Financing Strategies for Nuclear Fuel Cycle Facility

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To help meet our nation’s energy needs, reprocessing of spent nuclear fuel is being considered more and more as a necessary step in a future nuclear fuel cycle, but incorporating this step into the fuel cycle will require considerable investment. This report presents an evaluation of financing scenarios for reprocessing facilities integrated into the nuclear fuel cycle. A range of options, from fully government owned to fully private owned, was evaluated using a DPL (Dynamic Programming Language) 6.0 model, which can systematically optimize outcomes based on user-defined criteria (e.g., lowest life-cycle cost, lowest unit cost). Though all business decisions follow ... continued below

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Shropshire, David & Chandler, Sharon December 1, 2005.

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Description

To help meet our nation’s energy needs, reprocessing of spent nuclear fuel is being considered more and more as a necessary step in a future nuclear fuel cycle, but incorporating this step into the fuel cycle will require considerable investment. This report presents an evaluation of financing scenarios for reprocessing facilities integrated into the nuclear fuel cycle. A range of options, from fully government owned to fully private owned, was evaluated using a DPL (Dynamic Programming Language) 6.0 model, which can systematically optimize outcomes based on user-defined criteria (e.g., lowest life-cycle cost, lowest unit cost). Though all business decisions follow similar logic with regard to financing, reprocessing facilities are an exception due to the range of financing options available. The evaluation concludes that lowest unit costs and lifetime costs follow a fully government-owned financing strategy, due to government forgiveness of debt as sunk costs. Other financing arrangements, however, including regulated utility ownership and a hybrid ownership scheme, led to acceptable costs, below the Nuclear Energy Agency published estimates. Overwhelmingly, uncertainty in annual capacity led to the greatest fluctuations in unit costs necessary for recovery of operating and capital expenditures; the ability to determine annual capacity will be a driving factor in setting unit costs. For private ventures, the costs of capital, especially equity interest rates, dominate the balance sheet; the annual operating costs dominate the government case. It is concluded that to finance the construction and operation of such a facility without government ownership could be feasible with measures taken to mitigate risk, and that factors besides unit costs should be considered (e.g., legal issues, social effects, proliferation concerns) before making a decision on financing strategy.

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  • Report No.: INL/EXT-05-01021
  • Grant Number: DE-AC07-99ID-13727
  • DOI: 10.2172/911262 | External Link
  • Office of Scientific & Technical Information Report Number: 911262
  • Archival Resource Key: ark:/67531/metadc888943

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Office of Scientific & Technical Information Technical Reports

Reports, articles and other documents harvested from the Office of Scientific and Technical Information.

Office of Scientific and Technical Information (OSTI) is the Department of Energy (DOE) office that collects, preserves, and disseminates DOE-sponsored research and development (R&D) results that are the outcomes of R&D projects or other funded activities at DOE labs and facilities nationwide and grantees at universities and other institutions.

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  • December 1, 2005

Added to The UNT Digital Library

  • Sept. 22, 2016, 2:13 a.m.

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  • Nov. 7, 2016, 4:12 p.m.

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Shropshire, David & Chandler, Sharon. Financing Strategies for Nuclear Fuel Cycle Facility, report, December 1, 2005; [Idaho Falls, Idaho]. (digital.library.unt.edu/ark:/67531/metadc888943/: accessed September 24, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.