How do i find the return on cost for a nuclear energy plant?

You need a little bit more information. Primarily operating costs.

To find out the return on any investment, you have to know:

*investment cost
*revenue

To get the revenue you have to know how much electricity the plant will sell (besides the price they will sell it at) and you need to know all the costs (operating, distribution, sales, etc)

In this case the revenue is the money that you make selling the electricity minus the cost of producing and distributing the electricity. That cost is going to include fuel, manpower to operate the facility, maintenance costs, etc

Now, if you know how much electricity the plant will produce and sell, say an average rate of 10,000,000 kw

That means that your gross revenue (before subtracting costs) is the 1.7 cnts/kw-hr*10,000,000 kw*24 hr/day

That comes to 4,080,000 $/day

Now if it cost $80,000/day to operate then you have a net revenue of 4,000,000 $/day

Thats about 1.46 billion $/yr

Economic returns are usually expressed as a percent of the capital cost. Often there are farily complicated formulas used that take into account the time value of money (revenue two years down the road is not as valuable as immediate revenue) but you can get a simple return estimate from a simple percentage.

1.46 billion / 2 billion = .73

or a 73% return each year

That would be a very high return, but remember, I made up many of the bases numbers because they weren’t provided in your question (also, I may have made an arithmetic error)

Hopefully this was some help in understanding how to go about making a simplified economic return calcualtion.

2 Responses

Mr Soul says:

June 20, 2010 at 4:40 am

Need more info.

What are the running costs of the plant?
How much power will it produce?

So you have your capital cost of $2B.
An ongoing expense cost to run the plant after it’s built.
An ongoing revenue stream that your customers pay you.

A more detailed analysis would consider the time value of the capital cost (i.e.- return on putting that money in the bank), the change in running costs as the plant ages, and the change in the price of the power provided..
enginerd says:

June 20, 2010 at 5:25 am

You need a little bit more information. Primarily operating costs.

To find out the return on any investment, you have to know:

*investment cost
*revenue

To get the revenue you have to know how much electricity the plant will sell (besides the price they will sell it at) and you need to know all the costs (operating, distribution, sales, etc)

In this case the revenue is the money that you make selling the electricity minus the cost of producing and distributing the electricity. That cost is going to include fuel, manpower to operate the facility, maintenance costs, etc

Now, if you know how much electricity the plant will produce and sell, say an average rate of 10,000,000 kw

That means that your gross revenue (before subtracting costs) is the 1.7 cnts/kw-hr*10,000,000 kw*24 hr/day

That comes to 4,080,000 $/day

Now if it cost $80,000/day to operate then you have a net revenue of 4,000,000 $/day

Thats about 1.46 billion $/yr

Economic returns are usually expressed as a percent of the capital cost. Often there are farily complicated formulas used that take into account the time value of money (revenue two years down the road is not as valuable as immediate revenue) but you can get a simple return estimate from a simple percentage.

1.46 billion / 2 billion = .73

or a 73% return each year

That would be a very high return, but remember, I made up many of the bases numbers because they weren’t provided in your question (also, I may have made an arithmetic error)

Hopefully this was some help in understanding how to go about making a simplified economic return calcualtion.

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How do i find the return on cost for a nuclear energy plant?

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