World Nuclear Association Blog

Banking on Nuclear

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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 on the latest WNN Editorial article.

Specifically,says Cameron, 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.

Cameron argues that European wholesale electricity markets are currently not favourable to nuclear power, however. That, he says, is 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 generating capacity or otherwise by the consumer through higher electricity prices, subsidies or taxes. With no level playing field for nuclear in liberalised electricity markets, there is a real difficulty in seeing where nuclear new build is going to come from in Europe, without government action. Cameron thinks that there is a need to explicitly recognise the advantages that nuclear power provides to stabilise these markets long term, to support the move to a low carbon economy and to help with security of supply.

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