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The Financing of Nuclear Power Plants

image of The Financing of Nuclear Power Plants
Many countries have recognised that greater use of nuclear power could play a valuable role in reducing carbon dioxide emissions. However, given the high capital cost and complexity of nuclear power plants, financing their construction often remains a challenge. This is especially true where such financing is left to the private sector in the context of competitive electricity markets. 

This study examines the financial risks involved in investing in a new nuclear power plant, how these can be mitigated, and how projects can be structured so that residual risks are taken by those best able to manage them. Given that expansion of nuclear power programmes will require strong and sustained government support, the study highlights the role of governments in facilitating and encouraging investment in new nuclear generating capacity.

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Historical perspectives and experience

Nuclear Energy Agency

In the 1970s and 1980s, finance was available for a rapid and widespread expansion of nuclear capacity, even though this was then a new technology with only a limited track record. Today it can appear very difficult to finance a very modest expansion of nuclear capacity, even when it is clear that there is growing electricity demand and/or a need to replace retiring generating capacity. This seems true even though NPP designs available today have been improved in the light of many reactor-years of operating experience, and benefit from more advanced technologies in many areas (for example, in information technology).

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