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Acta Polytechnica Vol. 48 No. 3/2008

Nuclear Fuel Cycle Evaluation and Real Options

L. Havlíček

The first part of this paper describes the nuclear fuel cycle. It is divided into three parts. The first part, called Front-End, covers all activities connected with fuel procurement and fabrication. The middle part of the cycle includes fuel reload design activities and the operation of the fuel in the reactor. Back-End comprises all activities ensuring safe separation of spent fuel and radioactive waste from the environment. The individual stages of the fuel cycle are strongly interrelated. Overall economic optimization is very difficult. Generally, NPV is used for an economic evaluation in the nuclear fuel cycle. However the high volatility of uranium prices in the Front-End, and the large uncertainty of both economic and technical parameters in the Back-End, make the use of NPV difficult. The real option method is able to evaluate the value added by flexibility of decision making by a company under conditions of uncertainty. The possibility of applying this method to the nuclear fuel cycle evaluation is studied. Keywords: Nuclear fuel cycle, front-end, back-end, economic evaluation, evaluation methods, NPV, uncertainty, flexibility, real options.

1 Nuclear Fuel Cycle

The nuclear fuel cycle consists in principle of three basic parts. The first part is usually called the “Front-End”, and includes all activities connected with procurement of nuclear material and services, production of nuclear fuel and its transportation to the NPP site. The second part of the nuclear fuel cycle is normally defined as use of the nuclear fuel in the reactor. It is generally referred to as “Middle” or “In-Core”. For all subsequent manipulations and operations with used (“spent”) fuel the term “Back-End” of the nuclear fuel cycle is used. There are different points of view on the nuclear fuel cycle. In this paper I will look at it mainly from the position of a nuclear power plant...