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Role of the state in implementation of strategic investment projects: The SaHo Model for nuclear power Cover

Role of the state in implementation of strategic investment projects: The SaHo Model for nuclear power

International Journal of Management and Economics
Volume 57 (2021): Issue 4 (December 2021)
By: Łukasz Sawicki and  Bożena Horbaczewska  
Open Access
|Oct 2021

Figures & Tables

Figure 1

Median of investment costs for various electricity sources (USD′2019, millions).Source: Own elaboration based on [Projected Costs…, 2020, pp. 43–44].CCGT – Combined Cycle Gas Turbine; mln, million; PV - Photovoltaics.
Median of investment costs for various electricity sources (USD′2019, millions).Source: Own elaboration based on [Projected Costs…, 2020, pp. 43–44].CCGT – Combined Cycle Gas Turbine; mln, million; PV - Photovoltaics.

Figure 2

Predevelopment costs for various electricity sources in the UK (GBP′2018/MWh).Source: Own elaboration based on Electricity generation costs [2020, p. 26].CCGT – Combined Cycle Gas Turbine; PV - Photovoltaics.
Predevelopment costs for various electricity sources in the UK (GBP′2018/MWh).Source: Own elaboration based on Electricity generation costs [2020, p. 26].CCGT – Combined Cycle Gas Turbine; PV - Photovoltaics.

Figure 3

Changes in the ownership structure in the SaHo Model at subsequent stages of the project (basic scheme).Source: Own elaboration. SPV, Special Purpose Vehicle.
Changes in the ownership structure in the SaHo Model at subsequent stages of the project (basic scheme).Source: Own elaboration. SPV, Special Purpose Vehicle.

Figure 4

Changes in the ownership structure in the SaHo Model at subsequent stages of the project (detailed scheme).Source: Own elaboration. SPV, Special Purpose Vehicle.
Changes in the ownership structure in the SaHo Model at subsequent stages of the project (detailed scheme).Source: Own elaboration. SPV, Special Purpose Vehicle.

Advantages and disadvantages of business models – the EU investor's perspective

ModelAdvantagesDisadvantages
Electricity marketCompliance with EU state aid rulesNo offtakeHigh price volatility, negative pricesHigh investment risk
PPAOfftakeStable selling pricesNo compliance with EU state aid rules
CfD, CEACStable selling pricesState loan guaranteesNo offtakeEC acceptance required case by case
CfD (Czech version)OfftakeStable selling pricesState loan guaranteesModel waiting for EC acceptance
RABStable selling pricesCharging consumers from the beginning of constructionState loan guaranteesNo compliance with EU state aid rules (probably)No offtake
PTCFixed state subsidy for every megawatt hour (MWh) of electricity generatedRegulatory risk insuranceState (federal) loan guaranteesNo offtakeHigh price volatility, negative pricesNo compliance with EU state aid rules
ZECRelatively stable selling pricesNo offtakeNo compliance with EU state aid rules
CESA subsidy in market revenueNo offtakeNo compliance with EU state aid rulesSubsidy value is set by (dynamic) market
CMCovering of fixed production costsNo offtake (for energy)High price volatility, negative pricesEC acceptance required case by caseShort-term auctionsUnfavorable to units with high fixed costs
Carbon tax/ETSIncreasing of costs for coal- and gas-based competitorsCompliance with EU state aid rulesNo offtakeHigh price volatility, negative prices
ExeltiumOfftakeContracted sales of large electricity volume at relatively stable (indexed) pricePrice volatility in the long term, dependent on the wholesale market price indexOfftakers have a right to withdrawEC acceptance required case by case (probably)
MankalaOfftakeSelling price covers all production costsCompliance with EU state aid rulesHigh risk before and during constructionThe model requires a perfect cooperation of dozens of shareholders
DOI: https://doi.org/10.2478/ijme-2021-0020 | Journal eISSN: 2543-5361 | Journal ISSN: 2299-9701
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Language: English
Page range: 343 - 359
Submitted on: May 5, 2021
|
Accepted on: Aug 27, 2021
|
Published on: Oct 13, 2021
Published by: Warsaw School of Economics
In partnership with: Paradigm Publishing Services
Publication frequency: 4 issues per year
Keywords:
business model,
nuclear power development
Related subjects:
Business and economics,
Political economics,
Economic theory, systems and structures,
Business management,
Management accounting, financial controlling, cost calculation, investment

© 2021 Łukasz Sawicki, Bożena Horbaczewska, published by Warsaw School of Economics
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

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