Publication Laka-library:
Due diligence on the economics and business risks of new nuclear power

AuthorCraig A. Severance
6-01-0-10-84.pdf
DateMarch 2010
Classification 6.01.0.10/84 (COSTS)
Front

From the publication:

         Due Diligence
on The Economics and Business
  Risks of New Nuclear Power
                    Craig A. Severance CPA
   Author, Business Risks to Utilities as New Nuclear Power Costs Escalate
                       (Electricity Journal, May 2009)
   Co-
    Co-Author, The Economics of Nuclear and Coal Power (Praeger, 1976)
            Website Resources: www.EnergyEconomyOnline.com

                               March 4, 2010
       Brookings Institution/Global Public Policy Institute Conference
                 “Towards a Nuclear Power Renaissance?
                Challenges for Global Energy Governance”
                                                Governance”
                             Potsdam, Germany
      Evaluating New Nuclear Power
      Economics and Business Risks
„   Multiple studies & projections
„   Levelized Cost of Energy primary focus
„   Costs unproved, rely on nuclear vendors
„   Promoter business plans always look
    competitive – yet most have serious
    weaknesses
„   Due Diligence process asks questions that
    highlight strengths and weaknesses
„   Trillions of dollars of energy investment
    now at stake
„   Serious weaknesses exposed? Go slow.
“Who Stopped New Nuclear Power?”

 „   Not environmentalists – government
     policies always favored nuclear power

 „   Not Three Mile Island 1979 accident –
     cancellations already underway before
     accident

 „   Utility boards & Wall Street stopped
     nuclear expansion after true costs,
     business risks evident
     Core Due Diligence Tests
1.   Does proposal match customer
     needs?

2.   Financial Ability/Financial Stress

3.   Reliability of Cost Projections

4.   Assessment of Competition

5.   Reliability of Revenue Projections
          Business Test #1:
Does Proposal Match Customer Needs?
    – Current Utility Environment –

„   Demand forecasts highly uncertain
„   Energy efficiency efforts increasing
„   Smart Grid to be implemented
„   Distrib