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The economics of new nuclear power plants in liberalized electricity markets

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  • Linares, Pedro
  • Conchado, Adela

Abstract

Even after Fukushima, the nuclear debate is strong in many countries, with the discussion of its economics being a significant part of it. However, most of the estimates are based on a levelized-cost methodology, which presents several shortcomings, particularly when applied to liberalized electricity markets. Our paper provides results based on a different methodology, by which we determine the break-even investment cost for nuclear power plants to be competitive with other electricity generation technologies. Our results show that the cost competitiveness of nuclear power plants is questionable, and that public support of some sort would be needed if new nuclear power plants are to be built in liberalized markets.

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  • Linares, Pedro & Conchado, Adela, 2013. "The economics of new nuclear power plants in liberalized electricity markets," Energy Economics, Elsevier, vol. 40(S1), pages 119-125.
    • Handle: RePEc:eee:eneeco:v:40:y:2013:i:s1:p:s119-s125
    DOI: 10.1016/j.eneco.2013.09.007
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    2. Ahmad, Ali & Ramana, M.V., 2014. "Too costly to matter: Economics of nuclear power for Saudi Arabia," Energy, Elsevier, vol. 69(C), pages 682-694.
    3. Quentin Perrier, 2017. "The French Nuclear Bet," Working Papers 2017.18, Fondazione Eni Enrico Mattei.
    4. Phil Johnstone & Andy Stirling, 2015. "Comparing Nuclear Power Trajectories inGermany And the UK: From ‘Regimes’ to ‘Democracies’ in Sociotechnical Transitions and Discontinuities," SPRU Working Paper Series 2015-18, SPRU - Science Policy Research Unit, University of Sussex Business School.
    5. Rodica Loisel & David Shropshire & Christian Thiel & Arnaud Mercier, 2014. "Flexibility assessment in nuclear energy dominated systems with increased wind energy shares," Working Papers hal-00934217, HAL.
    6. Shirizadeh, Behrang & Quirion, Philippe, 2021. "Low-carbon options for the French power sector: What role for renewables, nuclear energy and carbon capture and storage?," Energy Economics, Elsevier, vol. 95(C).
    7. Perrier, Quentin, 2018. "The second French nuclear bet," Energy Economics, Elsevier, vol. 74(C), pages 858-877.
    8. Geissmann, Thomas, 2017. "A probabilistic approach to the computation of the levelized cost of electricity," Energy, Elsevier, vol. 124(C), pages 372-381.
    9. Mondello, Gerard, 2011. "Civil Liability, Safety and Nuclear Parks: Is Concentrated Management Better?," Sustainable Development Papers 102571, Fondazione Eni Enrico Mattei (FEEM).
    10. Jeong, Minsoo & You, Jung S., 2022. "Estimating the economic costs of nuclear power plant outages in a regulated market using a latent factor model," Renewable and Sustainable Energy Reviews, Elsevier, vol. 166(C).
    11. Wealer, B. & Bauer, S. & Hirschhausen, C.v. & Kemfert, C. & Göke, L., 2021. "Investing into third generation nuclear power plants - Review of recent trends and analysis of future investments using Monte Carlo Simulation," Renewable and Sustainable Energy Reviews, Elsevier, vol. 143(C).
    12. Rinne, Sonja, 2018. "Radioinactive: Are nuclear power plant outages in France contagious to the German electricity price?," CIW Discussion Papers 3/2018, University of Münster, Center for Interdisciplinary Economics (CIW).
    13. Huhtala, Anni & Remes, Piia, 2017. "Quantifying the social costs of nuclear energy: Perceived risk of accident at nuclear power plants," Energy Policy, Elsevier, vol. 105(C), pages 320-331.
    14. Huhtala, Anni & Remes, Piia, 2016. "Dimming Hopes for Nuclear Power: Quantifying the Social Costs of Perceptions of Risks," Working Papers 57, VATT Institute for Economic Research.
    15. Haratyk, Geoffrey, 2017. "Early nuclear retirements in deregulated U.S. markets: Causes, implications and policy options," Energy Policy, Elsevier, vol. 110(C), pages 150-166.
    16. Capitán Herráiz, Álvaro & Rodríguez Monroy, Carlos, 2012. "Evaluation of the trading development in the Iberian Energy Derivatives Market," Energy Policy, Elsevier, vol. 51(C), pages 973-984.
    17. Quentin Perrier, 2017. "The French nuclear bet," CIRED Working Papers halshs-01487296, HAL.
    18. Borrás, Susana & Edler, Jakob, 2020. "The roles of the state in the governance of socio-technical systems’ transformation," Research Policy, Elsevier, vol. 49(5).

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    More about this item

    Keywords

    Nuclear power; Economics; Liberalized electricity markets;
    All these keywords.

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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