Atomic Power Plants

A year ago so many electric utilities had announced plans for new atomic power plant construction that Resources referred to 1966 as marking the "coming of age" of civilian nuclear electric power. Looking back on 1967, that description seems to have been a safe one in view of the continued strong surge of new plant expansion decisions and the consistency with which the Atomic Energy Commission has raised its long-range projection of US nuclear power capacity.

The nuclear share of all planned steam-electric capacity expansion, better than 50 percent in 1966, apparently was sustained and probably even exceeded during 1967. During the first nine and one-half months of the year electric utilities planned for 30 new nuclear power plants with a total capacity of about 25,000 megawatts, and equipment manufacturers reported orders for 25 reactors—including some resulting from plans announced in previous years—with a capacity of 20,500 mw.

As of October 31, 1967, the overall cumulative status of American nuclear plants showed 16 presently operable plants (about 2,800 mw), 17 plants under construction (11,600 mw), 39 plants planned with reactors ordered (30,800 mw), and 15 plants announced without reactors ordered (13,200 mw). All told, this sums to 87 plants with a total capacity of over 58,000 mw.

Besides testifying to continuing confidence in nuclear reactors, these data also disclose a sharp and progressive increase in average unit generating capacity. The earliest, already operable units average out to about 175 mw, but the most recent plans call for an average unit size near 900 mw and ranging up to 1,100 mw. The probability of achieving scale economies seems to be strongly reflected in the rising quantity of nuclear commitments.

There has been some slowing-up in the rate of increase of planned additions to nuclear generating capacity, but the deceleration merely reflects the low base from which expansion has progressed over the past few years: only about 6,000 mw of planned nuclear capacity additions were announced during the whole of 1965. The pace of advance has nonetheless been sufficiently sharp to have led the AEC to issue successively higher forecasts of levels of nuclear generating capacity for a decade or so hence.

In these revisions the upper limit of the superseded forecast has tended to become the conservative end of the next range of estimates. Toward the end of May 1967, an AEC estimate for 1980 showed projected nuclear power capacity ranging from 120,000 to 170,000 mw, with a "most likely figure" of around 150,000 mw. (Based on the projected growth of total electric power—as estimated in the National Power Survey in 1964—this would represent close to 30 percent of total installed electric capacity for that year, compared with somewhat over 1 percent today.) Just a year earlier, the AEC's 1980 estimate had ranged from 80,000 to 110,000 mw. Projections published in 1964 indicate a range of 60,000 to 90,000 mw by 1980; while the still earlier estimate of 1962 pointed to a 40,000-mw level by 1980.

The buoyant status of nuclear power is, however, marked by some uncertainties. First, the recent steep rise in planned nuclear power plant expansion should be viewed in the context of a nationwide capital spending boom, in which public utilities have shared to a substantial extent. Expenditures (in current dollars) for new plant and equipment by (largely electric) utilities have gone up by 10, 12, and 20 percent in the years 1964, 1965, and 1966, respectively. A slackening in the investment expenditure pace could put some brakes on plans for additional atomic power plants. Of course, the same prospect applies to conventionally fueled plants.

Second, and equally important, is the question of the actual competitive status for nuclear energy. There is, as yet, insufficient experience to confirm or disprove the projected costs of nuclear operations. The flood of orders indicates that utilities are persuaded by the estimated cost comparisons of nuclear and conventional plants, but the long-term validity of these comparisons with regard to plant costs and fuel cost arrangements is far from assured.

For some time the suspicion has been voiced that the major equipment manufacturers were quoting prices that did not fully cover their own costs of development and production and that the scales were thus temporarily tipped in favor of nuclear plants. This received a degree of confirmation in early 1967 when General Electric, in its 1966 Annual Report, acknowledged that "earlier commitments made to win customer acceptance of this new technology [nuclear power stations] continue to affect earnings." GE had some months earlier announced that it was withdrawing from US "turnkey" business, under which it agreed to erect a complete power station at a firm price. It indicated that sharply rising costs of site preparation and construction, since a number of projects had been undertaken, would produce losses in filling whatever turnkey orders were still on the books. In addition, there is evidence of increasing variation in contractual arrangements concerning future reactor fuel supplies, as opposed to an earlier practice of offering relatively firm prices for a period of years.

