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Cambridge Judge Business School
Nuclear power: why
it’s different
Simon Taylor
Director, Cambridge Master of Finance
The Future of Nuclear Energy Churchill College
Is nuclear power different?
Scale?
Complexity?
Capital intensity?
Time for construction?
Time for operation?
Role of the state?
2
What’s the difference?
3
EPR under construction,
Taishan, Guangdong, China
Part of LNG terminal,
Sakhalin, Russia
Nuclear as an extreme form of infrastructure investment
Two problems:
i) Nuclear is not economic in a free (and failing) market
4
US data: nuclear competitive except with gas (2019)
5
Source: US Energy Information Administration April 2014http://www.eia.gov/forecasts/aeo/pdf/electricity_generation.pdf
Nuclear is competitive in 2040 (if you trust the figures)
6
Source: US Energy Information Administration April 2014http://www.eia.gov/forecasts/aeo/pdf/electricity_generation.pdf
Nuclear as an extreme form of infrastructure investment
Two problems:
i) Nuclear is not economic in a free (and failing) market
ii) Even with market failures corrected, construction risk is too high
So:
i) Fix the market (carbon floor, carbon tax)
ii) Find efficient ways of managing construction risk for early stations
EDF: major corporation, with excellent record, sovereign shareholder.
But needs loan guarantee and non-market fixed price contract to proceed with
Hinkley Point C
The Chinese are coming…
7
s.taylor@jbs.cam.ac.uk

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What makes nuclear power different?

  • 1. Cambridge Judge Business School Nuclear power: why it’s different Simon Taylor Director, Cambridge Master of Finance The Future of Nuclear Energy Churchill College
  • 2. Is nuclear power different? Scale? Complexity? Capital intensity? Time for construction? Time for operation? Role of the state? 2
  • 3. What’s the difference? 3 EPR under construction, Taishan, Guangdong, China Part of LNG terminal, Sakhalin, Russia
  • 4. Nuclear as an extreme form of infrastructure investment Two problems: i) Nuclear is not economic in a free (and failing) market 4
  • 5. US data: nuclear competitive except with gas (2019) 5 Source: US Energy Information Administration April 2014http://www.eia.gov/forecasts/aeo/pdf/electricity_generation.pdf
  • 6. Nuclear is competitive in 2040 (if you trust the figures) 6 Source: US Energy Information Administration April 2014http://www.eia.gov/forecasts/aeo/pdf/electricity_generation.pdf
  • 7. Nuclear as an extreme form of infrastructure investment Two problems: i) Nuclear is not economic in a free (and failing) market ii) Even with market failures corrected, construction risk is too high So: i) Fix the market (carbon floor, carbon tax) ii) Find efficient ways of managing construction risk for early stations EDF: major corporation, with excellent record, sovereign shareholder. But needs loan guarantee and non-market fixed price contract to proceed with Hinkley Point C The Chinese are coming… 7