The Economics and Uncertainties of Nuclear Power.

• Author: Rothwell, Geoffrey

The Economics and Uncertainties of Nuclear Power, by FRANCOIS LEVEQUE (Cambridge: Cambridge University Press 2015) Hardbound, 341 pages, ISBN 978-1-107-08728-6

This book presents a thorough discussion of the cost uncertainties and externalities associated with nuclear power generation. However, a better title in English might have been The Political Economy of Nuclear Power in the Light of Uncertainty, as the book suggests on page 3. The book introduces concepts from economics, but does not provide an 'economic analysis' of nuclear power or the nuclear power industry, as the Anglo-American reader might expect. The focus is more on nuclear power policy and regulation than on a complete quantification of costs and uncertainties.

While Part I (1) adds up the expected present value of the costs of nuclear power, (2) speculates as to the origin of the "curse of rising costs," and (3) compares these costs with alternative forms of generation, the book concludes Part I with "Setting aside any consideration of possible accidents, it would be an economically risky choice for an operator to invest in building new nuclear power plants or for a state to facilitate such projects." (p. 78)

Part II covers the probability of nuclear power plant accidents (see International Atomic Energy Agency's, IAEA's, International Nuclear and Radiological Event Scale, INES, defining the severity of nuclear accidents). Chapter 4 starts with a review of the publicly available studies of the probability of a nuclear power plant accident in Europe in light of the accidents at Three Mile Island in the United States in 1979 (INES Level 5), at Chernobyl in the Ukraine (then the Soviet Union) in 1986 (INES Level 7), and at Fukushima Daiichi in Japan in 2011 (INES Level 7). In contrast to these studies, Chapter 5 introduces the reader to the economic analysis of risk aversion, including the complexities of asymmetric value functions taking into account "The distorting effect of t0he Fukushima Daiichi disaster [which] is likely to be a durable feature, particularly as we receive regular reminders." (p. 117)

These two chapters provide an introduction to Chapter 6, "The magic of Bayesian analysis," arguably the most important contribution of the book to this literature. Chapter 6 shows how the results of Probabilistic Risk Analysis (PRA) of a potential accident (calculated for each nuclear reactor since PRA was proposed in the 'Rasmussen Report,' WASH-1400, 1975) can be updated...