Date : Lundi 27 mai de 15h à 16h
Room : Salle PwC (section verte), HEC Montréal, Côte-Sainte-Catherine
Speaker : Ange Blanchard, Ph.D. Student, Industrial Engineering Research Department (LGI), CentraleSupélec & Climate Economics Chair, Paris-Dauphine PSL*
Abstract
This paper investigates the financing strategies for new investments in nuclear power plants with a focus on minimizing short-term market price exposure while ensuring optimal dispatch. We analyze two main categories of financing schemes: capacity-based subsidies, such as public loans and tax credits, and energy-based schemes, specifically Contracts for Difference (CfDs). Capacity-based subsidies allow for market electricity price exposure, optimizing dispatch within nuclear plants’ operational flexibility constraints. However, they also introduce price and volume uncertainties for investors. In contrast, energy-based subsidies, commonly used in renewable energy investments, offer stability but may not fully value operational flexibility.
We propose a complementary modeling approach for the European electricity market in 2050, integrating different support schemes for nuclear investments. Our analysis includes CfDs that account for flexibility, termed financial or yardstick CfDs. By simulating various scenarios, we assess the impact of these schemes on renewable energy investment levels and overall social welfare. This study contributes to understanding the trade-offs between market exposure and stability in financing strategies for nuclear power, providing insights for policymakers and investors in the energy sector.
