Assessment of costs of nuclear power in Bangladesh

Abstract

Financing and economic risks are two of the major challenges facing by the nuclear industry today for the construction of a new build Gen III+ or an advanced Gen IV nuclear power plant (NPP). Prediction of economics and financial aspects of an NPP always remains uncertain as these are heavily dependent on investment costs, construction time, licensing and regulation, operation and maintenance (O&M) costs, fuel costs, financing costs, plant capacity factor (PCF), etc. Such uncertainty in accurately predicting the risk of financing and economics limits the growth of the nuclear industry. Furthermore, global high-trend construction costs of NPPs lack confidence amongst manufacturers and builders. This paper attempts for modeling the costs of the twin under construction VVER-1200 model Gen III+ reactors at Rooppur in Bangladesh based on techno-economic and financial data, and some assumptions. To calculate the levelized unit electricity cost (LUEC), net present value (NPV), internal rate of return (IRR), and payback period (PBP), nine scenarios are modeled in the FINPLAN modeling tool given the plant technical data, investment costs, financial terms & conditions, global benchmarked operation & maintenance (O&M) costs and fuel costs, PCFs of 50–90%, and a fixed discount rate of 10%. The study finds that the estimations of LUECs of the Rooppur NPP project are in the range of 43.8–82.5 $/MWh of which are lower than for coal, oil, and renewable energy sources. The annual rate of return of the project is found in the range of 13–20%. The PBP is within 7–8 years after the start of commercial operation. Cost sensitivity analysis is performed by taking a large variation of O&M costs, fuel costs, and PCFs. The results show favorable economic situations with regard to the country’s other power sources and are expected to be competitive with global NPPs projects. Only the competitive NPP projects can contribute to a sustainable economic, social, environmental, scientific, and technological developments for both NPP importing and exporting countries.