Integrated framework for the external cost assessment of nuclear power plant accident considering risk aversion: The Korean case

Recently, the estimation of accident costs within the social costs of nuclear power plants (NPPs) has garnered substantial interest. In particular, the risk aversion behavior of the public toward an NPP accident is considered an important factor when integrating risk aversion into NPP accident cost. In this study, an integrated framework for the external cost assessment of NPP accident that measures the value of statistical life (VSL) and the relative risk aversion (RRA) coefficient for NPP accident based on an individual-level survey is proposed. To derive the willingness to pay and the RRA coefficient for NPP accident risks, a survey was conducted on a sample of 1550 individuals in Korea. The estimation obtained a mean VSL of USD 2.78 million and an RRA coefficient of 1.315. Based on the estimation results in which various cost factors were considered, a multiplication factor of 5.16 and an external cost of NPP accidents of 4.39E−03 USD-cents/kW h were estimated. This study is expected to provide insight to energy policy decision-makers on analyzing the economic validity of NPP compared to other energy sources by reflecting the estimated external cost of NPP accident into the unit electricity generation cost of NPP.