The FuTure oF nuclear Fuel cycle - MIT Energy Initiative

CitationS and noteS
1. At a finer level of policy analysis, a case might be made for particular risk-sharing arrangements between state and
private entities. These risk-sharing arrangements could optimize performance incentives or provide other important
advantages for efficiently implementing a nuclear program. Such tactical considerations do not alter the general
perspective that the aggregate social cost of a nuclear fuel cycle must be evaluated using a cost of capital comparable
to what would be employed by any commercial entity, and that this cost of capital is roughly constant across
cycles.
2. The methodology is described in the Appendix. A more detailed presentation appears in De Roo, Guillaume, and
John E. Parsons, A Methodology for Calculating the Levelized Cost of Electricity in Nuclear Power Systems with
Fuel Recycling, Energy Economics, forthcoming 2011, doi 10.1016/j.eneco.2011.01.008. Although a few parameter
inputs vary, the calculations follow by exactly the same steps. A spreadsheet containing the detailed calculations is
available on the web for download at http://web.mit.edu/ceepr/www/publications/workingpapers/DeRooParsons_
spreadsheet.xls.
3. In our 2009 Update of the 2003 Future of Nuclear Power Report we calculated a base case LCOE for nuclear power of
8.4¢/kWh, which matches the figure reported here. The key inputs to the two calculations are the same, although
there are some minor differences in a few inputs and in the format of the calculation and therefore the outputs are
not strictly comparable. The main difference in format comes from the fact that the Update calculation uses a nominal
Weighted Average Cost of Capital of 10% and an inflation rate of 3%, while the calculations in this report are done
in real terms. Therefore we use the equivalent real Weighted Average Cost of Capital of 7.6% as our discount rate.
4. De Roo, Guillaume, Economics of Nuclear Fuel Cycles: Option Valuation and Neutronics Simulation of Mixed Oxide
Fuels, Masters Thesis, MIT, 2009.
5. In the Fast Reactor Recycle, spent fast reactor fuel is also reprocessed and the separated transuranics and uranium
mixture is once again fabricated into fuel for another pass through a fast reactor. To a first order approximation, the
LCOE will be the same whether the fast reactor uses transuranics separated out from spent UOX fuel or a mixture of
transuranics and uranium separated out from spent fast reactor fuel.
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