9th session of seminars on research in energy economics at paris-sciences-lettres
Abstract
PROGRAM AND PRESENTATIONS
Nicolas Boccard (Université de Gérone) présentera son article récemment paru dans Energy Policy:
The cost of nuclear electricity: France after Fukushima.
Presentation.
Lina Escobar Rangel (Mines ParisTech) présentera son papier, co-écrit avec M. Berthelémy:
Nuclear reactor’s construction costs: the role of lead-time, standardization and technological progress.
Ses travaux seront discutés par Geoffrey Rothwell (AEN-OCDE).
Presentation.
Summary
Nicolas Boccard (University of Girona), The cost of nuclear electricity: France after Fukushima:
The Fukushima disaster has lead the French government to release cost information relative to its nuclear electricity program in a novel court of audit report. It allows us to compute the levelized cost of French nuclear power over 40 years using. We include R&D, technology development, fissile fuel, financing cost, decommissioning and the back-end cycle. We find a mild capital cost escalation and a high operation cost driven by a low fleet availability. We identify a modest escalation of capital cost and a larger than expected operational cost. Under the best scenario, the cost of French nuclear power over the last four decades is 59 €/MWh (at 2010 prices) while in the worst case it is 83 €/MWh. On the basis of these findings, we estimate the future cost of nuclear power in France to beat least 76 €/MWh and possibly 117 €/MWh. A comparison with the US confirms that French nuclear electricity nevertheless remains cheaper.
Lina Escobar Rangel (Cerna, Mines ParisTech) , Nuclear reactors’ construction costs: The role of lead-time, standardization and technological progress:
The paper co-authored with Michel Berthélemy provides a comparative analysis about nuclear reactors’ construction costs in France and the United States. Studying the cost of nuclear power has often been a challenge, because of the lack of reliable data sources, the heterogeneity between countries, as well as the long time horizon which requires controlling for input prices and structural changes. We build a simultaneous system of equation for overnight costs and construction time (lead-time) to control for endogeneity, using expected demand variation as an instrument for construction time. We argue that benefits from nuclear reactor programs’ standardization can arise through short term coordination gains or long terms benefits through learning spillovers from past reactors’ construction experience, if those spillovers are limited to similar reactors. We find that these spillovers are only significant for nuclear models built by the same Architect-Engineer (A-E). In addition, we show that the standardization of nuclear reactors under construction has an indirect and positive effect on construction costs through a reduction in lead-time. Conversely, we also explore the possibility of learning by doing and find that innovation leads to construction costs increases. This can be explained by the fact that innovation in nuclear technologies has focused on safety improvements, leading to safer, but more expensive reactors.
Discutant: Geoffrey Rothwell (AEN-OCDE). Dr. Geoffrey Rothwell is the Principal Economist at the Nuclear Energy Agency of the Organization for Economic Cooperation and Development (Paris, France). From 1986 to 2013, he was a Senior Lecturer and the Director of Honors Programs in the Department of Economics, Stanford University, and Associate Director of Stanford’s Public Policy Program.
