IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v38y2010i10p6360-6374.html
   My bibliography  Save this article

Small-medium sized nuclear coal and gas power plant: A probabilistic analysis of their financial performances and influence of CO2 cost

Author

Listed:
  • Locatelli, Giorgio
  • Mancini, Mauro

Abstract

Nations or regions with limited electrical grid and restricted financial resources are a suitable market for small medium power plants with a size of 300-400Â MWe. The literature presents several comparisons about the economics of large power plants (of about 1000Â MWe); however there are not probabilistic analysis regarding the economics of small medium power plants. This paper fills this gap comparing, with a Monte Carlo evaluation, the economical and financial performances of a nuclear reactor, a coal fired power plant and a combined cycle gas turbine (CCGT) of 335Â MWe. The paper aims also to investigate the effect of the carbon tax and electrical energy price on the economics of these plants. The analysis show as, without any carbon tax, the coal plant has the lowest levelised unit electricity cost (LUEC) and the highest net present value (NPV). Introducing the carbon tax the rank changes: depending on its amount the first and the nuclear after becomes the plant with lower LUEC and highest NPV. Therefore, the uncertainty in the carbon tax cost increases the risk of investing in a coal plant above the level of the new small medium reactor.

Suggested Citation

  • Locatelli, Giorgio & Mancini, Mauro, 2010. "Small-medium sized nuclear coal and gas power plant: A probabilistic analysis of their financial performances and influence of CO2 cost," Energy Policy, Elsevier, vol. 38(10), pages 6360-6374, October.
    • Handle: RePEc:eee:enepol:v:38:y:2010:i:10:p:6360-6374
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301-4215(10)00490-8
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Durand-Lasserve, Olivier & Pierru, Axel & Smeers, Yves, 2010. "Uncertain long-run emissions targets, CO2 price and global energy transition: A general equilibrium approach," Energy Policy, Elsevier, vol. 38(9), pages 5108-5122, September.
    2. Aydin, Gokhan & Karakurt, Izzet & Aydiner, Kerim, 2010. "Evaluation of geologic storage options of CO2: Applicability, cost, storage capacity and safety," Energy Policy, Elsevier, vol. 38(9), pages 5072-5080, September.
    3. Feretic, Danilo & Tomsic, Zeljko, 2005. "Probabilistic analysis of electrical energy costs comparing: production costs for gas, coal and nuclear power plants," Energy Policy, Elsevier, vol. 33(1), pages 5-13, January.
    4. Bolinger, Mark & Wiser, Ryan & Golove, William, 2006. "Accounting for fuel price risk when comparing renewable to gas-fired generation: the role of forward natural gas prices," Energy Policy, Elsevier, vol. 34(6), pages 706-720, April.
    5. Vaillancourt, Kathleen & Labriet, Maryse & Loulou, Richard & Waaub, Jean-Philippe, 2008. "The role of nuclear energy in long-term climate scenarios: An analysis with the World-TIMES model," Energy Policy, Elsevier, vol. 36(7), pages 2296-2307, July.
    6. Trujillo, Lourdes & Quinet, Emile & Estache, Antonio, 2002. "Dealing with demand forecasting games in transport privatization," Transport Policy, Elsevier, vol. 9(4), pages 325-334, October.
    7. Roques, F.A. & Nuttall, W.J. & Newbery, D.M., 2006. "Using Probabilistic Analysis to Value Power Generation Investments Under Uncertainty," Cambridge Working Papers in Economics 0650, Faculty of Economics, University of Cambridge.
    8. Bent Flyvbjerg, 2007. "Policy and Planning for Large-Infrastructure Projects: Problems, Causes, Cures," Environment and Planning B, , vol. 34(4), pages 578-597, August.
