Investment in different sized SMRs: Economic evaluation of stochastic scenarios by INCAS code

Conference · Sun Jul 01 04:00:00 EDT 2012

OSTI ID:22107909

Barenghi, S.; Boarin, S.; Ricotti, M. E. ^[1]

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1. Politecnico di Milano, Dept. of Energy, CeSNEF-Nuclear Engineering Div., via La Masa 34, 20156 Milano (Italy)

Small Modular LWR concepts are being developed and proposed to investors worldwide. They capitalize on operating track record of GEN II LWR, while introducing innovative design enhancements allowed by smaller size and additional benefits from the higher degree of modularization and from deployment of multiple units on the same site. (i.e. 'Economy of Multiple' paradigm) Nevertheless Small Modular Reactors pay for a dis-economy of scale that represents a relevant penalty on a capital intensive investment. Investors in the nuclear power generation industry face a very high financial risk, due to high capital commitment and exceptionally long pay-back time. Investment risk arise from uncertainty that affects scenario conditions over such a long time horizon. Risk aversion is increased by current adverse conditions of financial markets and general economic downturn, as is the case nowadays. This work investigates both the investment profitability and risk of alternative investments in a single Large Reactor or in multiple SMR of different sizes drawing information from project's Internal Rate of Return stochastic distribution. multiple SMR deployment on a single site with total power installed, equivalent to a single LR. Uncertain scenario conditions and stochastic input assumptions are included in the analysis, representing investment uncertainty and risk. Results show that, despite the combination of much larger number of stochastic variables in SMR fleets, uncertainty of project profitability is not increased, as compared to LR: SMR have features able to smooth IRR variance and control investment risk. Despite dis-economy of scale, SMR represent a limited capital commitment and a scalable investment option that meet investors' interest, even in developed and mature markets, that are traditional marketplace for LR. (authors)

• Research Organization: American Nuclear Society, 555 North Kensington Avenue, La Grange Park, IL 60526 (United States)
• OSTI ID: 22107909
• Country of Publication: United States
• Language: English

Related Subjects

21 SPECIFIC NUCLEAR REACTORS AND ASSOCIATED PLANTS
29 ENERGY PLANNING, POLICY, AND ECONOMY
CAPITAL
DESIGN
ECONOMICS
ECONOMY
EVALUATION
INVESTMENT
MARKET
NUCLEAR POWER
NUCLEAR POWER PLANTS
PAYBACK PERIOD
RISK ASSESSMENT
STOCHASTIC PROCESSES