Perrier Quentin

August 2018
Titre Ouvrage:
The second French nuclear bet
Energy Economics, vol. 74, August
pp. 858-877

Following the first oil crisis, France launched the world’s largest ever nuclear energy program, commissioning 58 new reactors. These reactors are now reaching 40 years of age, the end of their technological lifetime. This places France at an energy policy crossroads: should the reactors be retrofitted or should they be decommissioned? The cost-optimal decision depends on several factors going forward, in particular the expected costs of nuclear energy production, electricity demand levels and carbon prices, all of which are subject to significant uncertainty. To deal with these uncertainties, we apply the Robust Decision Making framework to determine which reactors should be retrofitted. We build an investment and dispatch optimization model, calibrated for France. Then we use it to study 27 retrofit strategies for all combinations of uncertain parameters, with nearly 8000 runs. Our analysis indicates that robust strategies involve the early closure of 10 to 20 reactors, while extending the life of all other reactors. These strategies provide a hedge against the risks of unexpected increases in retrofit costs, low demand and low carbon prices. Our work also highlights the vulnerabilities of the official French government scenarios, and complements them by suggesting new robust strategies. These results provide a timely contribution to the current debate on the lifetime extension of nuclear plants in France.