Effect of Depreciation Method for Long-Term Tangible Assets on Sustainable Management: From a Nuclear Power Generation Cost Perspective under the Nuclear Phase-Out Policy

Abstract

The Korean Government has been implementing a nuclear phase-out policy since 2017. Nuclear power plants accounted for 30.0% of the total power generation in 2016; this figure fell to 25.9% at the end of 2019, and the average Capacity Factor (CF) of a nuclear power plant approximately dropped from 89.1% to 69.2%. The nuclear phase-out policy presents severe consequences for the sustainable management of the nuclear power industry. Accordingly, the purpose of this study is to analyze the effect of a decrease in the nuclear capacity factor under the nuclear phase-out policy on the depreciation cost per unit using the Straight-Line Method (SLM) and Decelerated Depreciation Method (DDM) and to provide recommendations from a sustainable management perspective. The results show that the decrease in CF of nuclear power plants has a negative impact on sustainable development of the nuclear power industry. DDM is more beneficial than the SLM during this initial stage of depreciation under the nuclear phase-out policy. In addition, in the early stages of projects or immediately after attracting large-scale investments, DDM can offer more positive signs for stockholders by calculating a smaller net loss or a higher net profit.

Book depreciation methods under intuitionistic fuzzy environment

“…Sušková and Buchtová (2021) defined the individual types of depreciation and the methods for depreciation of tangible fixed assets in a metallurgical company. Bang and Park (2021) analyzed the effect of a decrease in the nuclear capacity factor under the nuclear phase-out policy on the depreciation cost per unit using the straight-line method and decelerated depreciation method and to provide recommendations from a sustainable management perspective. Sampaio et al (2021) evaluated the influence of four depreciation methods on the cost of forest road transportation.…”

Evolution of Standardized Specifications on Materials, Manufacturing and In-Service Inspection of Nuclear Reactor Vessels

“…Present and future nuclear power plants (based on both fission and fusion reactions) require high levels of security, automation, and robustness to ensure protection from radiation [8]. Nuclear safety refers to all the technical dispositions and the organizational measures taken to prevent accidents or to limit their effects during the construction, operation, shutdown and dismantling of nuclear installations with ionizing radiation sources, as well as during the transport of radioactive substances [9].…”