| dc.description.abstract | This study explores the impact of input factor variability and the scope of analysis on profitability
calculations for nuclear and offshore wind power in the Norwegian power market. The research
employs several data sources and combines LCOE calculations and Monte Carlo simulations to assess
the impact of uncertain factors on profitability estimations. Additionally, regression analyses assess
the relationship between the share of the different power technologies and balancing volumes in a
system. Additionally, a comprehensive discussion on system costs is included to encompass the
system cost concept fully.
The study's main findings include that the LCOE of offshore wind projects primarily relies on the
discount rate and capacity factor. On the other hand, a potential SMR project would be impacted
mainly by CAPEX and OPEX. Additionally, we find that LCOE has two significant limitations. First,
the metric fails to account for the value of longevity in power production, which contradicts long-term
supply and environmental objectives. Secondly, it does not count for system costs occurring beyond
the scope of the project. This makes the validity and significance of the LCOE metric vary among
different stakeholder groups.
Another important finding is a significant but low correlation between the penetration of the different
power sources and balancing volumes. While an increase in wind power penetration level is
associated with an increase in imbalance volumes, the opposite effect is observed when studying the
relationship with nuclear power. This could have important implications for the total costs of
electricity production and suggests that a holistic approach is essential for informed decision-making
regarding the future Norwegian energy mix. | en_US |
