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Deregulation and Investment in Generation Capacity: Evidence from Nuclear Power Uprates in the United States

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  • Zhen Lei
  • Chen-Hao Tsai
  • Andrew N. Kleit

Abstract

Nuclear power uprates are investments in generation capacity that enable reactors to operate beyond their original power limit. We find that owners of deregulated reactors are more likely to make investment in power uprates. Moreover, after deregulation owners of boiling water reactors are more likely to choose Extended Power Uprates (EPUs) that could add up to 20 percent of the original power, but owners of pressurized water reactors, another type of reactors for which EPUs are more technically challenging, tend to select other types of uprates that add -less of reactor power. Deregulation incentivizes reactor owners to pursue profitable investments and propels them to make careful investment decisions more consistent with the technological nature of their plants.

Suggested Citation

  • Zhen Lei & Chen-Hao Tsai & Andrew N. Kleit, 2017. "Deregulation and Investment in Generation Capacity: Evidence from Nuclear Power Uprates in the United States," The Energy Journal, , vol. 38(3), pages 113-139, May.
    • Handle: RePEc:sae:enejou:v:38:y:2017:i:3:p:113-139
    DOI: 10.5547/01956574.38.3.zlei
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    References listed on IDEAS

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    1. Kira R. Fabrizio & Nancy L. Rose & Catherine D. Wolfram, 2007. "Do Markets Reduce Costs? Assessing the Impact of Regulatory Restructuring on US Electric Generation Efficiency," American Economic Review, American Economic Association, vol. 97(4), pages 1250-1277, September.
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