    9. Dong-Joon Jo & Erik Gartzke, 2007. "Determinants of Nuclear Weapons Proliferation," Journal of Conflict Resolution, Peace Science Society (International), vol. 51(1), pages 167-194, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Locatelli, Giorgio & Boarin, Sara & Pellegrino, Francesco & Ricotti, Marco E., 2015. "Load following with Small Modular Reactors (SMR): A real options analysis," Energy, Elsevier, vol. 80(C), pages 41-54.
    2. Locatelli, Giorgio & Mancini, Mauro & Lotti, Giovanni, 2020. "A simple-to-implement real options method for the energy sector," Energy, Elsevier, vol. 197(C).
    3. Jano-Ito, Marco A. & Crawford-Brown, Douglas, 2017. "Investment decisions considering economic, environmental and social factors: An actors' perspective for the electricity sector of Mexico," Energy, Elsevier, vol. 121(C), pages 92-106.
    4. Mignacca, B. & Locatelli, G., 2020. "Economics and finance of Small Modular Reactors: A systematic review and research agenda," Renewable and Sustainable Energy Reviews, Elsevier, vol. 118(C).
    5. Sarjiya, & Budi, Rizki Firmansyah Setya & Hadi, Sasongko Pramono, 2019. "Game theory for multi-objective and multi-period framework generation expansion planning in deregulated markets," Energy, Elsevier, vol. 174(C), pages 323-330.
    6. Kavvadias, K.C. & Khamis, I., 2014. "Sensitivity analysis and probabilistic assessment of seawater desalination costs fueled by nuclear and fossil fuel," Energy Policy, Elsevier, vol. 74(S1), pages 24-30.
    7. Van Hee, Nick & Peremans, Herbert & Nimmegeers, Philippe, 2024. "Economic potential and barriers of small modular reactors in Europe," Renewable and Sustainable Energy Reviews, Elsevier, vol. 203(C).
    8. Maria del Carmen Gomez-Rios & Dora Carmen Galvez-Cruz, 2021. "Simulation of Levelized Costs of Electricity Considering Externalities," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 16(4), pages 1-23, Octubre -.
    9. Lai, Chun Sing & Locatelli, Giorgio & Pimm, Andrew & Tao, Yingshan & Li, Xuecong & Lai, Loi Lei, 2019. "A financial model for lithium-ion storage in a photovoltaic and biogas energy system," Applied Energy, Elsevier, vol. 251(C), pages 1-1.
    10. Locatelli, Giorgio & Mancini, Mauro, 2011. "Large and small baseload power plants: Drivers to define the optimal portfolios," Energy Policy, Elsevier, vol. 39(12), pages 7762-7775.
    11. Wright, Daniel G. & Dey, Prasanta K. & Brammer, John G., 2013. "A fuzzy levelised energy cost method for renewable energy technology assessment," Energy Policy, Elsevier, vol. 62(C), pages 315-323.
    12. Locatelli, Giorgio & Mancini, Mauro & Todeschini, Nicola, 2013. "Generation IV nuclear reactors: Current status and future prospects," Energy Policy, Elsevier, vol. 61(C), pages 1503-1520.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Roques, Fabien A., 2008. "Technology choices for new entrants in liberalized markets: The value of operating flexibility and contractual arrangements," Utilities Policy, Elsevier, vol. 16(4), pages 245-253, December.
    2. Geissmann, Thomas, 2017. "A probabilistic approach to the computation of the levelized cost of electricity," Energy, Elsevier, vol. 124(C), pages 372-381.
    3. Vithayasrichareon, Peerapat & MacGill, Iain F., 2012. "A Monte Carlo based decision-support tool for assessing generation portfolios in future carbon constrained electricity industries," Energy Policy, Elsevier, vol. 41(C), pages 374-392.
    4. Bert van Wee, 2007. "Large Infrastructure Projects: A Review of the Quality of Demand Forecasts and Cost Estimations," Environment and Planning B, , vol. 34(4), pages 611-625, August.
    5. Després, Jacques & Hadjsaid, Nouredine & Criqui, Patrick & Noirot, Isabelle, 2015. "Modelling the impacts of variable renewable sources on the power sector: Reconsidering the typology of energy modelling tools," Energy, Elsevier, vol. 80(C), pages 486-495.
