Funding New Nuclear Power with Regulated Asset Base?
(2025) NEKH04 20251Department of Economics
- Abstract
- The Nuclear Renaissance is a term which describes the increased interest in expanding the nuclear power fleet in recent years, after decades of stagnation in the development of new nuclear power plants. Nuclear power has previously met large political resistance, and although this resistance is decreasing, the problem of how to fund new nuclear power plants remains. The thesis investigates whether the Regulated Asset Base funding model, which is currently implemented in the nuclear project Sizewell C in the UK, should be used to fund new nuclear power plants in Sweden. By comparing the Regulated Asset Base model and the Contract for Difference model, important information of the benefits of Regulated Asset Base is retrieved. Furthermore,... (More)
- The Nuclear Renaissance is a term which describes the increased interest in expanding the nuclear power fleet in recent years, after decades of stagnation in the development of new nuclear power plants. Nuclear power has previously met large political resistance, and although this resistance is decreasing, the problem of how to fund new nuclear power plants remains. The thesis investigates whether the Regulated Asset Base funding model, which is currently implemented in the nuclear project Sizewell C in the UK, should be used to fund new nuclear power plants in Sweden. By comparing the Regulated Asset Base model and the Contract for Difference model, important information of the benefits of Regulated Asset Base is retrieved. Furthermore, the conditions for implementing Regulated Asset Base in the UK are compared to the conditions in Sweden. The conditions for implementing Regulated Asset base in the Czech Republic are also analyzed, since the newly proposed Swedish funding model for new nuclear power is inspired by the Czech model which uses state loans and a form of Contract for Difference. The results show that the UK chose the Regulated Asset Base model for Sizewell C because it leads to a lower Weighted Average Cost of Capital than Contract for Difference. The results also indicate that the UK does not have a significantly larger previous experience of Regulated Asset Base than Sweden and the Czech Republic. However, the proposed model in Sweden which has state loans as one of its main components is especially appropriate in Sweden where the interest rate for state loans is much lower than in the UK and the Czech Republic. The conclusion is that the Regulated Asset Base model should be implemented in Sweden to lower the Weighted Average Cost of Capital, although not for the first new nuclear power plant due to the risk of political friction. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9207641
- author
- Eckerberg, Alexandra LU
- supervisor
- organization
- course
- NEKH04 20251
- year
- 2025
- type
- M2 - Bachelor Degree
- subject
- keywords
- Public finance, mega projects, nuclear power plants, Regulated Asset Base, Contract for Difference
- language
- English
- id
- 9207641
- date added to LUP
- 2025-09-12 09:22:42
- date last changed
- 2025-09-12 09:22:42
@misc{9207641,
abstract = {{The Nuclear Renaissance is a term which describes the increased interest in expanding the nuclear power fleet in recent years, after decades of stagnation in the development of new nuclear power plants. Nuclear power has previously met large political resistance, and although this resistance is decreasing, the problem of how to fund new nuclear power plants remains. The thesis investigates whether the Regulated Asset Base funding model, which is currently implemented in the nuclear project Sizewell C in the UK, should be used to fund new nuclear power plants in Sweden. By comparing the Regulated Asset Base model and the Contract for Difference model, important information of the benefits of Regulated Asset Base is retrieved. Furthermore, the conditions for implementing Regulated Asset Base in the UK are compared to the conditions in Sweden. The conditions for implementing Regulated Asset base in the Czech Republic are also analyzed, since the newly proposed Swedish funding model for new nuclear power is inspired by the Czech model which uses state loans and a form of Contract for Difference. The results show that the UK chose the Regulated Asset Base model for Sizewell C because it leads to a lower Weighted Average Cost of Capital than Contract for Difference. The results also indicate that the UK does not have a significantly larger previous experience of Regulated Asset Base than Sweden and the Czech Republic. However, the proposed model in Sweden which has state loans as one of its main components is especially appropriate in Sweden where the interest rate for state loans is much lower than in the UK and the Czech Republic. The conclusion is that the Regulated Asset Base model should be implemented in Sweden to lower the Weighted Average Cost of Capital, although not for the first new nuclear power plant due to the risk of political friction.}},
author = {{Eckerberg, Alexandra}},
language = {{eng}},
note = {{Student Paper}},
title = {{Funding New Nuclear Power with Regulated Asset Base?}},
year = {{2025}},
}