EPRG 0808

Simon Taylor

Nuclear Power and Deregulated Electricity Markets: Lessons from British Energy

EPRG 0808 Non-Technical Summary | PDF

Also published in:

  • Taylor, Simon. (2007), “Nuclear Power and Deregulated Electricity Markets: Lessons from British Energy”, DIW Conference, CESSA

Abstract: The privatisation in 1996 and subsequent financial crisis in 2002 of the company British Energy plc shed some light on the difficulties of running a nuclear generator in a deregulated electricity market. This paper explains the causes of the company’s financial difficulties and argues that they do not amount to evidence that nuclear power cannot survive in liberalised markets. The causes of the financial crisis were complex and varied but nuclear power risks are not conceptually different from those successfully handled by markets in other sectors. In particular there is no reason in principle why new nuclear power stations should not be viable in a deregulated power market, assuming they are fundamentally cost competitive.

Keywords: Electricity markets, nuclear power, risk management, corporate strategy, financial strategy, privatisation.

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