Financial Analysis of Large Versus Small Nuclear Power Plants

There have been no new orders for nuclear plants and many nuclear plants under construction have been cancelled in recent years in the United States. Financing problems have been a major factor in this slow down of new nuclear plant activity. Meanwhile, the nuclear plants that have been completed have been operating cost effectively and vielding fossil fuel conservation and air quality bene fits. Smaller plants have been designed in the past for the purpose of penetrating markets in developing countries and countries with relatively small utility systems. This paper examines the question of whether these smaller plants would be a viable option to large nuclear plants in the United States. Although the smaller plants are estimated to have a somewhat higher capital cost on a /kW basis, they have the potential advantage of a lower total financial commitment. The computational tools required for this evaluation are optimal generation planning and financial simulation programs and the corresponding generation and financial data bases for a variety of systems. The results of this evaluation show that on large electric systems with large growth rates the financing benefit from small nuclear plants is minimal while on small systems with small growth rates, the potential financing benefits from small nuclear plants can be substantial.