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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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The role of governments and other public bodies

Nuclear Energy Agency

No utility or other investor is likely to consider financing a nuclear project without a clear and sustained government commitment to having nuclear power as part of the long-term energy mix. In most cases, a broad political consensus or acceptance of this policy will be required, to give confidence that political and policy support will be maintained for the life of the project. Such government support provides certainty and security for investors. Public acceptance is also vital for a successful nuclear programme. Where nuclear power is part of the national energy strategy, it is the task of government and politicians to lead public debate and contribute to ensuring that the nuclear programme has the confidence of the public at large.

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