Cost-Benefit Analysis Case Study: Nuclear Power Station in Tulear, Madagascar

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Benefit-Cost Analysis

Case Study

Nuclear Power Station In Tulear, Madagascar

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Yavor LAZAROV

Abdo SADAKA

Contents
Introduction3
Madagascar’s case3
Background information4
Estimation of Power Plant Capacity.5
Cost of the project6
Outflow forcast7
Total Inflow8
Payback Method.10
NPV Method.12
IRR Method13
Discounted Payback Method14
Sensitivity Analysys15
Scenario Analysy.17
Advantages and disadvantages of nuclear power generation19 Conclusion20

Introduction:

Energy has always been a must for national development. Nearly every aspect of development from reducing poverty and raising living standards to improving health care, industrial and agricultural productivity requires reliable access to modern energy resources. Countries may have different reasons for considering starting a nuclear power project to achieve their national energy needs, such as: lack of available indigenous energy resources, the desire to reduce dependence upon imported energy, the need to increase the diversity of energy resources and/or mitigation of carbon emission increases.

The primary objective of this project is to ascertain the feasibility of siting and commissioning a nuclear plant to serve the future energy needs of Madagascar. An immediate goal is to enable Madagascar’s government to offset the cost of increasingly expensive fossil fuel, thereby avoiding the progressive transfer of the hard currency to foreign shores. By adding abundant clean energy to the grid, a nuclear plant would additionally support the goal of clean air in Africa, given that most regions of high population within the state are currently judged to be non-attainment areas.

Madagascar’s case:

Due to the rising levels of pollution in Madagascar the government has come to a decision to cancel all the Fossil fuel power plants. Currently these types of power plants are supplying around 33% of the Madagascar electricity consumption.

The government decided to build the Nuclear Power Station in the south-west part of the island, next to the city of Tulear (for detailed information see the map on the right). The location has been chosen according to low population density of this part of Madagascar. It is a safety measure - in case of failure the expected casualties in this area are low.

It also has a population of 100 thousand people – enough work force would be supplied to operate a power plant. As a port town it acts as a major import/export hub, which is from great importance when it comes to building the plant.

Background Information

Nuclear Reactor AP1000 Forth Generation by General Electric/Westinghouse

The AP1000 is defined for having an average operational lifetime of minimum 30 and maximum 45 years; in our case we shall consider that it is built to last 37 years. This means that AP1000 is currently regarded as one of the most significant technological breakthroughs in energy production developed in the second half of the 20th century. At the beginning of 2010 there were about 13 of the fourth generation of AP1000 around the world, producing in total 7,800,000,000,000 KW (that is 2.5% of the world’s production of electricity)

Project length:

GE/Westinghouse has developed an extensive, detailed 3D computer model of the AP1000 nuclear reactor plant. This model was developed over eight years, using input from a number of design participants from a variety of countries. GE used its construction experience and a detailed knowledge of the plant to create a detailed schedule for construction of the entire plant. This schedule was “logic” driven and included activities with industry standard durations. It is based upon a 50 hour, 5 day week and resulted in 36 month duration from start of basement concrete pour to the beginning of fuel load....
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