Nuclear: The Challenges for Investment. Talk given by Stephen Tromans QC at the 39 Essex Chambers Energy Law conference.

1. NUCLEAR:
The challenges for investment
Stephen Tromans QC

2. The Global Picture: reactors under construction
Source: IAEA Power Reactor Information System - 2013
Under Construction Reactors

3. Operational reactors by age
• Source: IAEA Power Reactor Information System - 2013
Operational Reactors by Age

4. The challenges
• Construction risk – huge and complex projects
• Economic uncertainty as to future energy prices
• Safety – ever more exacting standards in a post-
Fukushima environment
• Political risk – anti-nuclear sentiment, e.g.
Germany
• Liabilities – both for accidents and for long term
management of wastes

5. The financing environment
• Shift from model of government owned and
sponsored projects to private finance
• First of a kind technology
• No consistent financial model
• Constraints on financing by World Bank, IFC
• Requirements of vendor financing
• Importance of de-risking the project

6. Olkiluoto-3
• Construction began August 2005, projected online by
end 2018
• World’s largest nuclear arbitration – currently €3.4bn by
contractor consortium and €2.3bn by utility

7. Economic de-risking
• The UK arrangements with EDF on strike price
• Commission concluded measures with
modifications were compatible with EU State Aid
rules (October 2014)
• Decision subject to challenge by Austria and by
German co-operative founded by Greenpeace
• Implications for final investment decision

8. Hinkley C
EDF visualisation

9. Safety
• Consequences of Fukushima
• Disruption of programmes
• Stress testing of existing reactors
• Greater focus on safety in new build

10. Liability
• Fukushima predicted costs
now $105bn
• Includes $47bn
compensation to affected
residents
• $23bn clean-up costs
• Ruling for payment of
$472,000 to widower whose
wife committed suicide

11. Nuclear plants and earthquake activity
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