Will Fund Managers advise Clients to ‘Follow the Money’ when Cost-of-Capital for Nuclear Power is negated?

BWRX-300 SMR: The world’s most cost-effective NPP

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Feb 16, 2022

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Advanced nuclear power plants, in the form of small modular reactors (SMRs) are the future of nuclear power.

The first GE Hitachi’s BWRX-300 SMR will be operational in 2028 and has a build programme of 2–3 years. The first Rolls-Royce’s UK SMR will be operational in 2030, with a build programme of 4 years.

These build programmes are no different to those of wind and solar power plants (WASPPs) and the cost-of-capital that has crucified ‘big nuclear’ is utterly negated.

Forget the flimflam of the feculent LCOE metric

5SCOE: 5 Significant Costs Of Electricity — presents costs that everyone has experienced and can understand:

No 1 Significant Cost: Overnight Capital Cost (OCC) is a perfectly justifiable metric to compare WASPPs and SMRs under this ‘level playing field’ scenario.

No 2 Significant Cost: Fuel (Zero here for WASPPs).

No 3 Significant Cost: Operation and Maintenance (O & M).

No 4 Significant Cost: Decommissioning.

No 5 Significant Cost: Waste handling and dispositioning.

And here are the figures comparing Onshore Wind and the Rolls-Royce SMR:

Within the next 5 years, both technologies will be competing for the $trillions on offer in pension funds, green banks, etc.. It’s anybody’s guess what the price of wholesale electricity will be.

Over the past 6 months it has peaked a few times at over £300/MWh; it’s now down below £150/MWh. Since it’s trending downwards, let’s pick £125.00/ MWh — why not. ~~~~~~~~~~~~~~~~~~~~~~~~~//~~~~~~~~~~~~~~~~~~~~~~~~~

South Kyle WF: Earnings = Selling price less 5SCOE = £92.08/MWh Total lifetime earnings = 15,206,500 MWh x £92.08 = £1,400 million.

For every £1.00 an investor puts into the OCC, which is needed to start the income rolling in, the earnings (from which dividends will be paid) will be £4.38 (£1,400 million ÷ £320 million) ~~~~~~~~~~~~~~~~~~~~//~~~~~~~~~~~~~~~~~~~~

R-R UK SMR: Earnings = Selling price less 5SCOE = £100.40/MWh. Total lifetime earnings = 229,739,760 MWh x £100.40 = £23.07 billion.

For every £1.00 an investor puts into the OCC, whiuch is needed to start the income rolling in, the earnings (from which dividends will be paid) will be £12.82 (£23.07 billion ÷ £1.8 billion) ~~~~~~~~~~~~~~~~~~~~//~~~~~~~~~~~~~~~~~~~~

To Pension Fund and Green-Bank Managers the world over — a simple question:

The time to invest in SMRs is now. Will you advise your clients of the potential of ~3X greater earnings for every £1.00 invested, or will you stick with the claims of the WASPP industries and NGOs?

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