Marketing challenges for the next generation of nuclear power: Has deregulation eliminated the nuclear option?

Abstract

The purchase of a nuclear plant relies on bank financing and lenders emphasize the quality of the nuclear plant's projected income stream to repay the financing. This is why all previous nuclear plant financings relied on the monopoly status of the purchaser with its legislatively anointed captive market to ensure an adequate income stream. Today, due to deregulation, electric utilities can't own regulated power plants in two-thirds of the country. In these states, electricity is generated and sold on a competitive basis by Independent Power Producers, end-use customers are free to choose their electric suppliers, and state regulators no longer ensure cost coverage of the nuclear-related risks. However, policymakers at last year's United Nations COP26 and other environmental forums touted nuclear power as a solution to climate change because it doesn't produce greenhouse gases. Missing is a discussion and analysis of the impact of this deregulation (and its loss of a guaranteed revenue stream) on the ability to obtain financing and, in turn, on the potential size of this market. Thus, deregulation may have eliminated nuclear power as an option to fight climate change. This presentation builds on earlier research by proposing an analysis of survey data regarding two post-deregulation risk factors (long-term price certainty and long-term output quantity certainty) versus the likelihood to obtain financing.