4 ms·

> 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.) Residu

> 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

> 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.