable Development Commission by Science & Technology Policy Research (SPRU, University of Sussex) and NERA Economic Consulting March 2006
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22 November 2005 Economics of Nuclear Power A Report to the Sustainable Development Commission
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Project Team Gordon MacKerron, University of Sussex Dennis Colenutt, NERA Economic Consulting Michael Spackman, NERA Economic Consulting Alastair Robinson, University of Sussex Essie Linton, NERA Economic Consulting NERA Economic Consulting 15 Stratford Place London W1C 1BE United Kingdom Tel: +44 20 7659 8500 Fax: +44 20 7659 8501 www.nera.com Science and Technology Policy Research University of Sussex (SPRU) Freeman Centre University of Sussex Falmer, Brighton BN1 9QE Tel: 01273 876584 Fax: 01273 685865 www.sussex.ac.uk
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Economics of Nuclear Power Contents NERA Economic Consulting Science & Technology Policy Research, University of Sussex i Contents Executive Summary i 1. Introduction 1 2. The Policy and Market Context 2 2.1. International ordering 4 2.2. Clearly negative externalities 5 2.3. Clearly positive externalities 5 3. Components of Nuclear Power Costs 6 4. Data Sources and Quality 10 4.1. Reactor types 10 4.2. Data sources 11 5. Analytical Comparisons of Cost Data 14 5.1. Fuel, O&M and back-end costs 14 5.2. Capital costs, construction time and operating performance 15 6. International Case Studies 21 6.1. Making International Comparisons 21 6.2. Plants under Construction and Planned 22 6.3. Finland 27 6.4. China 31 7. Financing Mechanisms and Potential Market Impacts 36 7.1. Past Financing Mechanisms for Nuclear Power 36 7.2. Financing Options 37 7.3. Electricity Market Issues 40 8. Bibliography 48 Appendix A. Discounting and the Cost of Capital 51 Appendix B. Glossary of Terms 54
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Economics of Nuclear Power Executive Summary NERA Economic Consulting Science & Technology Policy Research, University of Sussex i Executive Summary When the UK Government published its energy White Paper in February 2003 there was no imminent prospect of a decision on building new nuclear power stations. Since that time, a range of factors has led to an intensification of the debate about nuclear power. Government has now announced a major new energy review in 2006 in which nuclear power will be a significant subject. However, uncertainties about the costs of future nuclear generation have not materially reduced. Important examples are: § neither of the two main potentially competing designs of reactor have yet been built anywhere in the world and recent international experience of nuclear ordering offers few direct lessons for the UK; § the UK safety licensing system has yet to give serious consideration to either design; § the UK’s history in building nuclear projects and some other large infrastructure has been poor. While there are solid grounds for expecting that future construction would be less costly, ‘appraisal optimism’ remains a real risk.
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Nuclear-paper4-Economics - sustainable development...

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