Value of Information in Fuel Cycle Decision-making

Transitions between nuclear fuel cycles with uncertain key parameters (e.g., SNF and HLW disposal costs, fast reactor capital costs) have been examined using a decision-making under uncertainty methodology. The methodology explicitly incorporates uncertainties in key parameters into the decision-making process by constructing a stochastic model and embedding uncertainties as bifurcations in the decision-tree. The framework of this methodology allows for interpretation using a real options valuation or game theoretic approach, reviewed in. The work presented here extends the decision-making under uncertainty framework to calculate the value of information, which may be used to inform a game against nature. These games against nature have been applied to resource allocation problems, where scarce resources are allocated to maximize expected payoffs. More broadly, the value of developing alternative technologies may be considered under the same framework, where an investment portfolio for technology deployment may be developed. Here, the value of information is taken as the value of reducing uncertainty in key parameters, and these values may be substituted for the traditional payoff matrix when considering allocating scarce resources. Games against nature may provide a unique perspective on R and D funding decisions when considering transitions between nuclear fuel cycles. By determining the value of reducing uncertainties (of gaining information on probability distributions) scarce resources may be allocated in such a way to maximize their utility. (authors)