An Express Method for Creation a Financial and Economic Model of Projects in the Nuclear Energy Industry Based on the Example of Intentions to Construct a Npp in the Republic of Kazakhstan
Year: 2024
Type: article
Abstract: Energy is the basis of successful economic growth and society development in general. However, today Kazakhstan is experiencing a shortage of electricity and, according to forecasts, by 2029 it is expected to have more than 3 GW of electric capacity deficit. The introduction of nuclear generation is a perspective solution of electricity shortage issue. Therefore, the construction of a nuclear power plant (NPP) today is one of the key elements on the agenda of our country. In this regard, there is a need for an in-depth analysis and careful consideration of issues related to the NPP construction including financial planning and implementation. Financial and economic modeling (FEM) is the most famous tool for forecasting, planning and management in business. Commonly, some analysis of business ideas begins namely with the FEM, and if the assessments show effectiveness of a business project, then a decision is made on detailed review and funding. It is common practice to construct a fairy complete FEM during feasibility study (FS) of an investment project, when the major design and construction concepts and structural and administrative measures (including financial schemes) have already been defined. Analysis of the model and assessment of financial and economic indicators using FEM allows making a decision on future project developments. In the case of a NPP construction project, where the specific capital costs for the construction of a two-unit station with a total capacity of up to 2.4–2.7 GW are about US$10–15 billion, the financial costs for a feasibility study developing can reach more than US$100 million, and it will take about 3 years to prepare a full feasibility study. The proposed methodology is an express method for developing the FEM of NPP construction projects, which is sufficiently stable with respect to the statistical inaccuracy of some initial data, to determine the financial efficiency of NPP projects. The developed methodology can be used when comparing a large number of NPP construction projects with different initial data in order to quickly select several optimal ones for their detailed study. This paper is relevant considering the adopted course of the Republic of Kazakhstan, as well as many world’s rapidly developing countries, towards decarbonization of the energy sector and industry.
Source: NNC RK Bulletin
Authors: S. А. Mukeneva, D. B. Zarva, A. V. Gulkin
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W4403494600