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Title: NPP financial and regulatory risks-Importance of a balanced and comprehensive nuclear law for a newcomer country considering nuclear power programme

The nature of Nuclear Power Plant (NPP) projects are: long duration (10-15 years for new build), high capital investment, reasonable risks and highly regulated industries to meet national and international requirement on Safety, Security, Safeguards (3S) and Liabilities. It requires long term planning and commitment from siting to final disposal of waste/spent fuel. Potential financial and regulatory risks are common in massive NPP projects and will be magnified in the case of using unproven technology. If the risks are not properly managed, it can lead to high project and operation costs, and, fail to fulfil its objectives to provide compatible electricity prices and. energy security. To ensure successful, the government and investors need to ensure that the NPP project is bankable with low cost of project and funding, have fair treatment and proper risk mitigation, and able to complete on time with no cost overrun. One of the requirements as prerequisite for the development of NPP as stipulated by the International Atomic Energy Agency (IAEA) is the establishment of a Legal and Regulatory Framework. The main objective of nuclear law is to ensure that the activities and projects carried-out in the country are legal and compliant to national and internationalmore » requirements. The law should also be able to provide fair treatment of risks on its activities that is acceptable to investors. The challenge for a newcomer country is to develop a balanced and comprehensive national nuclear law that meet these objectives while taking into consideration various stakeholders’ interest without compromising on safety, security, safeguard, liability requirements and other international obligations. This paper highlights the nature of NPP projects, its potential and associated financial and regulatory risks, and its major concerns and challenges. It proposes possible risks treatment and mitigation through the formulation of a balanced and comprehensive legislation by clear understanding of various requirements of public, regulators, investors, financial institutions, international community, operator and other important stakeholders. Ambiguities and uncertainties, especially with regards to certain conditions and requirements should be minimised by emulating good practices of experienced nuclear regulators. The imposition of various financial requirements such as funds for decommissioning, radioactive waste management, financial security, nuclear liabilities and licensing fees are necessary, but at the same time the quantum needs to be clearly defined. Concerns on absolute liability of the operators need to be addressed through a creation of necessary and proper nuclear insurance legislations to mitigate operator S nuclear liability obligations and other financial risks. Another major risk to investors is the possibility of public resistance which will not only can hinder the construction but can also stop operation of the nuclear power plant which will contribute to huge losses to investors and countries. This may require a provision in the legislation that provide proper compensation for these situations and at the same time to allow operators to engage in nuclear promotional activities, such as community benefit and public consultation as voluntary initiatives. Through proper planning, research, consultation and execution, the proposed nuclear law shall be able to promote good regulatory practices for public and investors’ confidence and benefit. Early involvement of various stakeholders is essential as a platform for regular communications between regulators and interested parties. Stakeholders’ participation in the NPP programme and law developments will also promote transparency of the projects while upholding the independency of the regulators.« less
Authors:
; ;  [1]
  1. Nuclear Energy Department, Planning Division, Tenaga Nasional Berhad Level 32, Dua Sentral, No. 8 Jalan Tun Sambanthan, 50470 Brickfields, Kuala Lumpur (Malaysia)
Publication Date:
OSTI Identifier:
22391615
Resource Type:
Journal Article
Resource Relation:
Journal Name: AIP Conference Proceedings; Journal Volume: 1659; Journal Issue: 1; Conference: NuSTEC2014: Nuclear Science, Technology, and Engineering Conference 2014, Skudai, Johor (Malaysia), 11-13 Nov 2014; Other Information: (c) 2015 AIP Publishing LLC; Country of input: International Atomic Energy Agency (IAEA)
Country of Publication:
United States
Language:
English
Subject:
21 SPECIFIC NUCLEAR REACTORS AND ASSOCIATED PLANTS; COST OVERRUNS; ENERGY SECURITY; HAZARDS; IAEA; LEGISLATION; MITIGATION; NUCLEAR INSURANCE; NUCLEAR LIABILITY; NUCLEAR POWER; NUCLEAR POWER PLANTS; PLANNING; RADIOACTIVE WASTE MANAGEMENT; REACTOR DECOMMISSIONING; REACTOR OPERATION; REACTOR SAFETY; SAFEGUARDS; SPENT FUELS