The nuclear industry needs to satisfy the multi-criteria approach to risk that banks take when they decide whether to invest in a large infrastructure project. Only then, can it expect to attract this form of financing to nuclear new build projects, writes Ron Cameron.
Specifically, banks look for long-term certainty on price, stable government policy, industry reputation, regulatory certainty, the process for addressing planning and environmental issues and public acceptance, in addition to the economics of the project.
European wholesale electricity markets are currently not favourable to nuclear power, however. That’s because the role of nuclear in offsetting the negative effect on price of feed-in tariffs and grid priorities for renewable forms of energy is not adequately recognised. The cost to the system of having intermittency of supply is often borne by the nuclear plants through their role in providing back-up or otherwise by the consumer through higher electricity prices, subsidies or taxes. Read more...