In this general context it might be noted that quoted nuclear fuel plant costs reached their lowest point in 1966 with the announcement that TVA had gone nuclear in its Browns Ferry (Ala.) project. (A TVA cost comparison showed a plant cost of $116 per kilowatt nuclear vs. $117 per kilowatt coal fired, and a total cost of 2.40 mills/ kwh nuclear and 2.90 mills/kwh coal.) Since then, quoted equipment prices have risen substantially, perhaps by as much as 30 percent. It is of some interest that, having ordered the twin-nuclear plant facility for Browns Ferry in 1966, TVA in mid-1967 ordered another pair of generating units—but this time a nuclear power plant along with a large coal-fired station as part of the same Browns Ferry complex. In its announcement TVA indicated that the total cost (fixed charges plus operating expenses) of nuclear power had increased by 15 per cent between 1966 and 1967, and that "the relative cost of nuclear and coal-fired capacity available to US at this time [June 1967] is about a standoff."

Thus, the issue of nuclear power costs remains somewhat unsettle. This does not detract from the sizable inroads that nuclear energy has already made into the US electric power industry, but it does suggest that the future may not be as completely assured to nuclear power as the trend of the past two years would seem to indicate.

While the above considerations merely raise questions of pace of advance in what has been a US boom of unexpected proportions, there are indications that nuclear power development in the USSR may be in a period of stagnation. Indeed, the Soviet fission-based nuclear power program may come to a complete halt, if one takes at face value a reported statement by V. Kirillin, Deputy Prime Minister of the USSR and chairman of State Committee on Science and Technology. According to this, no more nuclear power stations are to be built in the Soviet Union because they are not economically competitive with conventional-fueled power stations. If this turns out to be the case, one may expect serious repercussions throughout Eastern Europe, especially the COMECON group of Soviet Bloc countries whose future nuclear energy plants depend heavily on Soviet technology and aid. For example, the recently announced plans for constructing with Soviet technical aid and Soviet reactors, two 400-mw nuclear power stations, one in Hungary and the other in Bulgaria, may never materialize.

If Dr. Krillin's statement reflects a new Soviet nuclear power policy, as his position on the State Committee suggests, the gap between the USSR and the non-Communist world in nuclear power development will grow larger. At present, world nuclear capacity exceeds 10,000 mw, of which nearly 60 percent is in Western Europe, over 25 percent in the United States, and not quite 15 percent in the USSR and East Germany. If no new power stations are to be started in the USSR and the COMECON countries, world nuclear capacity may reach 28,000 mw by the end of 1970. The US share may grow to 35 percent, Western Europe's share may decline to less than 50 percent, and the COMECON share would then shrink to less than 10 percent. Should this take place, it will reflect the great differences between the approaches of the centrally planned and more market-oriented economies in evaluating the economic impact of fission-based nuclear power.

For some time there have been indications that the Soviets were engaged in a re-evaluation of the economic prospects of nuclear power. A study undertaken in the early sixties concluded that there was not much hope for the slow thermal reactors to become economically competitive with conventional fuels and hydropower. Only breeder reactors with a capacity of 500 mw and over that favored, and it was suggested that controlled thermonuclear fusion would probably be the eventual answer for future USSR energy problems once the relevant technological problems had been overcome.

Today's apparent shift in policy is consistent with several recent developments in planning for future energy supplies in the Soviet Bloc countries. Significant elements in these plans include the following:

• Nuclear power plants of 400-mw capacity planned for construction in the European parts of the USSR (one near Leningrad) have been abandoned.
• Instead, the electricity for these regions is to be provided by large hydroelectric and thermal power plants located in Siberia. The thermal plants are to be fueled by nearby low-grade coal, fuel oil, or natural gas. Up to now, thermal stations in the USSR have had a maximum capacity of 2,000-3,000 mw, but it was reported in 1967 that it will be possible to increase their capacity to 4,000 mw.
• High voltage transmission lines (750 kv) are being built to connect the Siberian power plants with the power grid in the European part of the USSR and, in effect, with the power network for the COMECON countries.
• Oil and natural gas are being transported on an increasing scale to the energy-deficient industrial areas in the European part of the Soviet Union. Two pipelines, one 48 inches and the other 56 inches in diameter, are being constructed to bring natural gas from northwest Siberia across the Ural Mountains to Leningrad and Minsk, a distance of more than 1,500 miles.
• Plans are being made to supplement the existing Druzhba (Friendship) pipeline for crude oil with a similar pipeline network for natural gas deliveries to the COMECON countries.