    6. Vithayasrichareon, Peerapat & MacGill, Iain F., 2013. "Assessing the value of wind generation in future carbon constrained electricity industries," Energy Policy, Elsevier, vol. 53(C), pages 400-412.
    7. Ningning Zhao & Tianfu Xu & Kairan Wang & Hailong Tian & Fugang Wang, 2018. "Experimental study of physical‐chemical properties modification of coal after CO2 sequestration in deep unmineable coal seams," Greenhouse Gases: Science and Technology, Blackwell Publishing, vol. 8(3), pages 510-528, June.
    8. Cantarelli, C.C. & Flyvbjerg, B. & Buhl, S.L., 2012. "Geographical variation in project cost performance: the Netherlands versus worldwide," Journal of Transport Geography, Elsevier, vol. 24(C), pages 324-331.
    9. Kiriyama, Eriko & Kajikawa, Yuya & Fujita, Katsuhide & Iwata, Shuichi, 2013. "A lead for transvaluation of global nuclear energy research and funded projects in Japan," Applied Energy, Elsevier, vol. 109(C), pages 145-153.
    10. Santos, Lúcia & Soares, Isabel & Mendes, Carla & Ferreira, Paula, 2014. "Real Options versus Traditional Methods to assess Renewable Energy Projects," Renewable Energy, Elsevier, vol. 68(C), pages 588-594.
    11. Anandarajah, Gabrial & Gambhir, Ajay, 2014. "India’s CO2 emission pathways to 2050: What role can renewables play?," Applied Energy, Elsevier, vol. 131(C), pages 79-86.
    12. Love, Peter E.D. & Ika, Lavagnon A. & Ahiaga-Dagbui, Dominic D., 2019. "On de-bunking ‘fake news’ in a post truth era: Why does the Planning Fallacy explanation for cost overruns fall short?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 126(C), pages 397-408.
    13. Hugo Priemus & Bert van Wee (ed.), 2013. "International Handbook on Mega-Projects," Books, Edward Elgar Publishing, number 14791.
    14. Standardi, Gabriele & Cai, Yiyong & Yeh, Sonia, 2017. "Sensitivity of modeling results to technological and regional details: The case of Italy's carbon mitigation policy," Energy Economics, Elsevier, vol. 63(C), pages 116-128.
    15. Tom Ferris & Theo Thomas, 2009. "Review of Public Investment Management Performance (PIMP) in an Economic Crisis," World Bank Publications - Reports 10532, The World Bank Group.
    16. Walker, Joan L. & Chatman, Daniel & Daziano, Ricardo & Erhardt, Gregory & Gao, Song & Mahmassani, Hani & Ory, David & Sall, Elizabeth & Bhat, Chandra & Chim, Nicholas & Daniels, Clint & Gardner, Brian, 2019. "Advancing the Science of Travel Demand Forecasting," Institute of Transportation Studies, Research Reports, Working Papers, Proceedings qt0v1906ts, Institute of Transportation Studies, UC Berkeley.
    17. Roux, Charlotte & Schalbart, Patrick & Assoumou, Edi & Peuportier, Bruno, 2016. "Integrating climate change and energy mix scenarios in LCA of buildings and districts," Applied Energy, Elsevier, vol. 184(C), pages 619-629.
    18. Hache, Emmanuel & Seck, Gondia Sokhna & Simoen, Marine & Bonnet, Clément & Carcanague, Samuel, 2019. "Critical raw materials and transportation sector electrification: A detailed bottom-up analysis in world transport," Applied Energy, Elsevier, vol. 240(C), pages 6-25.
    19. Chantal C. Cantarelli & Bent Flybjerg & Eric J. E. Molin & Bert van Wee, 2013. "Cost overruns in Large-Scale Transportation Infrastructure Projects: Explanations and Their Theoretical Embeddedness," Papers 1307.2176, arXiv.org.
    20. Segantin, Stefano & Testoni, Raffaella & Zucchetti, Massimo, 2019. "The lifetime determination of ARC reactor as a load-following plant in the energy framework," Energy Policy, Elsevier, vol. 126(C), pages 66-75.

    More about this item

    Keywords

    LUEC Small medium plant Monte Carlo;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:38:y:2010:i:10:p:6360-6374. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.