ON THE OPTIMAL LIFETIME OF NUCLEAR-POWER-PLANTS

We present an empirical model of optimal operation of nuclear power pl ants. The optimal lifetime is the solution to an optimal stopping prob lem: The plant is closed when the expected discounted losses from cont inued operation exceed the discounted costs of decommissioning. We for ecast the evolution of the nuclear power industry under the current re gime of 40-year operating licenses and for a policy allowing 20-year l icense extensions. We conclude that the extension would double the exp ected discounted value of U.S. nuclear power plants and double the und iscounted electrical power output of the U.S. nuclear industry over it s remaining lifetime.