Investment costs of nuclear power plants and the effect of investment costs on the levelized cost of electricity

The aim of this thesis is to assess different scenarios based on the factors affecting investment costs, which have the largest share in the unit cost (LCOE) of electricity produced from nuclear power plants, and the effects of these factors on the investment costs and LCOE. In this study, the financing cost (interest during construction), which is one of the main cost elements of the total investment cost of nuclear power plants, were examined. It was determined that the factors affecting this cost element were the construction period and schedule, discount rate, and inflation. The total investment cost of the Akkuyu Nuclear Power Plant Project was analyzed as a case study according to the factors listed above by creating an Excel model using data obtained from the Akkuyu Nuclear Power Plant Project Final Environmental Impact Assessment Report and relevant references. Based on the results obtained, the effect of the interest during the construction on the total investment costs and the effects of the total investment costs on the LCOE were evaluated. It has been observed that the total investment cost, the share of the interest during construction in the total investment cost, and the share of the total investment cost in the LCOE are quite sensitive to the construction period, the interest rate for debts, and therefore to the discount rate applied to the cash flows, and inflation. It is found that the highest value of LCOE is 113.77 USD/MWh, the share of interest during construction in the total investment costs is 19.67%, and the share of the total investment cost in the LCOE is 85.63%. The calculated share of the interest during construction in the total investment cost and the share of the total investment costs in the LCOE are comparable to the data provided in literature. The largest raise in the LCOE was observed in the scenario that considers the economic impact of the Covid-19 Pandemic. According to the analysis conducted for this scenario, the LCOE, pre-defined as 123.5 USD/MWh in the "Agreement between the Government of the Republic of Turkey and the Government of the Russian Federation on Cooperation in Relation to the Construction and Operation of a Nuclear Power Plant at the Akkuyu Site in the Republic of Turkey", was calculated as 113.77 USD/MWh (as an average of Unit 1 and Unit 2).