On the Optimal Lifetime of Nuclear Power Plants

Geoffrey Rothwell and John Rust ()

Journal of Business & Economic Statistics, 1997, vol. 15, issue 2, 195-208

Abstract: The authors present an empirical model of optimal operation of nuclear power plants. The optimal lifetime is the solution to an optimal stopping problem: the plant is closed when the expected discounted losses from continued operation exceed the discounted costs of decommissioning. The authors forecast the evolution of the nuclear power industry under the current regime of forty-year operating licenses and for a policy allowing twenty-year license extensions. They conclude that the extension would double the expected discounted value of U.S. nuclear power plants and double the undiscounted electrical power output of the U.S. nuclear industry over its remaining lifetime.

Date: 1997
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Working Paper: On the Optimal Lifetime of Nuclear Power Plants (1996)
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