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Chapter 20 - A Cost/Benefit Perspective of Extended Unit Service as a Decommissioning Alternative

Some people consider life extension (and its cousin, license renewal) analternative to decommissioning. The reasons for the popularity of suchalternatives include presumed cost effectiveness, retention of scarce power plantsites, and the continued ability to pass on waste storage expenses as a cost ofservice. In this chapter, James Hewlett addresses nuclear power plant lifeextension- -which he calls NUPLEX--in its economic garb, starting with a look atthe common utility presumption that life extension of a nuclear plant will allowit to produce electricity at a lower rate than new coal generation. Thispresumption, he argues, may not be supportable by analysis. He concludes thatthe deferral of constructing new replacement capacity would result in costsavings only if both the level and escalation rate of the operating costs forthe refurbished unit fall substantially from 1986 levels. Therefore, it is unclearwhether the deferral of the construction of new capacity would result in the costsavings, although it definitely shifts the financial burden into the future.

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Energy Specializations: Nuclear Power – Markets and Prices; Nuclear Power – Policy and Regulation

JEL Codes: L94: Electric Utilities, Q35: Hydrocarbon Resources, Q42: Alternative Energy Sources, G32: Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill, Q40: Energy: General, D24: Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity, Q31: Nonrenewable Resources and Conservation: Demand and Supply; Prices, Q54: Climate; Natural Disasters and Their Management; Global Warming

Keywords: Nuclear decommissioning, Reactor life extension, Refurbished reactor, NUPLEX

DOI: 10.5547/ISSN0195-6574-EJ-Vol12-NoSI-20

Published in Volume 12, Special Issue of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.


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