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Flavin, ChristopherNuclear Power: The Market Test. Worldwatch Paper57.Worldwatch Inst., Washington, D.C.ISBN-0-916468-56-9Dec 83

- 85p.Worldwatch institute, 1776 Massachusetts Ave., NW,Washington, DC 20036 ($2.00 per copy; 2-10 copies:$1.50 ea.; 11-50: $1.25 ea.; 51 or more: $1.00ea.).Reports - General (140)

MFO1 Plus Postage. PC Not Available from EDRS.*Costs; *Economic Factors; *Economics; Electricity;Foreign Countries; *Nuclear Enetgy; *Nuclear PowerPlants; *Nuclear Technology; Policy Formation;Research and Development; Utilities

ABSTRACTNuclear power was considered vital to humanity's

fUture until just a short time ago. Since the late seventies,economic viability has joined a list of such issues as waste disposaland radiation hazards which call into question the future of nuclearpower. This document discusses (in separate sections): (1) theselling of nuclear power, including worldwide nuclear powercommitments; (2) costs, including annual rate increases for nuclearconstruction; (3) explanations for the rising cost of nuclear power,examining such issues as mismanagement, nuclear power plant sizes,design flaws in early plants that required costly correction, andearthquake resistance; (4) decline .of nuclear power programs in theUnited States; (5) international outlook on nuclear powerdevelopment; and (6) other issues and problems. It is pointed out inthe last section that the economic failings of nuclear power suggestthe need for several. major policy changes,-including a more balancedapproach in energy research and development which nuclear power hasdominated in most industrial countries since the Fifties. (JN)

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Worldwatch Institute is an independent, nonprofit research organizationcreated to analyze and to focus attention on global problems, Directed by Lester R. Brown,Worldwatch is funded by private foundations and United Notions organizations. Worldwatch papers arewritten for a worldwide audience of decision makers, scholars, and the general public.

Nuclear Power:The Market Test

Christopher Flavin

Worldwatch Paper 57December 1983

4

Selections of this p.tpc.1 lady he reproduced tti mdmiines antinewspapers with 4 -knowledgment to %Vol- Itheatch Institute- Theviews expressed are those of the author and do not two. irityrepresent those of Worldvateh Institute and its director. rsOr staff.

'Copyright Worldwatch Institute I9 $3Library of Congress Catalog Card Number 83-51-133

!SUN MI.6468-56-9

Printed on recycled paper

5

Table of Contents

Introduction 5

The Selling of 6

Adding Up the COY--1 12

Roots of the Crisis; .1 ufl ,ounting?.. 23

Financial Meltdown in the United States .. .. ...... 33

The International Outlook 43

Toward a Mirket Test , , . 55

Notes 67

Introduction

Nuclear power was considered vital to humanity's futureuntil just a short time ago. Its seemingly infinite potentialand the freedom from fossil fuel dependence that it prom-ises made nuclear power seem inevitable. Although issues

such as plant safety, waste disposal and the spread of atomic weaponssoon created controversy, faith in this energy source among keydecision makers remained high throughout the past' three decades.Their confidence was based largely on economics. Whatever its otherproblems, nuclear power was sure to be less expensive_ than theavailable alternatives.

Since the late sevcrIties, ho- ever economic. viability has joined thelist of issues that call into qu _stion the future of nuclear power. Fromstate regulatory hearings to the highest levels of national energy

the economics of nuclear power has gained center stage.One might expect-ce refill-economic-analysis_ to, provide some cairn\amid the fury,but nuclear economics has proved to be almost as hotlydisputed as other nuclear issues. Cost estimates frequently vary by afactor of two or more and economists examining the same issuesoften reach sharply contrasting conclusions.

Although analysts continue to disawee on many issues, fei.V\ candoubt that a wide range of economic problems has buifeted nuclea,rpr4-wver since the early seventies. Cost overruns on nuclear projectshave become endemic and devastating. Figures from utilities andgovernments in key countries show near-universal increases, in thereal (inflation-adjusted) cost of nuclear power during the past decade.Niiclear power has. lost .substantial economic ground compared tocoal-fired- powerthe other main source of new baseload generatingcapacity in most countries. Only in Prance and a few other nations arenew nuclear plants a less expensive power source than new coalplants, and nowhere is nuclear power economical compared toinvestment in improved energy efficiency. In addition, dramaticslowdowns in the rates of growth of electricity demand in manynations have eliminated the need for many nuclear plants now underconstruction.

I would like to thank Peter Bradford, Irvin Bupp, Scott Fenn, S. David Freeman.Charles Komanoff, Amory Lovins and Edward Sullivan for reviewing this manuscriptand John Foggle for research assistance in preparing this publication.

The major economic assessments on which today's nuclear powerprograms are based are riddled with errors. But with billion-dollardecisions riding on the outcome, utilities and their customers cannotafford to proceed blindly any further. Developing countries particu-larly need better information since many have little idea of the finan-cial risks nvolved in their nascent nuclear programs. Continuing costincreases for nuclear power and a troubled world economy will likelymake the economics of nuclear power an increasingly prominentissue in many nations in the next few years.

The economics of nuclear power cannot be separated from otherimportant nuclear issues. Waste disposal and radiation hazards, forinstance, have major economic implications. And the need to makenuclear plants safer is at the root of much of the cost increase. Theseissues are, of course, enormously important on their own, but theeconomics of nuclear power today will help set the context in whichother issues are examined. If nuclear power is cost-effective, somemay consider its many risks worth accepting. But if nuclear power isnot economical and unlikely to become so, it will be cut back orabandoned, regardless of how the other questions are resolved. Thetime to make difficult decisions is at hand.

The Selling of Nuclear Power

The eighties were expected to be a glorious decade for nuclear powerworldwide. In 1970 the Organisation for Economic Co-operation andDevelopment (OECD) projected that its member nations in WesternEurope, North America and Japan would have 568,000 megawatts ofnuclear generating capacity by 1985about half the genera tincapacity that OECD countries have in all sources c ambined in 198._Nuclear power plants were to be built at a rate of over 100 per yearduring the eighties. The United States alone planned to have 1,200operating nuclear plants by the end of the century.'

Today_ a decade after these bullish nuclear power forecasts, theworld is using less than half as much nuclear power as was projected.The nuclear industry's plans have shrunk even more Estimates for1990 show nuclear plants supplying only 300,000 to 400,000 mega--watts of capacity, compared to the over one million megawatts. pro-

8

"So far in ,t-he eighties,nuclear plaint cancellations

have been outrunningnew orders worldwide."

jected in International Atomic Energy Agency documents a decadea o.= The largest reductions have been made in the United States,were 87 plants have been canceled since 1975. Major cutbacks havealso been made in Western Europe, the Soviet Union and the ThirdWorld.

Nuclear power is by no tne'ans 'insignificant, however. As ofNovember 1983, 282 commercial nuclear plants in 25 countries pro-vided 174,000 megawatts of ` generatir capacityenough to produceabout 9 percent of the worlds electricity, or 3 percent of total energy.(See Table 1.) In industrial countries the share of electricity suppliedby nuclear power varies widely about 40 percent in France, 17=per-cent in Japan, 13 percent in the United States, 6 percent in the SovietUnion and zero in nations such as Australia and Denmark that havedecided to forego harnessing the atom altogether.' In the next threeears, over 100 nuclear plants are scheduled to begin operating,oosting global nuclear capacity by 60 percent. The 171 plants now

under construction run up a bill of approximately 540 billion eachyearnot the usual measure of a sick industry.

The large number of plants operating and neariiig conwirtiorrreflepast ambitious plans and investments more than the health of today'sindustry: So far in the eighties, nuclear plant cancellations have beenoutrunning new orders worldwide. Unless fortunes shift quickly, thepipeline of new plants will begin to run dry in all but a kw countriesby the end of the decade. The Financial Tunes Energy Economist, anewsletter of the international energy establishment, reported inearly 1983 that -The day when nuclear power will be the world'sleading electricity source now seems to have been postponed indefi-nitely. a To the surprise of many, nuclear power's economic failingsare what most jeopardize its future.

Commercial nuclear power has a short history. Although the atomwas first fissioned in Germany in 138, the only real fruits of thenuclear age after a decade and a half were nuclear submarines, someimportant medicjil uses of radiation and weapons of mass destruc-'tion. The United States and the Soviet Union, which led the world indeveloping nuclear technologies during the forties and fifties, con-centrated their early expertise and funds on weapons development.Civilian nuclear research and development programs were more

8

Table 1: Worldwide Nuclear Power Commitment, November 1983

--Under

fiTotal

CommitmentCountry Operating

Orderedor

Construction*(number) (megawatts) (number) (megawatts) (number) (megawatts)

United States 77 60,026 64 70,376 141 130,402France 31 21,778 31 34,520 62 56,298West Germany 12 . 9,806 17 19,516 29 29,322Japan 25 16,652 15 12,649 40 29,301Soviet Union 34 18,915 11 9,880 45 28,795

Canada 12 6,622 12 8,710 24 15,332Great Britain 34 9,273 8 5,115 42 14,388Spain 6 3,820 7 6,801 13 10,621Sweden 10 7,300 .2 2,110 12 9,410South Korea 1 556 8 6,710 9 7,266Belgium 5 3,450 2 2,000 7 5,450Switzerland 4 1,940 3- /1,947Taiwan

-3,0071,814 6 4,9244 3,110 2

Czechoslovakia 2 880 8 3,520 10 4,400

Italy , 3 1,285 3 2,004 6 3,289Brazil 3 3,116 3 3,116East Germany 1,830 2 880 7 2,710India 804 6 -1,320 10 2,124Argentina 335 2 1,292 3 1,627

Rest of World 12 5,205 21 14,044 33 19,249

World Total 282 173,587 227 209,384 509 382,971

*Includes over ten plants where construction has been suspended.Source: Nuclear Neils, August 1983, Atomic Industrial Forum and press reports.

modest, but enthusiasrn-ran high. To many people nuclear powerseemed to provide the key to the world's future. It would supplyinfinite amounts of energy indefinitely and remove rrylls.1 't theconstraints under which humanity had struggled for millennia. The

_ 1. 0

"The U.S. GovernmentMing to go where the Fortune 500

feared to tread."

7Chancellor of the University of Chica pi edicted that "Heat will beso plentiful that it will be used to me t snow as it falls."'

In the early fifties both the United States and the Soviet Union greatlyaccelerated their R&D programs to commercialize nuclear power.Among the reactor designs tested were gas-cooled reactors, moltensalt breeder reactors and two kinds of light water reactors. Majortechnical improvements led to the world's first electricity-producingreactors: a small breeder plant built in the United States, in 1951, and a

_five-megawatt light water plant built in the Soviet Union in 1954, Alsosuccessful were the nuclear-powered submarines developed in acrash LI.S. Navy program, headed by the hard-driving AdmiralHyman Rickover. Light water reactors that powered these sub-marines were the models for the first true nuclear power plant, builtat Shippingport,.Pennsylvaniiin 1957.

Efforts in-lather countries to develop nuclear power in the fifties werehampered by an early superpower monopoly ormuclear technologiesand fuel supplies. Countries that netwertheless began substantial

-.nuclear= power-programs-include-Canada,-Great-Britain,Fraoce_andWest Germany, each pursuing. its own approach to elude* tech-nology. Unexpected engineering problems that emerged in scaling upfrom tiny prototypes to commercial plants slowed - progress every-where.

9

Private companies showed little interest in commercializing nuclearpower in the late fifties. The electricity business was booming, costs,were falling and imported oil was cheap. Utility planners saw notneed to invest in an expensive and -risky new technology. But theU.S. Government was willing to go where the Fortune 500 feared totread. The United States spent hundreds of millions of dollars on thePower Reactor Demonstration Program, in which large corporationsbuilt a half-dozen prototype nuclear power plants, a tempting toprove the economic viability of the technolqgy

As the demonstration plants were completed in the eaz y ix ties, theU.S. Atomic Energy Commission and nuclear equipm n rnanufac-turers mounted a campaign to convince utilities that nuclear costscould be lowered substantially. The Atomic Energy Commission'sReport to the President in 1962 concluded that nuclear power was at

"the threshold of economic competitiveness" with other electricitysources." Although this claim was made on an exceedingly slim database, many planners became convinced that nuclear power would

-soon be a commercial reality. Private-utilities-were=further prompted10 by increasingly explicA government threats to turn nuclear power

over to public agencies such as the Tennessee Valley Authorityashad been done with hydropower in the thirties.'

Still, utilities demanded a uarantee that nuclear plants would becheaper than alternatives. The turning point came in December 1963when General Eleztric and the Jersey Central Power & Light Companysigned a contract for a "turnkey" nuclear plant that G.E. built at a setprice, competitive with the cost of a coal fired plant. The utility riskedlittle since it simply paid the agreed price when construction wascomplete and then turned the Vey" to begin generating power. Asmall wave of eight similar agreements followed, launching commer-cial nuclear power in the United States. Although these plants did notactually produce power for several years, the signed contracts seemedto substantiate manufacturers' claims that the technology wasniature.10

The next srage came quickly. In 1966 and 1967 utilities ordered 51more nuclear plants, signing open - ended- contracts thatshifted the burden of any future cost overruns to the utilities and theircustomers. By the end of 1967 the United States had 28 times as muchnuclear power capacity on order as it had in operation. The four U.S.companies selling nuclear reactors competed aggressively for neworders, and utilities rushed to stay at the forefront of the technology.Nuclear power was considered inevitable for meeting future elec-

.-tricity demand, which was doubling every ten years.

Economists Irvin Bupp and Jean-Claude Derian aptly describe thisperiod as a Great Bandwagon Marker for nuclear power." Theresulting euphoria discouraged dispassionate analysis of the state ofnuclear technology. Utilities had little understanding of the moredemandifig engineering that nuclear power plants required, and noeconomic history existed to assess the vendors Llaims. Each addi-tional order was simply taken as evidence of the accuracy of thoseclaims. Bupp and Derian said that, The rush to nuclear power hadbecome 'a self-sustaining process:" Perhaps self-sustaining, but not

12

sustainable in withoutthout urther proof of economic com-petitiveness.

The apparent commercial success of nuclear power in the UnitedStates boosted nuclear power rograms around the world. By theearly sixties, Great Britain and Franc e had built successful prototype

lied reactors, and Canada was well along in developing itsieaG v water reactor design. But most analysts tiacl concluded that

economical nuclear power was at least several years away in all ofthese countries, In 1970 an authoritative French report conceded that"Aide from Great Britain and Canada, the success of nuclear poweris the success of,American light water reactors . . which overwhelmall markets where true competition exists."' The Soviet Union'snuclear p_igram also lagged well behind that in the United States,with only eight small nuclear plants operating by the late sixties.

Beginning in the mica - sixties, U.S. companies aggressively marketednuclear technologies in Europe, Japan and some developing nations.The companies were assisted by the U.S, Government's Atoms forPeace provam, designed to counter the Soviet Union's successes incourting Third World nations. More than a dozen countries pur-chased American designed plants or signed licensing agreementswith U.S. companies. Today France, Japan and West Germany,which, along with the United States, play a prominent role in thenuclear power industry, all build nuclear plants based on U.S.designs. Nuclear power was easier to develop in Europe than in theUnited States, given a strong tradition of government control of theutility industry and the many links between government officials,banks and private corporations. With the rapid growth of. electricitydemand and the relative scarcity of indigenous energy resources inEurope, fey., challenged the notion that nuclear pqwer deserved ahigh priority."

