Study on Levelizing Electricity Generation Cost for Nuclear Power Generation between Generations

Abstract

Evaluation of electricity generation cost is important to make energy policy. Levelizing technique for cost and benefit, i.e. discounting technique, plays an important role in the evaluation especially for Nuclear Power Generation (NPG) because the activity related to power generation has been performed beyond generations. On the other hand, there are many arguments for the discounting technique for a long-term, e.g. the cost of climate change. However, those are few arguments for the electricity generation cost for NPG. Therefore, I discuss the discounting technique by referring to the history of cost evaluation for NPG and the recent discussion of backend problem. Moreover, gamma discounting, which attracts a particular interest because of the gradual decrease of effective discounting rate, and two-good model are attempted and discussed. As a result, it is concluded that the two-good model proposed in this study is the most reasonable discounting technique.