Electricity markets and policy uncertainty: external pressure points for nuclear decommissioning

This thesis provides an integrated assessment on the influence of electricity markets and policy uncertainty on nuclear plant financing, early nuclear power plant (NPP) shutdown dynamics, and nuclear waste management. The first paper investigates whether out-of-market support schemes were justified for state subsidised NPPs in the New York Independent System Operator (NYISO) and PJM wholesale electricity markets over a five-year period between 2017 and 2021. The results indicated that for long stretches of time, the sample NPPs were in a solid financial position, relying solely on market revenues without the need for state support schemes (i.e., zero-emission credit schemes). The findings further suggest that under a dual state and federal support scheme system, the magnitude of excess profits would be substantial. The second paper takes a forward-looking approach and evaluates the electricity market impacts of a premature nuclear plant shutdown and the spillover effects on the long-term income conditions of NPPs. The paper developed a bespoke bottoms-up dispatch model for the NYISO and four regional electricity markets. Results indicate that shutting down upstate New York NPPs in 2018 and 2021 induced a slightly higher cost burden for New York consumers compared to the total zero-emission credit (ZEC) expenditures. In contrast, phasing out upstate NPPs in 2030 induced a lower cost burden compared to the total ZEC expenditure, mainly due to a high credit price. In the long-term, integrating a carbon price mechanism into the NYISO market would raise average NYISO prices, thereby enhancing the long-term income conditions of NPPs, and ensuring sufficient accumulation of nuclear decommissioning funds. The third paper explores the dynamic interaction between government policy decisions and firm investment decisions into a consolidated interim storage facility (CISF) using a simplified game theoretic framework. Results indicate that firms should always commit to constructing a CISF regardless of the government's final policy decision. The final government decision under various sensitivity iterations is an equal split between long-term contract and allowing firms to privately operate the CISF.