French lessons—Can They Help the US Nuclear Industry?

Many analyses of the politics and economics of nuclear energy in the United States rely on comparisons of U.S. reactor programs with those of France, which have proven to be more successful. The kernel of the comparison is that France has a large and growing nuclear system that produces most of the country's electricity, little political resistance, electric rates that are among the lowest in Europe, and independence from the vicissitudes of the oil markets. By contrast, in the United States there are widespread political resistance and unfavorable public opinion, uncertainty about future plans for nuclear energy, and a generally costly set of reactors that produce about 15 percent of the country's electricity. What is more, the relatively expensive American plants are often thought to be less safe than their cheaper French counterparts.

In attempting to explain the French success and the U.S. failure, observers have been all too prone to single out as the root cause a particular political or economic factor that differs between the two countries. One of the major shortcomings of this approach is that there are a number of relevant differences, any of which could play a part in affecting the countries' nuclear programs and which may not be easily changed. Moreover, implicit in each explanation is a prescription for how to aid the ailing nuclear industry in the United States—a prescription that may well be questionable.

Public protest lesson

The news media, in particular, tend to extract political "lessons" from the French experience that are frequently tendentious and misguided. A common claim is that France has encountered very little public resistance to nuclear energy and that the American anti nuclear movement has hurt our nuclear programs. By following France's example, proponents of this view explain, utility planners in the United States would be free to respond quickly, flexibly, and rationally to price changes such as those caused by the oil crisis of 1973-1974 and to use the opportunity to promote nuclear power.

Ironically, public opinion in France during the mid-1970s was even more anti-nuclear than in the United States. The French government ignored the protesters as long as it could, but when they began to occupy construction sites in 1977 they were forcibly removed by the riot police.

French resistance to nuclear energy was further quieted by the 1981 election of the Socialists, who were expected to reduce the nuclear program more than they actually did. Only since then has the French public resigned itself to nuclear energy and even grown proud of France's technological successes.

Another version of the political lesson admits that French protest against nuclear power was suppressed. Proponents of this view go on to say that this curtailment of democracy is justified as being necessary in the interest of economic rationality. Costly delays in the United States, they say, are due in large part to the activities of anti nuclear protesters.

One of the major shortcomings of this view is that it exaggerates French economic rationality. It neglects to recognize that an open door to nuclear energy can have economic disadvantages as well as benefits, which the French have since learned from firsthand experience. The flexibility that allowed French elites to launch a massive nuclear program so quickly after the oil crisis took them down a path that led to too much nuclear energy. Not only does France now export 5 to 10 percent of its electricity—never a stated rationale for its nuclear program—but it has been forced into energy practices that are not always efficient.

For instance, electricity in France is used extensively to heat homes, and nuclear generating capacity exceeds base load requirements. Nuclear plants are used for load following, meaning that their operating power is increased or reduced to meet the demand for electricity. I believe that its nuclear commitment has prevented France from recognizing conservation as an important new energy resource, one that would be much cheaper to exploit than nuclear energy.

Poor management

To blame the troubles of America's nuclear energy program on delays caused by public protest is shortsighted. First, the costly delays have been caused much more by poor management and construction than by opponents or regulators—a view supported by a 1984 report from the Office of Technology Assessment entitled Nuclear Power in an Age of Uncertainty.

Second, although delays may have been costly, in many cases they have been less expensive than the alternative of completing unnecessary plants. The combined effect of conservation measures and flat energy demand has meant that many nuclear plants are not yet needed. The result is that utilities have often delayed construction in the face of demand uncertainty, while publicly blaming delays on regulators. In fact, delays actually increased overall economic flexibility after the oil crisis, allowing many utilities and policymakers to embrace conservation as a new energy resource.

Finally, the recommendation that public involvement should be limited in the United States in the way that it has been in France is based on a misperception of the French public's true involvement. In fact, one of the largest French trade unions, the CFDT, has played a key role in both stimulating public debate and raising technical issues that otherwise would have been suppressed. Because CFDT activists have gained grudging respect from the nuclear establishment their complaints are often taken seriously, all the more so since union procedures filter out personal gripes and pursue major problems.

In the United States, whistle-blowers have no organizational force behind them. They typically are not protected from retaliation, have few ways of getting their grievances attended to, and can create red herrings for personal reasons such as anger at a boss or extension of an employment period. If there is any valid prescription implicit in the French example, it may be that providing an organizational structure for debate and dissent breeds responsible attitudes and actions and that the United States could benefit from routinizing public participation in a similar manner.

