Financing New Nuclear Reactors

The financing of new nuclear reactors is based on a mix of renewable and nuclear energies to minimize costs and maximize robustness. However, economic uncertainty, which has been heightened by events such as the Covid-19 pandemic, is having a major impact on future nuclear energy costs. Within this context, the role of government is crucial, not only to raise capital, but also in sharing risk, thereby ensuring the viability of nuclear energy projects. The determining factors in the final cost of electricity are the cost of capital and the discount rate. Government intervention can reduce the risks as seen by investors, which has been demonstrated by models such as Hinkley Point in the UK, where contracts for difference (CfDs) ensure price stability. Financing methods vary, including approaches such as « Project Finance » or direct government funding. Examples, like the Mankala model in Finland, illustrate innovative alternatives for sharing risks and costs.