T:ie late sixties and early seventies also marked a great expansion ofThird World nuclear power programs. Nuclear power was welcomedas an alternative to imported oil and as a way for developing countriesto ppropel themselves into the twentieth century. Exports of the tech-

_no were vi-oroudsly promoted by the multinational corporationsthat ominate the in _ustry and-by governmenencies-such--as-the____U.S. Export-Import Bank. The International Atomic Energy Agency;

11

13

12

an arm of the United ati ns, was also influential lling nuclearpower in the Third World. Sixteen developing countries, some stillrelying on fuelwood as their major domestic energy source, hadnuclear power programs by the mid-seventies. Argentina, Brazil,India, South Korea and Taiwan are among the countries that pushedhardest. The head of Pakistan's Atomic Energy Commission said"For many developing countries nuclear power is simply a matter ofsurvival.'"

By 1973 worldwide nuclear power capacity had risen to 43,000 mega-watts, provided by 115 plants. The United States had halt the totalcapacity and Great Britain one-eighth. France and the Soviet Unioneach had the equivalent of only three 1000-megawatt nuclear plants,and Canada, Japan and West Germany, only two each. But nuclear

,construction programs were in full swing in a halt-dozen countries,and a dozen more programs were planned to begin soon_ In the peakgrowth years of 1971 through 1974 o.er 200 nuclear power lantswere ordered worldwide, approximately doubling the numberplanned reactors.'

The 1973-74 oil crisis was widely regarded as the final guarantee thatnuclear power would be the world's next preeminent energy source.Western political leaders saw nuclear power as the necessary high-technology solution to OPEC's stranglehold, on the oil market. TheNixon administration's "Project Independence- aimed for nuclearpower to supply half of U.S. electricity by the year 2000. French PrimaMinister Jacques Chirac spoke for many when he said in early 1975,

For the immediate future, I mean for the coming ten years, nuclearenergy is one of the main answers to our energy needs.'

Adding Up The Costs

When the Grand Gulf 1 nuclear power plant was ordered in 1972, theMississippi Power and Light Company estimated that it would costabout $300 million. In 1983 the plant began generating power severalyears behind schedule and 52.5 billion over budget. This figure isremarkable riot just for its magnitude; it is also about average for theU.S. nuclear industry.

14

"Sixteen developing countries,some still relying on fuelwood as their

major domestic energy source, had nuclear powerprograms by the mid-seventies."

Nuclear plants completed in the United States in the next fewyears will generally cost five to ten times as much as original's'projected overruns of more than 52 billion each. And some projectsmake that figure look like a bargain. The Limerick 1 plant in Pennsyl-vania is now budgeted at 53.4 billion, and the Nine Mile Point 2 plantin New York is expected to cost between 54.6 billion and 55.6 billion_Several recently canceled nude._ Flants would have cost as much as58 billion each had they been completed_ Even the few -successstories" claimed by the U.S. nuclear industry, such as the Palo Verdeplants in Arizona are over budget and will cost over 52.5 billion each.Nuclear economies is not for the fainthearted_ The annual cost over-runs alone equal the government budgets of many nations.'

Thirty years have passed since U.S. nuclear officials said nuclearpower would be -too cheap to meter_"" It was an unfortunate ciaimthat the nuclear industry no wishes had never been made. But thesewords will be long remembered, for they n. rk the beginning of a sadhistory of bold assertions and unsupportec. analysis that made theactual cost and economic merits of iclear power extremely uncer-tain. Even today a full and fair accounting of the economic status ofnuclear power is hard to find in any country. Some of the mostmisleading reports, unfortunately, come from government andindustry offices that should have access to the most complete data.

The 650-megawatt Oyster Creek plant that launched the commercialnuclear poWer industry-in 1963 was sold for 564 million, or about 5100per kilowatt of capacity. For Jersey Central Power and Light, thereactor was a bargain source of electricity. For the nuclear industry,Oyster Creek and the eight other turnkey" nuclear plants that fol-lowed were huge -loss leaders,- on svhich the plant manufacturerslost between 5800 million and 51 billion. But these projects servedtheir intended role by helping create the first bona fide market fornuclear power plants.'"

In the late sixties completed nuclear ower plants cost between 5250and 5300 per kilowatt rather than the 5150 per kilowatt predictedwhen the projects were started.'" Nuclear industry officials were littleconcerned since they assumed that nuclear power would soon followthe traditional "learning curve" in which design and constructiontechniques improve and costs fall. The utilities signaled their confi-

dence by ordering 126 nuclear poi plants between 1971 ind theend of 1974enough to increase total U.S, generating capaci: .1 theearly seventies by nearly half_

By the mid-seventies enough non-turnkey nuclear plants werefinished to begin assessing actual nuclear costs. The facts were notencouraging. Studies by Irvin bupp of the Harvard Business Schooland William Mooz of the Rand Corporation showed that most nuclearpower plants cost substantially more than expected and that costswere rising steadily over time.' Although respected analysts madethese estimates using standard accounting procedures, the dangerwarnings were drowned out by the continued optimistic claims ofnuclear manufacturers_ Industry consultants published stud L. s show-ing that nuclear power was mole economical than any other powersource and that cost increases were temporary, caused by inflationand regulatory delays.'

The economic case for nuclear power became far more difficult tomake as construction cost estimates for virtually every plant underconstruction climbed steadily during the late seventies. In 1981 econ-omist Charles Komanoff published a thorough assessment of costtrends in the nuclear industry. Using the utilities' own data butcarefully separating out the effects of inflation and interest rates, heconcluded that real (inflation-adjusted) construction costs for nuclearplants had risen 142 percent between 1971 and 1978, or 13.5 percentannually. He found that coal plants were also becoming more expen-sive (largely due to added pollution control equipment) but at a muchlower 7.7 percent annual rate.'

Because additional plants tend to reveal more technical problems thatre uire more costly solutions, Komanoff projected that by the lateeigghties nuclear plants would cost at least 51,800 (1982 dollars) perkilowatt to build, or 75 percent more than coal plants completed at thesame time Originally nuclear plants were expected to cost 10 to 30percent more than coal plants to build, but lower nuclear fuel costswere supposed to make nuclear power less expensive in the long run.A 75 percent construction cost margin, however, makes nuclearpower barely economical at best. The nuclear industry vigorouslydisputed Komanoff 's estimates, arguing that statistical analysis of therecent past does not reliably predict future trends.

To the chagrin of the industry, recent data shows thatprojections were, if anything, conservative. Since the mid:seventies,cost estimates for individual nuclear plants have risen 20 percentannually. Costs, therefore, doubled eyery tour 1..ears, rising faster

---than those for gasoline, housing or almost -anything else.- Nuclear--plants completed in the mid-eighties will cost an average of almost

,000 (1982 dollars) per kilowatt to build (interest costs not included),tyke as much as coal plants. (See Figure L) And because of the high

2,

2,0

1.5

1,0

millionDollars

Financing Cos

1111 Construction Costs

Scurcc: ,-Itiaptca tram c,,donatcs IfKorthotott Energy ,.-Imrelates

Nuclear--3a1

Coal

500 - Coal Nuclear

Nuclear

1971 1978 Mid -1980s

Figure I: Estimated Average U.S. Construction Costsfor 1,000-Megawatt Coal and Nuclear Power Plants

by Year of Completion (1982 dollars)

17

curt. and long contruction times, financing charges for a nuclearplant are now three times those for a coal plant and add S500 (1982dollars) per kilowatt to the average construction

-16 Operating costs for nuclear power plants, once expected to be neglibit?, have bet:orne substantial. A 19S2 study by economists with theEnergy Systems Research Group found that operation and mainte-nance (O&M) costs rose during the seventies at an average annualrate of 18 percent.'' By the ear_v eighties, the average nuclear plantcost more than S30 million a year to operate (excluding fuel costs andmajor capital additions), enough to contribute 20 percent to the costof nuclear power. Further O&M cost increases appear likely, particu-larly as plants age and systems deteriorate. Generic technical prob-lems recently disccvered in some nuclear plant designs, such as leakysteaiaa generators and brittle reactor vessels, could result in repair billsof hundreds of millions of dollars. Nuclear fuel costs have risen at amuch slower rate. They contribute only about 10 percent to the cost ofnuclear power and are one of the few factors in the economic equationnot giving nightmares to utility executives?

U.S. nuclear power plants have also been hurt by erratic operatingschedules. Plants have operated on average at less than 60 percent oftheir rated capacity in recent years rather than at 75 to 80 percent ofrated capacity as originally expected At fault are a range of technicalproblems that require operation at partial capacity as well as frequentshutdowns for repairs. Two-thirds of the cost of nuclear electricitycomes from construction costs and interest that must be paidregardless of whether the plant is operating, and the Energy SystemsResearch Group estimates that a drop in capacity factor of 20 percent-age points increases the cost of power by 30 percent. Coal plants havea so run at about 60 percent of rated capacity, largely due to lowpower demand and resulting ir _ntional cutbacks. But only a third ofCoal generation costs are capital costs, so the economic penalty is notnearly as great. Most of today's nuclear power plants are relativelynew and research .-5 are concerned that as plants age, deterioratingequipment may rc..luce capacity factors further. Salt water cooledreactors are particularly troublesome because they apparently suffer asignificant decline in capacity factor as early as the seventh year ofoperation, presumably due to corrosic n.2).

18

"In the nuclear business,the line between serious analysis

and industry propaganda is frequently blurred."

Industry and government studies have been slca to recognize thedeclining economic competitivenes. of nuclear power. Cost estimatesfor plants under construction hired on traditional engineering assess-ments continue to _miss the marl; ,.'idol'.' and are adjusted upward byhundreds of millions of dollars each yar. Many industrywide stud-ies, failing to distinguish betw,e-en real cost trends and inflation,simply assume that all increases are caused by inflation .and highinterest rates. Even the -real cost of currently operating nu- plantsis frequently misstated by relying on cumbersome accounting meth-ods and failing to note important trends over time. Since nuclearplants typicalk. take eight to twelve years to build, during whichinflation is constantlY lowering the real_ Vaiue of money spent, figur-ing the real (inflation-adjusted) value of each year's work is laboriousbut essential. Projections of future costs are otti even further fromthe mark since they assume that steeply rising curves will soonflatten out In the nuclear business, the line between serious analysisand industry propaganda is frequently blurred..,

Even government and ndu =try Ws are now much less bullish onthe economics of nuclear pOw In industry boardrooms and atregulatory hearings, cost overruns are frequently cited as a majorproblem confronting nuclear power. Lewis Perl, a utility industryconsultant %v ho bears responsibility for many reports extolling theeconornk-s of nuclear power, now says that "Continued escalation incapital costs and operating costs for -even a couple more years wouldwipe out the nuclear advantage (over coalL"' Though Pert s timin.4 isoff, his conclusion is essentially right. On the other hand, a 1982 L S.Department of Energy (DOE) report concluded that for nuclear andcoal plants completed in 1995, total generating costs would be abouteven, at between 40 and be (1980 dollars) per kilowatt -hour depend-ing on the region of the country.11 Though a nets admission for DOE,the s'-udy is still severely biased in favor of nuclear power. It under-states the real cost of nuclear plants new being completed by at least20 percent and assumes without foundation that construction costincreases will slow drastically in the next few years.

Careful analysis of utility industry data for the 30-Odd U.S. nuclearplants scheduled for completion in the mid-eighties shows that theywill generate electricity at an average lifetime generating cost ofbetween 100 and 12c per kilowatt-hour (1982 dollars). This is more

9

than 6= percent a cive the cost of new coal-fired power and 25 percenthigher than new oil tired power, even assuming substantial fossil fuelprice increases. (See Figure It all t electricity used bv Ameri-cans cost as much as this nuclear electricity will, the nation's utility

18 bills would rise about 130 percent." As a source of heat, electricityfrom new nuclear plants at today's delivered cost compares with oilpriced at 5240 per barrel.'`'

Enough data exists to show conclusively that new nuclear powerplants are not cost-effective in the United States compared to new coal,

Cents PerKilowatt-hour

111111111111111

Waste Disposal and_DecommissioningFuel_Operation andMaintenance

Financing

DirectConstruction

Oil Coal NuclearFigure 2: Estimated Average Lifetime Generating Costs

For U.S. Power Plants Completed In The Mid-Eighties (1982 dollars)

ra 0

plants. Even if all the unique and health dangers c nuclearpower were removed, a U.S. utility p1inner choosing =tween a coalor nuclear power plant solely on the basis of-economics would hateselect. coal. Compared with energy cttic encv improvements, nuclearpower woks even less economically attractive (a comparison that isassessed in the last section of this paper). In addition, nuclear powercarries financial risks that that have struck terror in the hearts of maneutility executives. S. David Freeman, a &rector of the TennesseeValley Authority, which rice had the largest nuclear constructionprogram in the United States, concluded in 1982 that The cost ofnuclear power isn't just high, its unpredictable. No sane capitalist is

ing to build something for which he can't derive a co-stIbenefit ratioecause the cost is unknowable_""

Outside the United States, the economics of nicc ear power is muchharder to calculate. In most countries the relatively few operatingplants have produced only a slim data base, and few nations releasecost figures for individual nuclear plants. As in the United States,companies and government agencies strongly committed to nuclearpower selectively release data and sometimes provide biased inter-pretation of figures they do release. Outside anal % sts often haveinsufficient data to scrutinize official claims. Nonetheless, importantinformation is emerging from several key countries._

In Great Britain, the government's nuclear program is at a turningpoint_ The country's advanced gas-cooled plants-bave had poor oper-ating records, and the Atomic Energy Authority and vvernment-owned utility, the Central Electricity Generating Board (CEEB), have

uproposed building a new generation of light water nuclear plantsased on the American Westinghouse design. The Sizewell inquiry, a

semi-judicial proceeding convened in 1983, is assessing the proposaland will recommend to the government in 1984 whether a light waterplant should be built. Already the longest hearing of its kind in Britishhistory, the Sizewell Inquiry has become an unprecedented, wide-ranging assessment of nuclear power's economic status in Britain. Tothe surp4ise of many, safety and environmental issues have beenpushed into the background.''

The government has spent several months presenting a detailed casefor additional nuclear plants. One of the most telling critiques comes

21

20

from Gordon Nlackerron of the University of Sussex, who concludedin a 1982 re-port that CEGB estimates for plants already built in GreatBritain layOred nuclear power by failing, to calculate the full valueof past capital investments_ The CEGB, Mackerron found, had notdistinguished clearly between current and constant dollar costs.Regarding the CEGB's future calculations, the government's ownN1onopolies_ Commission faulted the utility for consistently using"optimistic- rather than "mid-range" assumptions. Both GordonNlackerron and J.W. Jeffery, a retired professor at the University ofLondon, have conducted tl=imrough economic assessments of Britishnuclear plants in recent years. Mackerron concludes that coal andnuclear generating costs in Great Britain are virtually even, with coalpower' 3 higher fuel costs largely offset by the much higher capitalcost of nucrear power. Jeffery contends that nuciear power is consid-erably more expensive than coal-fired power,'

Although vigorously disputing these figures at first, the CEGB in 1983had to recant many of its earlier economic claims for British nuclearplants_ The latest CEGB figures show that the country's more recentgas-cooled plants cost b.yice as much to build e.s coal-fired_plants,,ielding slightly higher total generating costs. Yet the CEGB con-tinues to press for new light water plants in Great Britain, despite thedisappointing U.S, experience with that technology. The CEGB willbe challenged by a growing number of analysts who agree with J.W.Jeffery's contention that, 'Nuclear power has not been economic, isnot economic and is likely to get more uneconomic in the future.-Even the British energy establishment believes that the governmentcase has not held up well so far, but the outcome is difficult to predictbecause political considerations will likely play a major role.'