Unions in the United States, however, probably could not fill that role. Paradoxically, regular funding of and channels for intervenor groups could prove helpful in reviving the nuclear industry. For example, after the Three Mile Island accident, the Nuclear Regulatory Commission (NRC) funded a panel whose members included representatives from opposing groups, a measure that greatly helped alleviate public concern during the cleanup.

New ideas, warnings, and fears must be dealt with rather than ignored. Bureaucracies that are insulated from these forces can be flexible in the short run, but the same bureaucracies may implement policies that are inflexible in the longer run.

Watchdogs and managers

Regulation is another area in which the media have occasionally used the French example as a basis for making recommendations for the United States. The essence of the argument here is that the utility-regulator relationship in the United States should be less adversarial, or simply that there should be less regulation of the nuclear energy industry.

Closer, less adversarial relations between the Nuclear Regulatory Commission and the utilities might improve utility attitudes, but they could also undermine NRC standards. Such a change could lead either to increased NRC influence over the utilities' internal operations and management practices or to the capture and ineffectiveness of the NRC.

Before embarking on a program of less regulation, it is essential to examine existing management practices and attitudes, particularly toward safety. The key difference between France and the United States here is that Electricite de France (EDF), a state-owned corporation that is the sole producer of nuclear power in that country, has a healthy respect for the challenges of nuclear fission, tight control over reactor operation, and generally good management, while too many American utilities have none of these. It has often been said that American utilities see nuclear energy as just another way to boil water—an attitude that is a sure recipe for disaster in terms of safety.

Interestingly, although EDF is an extraordinarily diligent and well-run company, twenty years ago its attitude was not unlike that in the United States, and its nuclear program was as inefficient and potentially unsafe. The attitudes of EDF have changed while those in the United States have not—with the exception of a handful of utilities whose nuclear programs are very successful.

Given that bad management currently exists in the U.S. nuclear industry, it it would be disastrous simply to decrease regulation and shift the responsibility for safety to utilities. In this case as in others, extrapolations from the French experience tend to reverse cause and effect. That is, less regulation is possible in France because good management exists, but less regulation did not cause good management practices to be adopted, and it should not be pursued as a means of improving management of the U.S. nuclear industry.

To achieve improved management practices and attitudes among U.S. utilities would require that a number of steps be taken. For instance, certain utilities simply should not be running nuclear plants. Utilities should be screened carefully to find the few that are capable of a serious nuclear effort. One possibility might be to set up companies whose only job is to generate nuclear electricity for a group of utilities.

One component of better management practices could be to establish a more cooperative (as opposed to antagonistic) relationship with regulators by means of regulation from the inside rather than from the outside. The nuclear industry should take strong steps to regulate its own members. As Atomic Energy Commission and NRC commissioners have told the industry, it is as weak as its weakest link. Needed change would probably involve more regulation rather than less, since the new regulations would be aimed at changing Internal utility operations.

The steps in self-regulation that have been taken since the Three Mile Island accident, such as the establishment of the Institute for Nuclear Power Operations, may not prove sufficient. In fact, the accident highlights one operating lesson that the French can provide: U.S. nuclear operators should be trained much more thoroughly than they are now—certainly at least so that they understand how a reactor functions.

Standardization lesson

Another prescription frequently offered for lowering costs and increasing safety among U.S. nuclear plants is standardization of both plant and reactor design. Here again, proponents point to the French example as validation of their argument.

The large French nuclear program was launched in 1974, the same year that reactor orders in the United States began to fall off and cancellations began to soar. Perhaps ironically, the French rationale for a highly standardized reactor design was not cost or safety as much as the rapid deployment of as many reactors as possible after the oil crisis.

EDF, which serves in the capacities of architect-engineer, owner, and operator of its plants, currently buys all its reactors from one manufacturer, Framatome, and all its turbines from another manufacturer, Alsthom-Atlantique. Although nuclear reactor designs have evolved over the years, the technology as well as the plants and control rooms are highly standardized.

