3 ms·

> Have you ever held a senior role in finance or banking? If you’re going to go ad hominem, don’t bring a rubber duck to a battleship. Why aren't you answering

> Have you ever held a senior role in finance or banking? If you’re going to go ad hominem, don’t bring a rubber duck to a battleship. Why aren't you answering the point? Is it that hard to substantiate your claims that a 60 year amortization + 15 year construction = 75 years is reasonable. > Data sorely lacking. (Outside hydro.) You mean like the data available on economic nuclear energy? :) > Oof, no, it’s not. Seriously, you can derive this and it’s elementary finance. Also, like, the marshmallow test. Do you see the year in the investment time ending up in the exponent? Of course in reality you expect the money to trickle in over time reducing the risk a bit. https://www.investopedia.com/articles/03/082703.asp#toc-calculating-future-value https://www.investopedia.com/articles/03/082703.asp#toc-calc...

JumpCrisscross 3y ago
> Is it that hard to substantiate your claims that a 60 year amortization + 15 year construction = 75 years is reasonable What do you mean reasonable? It’s real. We amortise over long time horizons in project finance all the time. Also, look up residual value. (And dams.) And yes, I’m contesting both 60 and 15; they’re 80 and 10 and could be 80 and 5 with permitting reform. And within that latter envelope, it works with conventional financing. (The same problem plagues HVDC lines, which also take 10+ years to permit.) > Do you see the year investment time ending up in the exponent? You may actually enjoy reading some of the foundational texts whose concepts you’re glancing across. (Principles of Economics, Mankiw, is a classic. For a more-applied text, Fabozzi’s Fixed Income.) You’re citing real things. But you’re connecting them nonsensically. Investopedia isn’t a replacement for training, though it’s a good reference once you’ve learned the material. (The exponent comes from compounding time preference. Its time component is orthogonal to technological progress, which embeds in the rate. That’s why it’s constant. If you want to consider obsolescence risk, you start getting into hyperbolic discounting.)
- ViewTrick1002 3y ago
  > What do you mean reasonable? It’s real. We amortise over long time horizons in project finance all the time. Also, look up residual value. (And dams.) Residual value for nuclear power plants are negative. The plant is EOL and now it is time to decommission the entire site. Now you try to equate nuclear power with infrastructure, even though we have cheaper alternatives which the public don't even have to finance. Sounds reasonable? For the private industry a typical expected discount rate is 10-15% above the risk free return rate to account for known and unknown risks. Apply this to nuclear investment. For the money being returned year 60, in percentage, what is the risk? Please calculate it, don't try to suggest different methods of "delaying gratification", that is simply trying to talk around the subject because you know the answer. The risk premium for the expected returns year 60 are ludicrous which is why no one suggests it.
  - JumpCrisscross 3y ago
    > Residual value for nuclear power plants are negative Not what residual value means. > you try to equate nuclear power with infrastructure, even though we have cheaper alternatives which the public don't even have to finance Infrastructure isn’t dependent on source of financing. Neither do ROI calculations, though you might scope them differently for public benefit. We are doing none of that here. > risk premium for the expected returns year 60 are ludicrous which is why no one suggests it Plenty of large projects model residuals and terminal value over the long term. Bankers typically stop modelling when the financing has to be rolled over for practical reasons; it’s unnecessary to be precise. I’m genuinely curious what your background in this is. > Please calculate it Lots of people at federal agencies, banks and private companies are; their work is cited across these threads. But if you’re arguing about the definition of time value and infrastructure, I don’t think that’s a productive place to start. There is seldom substitute for fundamentals.
    - ViewTrick1002 3y ago
      Please explain then The investment horizon is so long that we can't model it. Sounds good! Looking at Hinkley Point C, Lazard, IEA, NuScale and the French accounting agency the number is $120-180/MWh. You've found one low quality source which massage the numbers to fit your narrative and continue harping about it.

JumpCrisscross 3y ago

> Is it that hard to substantiate your claims that a 60 year amortization + 15 year construction = 75 years is reasonable What do you mean reasonable? It’s real. We amortise over long time horizons in project finance all the time. Also, look up residual value. (And dams.) And yes, I’m contesting both 60 and 15; they’re 80 and 10 and could be 80 and 5 with permitting reform. And within that latter envelope, it works with conventional financing. (The same problem plagues HVDC lines, which also take 10+ years to permit.) > Do you see the year investment time ending up in the exponent? You may actually enjoy reading some of the foundational texts whose concepts you’re glancing across. (Principles of Economics, Mankiw, is a classic. For a more-applied text, Fabozzi’s Fixed Income.) You’re citing real things. But you’re connecting them nonsensically. Investopedia isn’t a replacement for training, though it’s a good reference once you’ve learned the material. (The exponent comes from compounding time preference. Its time component is orthogonal to technological progress, which embeds in the rate. That’s why it’s constant. If you want to consider obsolescence risk, you start getting into hyperbolic discounting.)

ViewTrick1002 3y ago
> What do you mean reasonable? It’s real. We amortise over long time horizons in project finance all the time. Also, look up residual value. (And dams.) Residual value for nuclear power plants are negative. The plant is EOL and now it is time to decommission the entire site. Now you try to equate nuclear power with infrastructure, even though we have cheaper alternatives which the public don't even have to finance. Sounds reasonable? For the private industry a typical expected discount rate is 10-15% above the risk free return rate to account for known and unknown risks. Apply this to nuclear investment. For the money being returned year 60, in percentage, what is the risk? Please calculate it, don't try to suggest different methods of "delaying gratification", that is simply trying to talk around the subject because you know the answer. The risk premium for the expected returns year 60 are ludicrous which is why no one suggests it.
- JumpCrisscross 3y ago
  > Residual value for nuclear power plants are negative Not what residual value means. > you try to equate nuclear power with infrastructure, even though we have cheaper alternatives which the public don't even have to finance Infrastructure isn’t dependent on source of financing. Neither do ROI calculations, though you might scope them differently for public benefit. We are doing none of that here. > risk premium for the expected returns year 60 are ludicrous which is why no one suggests it Plenty of large projects model residuals and terminal value over the long term. Bankers typically stop modelling when the financing has to be rolled over for practical reasons; it’s unnecessary to be precise. I’m genuinely curious what your background in this is. > Please calculate it Lots of people at federal agencies, banks and private companies are; their work is cited across these threads. But if you’re arguing about the definition of time value and infrastructure, I don’t think that’s a productive place to start. There is seldom substitute for fundamentals.
  - ViewTrick1002 3y ago
    Please explain then The investment horizon is so long that we can't model it. Sounds good! Looking at Hinkley Point C, Lazard, IEA, NuScale and the French accounting agency the number is $120-180/MWh. You've found one low quality source which massage the numbers to fit your narrative and continue harping about it.