West Germany has a gar and more successful nuclear power pro-gram than does Great Britain, but it has suffered 'from major costoverruns nonetheless. Official figures compiled by Rheinisch-West-falisches Elektrizitatswerk (RWE), the country's dominant investor-owned utility, show direct nuclear construction costs rising sixfoldbetween 1969 and 1982 while coal plant construction costs went upless than fourfold. The utility concluded that nuclear costs, afterallowing for the effects of inflation, had risen at an annual rate of 9percent while coal costs had risen 4.6 percent annually._ The RWEfigures indicate that nuclear plants completed in 1985 are likely to cost

22

130 percent more than coal-tired plants. Another set of official projec-tions made in 1982 for plants begun in that year (tor completion in1993) show nuclear capital costs of D\1 5000 (51800) per kilowatt incurrent dollars compared to D\1 2500 ($900) per kilowatt for a coal

Coal prices are relatively high in West Germany pros somebasis for the government's claim that nuclear po%yer still has a lifetimegenerating cost advantage over coal-fired power. But nuclear poweris unlikely to overcome a capital cost margin as large as the oneofficials now .1dmit to_ Critics charge that West Gerrnan nuclearplanners consistently underestimate the cost of nuclear projects anduse accounting methods that do not measure the full cost of nuclearelectricity generation. A major study by itirgen Franke and DieterVielhues of the Institut Freiburg concluded in 1983 that due to rapidlyescalating construction costs and interest rates, nuclear electricityfrom plants begun today will cost at least 60 percent more than coal-fired power. According to Franke and Vielhue5, even wider the mostoptimistic: assumptions, a case for ordering additional nuclear plantsin West Germany no longer exists.-

France is a key country in international comparisons of nuclear eco-nomics. With perhaps the only nuclear construction program runningat near full capacity in recent years. France has an internationalreputation for efficiency and speed. Though U.S. nuclear plants takeon average almost ten Years to build, French plants average less thansix years. Official French figures published in 1982 show real capitalcosts rising from FF 2430 (5350-S.700) per kilowatt in 1974 to FF 3500(8500-S700) per kilowatt in 1981 all expressed in '1981 francsarelatively modest 43 percent increase. This works out to an annualrate of increase of 5 percent, one-third the rate in the Americannuclear industry and one-half the West German rate. The tigure iscorroborated by a 3-5 percent annual real rate of increase reported toKomanoff by Electricite de France, the country's national utility, in1981. French planners maintain that nuclear plants cost just 17*per-cent more to build than coal plants and that overall, nuclOar power is20-40 percent cheaper than coal-fired power.'

The meager cost data released by French authorities makes theveracity of the official numbers hard to prove. Most of the figures

23

released are aggregates compiled by planners with a vested interest intheir program_ Data for individual- plants is not available, so figuresca he confirmed or correlated with rAevant variables. Officialaccounting techniques are not described r,nd could easily hide majorsubsidies tor the nuclear program.

At least relative to other countries, however, the French nuclearprogram has been in economic toccess. The margin may, not be aslarge as official figures indicate, but nuclear power in France doesappear to he significantly less expensive than coal-fired power.LapacitY factors and operating costs for French plants, however, have.uttered from poor performance since 1982, which will likely raisecosts. Only more time and experience will tell how economicalFrance's ambitious nuclear program really is.

The limited information aailable for other nations also shows sub-stantial cost increases during the past decade. In Japan average realconstruction costs have gone from lr 0,000 ven (5423) per kilowatt inthe earlY- severities to 280,000 yen (51,200) Tier kilowatt in the earlyeighties (all in 1982 yen), according to utility' industry sources. Japanese nuclear plants now cost 140 percent more than coal plants tobuild_ In the Soviet Union the latest Five-Year Plan reports thatnuclear plants are 80 to 100 percent more expensive to build than coalplants. In Sweden utility industry figures show that the real cost ofnuclear projects has risen at a 7.5 percent annual rate, and generatingcosts for the latest Swedish reactors come to between 2 9c and 4.2cper kilowatt-hour.'

In Canada, the country's CANDU reactors have some of the bestoperating records among nuclear plants worldwide_ But data releasedby Ontario Hydro, the builder of Canada's CANDU nuclear plantsshows that construction costs rose from 5400 per kilowatt in 1972 to51,700 per kilowatt in the early eighties, or a real rate of increase of 6percent after inflation Critics of Canada's nuclear program argue thatnew nuclear plants will generate power that is several times as expen-sive as hydropower now being hanessed. In India the governmentnow admits that nuclear power is much more expensive than coal-fired electricity, but justifies its large nuclear program in terms ofnational prestige and technological leadership.

24

"In the Soviet Unionthe latest Five-Year Plan reports

that nuclear plants are SO to 100 percent more expensiveto build than coal plants."

Table 2: Annual Real Rates of Increase of Nuclear ConstructionCosts Since The Early Seventies In Selected Countries

Installed NuclearCountry Capacity, 1983 Annual Cost Increase 23

United statesFrancelapanWest GermanvSwedenCanada

1.0041 trivga%v,itt,.1

60

17Itl

(rercvnn

135

11986

Source: Worklwatch In-titute

Comparin nuclear economics internationally in strictly quantitativeterms is a hopeless endeavor_ Not only is comprehensive and reliabledata scarce, but constant variations in inflation, exchange rates andfuel costs make common standards difficult to apply. Enough data isavailable, however, to show that cost overruns have been most severein the United States, West Germany and 'Great Britain. But costincreases above inflation have been near-universal even in such"model" nuclear countries as France and Japan. (See Table 2.) Thesetrends have badly hurt nuclear power' s economic standing comparedto its most direct competitorcoal-fired power. Perhaps most dis-turbing from a long-term view is that the economics of nuclear powerseems to worsen over time--In most countries_ Many are poised torepeat the disappointing experience with nuclear power in the UnitedStates.

Roots of the Crisis: A Full Accounting?

Explanations for the rising cost of nuclear power provoke enormousdisareement, The nuclear manufacturers generally blame their woeson excessive government regulation or a harsh economic climate,while nuclear critics blame inept management or a flawed tech-

25

nologv. All of these factors and several ahers play a role, but safety isalmost certainly the single most important issue in understandingcost trends in the nuclear industry_ _ Nuclear proponents ancl criticsagree that nuclear plants _mu 3t be sate to be a viable energy source,and the measures taken to improve safety account for a large share ofrising costs. From nuclear power's earlit_im days the cost of particularsafeguards has stirred controversy. Many proposed regulations werenot issued because of their potential economic impact, according to astudy by Daniel Ford of the Union of 'Concerned Scientists.'

The designers, builders and regulators of nuclear plants in the latefifties and early sixties gradually discovered the complexity of theengineering needed to ensure the _safety of nuclear power. Thedozens of interlocking SVstems that had to work in synchronv wereoften unlike any that hid been built before_ Nuclear- plants pushedmany materials and engineering standards beyond their limits, whilethe scale of the projects caused unprecedented management difficul-ties. The broad "general design criteria" issued by government reg-ulators were about as helpful as a quick sketch would be to a companybuilding a skyscraper. Regulators began issuing more specific require-ments almost immediately and plant builders faad to introduce manyinnovations of their own. 'n

Much of the cost overruns for-nuclear plants planned in the sixtiescan be attributed to the unrealistically low bids made by manufactur-ers trying to sell their product to the utilities. Engineers found seriousdesign flai.vs in the early plants that required costly correction. Reg-ulators, both in the United States and Europe, assumed that nuclearpower was a mature .technolog-y and so dealt with,these variousproblems individually as they arose. Ovefall plant design was neverthoroughly reassessed.

Stabilizing plant design was further complicated by efforts to increasethe size of the plants. Size became a major selling point for thenuclfar companies. since economies of scale were expected to lowerthe cost per kilowatt. The manufacturers abandoned their usual con-servative approach to scaling up new echnologies, and plantsordered in the United States increased from an average of 300 me a-watts in 1962 to 700 megawatts in 1965 and 1,150 megawatts in 197 47

By the late sixties nuclear plants under construction were six times

26

"Engineers found serious design flawsin the early plants that required

costly correction."

larger than any then in operation_ West German officials report thatthe rapid scaling up of their nuclear plants resulted in many technicalproblems and cost overruns.'

The rapidly increasing size of nuclear power plants affected manyaspects of plant design, Larger nuclear cores contain more radioactive

products and have a greater power density, increasing thedanger in the event of an accident. potential for a plant meltdownsteadily grew as plant size increaseo. Beginning in the early sixtiescontainment structures became essential to prevent the release ofradioactive materials. Emergency core-cooling systems, whichremove heat from the core in the event of a breakdown, were intro-duced, enlarged and provided with backups. The response time ofthe various safety systems had to be shortened and each becamevastly more complicated_'

By 1970, when the first nuclear plant with a capacity over 600 mesa-watts began operating, more than 50 plants of similar or greater sizehad been ordered. Actual experience with these large, new plantsproduced some unpleasant surprises. Pumps, valves and electricalsystems broke down, fires erupted, radioactive water-leaks contami-nated equipment and workers, and essential safety systems wereoccasionally shOt down b!, accident. Similar problems might haveplagued a new automated automobile factory or cement plant, but atnuclear plants they raised grave safety concerns.

Earthquake resistance typifies the problems encountered. Thoughengineers first considered earthquake damage when nuclear plantswere proposed in Califo nia in the mid-sixties, they soon realized thatearthquakes could disable a plant's safety systems in most regions ofthe world. New seismic standards had to be developed and thengradually changed over time. Blueprints for plants often had to bereworked as standards changed. Most disruptive were new standardsimposed on plants already under construction. As a result, many oftoday's huclear plants are cluttered with oddly-positioned supportstructures, making it hard for workers to move about-. At the DiabloCanyon plant in California, built near a major offshore fault, seismicimprovements have led to cost overruns of hundreds of millions ofdollars. Plant operation has been delayed several years simply toverify the adequacy of the plant's seismic design.5u

27

Safety- related nuclear components, whether cooling systems,trical I wiring or containment structures, must have several backupsystems. This philosophy of redundant design has even extended tothe control room, vvhich in some cases has a complete backup shouldthe first become disabled. Today most nuclear plants have at leastthree diesel generators with a combined capacity of over 100 mega-watts_ The generators supply power to the plant's safety systemsduring an emergency in which the plant shuts down and outsidepower is cut off. In many cases generators have been added after theplant is completed, requiring a new building to house them.

Simply ensuring that all nuclear power plants stems meet requiredstandards has become extremely complicated. Donald Brand, a vice-president of the Pacific Gas and Electric Company in California,describing the procedures to r safety-related wiring in the DiabloCanyon plant, said For each circuit we can tell you what kind ofwire was used the names of the installing crew, the reel from whichit came, the manufacturing test and production history. The tensionon the wire when it is pulled is recorded and the tensioning device iscalibrated on a periodic basis."' In West Germany a similar- .legree ofdocumentation is required and has reportedly added significantly tocosts. Operating experience, including faulty Welds, stuck valves andmixed-up blueprints, has provided little reason for easing qualityassurance s tandards.

Figures for the past decade show that the amount of concrete, pi inand cable used in an average nuclear plant has more than doubleand that labor requirements have more than tripled. Not all of thecosts can be explained so easily, however. T

"The changes needed to

make nuclear plants safer affect not only discrete components butcomplex, interrelated systems. Often one change results in another,and so on A study by the Atomic Industrial Forum in the U.S. notedthat "Attempts have been made on numerous occasions to pinpointthe full impact of regulatory changes on a nuclear project, and in eachcase it was found that the total impact was inevitably larger than thesum of the parts."'

Economist Charles Komanoff observed in his cost-trends study that,"Reactors were increasingly built in an 'environment of constantchange' that precluded control or even estimation of costs and spur-

28

red endemic inefficiency in design and construction. Many o-ceclures were performed poorly by inexperienced workers, sonic dto be undone in order to allow for changes in other components, andconstruction crews often sat idle 1,yhile %vaiting for parts to arrive orfor supervisors to solve a difficult problem. Changes are made morecomplicated in the United States by literally scores of unique powerplant designs, each of which must be individually evaluated andmodified. Chronic inefficiency has become a trademark of manynuclear industries.--

The near-meltdown at the Three Mile Island nuclear plant in 1979generated a new wave of changes in plant design and construction,even outside the United States. The accident revealed critical weak-nesses in systems assumed to be sound. The pioneering nuclearphysicist Alvin Weinberg reflected the eneral philosophy thatemerged from the Three Mile Island accident when he said Fornuclear energy to grow in usefulness, the accident probability perreactor will simply have to diminish."' Both industry officials andregulators looked more critically at plant design and found widerange of generic technical problems that would have to be corrected atall plants to ensure adequate safety. Even today the changes con-tinue, and most operating nuclear plants in the Lnited States resem-ble construction sites. Marc Budai, an engineer at New Jersey's OysterCreek reactor, the first commercial plant in the United States,expressed the frustration of many in the nuclear industry in the earlyeighties when he said When they are decommissioning this powerplant, and pouring concrete in the reactor vessel, there'll still be someengineers Out there installing field changes.'

One reason changes are so expensive is that many projects are mis-managed. The large engineering firms that direct nuclear projects in

_many countries sign -cost-plus" contracts with the utilities. (Fluidplant design and component costs make it virtually impossible to set afarm price and hold the builder to it.) Under the cost -plus system, thelead company and its subcontractors have ':ttle incentive to minimizecosts. In fact, incentives are strong to stretch out construction andraise the total bill since profits are usually calculated as a fixed per-centage of the project's cost. Utilities in turn pass all costs along totheir customers, regulators permitting. Even those utilities that dorigorously attempt to control costs often lack the staff to ride herd on

the project. This system has inL de nuclear power r highly profitable formany of the engineering firms that build nuclear ough notfor the major vendors.

France has largely avoided the environment of constant change"that characterizes most ci the world's nuclear power programs_ TheFrench program. begun only in the early seventies, is based on anAmerican design that had been tested for a decade. As a result,France avoided the costly and time-consuming task of designing anuclear plant from scratch French planners Eiaved new ground, how-ever, by concentrating early on two standardized plant designsoneof 900 megawatts and the second of 1,300 megawatts_ This allowedthe traditional learning process to untold and helps account for theapparently slower rate of cost escalation in France.''

Costs have also been kept in check by consolidating responsibility- forbuilding all the country's nuclear power plants under one agencyElectricite de France (EDF). The utility both accumulates considerableexperience and since it pays for the lants, has a direct incentive tokeep them within budget. The United States, in contrast, has dozensof utilities with -nuclear projects, and most because they usually buildjust one or two, have little expertise. In France, EDF is an adjunct ofthe national government and has much broader authority than com-parable agencies in most countries. French regulators and industryofficials avoid confrontation, and many issues are settled across alunch table, rather than in a hearing room. Citizens groups or localgovernments opposing a particular project on economic, safety orenvironmental grounds have little opportunity, to intervene in thedecision-making process_

The nuclear industry argues strenuously that inept regulation is at theroot of the cost increases that plague it in most countries. The growthof regulation has indeed had an impact on cost. Some ad hoc require-ments have added little to plant safety, and regulators have reversedthemselves frequently. But blaming nuclear cost overruns on reg-ulators alone is like killing the messenger who carries had news.