In this country, more than 100 plants have operating licenses; the plants are operated by 50 different utilities and were designed by 17 architect-and-engineering firms. The U.S. program historically has been characterized by highly individualized nuclear reactors and plants. In its heyday, the early 1970s, the U.S. nuclear industry had four main reactor producers and a great many more architect-and-engineering firms that were producing the remainder of the components of each plant. By 1974, each of the four main companies had received orders for thirty or more reactors—the reactors ordered from any one of these companies outnumbering those in the entire French program at the time. Any of these companies could have standardized its product, but, unfortunately, competition took the form of customizing reactors for utilities rather than reducing production costs.

U.S. regulators did not pursue standardization more vigorously during those early years in part because it seemed premature. In the late 1960s and early 1970s little was known about operations and costs, and the industry was advancing so quickly that the plants being built were several times larger than any that were already in operation, so the soundest policy seemed to be to try various designs. By the time U.S. regulators began to encourage greater standardization, reactor orders had begun to dry up.

The U.S. nuclear energy program was doomed when it went to commercial scale before enough was known about the construction and operation of large nuclear reactors, and it has suffered from this pre-maturity ever since. Believing that development costs were behind them, U.S. utilities and the nuclear industry both predicted that costs would fall. But many refinements were needed, and utilities were shocked when costs rose in order to pay for them. France, by contrast, benefited from launching its industry at a relatively later stage in the development of light-water reactors.

Slicing costs from a different angle

Although standardization may offer one of the more convincing "lessons" among those generally put forth, it also may offer an overly simplistic solution to cost problems. The handful of U.S. utilities that have been successful at building plants almost as cheaply as the French have done so without completely standardized reactor designs or even large numbers of reactors: Commonwealth Edison of Chicago has twelve plants, Duke Power seven, and Florida Power and Light only four.

What these utilities do appear to have in common with EDF is both good management and operating experience. Effective management, which results in tight control over construction and engineering, is more important for cost control than is standardization of reactor manufacturing, largely because the reactor itself is only one-quarter of the total cost of a nuclear plant. Again, good utility management—including standardization within the utility—is what the United States should learn from the French, not production standardization or monopoly.

A closer look at the French program provides support for this prescription in that it reveals that standardization of reactor design is only partly responsible for lower prices. The cost-cutting advantages of standardization in France have been combined with further reductions made possible by EDF's negotiating strength with Framatome, the sole reactor manufacturer—even without direct regulation by the government.

Framatome is said to raise its prices for the reactors it sells to foreign companies. How much more expensive the reactors are is difficult to assess, since EDF has built-in cost savings by virtue of being its own architect-engineer. In addition, Framatome exports different packages of services to different customers and does not provide the public with details of its contracts.

In other words, while the prices EDF pays for reactors are much lower than those that U.S. utilities pay, the actual costs of manufacturing the reactors in the two countries may not diverge as greatly as is generally believed. The real savings may come from EDF's strength in negotiating a reasonable price. Therefore, setting up a production monopoly for reactors in the United States could hardly be expected to guarantee lower prices.

The most important ingredient needed by the U.S. nuclear industry is predictability and control over production and construction costs. More fundamental than standardization of plant and reactor design are utility experience and understanding of the technology. Standardization could be one aspect of this formula, but the industry must avoid the dangers of complete standardization.

Future generations of nuclear reactors will likely be better understood than light-water reactors were in the great boom market beginning in the late 1960s. Furthermore, the design and the parts may well be imported, in which case other countries would bear the extensive development costs that the United States carried for light-water reactors.

Not to be overlooked in discussions about standardization are the negative impacts it may have on the industry. As late as 1974, when the French launched their massive standardized construction program, they recognized that they were taking large risks by relying on just one reactor design.

According to French critics, EDF has been very reluctant to admit it when flaws have appeared, since to shut down one plant would imply that all plants should be shut down. When cracks were found in steel support tubes in 1979, EDF was attacked for its secretive style by its own trade unions as well as by the government's committee on nuclear information.

To a certain extent, prescriptions for the U.S. program—at least for new plants—may be somewhat premature, since it is inconceivable that nuclear construction will soon resume in the United States. But in the coming decades, new technologies and changes in energy supply and demand could well encourage reconsideration.

There are no easy lessons from the case of nuclear energy in France. The United States cannot assume that if the French followed a particular course and succeeded, it should pursue the same course. Every factor affecting the nuclear energy program in both countries is connected to a whole system of factors, only some of which are easily changed. Each country has a unique political system, particular traditions and history, and characteristic attitudes toward technology. The best the United States can do may be to study its own system carefully and to avoid using the French case in simplistic, ideological ways.