As they strive to meet the ever-increasing demand for electricity, governments around the world are grappling with the energy trilemma: providing reliable, sustainable, and affordable energy. In light of the recognized contribution of fossil fuels to greenhouse gas emissions, renewable energy sources enjoy broad public support. However, the inherent uncertainty of weather-dependent technologies casts a shadow over energy security. Against this backdrop, nuclear power generation emerges as an attractive solution to the energy trilemma, offering advantages in terms of reliability, sustainability, and, in some cases, cost-competitiveness.

This research aims to examine the economic feasibility of incorporating nuclear technologies into Israel's energy mix. The Israeli electricity sector relies heavily on natural gas, with local reserves expected to suffice for the next 20 years. However, Israel's international commitments under the Climate Convention necessitate an exit strategy from natural gas within this timeframe. Water resources and wind patterns in Israel are not conducive to reliance on them as significant energy sources, hence the use of renewable energy technologies is limited to solar sources. Besides the weather-dependent and therefore unpredictable nature of these technologies, and the fact that complementary technologies, including storage, which are expected to make them a viable substitute for fossil fuels, have not yet become competitive, the ability to rely on solar technologies in Israel is limited due to the country's small size. Given these constraints, it is essential to explore alternative sources of clean and reliable energy, and nuclear technology fits the bill.

Since nuclear power generation has not yet been utilized in Israel, assessing the economic feasibility of this technology cannot rely on empirical methodologies. It necessitates a structural model that simulates the local economy to the greatest extent possible. The assumptions underlying the model will impact the research results, and hence their appropriate selection is of paramount importance. The global literature has found that perfect competition models are not suitable for describing electricity markets. This research will draw on imperfect competition models developed within the economic sub-discipline of industrial organization, which, more than other models, simulate the behavior of the electricity sector. The research findings will provide energy policymakers with an assessment of the costs of nuclear technologies, as well as information on the optimal capacity level in the electricity sector, the optimal technology mix at that capacity, and long-term equilibrium prices.