Regulatory standards are essential for correcting inadequate technol-ogies that frequently break down and industries that are often para-gons of ineffiCiency. As former Nuclear Regulatory Commissioner

"France's unprecedented degreeof nuclear standardization has made it possible

to have politically acceptable safety standardswithout constantly altering plant designs.-

Peter Bradford has said, many of the industry's problems -lie in anomnivorous dream of growth that swept aside sensible regulation,sensible planning, in sensible g,overnment attention to the sideeffects_" Evidence grow of fundamental problems in many aspects ofcurrent plant design that will need further upgrading in order toprevent accidents_ S. David Freeman said, We ought to realize thatwith nuclear power, we are still experimenting. _ We stopped theresearch and development effort much too soon.- Reduced regula-tion without fundamental changes in nuclear technology and man-agement could make nuclear plants less safe, but not necessarily lessexpensive.''

There are risks even when nuclear power is "well- managed."France's unprecedented degree of nuclear standardization has madeit possible to have acceptable safety standards withoutco_nstantly altering plant designs But France has only a few years ofoperating experience with its large nuclear plants, and the perfor-mance and safety levels that officials claim remain to be proved. Thestandardized design adopted by the French also poses an inherent

since a generic technical problem may be discovered that wouldplague most of the country's reactors. Whether this gamble succeedswill not be known for several years, and already French AtomicEnergy Agency officials have privately warned that plant safetydesigns may he inadequate."' Other nations hoping to copy theFrench model must also decide whether to entrust energy policy to anagency authorized to spend billions of dollars in a single-mindedpursuit of nuclear power.

Important uncounted costs may further tip the economic scalesagainst nuclear power. Disposal of nuclear wastes and decommis-sioning old nuclear plants are important factors in the overall equa-tion, and vet neither has been resolved or even adequately researchedin any country. Nuclear wastes continue to pile up in temporarystorage, and most nuclear plant operators do not have procedures forpermanently shutting down plants after their presumed 30-year lifespan is over. How much these two problems will eventually add tothe cost of nuclear power is highly uncertain.

Radioactive wastes are an inevitable by-product of nuclear powergeneration. From uranium mining to fuel fabrication and plant opera-

31

tion, many wa products with varying lex-els of radioactivity musthi. disposed of properly troublesome_ are the highly_radioactive spent fuel assemblies removed periodically from operat-ing nuclear plants, which must he kept from human exposure forhundreds or thousands of \Tars Between l5,000 and 20,000 tons ofthese materials have been roduced in nuclear power plants world-wide, most of it still stored in temporary facilities at reactor sites.'

Options for long-term disposal include dumping wastes in Artarcticaor launching them into space, but for safety and health reasons,attention has focused on burial in stable geological formations,. WcsiGermany leads in developing such disposal sitesin naturaldepositsbut most countries are still Only investigating the pos-sibilities_ High-level wastes must be --)revented from leaking intoground %vater, and from there to the larger biosphere. Many geol-ogists doubt that long-term guarantees will ever be possible_ TheUnited States, xyhich has the most high-level radioactive wastes, didnot enact a detailed waste disposal law until 1982. The law requiresthe Department of Energy (DOE) to develop a working plan for wastedisposal by 1990. is apparently! already behind schedule, andmajor technical uncertainties and political battles are sure to fr.efforts to meet the Congressionally mandated target."'

Also of concern are uranium mining wastes and low-level s,which include a wide variety of materials that have been exposed toradiationeven workers' clothes. Although not as hazardous ashigh-level wastes, low-level wastes are sd abundant that they posedaunting disposal problems. Accordingg, to a U.S. Government esti-mate made in the mid-seventies, the United States might produce abillion cubic feet of such wastes by the end of the century, enough tocover a four-lane coast-to-coast highway a foot deep. Much of thismaterial is currently buried in shallow trenches or dumped at Sea, but-many scientists argue that this practice, if continued indefinitely, willcause ecological and health damage. Some of the low-level wastes lastfor decades and would eventually, enter the food chain.'

No thorough accounting of the cost of dealing effectively with theworld's nuclear waste disposal problems exists. Many utilities andgovernments do set aside some limited funds for this purpose, how-ever. In the United States, utilities must cover the cost of waste

32

disposalgenerated 13u

waste dispercent t

"Critics of nuclear power arguethat the country has built 'a house with no toilets'

and that Japan should stop building plantsuntil disposal problems have been solved."

ink the government SI for ever 1.0(10 kilowatt- hoursmany leaks and false starts encountered in early

efforts portend still higher costs, adding an estimatedo the total cost of nuclear power.-

The significance of the waste disposal issue goes far beyond theseuncertain figures, Since 1976 California has banned construction ofnew nuclear power plants because unresolved waste disposal prop-Ions might limit a plant's useful life and ruin its economic viability, Inl0S3 that law was Upheld by he U.S. Supreme Court on the groundsthat state,-; have the rignt to regulate economic aspects of nuclearpower. Japan, crowded and prone to earthquakes, has a particularlyacute waste disposal problem. Critics of nuclear power argue that thecountry has built "a house with no toilets- and that Japan should stopbuilding plants until disposal problems have been solved.'

The decommissioning of old nuclear power plants presents similareconomic worries. The term "decommissioning" is a misnomer sinceit implies a routine shutdown procedure similar to abandoning, an oldcoal mine. But nuclear plants that have been operating for decadeshave many parts that are radioactive and must be kept_ from thebiosphere for centuries. One approach is called "entombment"sealing a plant with reinforced concrete and providing guards for anindefinite period. But entombment, though possibly economical,poses unacceptable long-term environmental problems, particularlysince some materials would remain radioactive for as long as 100,000Years, long past the useful life of concrete. Ensuring the integrity ofhuman institutions to provide centuries of guard duty is also prob-lematic. Nuclear industry officials cringe at the notion of hundreds ofnuclear "tombs" around the world serving as a reminder of the long-term hazards of nuclear power,"

The more likely approach to decommissioning is dismantling eachnuclear plant piece by piece, and transporting radioactive materials tosuitable waste sites. The technical difficulties involved are consider-able. Because of the high levels of radiation that would be encoun-tered, elaborate safeguards must be used to limit human exposure.Some toarts of the reactor would have to be dismantled underwater inspecial pools using remote-control torches. Other procedures would

33

have to be done in many shifts to i the radiation received byindividual workers to ac ptabit levels.

Cost estimates for dismantling a 1000-megawatt nuclear plant rangefrom 550 million to over $1 billion (1982 dollars). The largest plant vetdismantled was the tiny 22-megawatt Elk River plant in Minnesota.The procedure required two years and $6 million, but provided fewlessons for dismantling plants_ fifty times as large and hundreds oftimes more radioactive. Yet the 10W costs frequently cited by thenuclear industry are based on extrapolation of the Elk River experi-ence. More revealing is the Shippingport plant, scheduled for decom-m_isioning in the mid- eighties at a cost _cif 56ftmillIon to 570 million,according to a contract signed in late 1983. The difficulties that may beinvolved in decommissioning are illustrated by the cleanup of thedisabled Three Mile Island plant, which has encountered a widerange of unanticipated problems and will cost well over 51 billion."'

Utilities in most countries are required to earmark funds for decom-missioning nuclear plants. West German planners set aside decom-missioning funds equal to 17 percent of the cost of building a plant. Inthe United States, the benchmark figure required in most states is 10percent, matching estimates made in goVernment studies. (Someresearchers believe that the final cost could be 50 percent or more ofconstruction costs.) This money, however, is generally a "shadowaccount," since it is not separated from .the rest of a utility's assets.Only six U.S. states in 1983 require that the funds be held in separatereserve accounts. In the United States, 51 nuclear plants are sched-uled for decommissioning in the decade front 200= 2012, whichcould be a major burden for utilities even if the lower cost estimatesprove accurate.'"

In no other industries are shutdown costs a sign.ificant fraction ofinitial capital costs. Yet nuclear power developinent has continuedwithout a full assessment of decommissioning costs or efforts tosecure sufficient funds, another sign of nuclear ower's protectionfrom market forces. A joint government utility effort to dismantle alarge nuclear plant is needed so that a price tag can be placed ondecommissioning and reasonable set-aside _requirements be imple-mented. Utilities would be wise to consider these figures when decid-ing whether to build a nuclear plant. Leaving these questions

34

unanswered is nottal business principnuclear deydopmenrenlain 1.111PCSOIVed,

lv

sl

rous to :seated.` but violates fundamen--headed capitalist will proceed withcaste disposal and decommissioning

Financial Meltdown in the United States

The country that led the war into the .1 of nuclear power may very%yell lead the way out. the first signs lit trouble for the U.S. nuclearindustry came in the mid-seventies: Eleven nuclear projects werecanceled in 1975 and another 32 from 1976 through 1979. During thisperiod only 13 nuclear plants were ordered. Many energy analystsargued that this was a mid-course correction, a downward blip innuclear power's healthy Itiltire, They were wrong,. The early eig,htieshave witnessed ti aiming of nuclear power programs bymost of the country's utilities. Sixteen plants were canceled in 1980,the year after the Three Mile Island accident; six were canceled in1981.; and a record 18 in 1982.''

A total of 87 nuclear plants were eliminated in the United Statesbetween 1975 and November 1983, with a net loss in future generat-ing, capacity of 83000 megawatts. (See Figure 3.) The TennesseeValley Authority eliminated 12 of the 17 nuclear plants it planned tobuild'. The Public Service Electric and Gas Companv of New Jerseycanceled five of eight. The Duke Power Company canceled six of 13.Total cancellations represent 30 percent more nuclear capacity thanthe United States currently has operating, enough to meet the totalelectricity needs of anv country except the Soviet Union and theUnited States. Meanwhile, U.S. c mommitents to coal plants had a netincrease of 58,000 megawatts."

Nuclear recession in the United States runs deep: only two nuclearplants ordered in the last nine years have not been subsequentlycanceled. (No work has been done on these two -phantom"' plantsand they are unlikely ever to be completed.) The first cancellationscast little since ground had not yet been broken for these plants. But-in the last several years plants as much as 10-20 percent completehave been scrapped. In 982 alone, plants on which S5.7 billion hadbeen spent were canceled, bringing the total bill for discontinued

35

34

plants to 510 bill.on. Only a rapidly shrinking list of plants not at leasthalf built (and therefore costly to cancel) can slow the cancellations.'3

Behind the cancellations lie not only massive cost _overruns but funda-_mental changes in the economic condition of the U.S. utility industry.High inflation and interest rates have made it more difficult to financelong-term, capital-intensive projects. Electricity demand growth hasfallen from 7 nt per year a decade ago to between 1 percent and3 percent to n e, greatly reducing the need for additional powerplants. The pers ent failure of utilities to forecast demand correctly

ThousandMegawatts300

200

Source: Attume Jnd,r trig(_Forum

01965 1970 1975 1980 1985

Figure 3: U.S. commitment to Nuclear Power, 1965-83

6

and to alter plans soon after trends shifted has further hurt thefinancial condition of utilities. The Edison Electric Institute, whichrepresents the U.S. utility industry, has been forced to lower its long-term electricity demand projections in each of its last nine annualforecasts. U.S: Department of Energy forecasters have been no moreaccurate, and their bullish 1983 long-term projection appears well outof line with current trends:'

Nuclear projects reveal inherent %yeaknesses in the curious blend offree market economics and bureaucratic decision making that hasseve=rely tested U.S. energy policy. Between power generation andthe consumer stand maze of monopolistic companies, various layersof government regulation and special tax provisions that distort thedecision-making process. It is a "free market" system that AdamSmith would hardly recognize and that few pcilicvmakers reallyunderstand.

Most utilities in the United States are investor-owned and obtaincapital mainly by selling, electricity, issuing stock to investors andborrowing on the capital markets, State regulators determine rates,usually based on a utility's investment in generating plants and otherequipment_ Throughout the fifties and sixties, utility stocks wereconsidered safe, "blue chip- investments, often' purchased by largeinstitutions and by small investors looking for a haven for theirsavings. Plant costs fell durin this period, and utilities became corn-placent in their regulated, risk free environment.

Since the mid-seventies, however, nuclear projects have drained thecapital budgets of many utilities. Annual investment in nuclear con-struction rose from S2 billion in 1970 to S19 billion in 1952, a fourfoldincrease after discounting for inflation. (See Figure 4.) Thou hnuclear plants claimed orik one-third of utilities expenditures ornew plants in 1970, they took two-thirds by 1983. Spending onnuclear-construction-in 1983=is_more _than one7fourth the annualinvestment in new plant and equipment of the LT. . rrS acturingsector and over three times that of the automobile industry.'

As capital outlays soared and electricity demand stagnated, the util-ities financial condition deteriorated. The proportion of expendituresthat could be met using cash on 11,:nd fell, causing a rapid increase in

37

borrowing and stock issuance just when interest rates were high andstock prices low. One measure of financial health is the ratio ofmarket value to book Va %e of a utility's assets. This figure stood atbetween 1,8 and 2.3 in the siNties but has gradually fallen to betweenU7 and 1.0 since 1974. (See Figure FLY'

Val! Street has signaled utilities to trim nuclear power pr ams.Leonard 'Hyman of the Merrill Lynch Comp:inv w d in 19S l that,"The market requires and is getting- moderately-higher rate of return

Dollars

3t

allon 1Jctrw inqln Public Power ,lssi i

1975 198- 1985

Figure $U Utilities' Expenditures for New Generating Plants,1970-83

"Many financial advisors,now warn investors to avoid

utililies with nuclear projects."

from investments in utilities that are construct in nuclear powerplants," Utilities with nuclear construction pro earns have lowerstock price and bond ratings on average than utilities that do notMany financial advisors not warn investors to avoid utilities withnuclear projects. The Three Mile island accicient and its billion-dollarplus bill for cleanup costs alone has forced the investment community'to rethink the financial risk equation, Many believe that the utilityindustry as a whole is badly underinsured for such an accident.Robert Barrett, a vice-president at Paine, lAiebber, Jackson & Curtis,calls nuclear power potential time bomb that could push a coin-panv to the brink of bankruptcy overnight." '

Ratio

1962 1965 1970 1975 1980

u 5: Average Market Value to Book Value Ratios forU.S. Investor-Owned Utilities, 1962432

39

Financial constraints have driven utilities with ongoing nuclear pro-grams to great lengths to raise capital:- Borrowing short-term fundsat usurious interest_rates and -creafive financing- are common_ TheConsumers Power Company of Nlichigan, builder of the troubled

38 rilid!and nuclear plant, has issued commercial paper against the utii-ibis oil, gas and coal inventories, sold and leased back the compam"sheadquarters building, and borrowed heavily on the Eurodollar mar-kets.- IN'llen massive emergency transfusions become commonplace,a patient is usually in deep trouble. The fortunate utilities are thosethat have cir`. their losses and gotten out early.

Financial troubles in the utility industry often lead to higher rates forcustomers. U_S_ electricity rates have more than tripled since 1973alter near stability during the previous decade_ Higher fuel pricescaused much of the increase, but rising nuclear construction costshave become increasingly important_ Ribbon-cutting ceremonies fornuclear facilities will soon inaugurate a brave ne%v %Yorld of 30-50percent higher electric bills, a phenomenon described by sortie as'rate shock-`` In New England the twin Seabrook plants could cause

rates to more than double. Many utility commissions are now tornbetween keeping electricity attordable and providing utilities withenough revenue to preserve their fMancial health.'

