Sensitivity of the Margin of Safety: A Nuclear Power Generation Case

Abstract: Nuclear power is seen as an important source of low-carbon electricity, supporting energy security goals, nuclear power plants contribute to competitive base-load electricity supply, After the Fukushima Daiichi Accident EU Member States retain their sovereignty over the use of nuclear power, some of the countries are still expanding their nuclear capacities, building or planning to build new nuclear reactors, or investing in nuclear fleet’s life-extension, upgrade or uprate activities, while some countries agreed to phase out nuclear generation by about 2022 or 2025. One of the most cited advantages of nuclear energy is said to be its relative insensitivity to fuel price fluctuation. However, due to its front-loaded cost-structure and the relatively high share of fixed versus variable costs in its costs structure, nuclear energy generation is exposed to wholesale price fluctuations. The high decline in the wholesale prices in the EU in the last few years affected negatively nuclear power plants. The goal of this study is to highlight the impact of the decline of the average selling price on the margin of safety by using a case study of an Eastern-European nuclear power plan.