The organization and management of nuclear power plants

Abstract

The explanation of aggregate and sectoral investment behavior has been one of the less successful endeavors in empirical economics. Existing econometric models have had little success in explaining or predicting investment spending. This may be because most such models fail to account for the irreversibility of most investment spending. With irreversibility, changes in the riskiness of future cash flows or interest rates should in theory dramatically affect the decision to invest - more so than, say, a change in the levels of interest rates. Here I survey some of the empirical support for this proposition, and discuss the implications for investment modelling.Nuclear power plants are a controversial technology. The future of the industry depends on the ability to manage efficiently and safely, and to effectively manage organizational change as new technologies and practices are introduced and disseminated. This paper provides a conceptual framework and discussion of the management and organization of nuclear power plants around three questions: (1) How should nuclear power plants be organized and managed to ensure that they are operated most safely and efficiently? (2) What does an understanding of the organization and management of nuclear power plants tell us about how they change or resist change? and (3) What indicators or measures of various characteristics and processes of nuclear power plants are needed in order to address the above questions? We review existing literature on the organization and management of nuclear power plants, and suggest how we would structure a research project to address the above questions.Supported by the Center for Energy Policy Research at M.I.T