Despite these rate hikes, the utility industry argues that regulatorshave not permitted enough increases to let-it spend as much capitalon new plants as needed. This claim is questionable considering thelarge tax incentives for capital investment and the substantial over-capacity that many utilities have for the foreseeable future In fact,when rate commission's prevented some utilities from charging con-sumers for construction work in progress, unneeded plants werecanceled that would have zost consumers billions. Had utilities beenable to bill customers immediately for virtually any investment, theday of market reckoning for nuclear power would have comae mitchlater and been more costly.''-

One utility that particularly concerns state regulators is the LongIsland Lighting_Co_mpany (Lilco),- builder of the 820-megawattShoreham nuclear plant in New York. Ordered 1967, the plant isnow scheduled to be completed in 1984 at a cost of $3.4 billion to $3.6billion, about 15 times the original budget. The Shoreham plant will

40

"The Shoreham plant will generateat most one-third of the utility's electricity,

but its cost exce ds the book valueof Lilco's entire electricity system."

gent most one-third of the utility's electricity, but its costexceeds the hook value of Lilco's entire electricity system. With theprospect of having to raise electricity rates by at least 60 percent, theutility commission is looking for ways to refinance the debt and phasein rate increases. Lilco may even try to sell the plant to the state,1,yhich would pay for it by issuing tax exempt bondsthereby forcingfederal-taxpayers to bear some of the burden. It the Shoreham plant ispermitted to operate, 1.vhich many observers now doubt, it will yieldthe most expensive electricity ever produced by a large central gener-atine station.`'

The worst nuclear financial disaster so far is that of the WashingtonPublic Power Supply System (INITSS) Formed in the late fifties as ajoint agency, WPPSS pooled the resources of over 100 public utilitiesin the Pacific Northwest. In the early _seventies, facing escalatingpower demand, WPPSS launched one of the largest nuclear construc-tion projects ever. Five 1000-megawatt-plus nuclear plants werebegun, all to be financed by tax-exempt municipal bonds issued bythe Supply System.

Projected costs for the badly mismanaged projects ballooned from $4billion in 1974 to 524 billion in 1981- Most of the money for the plantswas borrowed, and by 1980 the Supply System was issuing $200million in bonds every 90 days_ The totaioutstanding debt passed 58billion. While costs escalated, electricity demand growth slowed,quashing the notion that the five plants were essential. By 1981, thefinancial condition of the Supply System had deteriorated badly andits directors canceled plants 4 and 5, on which more than $2 billionhad already been spent. The Washington State Supreme Court ruledin June 19R3 that contracts requiring municipal utilities to honor thebonds for the canceled plants were not le 'all binding, causing theSupply System to default on the bonds t e largest such default inC. history."'

Even without the court ruling, default was inevitable. WPPSS hadalready been forced to mothball two additional plants that are 63percent and 75 percent complete. (The one plant still under construc-tion is 98 percent complete and scheduled to begin generating powerin 1984.) It is a crisis of epic proportions. Among the casualties of thecollapse are several thousand laid-off workers, tle financial health of

41

many energy-intensive farms and industries, and the municipal bondmarket itself, which has lost its risk-free image.

As striking as the depth of the WITSS financial problems is the failureti respond earlier- mounted throughout the seventies thatcosts were soaring. As early as 1977 studies showed that cost effectiveconservation measures could eliminate the need for two of the ptants.But the utilities instead heeded the warnings of the federal BonnevillePower Administration that massive blackouts could occur without thefive nuclear plants. %Vail Street gave the bonds strong credit ratingsand marketed them aggressively_ The result was i circle of reinforcingmisconceptions. Speaking of his fellow directors, WPPSS Chairman

in Halvorson said, -They became captives of the mystique of thenuke. And they had unlimited money.- That was the worst of it." Achagrined analyst at T. Rowe Price Associates Inc. said, "There hasbeen an awtuf lot of blind faith in contract terms in the marketgenerally and insufficient attention paid to the economic viability ofthe projects and the financial condition of issuers.--

Lack of attention to economic viability and abdication of responsibilityby decision makers explains many of the problems plaguing nuclearpower. Further clouding the nuclear "market" are major governmentsubsidies. Recent studies put total U.S. Government spending fornuclear pOwer development in the past three decades at between 515billion and S.16 billion (1982 dollars), depending on the accountinggmethods used Almost two- thirds of the total is for reactor researc_and development (R&D). Other bi;-ticket iterns include subsidies forenriched uranium, nuclear waste disposal R&D, and subsidized salesabroad through low-interest loans of the Export-Import Bank. If util-

es directly paid these costs, including breeder reactor development,it is estimated that nuclear electricity would be 50 percent moreexpensive.'"

Not included in these figures are gaping tax loop -holes for utilities thatprobable exceed all other subsidies combined. Investment tax creditsand accelerated depreciation of assets allow utility companies to paylittle taxes. Because the utility business is the most capital-intensiveindustry in the world, and because nuclear power is the most capital-intensive part of that business, such tax breaks are an enormoussubsidy for nuclear investment. Although these incentives cannot be

42

quantified precisely, Cornell University economist Duane Chapmanconcluded in 1980 that almost a third of the cost of nuclear plants ispaid for by tederal tax _subsidies, compared to one-sixth for fossil-tuel-fired power plants.' The U.S. utility industry as a whole has aneffective tax rate of only 9-11 percent .otter using, available loopholes,according to a study by the Environmental Action Fill indation.''

Another subsidy to nuclear power is tax breaks for capital invested inplank that are never completed. In addition to the 510 billion Worth ofplants canceled since the mid-seventies, the Department of Energyprojects that between 54.5 billion and 55.1 billion ot additional plantswill be canceled in coming years. (The actual total will likely be higherstill.) Regulatory battles are frequently fought over whetherratepayers or stockholders should pay these costs. Recent studies,however, show that about 40 percent is paid for by taxpayers in theform of tax deductions when utilities write off the lost investment ontheir tax returnsa 54 billion dollar write-off in the past decade."

Also crucial to the L.5 nuclear indusry is the Price-Andersc n Act,passed h Congress in 1957. It established a 5560 million limit on theliability ot a nuclear plant's builder and operator for any damage theplant might cause. Experts agree that a serious nuclear accident couldresult in damage mounting to tens of billions of dollarsfor whichprivate insurance cannot he purchased. (Every insurance company

as a nuclear exclusion clause in its contracts.) When the Price-Ander-son Act became law the perceived risks of nuclear power were sogreat that the industry would not proceed without an exemption fromthe liability laws that govern all other industries. But members ofCongress and the staff of the Nuclear Regulatory Commission haverecently proposed abolishing the Price-Anderson Act. They view it asinappropriate for an industry now 20 ars old and as a disincentivefor reliable operation of nuclear plants. What terminating the Price-Anderson Act would do to the nuclear industry is unclear, but itwould certainly bring nuclear power closer to the real economic

Even with these enormous incentives, revival of nuclear orders in theUnited States does not appear imminent. In the past several years,utilities have scrambled to adjust their nuclear construction programsto changing conditions, but the economics has been so confused and

4 3

lines of responsibility so uncertain that many decision makers haveintervened too late_ The financial crisis caused by the remainingnuclear projects hardly creates a climate conducive to contemplatingmajor new investment programs.

The L1_5. Atomic Industrial Forum began a 1982 press release with theassertion that "The U.S_ power program enters the homestretch of 19h2 like a runner poised in mid-stride.'-' But the positiveindicators the industry points to are the number of plants enteringservice and the prn they generate each of which continues to lagearlier projections by wide margins. No longer is the industry offer-ing, predictions of when it might stop living oft pre 1975 plants andstart ordering new- ones. Perhaps the most bullish recent forecast isthe Department of Energ,y's 1912 mid case" projection for the year2000, which assumes that another 25 nuclear plants will be ordered inthe eighties. This projection is probably little more than fantasy,however.'' Serious analysts who expect to see additional nuclearorders before 1990 are hard to find_

The list of industry "p reconditions" for the revival of nuclear power isusually dominated by regulatory reform, higher electricity rates topay for the plants while they are being built, and lower inflation andinterest rates. These issues, however-, hardly scratch the surface ofthe industry's problems. The fundamental changes that are reallyneededa guaranteed reduction in nuclear construction costs and amajor surge in electricity growthare far less likely.

With nuclear power much more expensive than available alternatives,even under the r-ost favorable assumptions, and with the enormousfinancial risks a utility must now take to invest in nuclear power,additional orders in this decade are almost inconceivable. To encour-age new orders, nuclear power development would have to be re-structuredin other words, further removed from market discipline.Government would have to bear more of the burden. Bertram Wolfe,a vice-president in charge of the nuclear division of the GeneralElectric Company, represents a growing mood in the nuclear industrywhen he says, -1 just don't think you're going to see a revival ofnuclear power until there's much stronger government involvementin the business.' The nuclear capitalists are now in full retreat.

4 4

"Serious analysts who expectto see additional nuclear orders

before 1990 are hard to find.-

The International Outlook

The financial collapse of nuclear power in the United States may bearticularlv severe, but it is not unique. Countries around the % oria

have encountered problems that have slowed the pace of develop- 43ment, and many have trimmed their plans for the f-uture. Althoughmust governments with major ni; clear programs remain stronglycommitted to nuclear power, the go p is widening between the moneyand talk spent on nuclear power an i actual achievements. Behind thelaggi! 4 pace lies a varied list of echnical. economic and politicalproblemS and a diminished rate of growth of electricity demand.

Total nuclear power plans in IVes;ern Europe have risen only 10percent since 1978, with most of the g,ains coming from France. -thetotal nuclear commitments of Great Britain and West Germany haverisen slightly, while those of Spain, Sweden, Switzerland and Italy

have-fallen--The- changed-outlook- is- well illustrate-d--by-the-Orgation for Economic Co=operation and Development's nuclear capacityprojections for 1985, %yhich have been lowered by nearly t

since 1970. (See Figure 6.) "' Nuclear power's future in Europe, how-ever, may be even more limited than these figures indicate.

In West Germany the private sector p1-as a major role in the directionof nuclear power programs, but authority is considerably more cen-tralized than in the United States. The utility industry is dominatedby a handful of large investor-owned companies fhal strongly sup-port nuclear power and direct much of the planning in conjunctionwith the country's powerful private banks. Key government andbusiness leaders have maintained their strong support of nuclearpower throughout the last decade, and the nuclear program, includ-ing the development of a breeder reactor, continues to dominate thecountry's energy investments."

Political opposition to nuclear power in West Germany has mush-roomed since the late seventies. It is part of a broader questioning ofthe future of German society, spearheaded by the country's GreenParty, which has made the dissolution of the nuclear power programits top priority atter the elimination of nuclear missiles in Europe.Major demonstrations have occurred at many nuclear plant sites,including one near Hamburg in 1981 that the West German Interior

45

Ntinister described as the bigge-t polFt,-,deral Republic,

ti n in the higory nrme

NI-Lich of the rap -- ion to nuclear .er arises out At local concernabout proposed nuclear plants. In 42-7t Germany, the Linder (state)governments have the final sav on nuclear licensing decisions, andopponents have successfully raised issues of safety, environmentaldamage and cost-effectiveness at hearings and in the courts. Designstandards have been frequently upgraded and many plants alteredsbstantially. As a result, profect tit=lays and cost (;verruns closelv

Thousand_Nley!.awatts

60(

orcvIlq$11Y

1970 1974

Figure 6: Projections of !%5NWestern Nations and

6

OtherJapanWesternEurope

UnitedStates

9p 1978 1983

clear Generating Capacity in then by Year of Projection

parallel those in the United States. Meanwhile, electricity growthrates have dropped substantially, and the country's economy hasfaltered, making investment in major capital-intensive projects muchless attractive.'

Only one nuclear power plant has been ordered in West Germanysince 1975, and construction has not Yet begun on eight orderedMore 1975, largely because of political opposition and ongoing courtbattles. Only eight nuclear plants are under construction, four ofthem at least 80 percent complete and another time at least 50 percentcomplete. 'the %Vest German nuclear industry suffers from consider-able oyercapacity. and component manufacturers are reportedly los-ing a good deal of money. Kratiwerk Union, a subsidiary of theSiemens electronics conglomerate, manufactures West Germany'sreactors and is reportedly suffering, losses on nuclear power. Manyworkers have been laid off, and without new orders, the kVestGerman nuclear industry is expected to weaken rapidly."

With only about 5,000 megawatts-worth of nuclear plants now underconstruction, West Germany in 1990 will have less than half the45,000 megawatts of nuclear capacity projected in the mid-seventies.The West German nuclear program is at a crossroads, with the coun-try's energy future beyond 1990 hanging in the balance. A "convoy"of largely standardized plants has received preliminary approval.Uncertain is whether this proposal can withstand criticism that theplants will be substantially more expensive than alternatives. Someutility officials now admit that the growing costs of nuclear power anda 50 percent reserve margin in most of the country's utility systemoffer little incentive to take major new risks.'"

France is the only country with a major nuclear pro m keepingclose to its ambitious plans of a decade ago. Prompted t the 1973 oilembargo, France ordered an average of i)( nuclear plants each yearbetween 1974 and the early eighties and now has 30 nuclear plants inoperation and 28 more under construction, France obtained 40 per-cent of its electricity from nuclear power in 1983 and is on course toreach 75 percent b,' 1990. B then the country will have 80 percentmore nuclear generating capacity than it had total capacity in 1973.But, even with France's impressive six -year construction Schedulesand reputation for cost control, clouds now appear on the horizon."

47

The nuclear business in France is run "ov two powerful governmentagencies, the French ;itomic Energy Agency, responsible for researchand development, fuel supply and waste disposal, and Electricit deFrance (EDF), the national utility that builds and operates the coun-

46 try's nuclear plants Both report to the Ministry of Industry and theiractions are fully coordinated. Even Framatome, the once private com-pany that builds all French nuclear reactors, is now half government--owned.'

1 he French nuclear program is a priority for the country's strongcentral government and industrial leaders'. The income and jobs thatnuclear power provides are a strong incentive to continue the pro-gram. Both the steel and heavy electrical industries, two importantsectors of the economy, are heavily dependent on the nuclear pro-gram. Decision making is centralized and French courts give thesporadic political opposition to the nuclear program little opportunityto intervene. Government public relations campaigns dissuade localcommunities from opposing pro, used plants. The staving per ofthe French nuclear program was demonstrated in 1981 when Socialist-President Mitterand called the nuclear program -excessive, even dan-g,erous- during his campaign and then supported nuclear powerstrongly after his election.'

Economic realities have proved much more hazardous to the Frenchnuclear program than political opposition. Electricity growth hasbeen gradually slowing since the late seventies, and the government,projecting annual greAyth in electricity demand of 5.6 percent asrecently as 1981, finally reduced its 1990 growth forecast by 50 F,ercentin 1982. These new figures mean that France will have at least 13percent too much generating capacity in 1990_ Furthermore, the coun-try may be generating well over 80 percent of its electricity fromnuclear power. Such a high proportion means that s-Jr.-142 nuclearplants must be used intermittently to match fluctuating daily demand(a role usually reserved for hydro and fossil fuel plants). This poses amajor technical challenge and hurts the economics of nuclearpower.'To ensure a market for all of the additional generating capacity, EDFnow offers special subsidies for electric heating and has set up_regional agencies to encourage industries to use more power. Also

4o

"In 1982 the directorof Electricite de France said that

the utility was in worse financial conditionthan it had been for .30 years."

planned are shutdowns It many relatively new coal-fired plants andthe export of electricity.' ' An additional Crunch is coming is nuclear

Capital markets.n I_ fhe Frenchprograms burden already strainedAtomic Energy .Agencv now has an annual budget of over FF i0billion, or between SI.5 billion and 52 billion. EVE lost approximatelyFE 8 billion in 1982 and has accumulated a total debt of FE 152 billion,although part of the debt was torgiven by the government in 1951.Debt reschedulings and major borrowing on the Eurobond markethave been required to keep construction going. In 1982 the director ofEVE said that the utility was in Worse financial condition than it hadbeen for 30 years. Since EDF is government-ownedFrench taxpayerswill likely pay a large share of the debt.'

