Real Options Valuation of New Nuclear Power Plants in the U.S. Energy Market
Stuart School of Business research presentation by: Carolina Guerrero Requejo, Associate Professor of Finance Sang-Baum Kang, and Pascal Letourneau
Real Options Valuation of New Nuclear Power Plants in the U.S. Energy Market
- Carolina Guerrero Requejo (M.S. Management Science and Analytics, ’25)
- Associate Professor of Finance Sang-Baum Kang
- Pascal Letourneau, University of Wisconsin-Whitewater
Abstract:
This research evaluates the economic feasibility and optimal timing of investment in new nuclear power plants in the U.S. using a real options framework. A Least Squares Monte Carlo (LSMC) model is developed in MATLAB to capture uncertainty in electricity and uranium prices, capital cost overruns, construction delays, and regulatory approval times. The model compares outcomes under different policy scenarios, including the Trump Administration’s executive order to accelerate licensing, and integrates the Climate Policy Uncertainty (CPU) index.
All ÐÓ°ÉÂÛ̳ faculty, students, and staff are invited to attend.
The Friday Research Presentations series showcases ongoing academic research projects conducted by Stuart School of Business faculty and students, as well as guest presentations by ÐÓ°ÉÂÛ̳ colleagues, business professionals, and faculty from other leading business schools.