The advantage of thorium-fuelled nuclear power is that it limits the potential for spreading weapons-grade material and produces less long-lived nuclear waste than existing uranium-fuelled plants. However, there are a number of technical challenges that need to be overcome, and the current costs of initiating a thorium fuel cycle would be very high. We analyse how a government may proceed with a staged development of meeting electricity demand as fossil fuel sources are being phased out. The thorium technology is one possibility, where one would start a major research and development program as an intermediate step. Alternatively, the government could choose to deploy an existing renewable energy technology, and using the real options framework, we compare the two projects to provide policy implications on how one might proceed.
Group for Research in Decision Analysis