In 1983 a high-level government committee published a study con-cluding that the country would need no additional nuclear plantorders until 1987. Recop,nir7ing the damage this would do to an indus-try scared to handle six IN orders per year, the government hasreduced sw'e'ar plant orders hi two unit, per year in 1984 and 1983.Even this plan threatens massive layoffs of nuclear ixorkers and couldforce France's small nuclear supplier companies out of business. Areduced pace of ordering would also disrupt the economy and thefamed efficiency ut the French program. Already Framatome hasquoted costs 20 to 40 percent higher should ordering he cut to two peryear."'

The French nuclear prolrInt, though successful politically and innarrow economic terms, has also been hurt by its own success. Itslarge _scale and the dearth of politico! oppositi6n have helped reducecosts but have also made it hard to adjust to economic difficulties andlower electricity demand. The future of nuclear power in France willbe decided largely on political grounds, but France's leaders will findit increasingly hard to nastily ordering even two units per year. Euro-pean nuclear analysts William Walker and Mans LOnnroth, analyzingthe French nuclear industry, concluded in 1983 that; It risks a viciouscircle of rising costs, higher electricity prices and even lower growthrates. A long period of drou_ght therefore seems imminent for theFrench nuclear industry."' In the nineties France will almost ceptainh, be generatin more nuclear electricity per person than anygother country, but by then this last full throttle nuclear expansioneffort may have sputtered to a halt.

49

The British nuclear program is mucl. more .4nemic. Beyond the 8,500megawatts of nuclear power now supplying 13 percent of the coun-try's electricity, only another 5,500 megawatts-wort h are under con-struction, most of it nearin g completion. The high cost of Britishnuclear plants built so tar and forecasts that electricity demand will besteady or even fall in the next decade provide ample economic hur-dles to a revitalized nuclear construction program. Ihe ongoing Size-well Inquiry on whether to build an American-style light water plantprovides the only hope for additional nuclear orders in the neartuture. Unless the plan proceeds, the nuclear industry in Britainwill soon wither. And even it Britain should decide to build a lightwater plant, its ability to support a vital nuclear industry seemsdoubtful. i,1%

Nuclear power Igrams in other northern European countries areBuite small an unlikely to grow significantly in the near future.elgium his five ober-Ai-rig nuclei'. ohnts Finland four, Switzerlandour and Netherlands u.s.'o;hut only Belgiuni has additional plants`

being built. None of these countries has a pressing need for moregenerating capacity, and mans national leaders now question therationale for additional nuclear plants." New orders do not appearimminent_ Sweden aggressively developed nuclear power until 1980,when a national referendum discontinued its construction programand called for closing all the country's nuclear power plants by theyear 2010. Although Sweden has nine reactors in operation and getsover 30 percent of its electricity from nuclear power, only two plantsare still being built.'"'

The nuclear power pro =rams of the Soviet Union and Eastern Europe,largely independent of those in the West, have followed a surpris-ingly parallel course. Nuclear plant construction in the Soviet Unionbegan in earnest in the early seventies, and the nation's nuclearea city grew tram 1,600 megawatts in 1970 to 6,200 megawatts in19 9 and 17,500 megawatts (at 29 plants) in 1983. Nuclear power isrun and controlled by the Soviet Government and the CommunistParty, which consider electrification to be the foundation of a moderneconomy. State-owned companies design and build the plants, stateutilities operate them, and government officials determine in fheirFive-Year Plans how many reactors will be financed."'

50

"The Soviet Union currently obtainsabout half as much electricity

from its nuclear plantsas was projected a decade ago."

Since the late seventh's, the Soviet nuclear program has focused on itsAtommash plant, designed to produce as many as eight standardizednuclear reactors e,-,eh year. This unprecedented effort at nuclear stan-dardization is supposed to help cut project lead times and reducecosts. The Atommash Plant is part of the only internationally in-tegrated nuclear program, in which components made in variousEastern European facilities are used in each phut_ The large Skodafacility in Czechoslovakia produces turbines, generators, pumps andpipelines. Plants in I lungarv, Bulg,aria, East Germany` and Poland arealso involved.

As with much of the Soviet economy, the nuclear program is keptunder tight wraps. I ublished intorm, tion accentuates successes anddownplays problems. (Problems encountered by Western nuclear

rograms, including the Three Milo Island accident, arelici and regarded as examples of the failures of capitalism.)Reports have emerged nonetheless of technical and organizationalctitilulfi..sr"' the pace of nuclear development, including labor-management problems and delays caused by builders and suppliers.The nuclear targets in the current Five-Year Plan will reportedly bemissed by at least 6,00(1 megawatts. In 1982 the Central Committeereorganized the nuclear pro tram hoping to improve its eflicienc,,.The Atommash tacility itself is at least two or three years behindschedule, and it suffered a major accident in mid-1983. Full capacity isnot expected until 1990 at the earlie.,t."`

Such problems are by no means rare in the Soviet economy, but thescale ot the nuclear setbacks is unusual. The Soviet Union currentlyobtains about half as much electricity trom its nuclear plants as wasprojected a decade ago, and the rest of Eastern Europe has missed itstargets by similar margins. Nuclear power is nonetheless becomingan increasingly important energy source throughout the Eastern bloc,already. supplying 6 percent ot the Soviet Union's electricity, 12 per-cent of East Cermany's and 18 percent of Bulgaria's.

Official projections call for nuclear power to supply close to a third ofthe region's electricity by 1990, which would require at least a triplingof nuclear capacity.'' Recent delays and cost overruns are likely tocause these goals to be missed as well. A time of testing almostcertainly lies ahead for Eastern Europe's nuclear power programs

51

since the scale ut the efforts and the consequent _tidal and tech-nical risks are growing, rapidly. Ntassive centralization and theabsence of political opposition and financial checks are likely to causemore problems than solutions, but it will he some Years before theperformance of Eastern Europe's nuclear program can be fullyassessed by outsiders.

Japan has one of the largest nuclear development programs in theworld today. Despite the painful legacy or the atomic bomb andconsiderable fear of radiation, nudear power has been a cornerstone.of government energ,y policy Since the cal l' seventies. With 117million people squeezed into an area the size of California and four-fifths of the country's energy currently imported, nuclear power isviewed as the only means of rapidly enhancing national energysecurity. Japan has 2 nuclear plants in operation that supply 16ercent of the country's electricity, and another 13 are under way.

n has ambitious plans to expand nuclear capacity sixfold by theend of the century, at which punt nuclear power would provideabout halt of the country's electricity.'

The first nuclear plants in Japan, based on U.S. designs, were built inconjunction with overseas corporations. Major R&D efforts in recentyears have aimed for an independent nuclear technology and indus-try, a process now largely cbmplete. Today Japan is considered aleader in reactor technology and has initiated joint ventures with U.S.and West German companies to develop an advanced light waterreactor design."' Japanese companies apparently aim to compete inthe nuclear export market should it revive in the years ahead.

The Japanese nuclear program is threatened mainly by politicalopposition, which grows as the number of communities affected b=ynuclear plants increases. Becauase Japan is so small and crowded,nuclear plants inevitably infringe on someone s "'backyard,- often avaluable fishery or beach resort. Radiation accidentally released atone nuclear plant has aroused enormous concern. Also troublesomeare frequent earthquakeswhich could severely damage nuclearplants in virtually all parts of Japan and nuclear waste disposal, aparticularly hard problem to resolve in such a populous country:17

2

Japan has failed to mint its early nuclear goals by a large margin. Thetarget for 1993, for example, has already been reduced by 13,000megawatts, and the recent recession may further delay the nuclearprogram. Cost overruns apparently concern Japan's nuclear manag-ers, but not enough to force a wholesale reevaluation of the countrynuclear goals. Also troubling are frequent shutdowns and what untilrecently was one of the worst nuclear operating records worldwide.These problems were seemingly resolved in 1982, but Whether thisimproved recon,1 will last is uncertAin \IthOUgh the country's conyofficials are determined to forge ahead, their pace will probablylimited by plant operating and safety records and by successdealing with the waste disposal problem.'

Developing countries had some of the brightest hopes fur nuclearpower in :he sixties and seventies. Third World leaders viewednuclear power as the prototypical modern technology and as a way to`boost national prestige and reduce crippling oil import bills. Govern-ments and international- agencies- in =industrial _couraries_dispatchedexperts to promote the economic merits of nuclear power. In the earlyseventies, the International Atomic Energy Agency (IAEA) projectedthat developing countries would have 390000 megawatts of nuclearcapacity by the end of the century - -40 percent more than worldwideoperating and planned nuclear capacity in 1983."'

By mid-1983 six developing countriesTaiwan, South Korea, India,Pakistan, South Africa and Argentinahad a total of 13 operatingnuclear plants. Three more deVeloping countries are building plants,and several others are consideringnuclear programs. But the ThirdWorld has just (1 percent of the total worldwide commitment tonuclear power. And since the mid-seventies the nuclear plans ofdeveloping countries have been substantially reduced. Many nationsregard nuclear power as important only in the distant future, andothers have eliminated it from long-range planning altogether. As inthe industrial countries, nuclear power's problems in the developingworld are largely economic.':"

A key obstacle to nuclear development is the small size of electricitygrids in Third World countries. If a single power plant provides morethan 15 percent of a grid's capacity, the whole system will "crash" ifthat plant is shut down. Using these figures, the IAEA estimates that

in

5

51

52

only South Korea, Taiwan, Pakistan and India have grids largeenough to install a conventional 1000-megawatt nuclear po.,ver plant,and only a few more countries will reach that point in the nextdecade.

Nuclear manufacturers have responded by pro osing mini-reac-tors" in the range of 100-500 megawatts. Research on small reactorshas been done in Canada, France, lapan, Sweden, the United Statesand (Vest Germany, but early plans have been continually pushedback. Only the Soviet Union currently has mini-reactors, but it doesnot export them. The estimated per-kilowatt construction cost for anuclear plant of 200 megawatts is more than twice that of a 1000-megawatt plant. -rhis means that a U.S. company marketing such a

lant in a developing country would have to charge at least 5 -1,000 per_ lowatt of installed co acitv (1982 dollars), which exceeds the cost ofavailable alternatives.

A_deteriora rig world_economy since 1980 has also led to a significanttrimming of the Third World`s most active nuclear power progratris:The capital intensity of nuclear power plants makes them unattractiveto debt-strapped developing countries particularly since much of thecapital must be spent abroad, draining scarce foreign exchange. Sub-stituting nuclear import bills fur oil import bills is not seen as much ofa gain by most Third World leaders.

The "miracle economies" of the Far East have made the largestcommitments to nuclear power in the Third World. Rapid growth andsizable electricity grids in countries such as South Korea and Taiwanexplain why they are likely to have over half of the Third World'snuclear capacity-in 1996. Taiwan, clinging to an aggressive nuclearexpansion program begun in the seventies, has four operating plantsand two under construction. The pace slackened in 1982, however,when Taiwan deferred several reactors indefinitely because of eco-nomic constraints and a slowdown in electricity growth.' SouthKorea has two operating plants and seven under construction, but ithis also decided against new orders in the early eighties Nationalleaders in these countries are strongly commited to nuclear power,but a major improvement in economic conditions is now a prerequi-site to building additional plants,

4

"The capital intensityof nuclear power plants makes them

unattractive to debt-strappeddeveloping countries."

The Philippines once had ambitious plans for nuclear power, but thecountry's first plant, sited near an earthquake fault Suffered majordelays and cost overruns while the seismic design was bolstered.Plans for additional plants have been scrapped:2'1 hailand and Indo=-nesia are reportedly considering, nuclear power plants, but their entryinto the nuclear world is still problematic. China has yet to beg,inbuilding a nuciear print, but the potential size of this market is eyedlusttully by nuclear manufaCtureN; Some of China's leaders appearquite interested in nuclear power, but capital requirements havemade them cautious in beginning major commitments. So tar Chinahas ordered only one small nuclear plant, and if the country's pro-gram goes forward, it likely be at a slow pacet"

India has the broadest range of nuclear technology and expertise ofany Third World country. Its nuclear power program is largely home-grown and much more independent thin those of _other developingnations. Four small plants are operating and another six are underconstruction. India now expects- to obtain 10 percent of electricityfrom nuclear power by the nineties. But the early hopes of thecountry.'s nuclear scientists have not been realized. The plants areexpensiVe and have poor operating records. Additional orders are notforeseen in the near future.'"

Among the Middle Eastern countries that once had ambitious plansfor nuclear power are Egypt, Iran, Iraq and Pakistan; Each has seen acombination of economic and political problems seriously jeopardizeits nuclear programs. Iran's Islamic revolution in 1999 toppled anambitious and costly nuclear power effort aimed at installing 23,000megam.itts of nuclear capacity by 1994. Even before the revolution,however, critics questioned the large scale and economic viability ofthe Iranian program. Iraq's nuclear program came to a halt in 1981when Israeli warplanes destroyed the research reactor that was its

.centerpiece. Egypt and Pakistan ,also considered building nuclearplants in the eighties, but both those efforts are now on hold.L"

Latin America was a booming market for nuclear power in the seven-ties, but it too has fallen on hard times. Argentina has had a smallnuclear plant operating since the early seventies, and two more arebeing built. Wrapped in the cloak of nationalism, Argentina's nuclearprogram has enjoyed strong government support, and the country

hopes to have six operating plants by the end of the century. Crip-pling debt problems, however, have cast doubt on Argentina'snuclear goals, and anything beyond the two plants now being built isuncertain.'

Brazil, the world's sixth most populous country, has one nuclearplant nearing operation and two under construction. The countryplanned to have eight plank-; operating by the early nineties, largelyrelying on West Gemian technolot;y. but major technical problemsand a lack of capical have rendered these goals meaningless. Brazilwill be lucky to complete the plants now under construction."' Mex-ico %vas a latecomer to nuclear power, but as oil revenues soared in1979 and 1980, the country's leaders announced plans to build sevenplants in the eighties_ Today that vision has been obliterated by thecouzitrv's debt crisis. The request for 1-Projed bids was withdrawn in19$2, and Mexico nowt-ms just two plants under construction.'"

Current plans indicate that developing countries will have at most20,000 megawatts- of nuclear capacity by 1990, or one-seventh asmuch as projected by the IAEA in the early seventies."' Yet eventhese numbers overrate the economic viability of nuclear power indeveloping countries. All of the nuclear sales the Third World sofar were subsidized by industrial country governments or manufac-turers. The day when nuclear plants are sufficiently cost-effective thatdeveloping countries will buy them at the full price is far off indeed.And no commercially available nuclear technology can yc" meet morethan a few percent of the developing world's electricity needs."'

Beyond these problems lies the more fundamental question ofwhether nuclear power is a wise use of scarce resources for a develop-ing country. Nuclear power creates fewer jobs and requires moredependence on foreign companies and governments than doesalmost any other investment a Third World nation can make.r" Evenassuming that nuclear power could be made cost-effective, the devel-opment of other energy sources would likely provide broader eco-nomic benefits. power is also likely to serve a small minoritythat uses electricity while bypassing the majority who rely on fuel -wood and charcoal. Investment in rural electrification using small-scale renewable energy sources, or improving the efficiency of woodcookstoves, would provide far greater benefits.

