Carbon Pricing, Power Markets and the Competitiveness of Nuclear Power

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Nuclear Energy Agency

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08 jui 2011
9789264118881 (PDF) ;9789264118874(imprimé)

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This study assesses the competitiveness of nuclear power against coal- and gas-fired power generation in liberalised electricity markets with either CO2 trading or carbon taxes. It uses daily price data for electricity, gas, coal and carbon from 2005 to 2010, which encompasses the first years of the European Emissions Trading System (EU ETS), the world’s foremost carbon trading framework. The study shows that even with modest carbon pricing, competition for new investment in electricity markets will take place between nuclear energy and gas-fired power generation, with coal-fired power struggling to be profitable. The outcome of the competition between nuclear and gas-fired generation hinges, in addition to carbon pricing, on the capital costs for new nuclear power plant construction, gas prices and the profit margins applied. Strong competition in electricity markets reinforces the attractiveness of nuclear energy, as does carbon pricing, in particular when the latter ranges between USD 40 and USD 70 per tonne of CO2. The data and analyses contained in this study provide a robust framework for assessing cost and investment issues in liberalised electricity markets with carbon pricing.

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Table des matières

Executive summary
Chapter 1 Introduction

-1.1 Social resource costs versus private profitability calculations in a real market environment
-1.2 Special issues in electricity markets
-1.3 Scope of this study
Chapter 2 Background
-2.1 CO2 emissions from power generation and carbon trading
-2.2 Key functions and forms of carbon pricing
-2.3 Three different methodologies for assessing the competitiveness of nuclear energy
-2.4 Data and the EU Emissions Trading System
-2.5 The merits of flexibility and low fixed-cost-to-variable-cost ratios
Chapter 3 Existing research on carbon pricing
-3.1 Five distinct approaches in a wide and varied literature
-3.2 Profit analysis
-3.3 Basic cash flow analysis
-3.4 Real option analysis
-3.5 Portfolio analysis
-3.6 EU ETS analysis
-3.7 Conclusion
Chapter 4 Carbon pricing: the competitiveness of nuclear power in LCOE analysis
-4.1 Paying or not paying for CO2 emissions?
Chapter 5 Profit analysis
-5.1 European energy and carbon prices from 2005 to 2010
-5.2 The profitability of different power generation options in the presence of carbon pricing
Chapter 6 Investment analysis
-6.1 Methodology
-6.2 The investment base case and electricity price scenarios
Chapter 7 Carbon tax analysis
-7.1 The set-up of the carbon tax model
-7.2 Results for the standard carbon tax model
-7.3 Results for the CCS carbon tax model
Chapter 8 Conclusions

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