Minimizing the Cost of Innovative Nuclear Technology Through Flexibility: The Case of a Demonstration Accelerator-Driven Subcritical Reactor Park
Steven J. Steer,
William Nuttall (),
Geoffrey T. Parks,
Leonardo VN. Gonçalves and
Richard de Neufville
Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge
Presented 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.
Keywords: Accelerator-driven subcritical reactor; real options; flexibility in design; electricity production; economics (search for similar items in EconPapers)
JEL-codes: D81 (search for similar items in EconPapers)
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Working Paper: Minimizing the Cost of Innovative Nuclear Technology Through Flexibility: The Case of a Demonstration Accelerator-Driven Subcritical Reactor Park (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:cam:camdae:1037
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