An economic analysis of the value of research and development in the area of fourth generation fast reactors

According to forecasts, the uranium market could start to become strained by the middle of the century. It is because of this hypothesis that we are in a position to evaluate the value of public research and development in the area of fourth generation fast reactors. In fact, as opposed to current reactors, fast neutron reactors allow for better use of natural uranium, and they will also be able to play an essential role in a 'sustainable' perspective. However, these technologies only emerge as a result of significant progress and require important investments in research and development. In this article, we try to evaluate the economic value of this research and development, ad analyse the interest in having this innovative technology available to cope with the expected increase in the price of uranium. If this increase in price is an entry criterion of a model, the dissemination of this innovation onto the market at the end of the research and development phase is supposedly a risky variable, conditioned by the the implementation of two probable scenarios (p and l-p respectively): 'the fast reactor is competitive and adopted by the industrialists' or 'it does not fulfill these conditions'. In view of its simplified hypotheses, the model gives the value of research and development according to an a priori estimate of p. It is then possible to judge, from a strictly economical standpoint, the relevance of pursuing a research and development programme or not in 2010, which is the date when the public authorities will have to announce their decision. With the deduced data, and a low estimation of research and development costs, the research and development programme is considered profitable, if the probability of p is above 20 %. This threshold increases with the cost of research and development, reaching close to 70 % in an extreme, unrealistic case, where it would be necessary to fund all the research and development (including the prototype) with public funds. (authors)