56

Nuclear pi.gwer's aura of modernity has been replaced by an image ofbackwardrit(;s and mismanagement. Nuclear rawer was greatly over-sold in the pird tVorld. Humanitarian and profit seeking motivesbecame conitiz,ied, and projects were pushed that hid little hope ofbeing successfIll. The h irdsell is continuing as industrial countryofficials attempt to bolster their flagging nuclear industries by sellingmore plants to developing countries.'" Nuclear power in the ThirdWorld was stillborn, and most nations would benefit it those projectsnot vet sLirted were swiftly canceled. Beyond the economic issue isthe growing realization that even successfully completed nuclearpower plants are inviting military and. terrorist targets in politicallyunstable regions.

Worldwide, nuclear power development hangs by a much thinnerthread than most policvmakers yet realize. The global commitment tobuilding nuclear power plants his declined by 31,000 megawatts since1978, as major cancellations in the United States were not offset bymodest orders in some other nations. Further declines in the next fewyears are virtually certain since few orders are expected, and most ofthe 20 to 30 plants not yet under construction or mothballed arecandidates for cancellation. The eighties are shaping up as a disas,-trous decade for nuclear power, and the world'S nuclear industriesare already feeling the pain. The usually optimistic Nuclear EnergyAgency atilt: OECD concluded in 1982 that "There is some risk that

, the nuclear industry still not remain commercially viable in a climateof uncertain and variable markets." _Markets of any kind are becom-ing rare indeed for the nuclear industry.'

Toward A Market Test

Evidence is compelling that nuclear power has lost economic groundduring the past decade. In several nati,:ms, electricity from newnuclear power plants is significantly more expensive than electricityfrom new coal-fired plants_ Where nuclear cost overruns have beenrelatively modest, nuclear power's economic advantages over coal aresignificant but not cwerwheiming. Even these comparisons overstatethe likelihood that the industry will revive in the future. Fundamentalchanges in the economics of electricity are challenging past assume-

57

tions and expanding the list ofbroader context is what will likely

ions available to utilities, Thisetcrmine nuclear power's future.

56 Some would argue that even ,t nuclear pottier is expkensive it is still anessential energy source for replacing imported oil. While it is true thatnuclear power has helped lower oil imports in ',ionic? nationspartic-tilarly France and Japanin most countries its contributiOn has beenUW0011112, dwarfed by coal and energy efficiency. In the UnitedStates oil imports have fallen 50 percent since 1978, but nuclear powergeneration has risen only 5 percent. Today a small and shrinkinfraction of the wodd's oil is used to generate electricity, and the 0tlversus nuclear equation is largely moot.'

The choice between coal or nuclear power as usually posed has many'drawbacks. Coal-caused air pollution has steadily increased in manycountries, producing new evidence of health and ,environmentaldamage. Air pollution is shoroning the lives of millions of people,particularly in developing, countries that cannot afford pollution con-trols. Energ,y costs have increased in industrial i:ountries that strictlylimit emissions from coal-fired power plants, though studies showthat the health and environmental benefits of the controls are worththe price. Recently, acid rain and the threat of carbon-dioxide-causedclimate change were added to the list of coal related ills and appearmuch less open to simple technical fixes.'7'

The world's energy options, however, are not limited to a choicebetween nuclear power or coal. The biggest change in the utilityindustry in recent years has been the new role of "end use energyefficiency as an :alternative to new power plants of any kind. EV

asing the amount of light delivered by a light bulb or the Ivorperformed by an industrial motor for every kilowatt-hour of elec-tricity used the same energy services are gamed at a lower cost than-is possible with a new generating plant. Throughout the world,dozens of energy efficiency studies have been sponsored by research -

institutes, universities and private companies. These studies,whether examinin, the economy as a whole or particular sectors suchis housing or steel production, conclude that improved energy effi-ciency has enormous untapped potential.

"In the .United Statesoil imports have fallen 50 percent since 1978,

but nuclear power generationhas risen only 5 percent_"

A 1981 re t by the 12.5. Solar Energy Research Institute estimatedthat cost-eftectiye investment in energy efficiency could reduce therate of growth of electricity use from 3.5 percent per year to less than0.5 percent per year for the rest of the century while the economysurged ahead at a 4 percent annual growth rate. l The NorthwestConser. a Lion and Electric Power Plan, ordered by the Congressin response to the .region's nuclear p-awer problems, concluded thatconservation could laHd dectricity use to current levels for the rest ofthe century. A 1983 analysis by Earth ResourLes Research in GreatBritain found that a somewhat more ambitious assortment of `energyefficiency measures could reduce British electricity use by 45 ipercentby 2025 While the country's gross national ,roduct doubled.

A 1983 study by Howard Geller of the American Council for anEnergy-Ethcient Economy graphically illustrates the potential tor spe-cific energy efficiency improvements to trim power use. The reportconcludes that by replacing residential appliances in use today withMore effident models already on the market, power demand could bereduced by 64,000 megawattsabout equal to 1983 U.S. nuclearcapacity. The need for 13 1,000-megawatt nuclear plants could beeliminated lust by shifting, to more efficient retrigerators, and 12 morecould be dropped lay replacing all light bulbs with more efficientcanes."

In the:current era of steeply rising costs, "end use" energy efficiencyis the only major bargain ayailat-ile to the utility industry. IVIany oftoday's efficiency investments wave energy at a cost of between It and2c per kilowatt-hour, or a tenth to a fifth the cost of electricity from aneW coal or nuclear plant.'" Since the mid-seyenties skvelectric rates have caused a-blossoming in efficiency innov1=7n6( anmarketing. Some older technologies are just now benefitir. ,n thescientific achievements of the late twentieth century. One cNample iscomputer-controlled industrial equipment and building energy sys-tems that always supply power at the most efficient rate.

US. investments in energy efficiency in 1982 hit 59 billion, vet theyare only one seventh of the cost-effeaiye level, according to estimatesby the Mellon Energy Productivity Institute.'' Nevertheless, the util-ity industry has been slow to redefine its role. Fortunes have beenmade and careers established largely on the basis of successful cum=

59

pletion of ever - larger power plants, In addition, tax codes and reg-ul )ry incentives penalize utilities that depart from the build at anycostso long as it is in the rate base" philosophy.

Attitudes are beginning to change, however. A 1983 survey of 120by the lip. estot Responsibility Rewardi Center (IRRC)

found that 73 percent have formal energy efficiency programs andtwo-thirds practice "load manag,ement" (shifting power demand a aytrout pekti, periods to reduce the need for new generating capacity).Some provide loans or even grants for insulation or storm windows.Others lend money to buy more efficient appliances. Collectively the120 utilities surveyed estimate that improved efficiency will reducetheir need for new generating capacity by 30,000 megawatts over thenext decade, at a cost of $6,6 billion, or less than one-sixth the cost ofequivalent power from a new nuclear plant.

Dozens of studies and years of lobbying by citizens groups haveprompted regulators to require efficiency programs and to includethese investments in the rate base. In the late seventies, the Environ-mental Defense Fund argued for a redirection of California utilitystrategiestoward conservation and small-scale generating. technolo-g,ies,l'his approach was later adopted by the California Public UtilitiesCommission and utility executives who saw improved efficiency asbeing in their own financial interest. Oyer extended capital spending,mainly for nuclear projects, has led many utilities to make reducedinvestment a priority. Donald Jordan, president of the Edison ElectricInstitute, said in 1983, The huge construction program we face hasdamaged our industry... The best thing for us would be no grokvth."Five years ago the utility industry migtmight have charged Jordan withblasphemy.'"

Energy conservation programs have caught on more slowly outsidethe Un- heti States, but many are now beginning. Virtually throughoutthe industrial world electricity growth rates have slipped from t_le 6-813ercent annual rate of the early seventies to between 1 and 4 percenttoday. In most industrial countries electricity use apparently willrow at a slower pace than does gross national product. In much ofirthern Europe, electricity use could actually ecline.'"

Utilities still resisting the idea of electricity as a market commoditywhose role varies according to price are often those with the largest

GO

'Rh only modest efficiency programs,most utilities in industrial countries

could avoid building any newpower plants for at least a decade."

commitments nuclear power. Utility planners in France, for exam-plc, encourage electricity demand so that it will match the growingsupply and justify earlier decisions to order the plants. However,most utilities, including Electricite de France, have had to raise ratesto pay for new plants, and this encourages consumers to conserve. As 59a result, many nuclear plants sow the seeds of their own economicdemise. With only modest efficiency programs, most utilities inindustrial countries could avoid building any new power plants for atleast a decade.

When new generating capacity is needed, utilities will have manymore options than when they last ordered plants. Promising renew-.able energy sources include small-scale hydropower, geothermalenerp,y. biomass energy, wind power and p'hotoYoltaic solar energy_In addition, ck)generationthe combined production of heat andpower is a rapidly growing alternative to central power plants. Thecost of these energy sources today rang,es from just below to substan-tially higher than the cost of power from new coal or nuclear plants_But the cost of these new power sources is declining steadily whilecoal and nuclear costs are still rising. (See Table 3.)nn

Table 3: Estimated Cost of Electricity from New Plants, 1983, withProjections for 1990*

Energy Source 1983 1990

Nuclear PowerCoal

Small HydropowerCogenerationBiomassWind PowerPhotovoltaics

Energy Efficiency

10-125-7

8-104-68-15

12-2050-100

I 1,110,,,,ilt=hour)

14-167-9

10-124-67-106-10

10-20

3-5

'Costs expressed in 1982 &AlaSource: Worldwatch Institute,

61

Since I sO some of the new energy sources have moved from thelaboratory to the in rl etplace, mosfly on a limited scale. The Philip-pines leads in biomass-fueled power plants, I'Vest Germany incogeneration, China, El Salvador and Nepal in small hydropower,and the United States and Denmark in wind generation. Photovoltaiccells, now the most expensive renewable energy technology, havebeen falling in price the fastest, and the solar cell market has grownthirtvfold since 1977. Over 50 U.S. utilities have invested in newgenerating sources or are buying pow-LA- from independent smallpower producers. The utilities have plans to add 15,000 megawatts ofgenerating capacity from these sources by the year 2000, a conser-vative estimate since mane utilities are still formulating

Most new generating sources can be developed on a small scale withshort lead times, avoiding the enormous financial risks posed by a1,000-megawatt power plant. A wind farm or a solar plant can be builton almost any scale and plans quickly modified it demand shifts, animportant advantage since utility torecasters have shown almost nofacility for accurate projections. Photovoltaic technology has beendeveloped in the laboratory and become a commercial reality in lesstime than it takes to plan and build a single nuclear plant. Aspokesperson for the Southern California Edison Company, a pioneerin nuclear power in the sixties and now a leader in harnessing renew-able energy sources, said, "The age of the dinosaurthe large centralpower plant with a 10-to-15 year lead timemay have passed.' 14,

Alternative power sources will supply only between 3 and 5 percentof projected U.S. generating capacity at time end of the century, butthey will meet a large part of the modest additions to power demand,and their value goes beyond the number of megawatts supplied.Renewable energy developers bring a spirit of innovation to theutility industry, where ,radually, as in any other business, price isbecoming important anc losers bear the burden of their mistakes.

Nuclear power will find it hard to survive_ in the competitive eco-nomic climate taking=-hold. In the United States most utilities nowstate openly that they do not even consider nuclear power in planningnets generating capacity for the next decade. In other countries thestrength of nuclear development appears to decline in direct propor-tion to the degree of responsibility and risk the private sector is

62

required to assume. Centrally planned economies such as those ofFt%ince and the Soviet Union, V 11ieh protect nuclear power both fromeconomic pressures and outside critics, have continued to expand therole of nuclear power. In %Vest Germany, where nuclear power ismore closely tied to the private sector, plans have dwindleti. herenuclear power must tare a market test, it has generally tailed,

if an overriding national goal is the expansion of nuclear power, acentrally planned energy prui,ranz appears to he hest, However,providing energy services at the least cost and ensuring adequatecap_ ital for non-energy investments make a centralized commitmentto nuclear power much less attractive. Even the relatively successfulnuclear power programs are encountering cost overruns that cannotbe entirely short-circuiteJ via central planning,

innovative efficiency programs and renewable energy projects havebeen slow to develop in countries where utility planning is cen-tralised and small entrepreneurs play no role. Such countries may tallfar behind in areas where technological improvements are progress-ing most rapidly. But to keep nuclear power expanding,plannersmust devote virtually all resources to nuclear development, Efficiencyinvestments arc feared because they compete with the near totalcommitment nuclear power needs. Once nuclear power is protectedfrom market forces, the process can easily become complex andinsidious. Not only are other alternatives squelched but the pressureto misrepresent economic issues and hide technical problemsbecomes enormous.

Experience so far indicates that a government commitment to nuclearpower rnust be absolute and unending to be successful, preconditionsthat raise many issues beeond energy policy ones. If nuclear powerCannOt he developed without complete protection from the market,many countries would have to restructure their economies and evenalter the rights of citizens to have a successful nuclear powerprogram.

The economic failings of nuclear power suggest the need for severalmajor policy changes. First is i more balanced ach in energyresearch and development (R&D), which nuclea. ,ver has domi-nated in most industrial countries since the fifties. Fossil fuel combus-

63

tion etaerg. efficiency and renewable energy technologies eachdeserve o share of energy R&D roughly c mai to that given nuclearpower. .-\lreadv. prig ate energy RCzb spending, has shifted dramat-ically in this direction, and some governments are following suit.'"

Resources are also misdirected within nuclear R&D programs. Mostfunds hove gone to breeder reactor technologies, vieeL _ on- the pasttwo decades the inevitable next evolutionary stage for nuclearpower, Breeder reactors produce Ile nuclear fuel while they gener-ate power, removing the worry that uranium fuel will run out. Buturanium prices and supplies have played no part in the currentproblems of nuclear power, and the breeder reactor developmentprograms have not been aimed at resolving, fundamental issues ofsafety and cost. In IdiA, brcdr rc,K tor to be significantlymore complex .mod possibly more vulnerable to catastrophic accidentsthan light water reactors.r' The cancellation of the 53 billion ClinchRiver breeder reactor project in the United States in 1983 was a step inthe right direction. N.Inclear R&D could be productively redirected tofinding safe ways to dispose of nuclear wastes and to decommissionold reactors.

Countries that want to develop nuclear power in the future will needsimpler fail-sale reactor technologies that do not vet exist. One of thechief lessons of the nuclear poWer experience so far is that existingtechnologies cannot provide sufficient safety at a reasonable cost.Nlany of the strongest advocates of nuclear power now argue thatengineers and physists will need to design new plants. Some smallsteps in this direction have begun, principally in Japan.. This is theonfy way nuclear power could possibly become economical. But suc-cess of such rograms is not guaranteed, and they could becomemulti - billion -doll, dry holes.

Improving the analytical base on which utility industry investmentsare made is as important as redirecting R&D programs. Failing toanticipate the slower rate of growth in electricity use in the seventieswas a mistake of monumental proportions. Although some mistakesare inevitable, planners took far longer to adjust to the change thanthey should have. Similarly, power plant cost projections have beenuniformly low, a consistency that should itself provide a warning flag.

4

"Without a range of incentivesto encourage better performance,

the economics of nuclearpower cannot improve."

Tube ettective, forecasters and analysts must resist political pressuresand examine the real world, not simply extrapolate historical trends.

Regulatory reforms are in order, both for nuclear manufacturers andthe utility industry. ,,V; part of a move to standardize reactor designand improve safety, the review process can be streamlined andpaperwork reduced. This should save some time and money, thoughnot nearly as much as the nuclear industry has hoped. Enoughgeneric technical problems and uncertainties remain in nuclear powerplants that any decision to "freeze" the regulatory process and pre-vent the introduction of new standards would create more problemsthan it would solve.

