Minimizing the Cost of Innovative Nuclear Technology Through Flexibility: The Case of a Demonstration Accelerator-Driven Subcritical Reactor Park
AbstractPresented is a methodology to analyze the expected Levelised Cost Of Electricity (LCOE) in the face of technology uncertainty for Accelerator-Driven Subcritical Reactors (ADSRs). It shows that flexibility in the design and deployment strategy of an ADSR park demonstrator significantly reduces its expected LCOE. The methodology recognizes in the conceptual design a range of possible technological outcomes for the ADSR accelerator system. It identifies flexibility “on” and “in” the design to modify the future development path in light of such uncertain scenarios. Uncertainty and flexibility are incorporated in the ADSR valuation. The resulting economic assessment is more realistic than typical discounted cash flow analysis that does not consider a range of development outcomes, or the flexibility to change development path.
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Bibliographic InfoPaper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 1037.
Date of creation: 16 Aug 2010
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Web page: http://www.econ.cam.ac.uk/index.htm
Accelerator-driven subcritical reactor; real options; flexibility in design; electricity production; economics;
Find related papers by JEL classification:
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
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- Louberge, Henri & Villeneuve, Stephane & Chesney, Marc, 2002.
"Long-term risk management of nuclear waste: a real options approach,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 27(1), pages 157-180, November.
- CHESNEY, Marc & LOUBERGE, Henri & VILLENEUVE, Stéphane, 2001. "Long-term risk management of nuclear waste : a real options approach," Les Cahiers de Recherche 767, HEC Paris.
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