Option approach to investment in modular nuclear electricity-generating capacity
Thesis (S.M.)--Massachusetts Institute of Technology, Dept. of Civil and Environmental Engineering, 2002.
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| Format: | Thesis |
| Language: | eng |
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Massachusetts Institute of Technology
2009
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| Online Access: | http://hdl.handle.net/1721.1/47913 |
| _version_ | 1811089251253616640 |
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| author | Benouaich, Michaël A. (Michaël Armand), 1976- |
| author2 | Fred Moavenzadeh and Gordon Kaufman. |
| author_facet | Fred Moavenzadeh and Gordon Kaufman. Benouaich, Michaël A. (Michaël Armand), 1976- |
| author_sort | Benouaich, Michaël A. (Michaël Armand), 1976- |
| collection | MIT |
| description | Thesis (S.M.)--Massachusetts Institute of Technology, Dept. of Civil and Environmental Engineering, 2002. |
| first_indexed | 2024-09-23T14:16:14Z |
| format | Thesis |
| id | mit-1721.1/47913 |
| institution | Massachusetts Institute of Technology |
| language | eng |
| last_indexed | 2024-09-23T14:16:14Z |
| publishDate | 2009 |
| publisher | Massachusetts Institute of Technology |
| record_format | dspace |
| spelling | mit-1721.1/479132019-04-11T07:22:03Z Option approach to investment in modular nuclear electricity-generating capacity Benouaich, Michaël A. (Michaël Armand), 1976- Fred Moavenzadeh and Gordon Kaufman. Massachusetts Institute of Technology. Dept. of Civil and Environmental Engineering. Massachusetts Institute of Technology. Dept. of Civil and Environmental Engineering. Civil and Environmental Engineering. Thesis (S.M.)--Massachusetts Institute of Technology, Dept. of Civil and Environmental Engineering, 2002. Includes bibliographical references (leaves 88-92). Intensive research efforts are currently taking place in the United States and abroad to shape the next generation of nuclear power systems offering enhanced reliability and safety along with better economics. Two design philosophies, with different technological and market perspectives, are considered. One is to develop large systems relying on evolutionary versions of the current dominant design, and the other is to go with small and modular reactor technology such as the Modular Pebble Bed Reactor (MPBR). This thesis examines the modular technology and its flexibility to add incremental capacity to timely respond to market demand. The decision to invest in a ten-module 1,100MWe MPBR plant is analyzed as a sequence of compound options, where the construction of each single module provides the decision maker with the option to build the next module. The proposed valuation model uses an original binomial approach. We demonstrate that, at any point in time, the value of a modular nuclear power plant has two components: the value of the installed capacity and the value of the firm's option to add capacity incrementally in the future. The modular technology provides additional economic value due to its flexibility that the traditional Busbar cost analysis fails to capture. We analyze different scenarios that highlight the fact that the value of the expansion option is particularly sensitive to the cost of the first module as compared with the following ones. In addition we show that the expansion option value grows when the cost is equalized among the modules to be built. This result leads to recommendations as to the design of the peripheral support facilities and to a larger extent to the overall plant layout. This thesis ends by exposing policy recommendations as to the use of the real options valuation methods in the regulatory framework that governs technology selection and energy capacity expansion decisions. by Michael A. Benouaich. S.M. 2009-10-01T16:03:01Z 2009-10-01T16:03:01Z 2002 2002 Thesis http://hdl.handle.net/1721.1/47913 50566965 eng M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission. http://dspace.mit.edu/handle/1721.1/7582 92 leaves application/pdf Massachusetts Institute of Technology |
| spellingShingle | Civil and Environmental Engineering. Benouaich, Michaël A. (Michaël Armand), 1976- Option approach to investment in modular nuclear electricity-generating capacity |
| title | Option approach to investment in modular nuclear electricity-generating capacity |
| title_full | Option approach to investment in modular nuclear electricity-generating capacity |
| title_fullStr | Option approach to investment in modular nuclear electricity-generating capacity |
| title_full_unstemmed | Option approach to investment in modular nuclear electricity-generating capacity |
| title_short | Option approach to investment in modular nuclear electricity-generating capacity |
| title_sort | option approach to investment in modular nuclear electricity generating capacity |
| topic | Civil and Environmental Engineering. |
| url | http://hdl.handle.net/1721.1/47913 |
| work_keys_str_mv | AT benouaichmichaelamichaelarmand1976 optionapproachtoinvestmentinmodularnuclearelectricitygeneratingcapacity |