The Kyoto Protocol Emissions Trading Mechanisms A Model for financing future nuclear development in

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The Kyoto Protocol Emissions Trading Mechanisms -
A Model for financing future nuclear development
in Romania By Dr.Ionut Purica FOREN 2006
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• Kyoto Protocol aside from imposing limits to the
  evolution of GHG emissions (which is opposed by
  the USA), is also providing the mechanisms to
  achieve the wished reduction (the level of this
  trade is 3 Billion US in the world presently and
  estimated to increase to 10 Billion in the next 5
  years).
• A production of 10 TWh of nuclear electricity
  per annum would avoid the release of 7.6 million
  tons of CO2 every year from coal plants.

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Potential financing structure for a NPP
project (the guarantees are not represented)
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Emission Trading finance ( i0 and the PBT is
infinite) it is not a loan
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Investment Bank Loan instead of Emission Trading
source of finance.
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• Conclusions
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• The impact on the price of the generated
  electrical energy, in the case Emission Trading
  is used to offset the effects of an Investment
  Bank loan, consists in a reduction of 12.5 of
  the price. By replacing only the Investment Bank
  Loan the sum considered is US1622Mx70x30US340
  .6 M.
• The CO2 emission reduction of 3.6MtCO2/year taken
  over 10 years is actually giving a price of sell
  of the ton of CO2 of cca. US9.5/tCO2 that is a
  very reasonable price for the today market of
  Emission Trading.
• Given the present shutdown of a significant
  thermal generation capacity in Romania there is a
  very favorable moment to combine this action with
  the phase in of units 3 to 5 at the Cernavoda
  site and to apply an Emission Trading mechanism
  to reduce the financial cost of the projects. In
  this transaction both Canada and Romania would
  benefit
• The benefit of integrating emissions trading into
  the financial scheme of the project is twofold
  (i) for Romania it helps to reduce substantially
  the generation cost of electrical energy produced
  by the new nuclear unit, (ii) while for Canada it
  provides a sizable amount of emission credits at
  an affordable market price.