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Minimizing the Cost of Innovative Nuclear Technology Through Flexibility: The Case of a Demonstration Accelerator-Driven Subcritical Reactor Park

Author

Listed:
  • Michel-Alexandre Cardin

    (Engineering Systems Division, Massachusetts Institute of Technology, Cambridge, USA)

  • Steven J. Steer

    (ESRC Electricity Policy Research Group and Department of Engineering, University of Cambridge)

  • William J. Nuttall

    (ESRC Electricity Policy Research Group and Department of Engineering, University of Cambridge)

  • Geoffrey T. Parks

    (Department of Engineering, University of Cambridge)

  • Leonardo V.N. Gonçalves

    (Department of Engineering, University of Cambridge)

Abstract

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.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Michel-Alexandre Cardin & Steven J. Steer & William J. Nuttall & Geoffrey T. Parks & Leonardo V.N. Gonçalves, 2010. "Minimizing the Cost of Innovative Nuclear Technology Through Flexibility: The Case of a Demonstration Accelerator-Driven Subcritical Reactor Park," Working Papers EPRG 1018, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    • Handle: RePEc:enp:wpaper:eprg1018
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    References listed on IDEAS

    as
    1. Louberge, Henri & Villeneuve, Stephane & Chesney, Marc, 2002. "Long-term risk management of nuclear waste: a real options approach," Journal of Economic Dynamics and Control, Elsevier, vol. 27(1), pages 157-180, November.
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    More about this item

    Keywords

    accelerator-driven subcritical reactor; real options; flexibility in design; electricity production; economics;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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