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Thesis
Home   /   Thesis   /   Effectiveness and robustness of the market design of low carbon electricity markets: the case of investment in new nuclear

Effectiveness and robustness of the market design of low carbon electricity markets: the case of investment in new nuclear

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Abstract

The subject deals with the role of nuclear power in a low-carbon energy system, helping to lower the costs of the electricity system in the face of the penetration of timed renewable energies (wind, solar). Despite its systemic benefits, nuclear power is struggling to generate sufficient revenues in today's electricity markets, due to price volatility and declining load factors. Models show that very high prices during periods of load shedding could compensate for these losses, but such hypotheses remain to be proven. What's more, any construction contingencies (delays, extra costs) accentuate the risks for investors. To deal with this, suitable economic instruments are proposed: contracts for difference (CfD), capacity mechanisms, and regulated asset bases (RAB). The thesis aims to assess the effectiveness of these instruments through several steps: (1) long-term modeling of a low-carbon interconnected power system, (2) evaluation of the profitability of nuclear power in an “Energy only” market, and (3) modeling integrating these regulatory mechanisms to test their ability to cover construction and operating risks. Finally, tools such as real options or futures markets will be explored to address the uncertainties associated with the mass deployment of new nuclear reactors, from a national energy policy perspective.

Laboratory

[I.Tésé] - Institut de Technico-Economie des Systèmes Energétiques
Institut de Technico-Economie des Systèmes Energétiques
Institut de Technico-Economie des Systèmes Energétiques
Paris-Dauphine
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