Rat mission,, through their control over ;pending, must pro-vide more incentives for utilities to build plants cheaply and operatethem safely and efficiently. Higher rates should be granted for plantsbuilt on time and within budget. In a pioneering move, the CaliforniaPublic Utilities Commission voted in l983 to fine utilities whoseplants operate below a 33 _percent capacity factor and reward thosethat go above SO percent. The utility industry usually approaches-regulatory reform" by arguing for higher rates, but automaticallyau h revenue for projects with huge cost overruns and ques-tionable performance makes little economic sense and is not in thebest interest of ratepayers.

What the nuclear industv needs most is a good dose of marketdiscipline. Without a range of incentives to encourage better perfor-mance, the economics of nuclear power cannot improve. One stepwould he to change tax codes that provide too high a reward forcapital investment in new power plants. Another would be to reformnuclear liability laws to ensure an adequate financial incentive for thesafe operation of nuclear power plantS.

Also needed are changes in the contracts between utilities and thebuilders of nuclear plants. Controlling costs will be impossible untilthe day of the open-ended, cost-plus contract is brought to a closeand contractors are prohibited from making a profit on cost overruns.Eventually, regulators may wish to consider granting power plantbuilders standard marginal electricity rates for any additional powergenerated. Builders would take responsibility for deciding which

65

power sources to develop, but would also shoulder the financial riskshould the project cost more than expected. Interestingly, these arethe same provisions granted to small power producers develop_ ingmany renewable energy sources in the United States.

Nuck'ar power's- protected status, apart from all other energsours ,!s, is no longer justified. The broad varietN of alternatives ax aL-.1ble nd the pace at which the utility industry is changing make abalar co] approach more important tlian ever. Attempts to pick out asing,io energy source and direct the pace of development are bound totail. Adequate power at the lowest feasible price is the most sensibleoverall goal, with an internal accounting of the environmental effectsand risks associated with each energy source. Nuclear power may notpass thin, market test, but it nut, it will he replaced by more appropri-ate energy sources.

Nuclear power's economic problems are not about to disappear.Costs continue to -increase in all countries, and high interest rates andtight capital markets will likely remain, even with a vigorous eco-nomic recovery. Arguments over the economics of nuclear power willlikely grow more heated as nuclear cost increases begin to affectelectricity consumers directly, and as nuclear industries, starved fornew orders, pressure for more support.

The question now is not whether to make a few small adjustments tofurther encourage a thriving industry, but whether to introduce fun-damental institutional changes and new economic subsidies to propup a dying business. Leaders in many countries will be tempted tomuddle through, making one decision at a time and so wadinggradually into a financial- quagmire. 'Fhis could be the most costlyapproach of all Slowly dying nuclear programs are likely -to have ahard time attracting first-rate management and engineering talent.

WFurther cost overruns and more accidents could result. Whethernuclear programs A2xpand or not, many societies will have to devoteconsiderable effort to solving problems posed by slowly aging nuclearplants 'and their attendant waste products.

National leaders continue to be mesmerized by the once-great hopesplaced in nuclear power and fail to assess its economic performanceobjectively. A basic business principle holds that money-losing enter-

66

prises should nut ht continued in an attempt to recover early losses ifmore promising, investment opportunities are available. The time is ithand to decide whether nuclear power prog,rams have reached thispoint. Many nations would benefit by cutting their losses and movingon to rnt+re roductive cruicovors,

67

65

Notes

1. International Energy Agency, 1Vort,1 Energy Outlook (Paris: Organisationfor Economic Co- operation and Development, 1982); U.S. Atomic EnergyCommissk,n, Nuclear linger Grozeth 19.-3-20(4) (Washing,ton, D.C.: 1971).

2, International ..Ntomic Fnerev Hie Annual 1.4,-)!or( for 1982 (Vienna:1983).

3. American Nuclear Society, "The World List of 'uclear Power Plants,-Nuclear :News, Augu,,t 1983; Nuclear: 1, \orld Status Financial Tone:. LnergyEconomist, January 1983; Atomic industr:al Forum, "International SurveyAnnual' Washington, D.C., March 1983.

4, "Nude World Status."' Fitianciai Tim -s Eiterxii Economist, Janua

5, R,ilph L. La (Ncw York: Harper & Brothers, 1953): DavidDietz, Atomic I/ in the Ctiniin,\ Era (NL York: Dodd Mead, 1945);Bertrand Goldschmidt, T Atomic Complex: A IN't,rldwidc Political History ofNuclear Energy (La Grange Park, Illinois: American Nuclear Socipty, 1982),

6. Peter deLeon, Di.--aqopment and aftiision of the Nuclear Power Reactor: AComparative (Cambridge, Mass.: Ballinger Publishing 1979);Arnold Kramish,' Atomic I' nag', m the Soz,iet Union (Stanford, Calif.: StanfordUniversity Press, 1959).

7. Philip Mullenbach, Civilian Nuclear Power (New York: The Twentieth Cen-tury Fund, 1963).

8, U.S. rltttmie Energy Commission, Civilian lea P. or.' 4 Report to HyPresident ashington: D,C.: 1962),

Arturo Gandara, Lit lily Decisionmaking and the Nuclear Option (SantaMonica, Calif.: Rand Corporation, 1977).

R.L. Perry et al., Development and Commercialization of the Light WaterReactor, 1946-1976 (Santa Monica, Calif.: Rand Corporation, 1977).

11 Irvin C. Bur, t and Jean-Claude Derian, Light Water How the Nuclear Dre- nDissolvt,d, (New York: Basic Books Inc., 1978).

12. Quoted in Bupp and Derian, Light Water.

13, William Walker and Mans I-kinnroth, Nuclear Power Sir Ies:ilndilistr31; 1Competition anti Proliferation Control (London George AllenPeter Pringle and James Spigelman, The Nuclear Barons (New York- Holt,Rinehart & Winston, 1981).

68

James ett Kati and Onior S. Nlarvcah, eds., Power in Ocala)-(i_Q\Ington, Mass.: Le\ington Books, 1982); Richard J. Barber

- Nuclear Power I9.7.-5-19911: Commercial, Economic and(lVa,linigton, 1).C.: 1974); faauddin Sardar. -Why the

Third World Nekkis N.,u,Iear Power,- New !,cititi:-t. February 12, 108I.

15. U.S. Atoi ria.1 Forum, "International SurveyAnnual," Wash-me,ton. I)(. . arion

lt. I and Det Ian Light IVater.

17. Cost figures for individual plants are compiled from ress reports andpersonal -communications with 1Yorldwatch nstituti. and arecurrl,nt as of late 1983, All cost figures in current (as spent) dollars unlessindicated otlwrwise,

18. Hie :is quote is a mystery, though some have attributed it toLewis Straus.-. ; chairman of the U.S. Atomic E nerF;y Commission; seeStephen Hilgartner, Richard C. Bell and Rory O'Conn. Nukesticak (SanFrancisco: Sierra Club Books, 1984

19. Perry et al, rieuelopment and Commercialization of it Water Reactor;Oupp and Derian, LiNiit Water.

20. Irvin C. Bury et it "Trends in Light Water Reactor Capital Costs in theCrultd States: Causes and Consequences,- Center for Policy Alternatives,Massachusetts Institute of Technology, December 1974.

21. bupp et al., "Trends m Light VVater Reactor Cos and William E. Mom,Cost Analysis of 1 =i, lit Wafer Reactor Pipits (Santo Monica, Calif,: Rand Corpora-tion, 19-,*.q,

Industry studies showing a large cost advantage for nuclear powerinclude Lewis J. Perk "Estimated Costs of Coal and Nuclear Generation,"National Economic Research Associates, 1978, and W.K. Davis, "Economicsof Nuclear Power," Bechtel Power Corporation. San Francisco, 1981.

23. Charles Komanoff, Power Plant Cost Escalation: Nuclear and Coal CapitalCosts. Regulation and Economics (New York: Komanoff Energy Associates,1981), republished by Van Nostrand Reinhold in 1983.

24. An industry analysis of cost trends in current dollars showing a 20percent annual rate of increase through 1981 is found in%Ramesh N. Budtwmi,Power Plant Scheduling, Construction and Costs: 10-Year Analysis," Power

Engineering, August 1982. A list of utility cost estimates for al; nuclear plants

69

under k-onstru ion mid-1983 was obtained from the EnvironmenAction Foundation. dolLir cost estimates are from the KomanoffEnergy .-lassoci,Iti,". s data tar t., private communication, September 19, 1983.These figures were col-an-mei, by !,rehired i,useii using the data base of theEnergy Systems Research (. priy,ite communication, September 27,1983.

25. Hai-hard A K,' -en. -Testimony before ale Indiana Public Service Com-mission,- (), titread data.

1'IS2, base,, on Energy -Systems Research Group static=

26. U.S. Department of Lnerey, Annual 1982 (Washington,D.C.: 1983); U.S. De mrtment elf Energy, f Hi( Llrainm

Wif Indus-

try (ashington, D. 1983).

27. RA:, Easterling, statistical of P on.er Plant capacity Factors lush1979 ON'ashingtoo,1).C., U.S Nuclear Regulatory Commission, 1981); StineThomas, 1Voriiirivile Nuclear Plant Performance Revisited: Art Analysis of1978-1951 (Brighton, U.K.: Science Policy Research Unit, 1983).

28. Richard Rosen, Energy Systems Research Group, private communica-tion, September 27, 1983.

29. Some of the most misleading but most widely quoted cost figures arethose published by the Atomic Industrial Forum in its annual fall pressrelease comparing nuclear and coil generating costs; see Atomic IndustrialForum, -Nuclear Power Boosts Its Advantage Over Coal In Costs and Capac-ity Factor,' press release, November 22, 1982, The AIF approach is dissectedan Charles Komanolf, "Power Propaganda: A Critittue of the Atomic IndustrialForums Nuclear and Coal Power Cost Data for 1978," Environmental ActionFoundation, March 1980. The All has responded to such criticism by nolonger breaking down the data by plant in its press releases, making indepen-dent evaluation of the results impossible.

30. Lewis J. Pert, The Economics of Nuclear Power,- National EconomicResearch Associates, New York, June 3, 1982; Lewis J. Peri, The CurrentEconomics of Electric Generation from Coal in the U.S. and WesternEurope,- National Economic Research Associates, October 26, 1982,

31. U.S. Department of Eherev, Projected Costs of Electricity from Nuclear andCoal-Fired Power Plants (Washington, D.C.: 1982).

32, These figures are Worldwatch Institute estimates based on the construc-tion cost figures described earlier and on O&M and capacity factor figurescompiled by Energy Systems Research Group and Komanoll Energy Associ-

7 0

att. Oil prices ore assuraed to rise at 3.3 percent annual real rate beginningin 198o and hit per barrel (1983 .lars) by the year 2000. Coal prices areassumed to rise at a 2 percent annual real rate and plants have "scrubbers- forSO,. removal. Generating cost figures are leyelized costs over the lifetime of aplant. Because two-thirds of nuclear generatin costs are construction costspaid during the early years of operation. nuclg ear power appears even lessattractive than the alternatives during the first Years of operation.

33. 1 igure based on a nuclear generating cost of 1 Ic per kilowatt-hour that,with transmission and distribution costs and line lossi.s, comes to a deliveredprice of 14.3e per kilowatt-hour. This compares with a U.S. average retailelectricity price in 195 of 6.3e per kilowatt-hour, according to U.S. Depart-ment of Energy. Alefrithie Energy Review, September 1983.

34. Figure based on one barrel of oil al in energy 1- to IL (k) ilowatt-hours of electricity after refining.

35. S. David Freeman, "Nuclear Po er 1st 't Scary These Reaeteers Are,"iVa4uttgton Post, November 28, 1982.

36. "Shewell B Inquiry Puts UK Energy Policy on 'trial, European EnergyReport, September If), 1983; Chad Neighbor, "Nukes and Crumpets, 'Environmental Action, lune P483.

37. Central Electricity Generating Board, The Case for he Sizewell 13 NuclearPower Station (London: 19821; "'British PWR Can Cut Costs," Nuclear Engineer-ing international, June 1982; Gordon Mackerron, "Nuclear Power and theEconomic Interests of Consumers," Electricity Consumers' Council, June1982; Gordon Mackerron, "A Case Not Proven," New SeientiQt, January 13,1983; J.W. Jeffery, "The Real Cost of Nuclear Electricity in the U.K.," EitergYPoheit, lune 1982; I.W. Jeffery, An [Economic Critique of the CEGB's State-ment of Case for a PWR at Showell" University of London, June 1983,

38. David Fishlock, Counting the' Real Cost of Nuclear Ener,y7;;r't F. inancialTunes, August 9, 1982, B Inquiry," European Energy

39. Gunter Marquis, "Experience with Nuclear Power Plant InvestmentCosts in the Federal Republic of Germany and Expected Future ElectricityProduction Costs," presented to the International Conference on NuclearPower Experience, Vienna, Austria, September 13-17, 1982; Leonard L. Ben-nett, Panos NI. K.arousakis and Georges Moynet, "Review of Nuclear PowerCosts Around the World,- presented to the International Conference,

40. Jur ,en Franke and Dieter Viefhues, Das rude Des Hilligen Atomstronts(Koln, West Germany: Institut Freiburg, 1983).

I

41. Bennett. I% Het. letV t:IVar I \it.- er 1_

1_ hark., Nuk I" er Costs: American AnstNers. FrenchHeins komanon I tie ie, taw,. I9s1: en IA ith Increased Costs. F_DFFind, Nuclear I ar v hearer than IVek, January 27, 1983,

7142. "Llectricite 1-r-mc 7-o-Billion 1 ranes in 1981,- ..Clikqeinuc,--; IVeck,1,ehrilon, 19s-2.. 1 R, flt Nt-port, lormary21 Bis

43. I lit tigur are unliublisheel estimates of the Central ResearchInstitute of Llectrit Pi IA 4,1- Industry, privat communication, Auust 9, 1983,and ot i,-..ecutoe t ice-president of Fokvo Electric Power Comp arty in aninterview in A--zazceck..August 12, PtS3 rhe Soviet figure is froni COmeconPreses Forward Vhile the I-Vet llesitates," Ifuton-4d l irrfes Energy Economist.A-Igust 1483. Ihe Swedish figure is from Ake Stincktrom, Ministry of Indus-try. private communication. September 12, 1983.

44. A.M Yu and 1.31 Kite. 'rends in the Capital Costs erf CANDL1Generating Sfations.- presented to the International Conferen _, OntarioHydro. Geist Lortiparim,Pt of CAN OLI Nuclear & Li-t)(71 Ftlefed C_Iinerating Stations(Toronto: 19821; Bennett Karousakis and Movnet, -Review of Nuclear PowerCosts.-

45. Daniel morel, Ow Cult the Atom (New Y( Simon & Schuster, 1982).

46. David Okrent. Nuclear Reactor Satetir On the History of flu Ro4,:tilatorltProce ('Madison, Vi, tjniverNity of Wisconsin Press, 1981)-

47. Burp and Ilerion. Iater

48. 41arquiGermany...

with Nuclear Power Plant Investment Costs in

49. Komantiff. Power Plrfrrt Cog l suml _)1

50. Jini Mint/. "1June 1 Mark E1981.

v the Engineers are Sinking Nuclear Po r " Science 83,Hoff, "Boondoggle at Diabl Not Man Apart, September

51. t )ueiteel Pon gain v ra

52. Marquis, "E:tperience with Nuclear Pot Plant Inte=stmenl Costs inGermany."

72

53. Rame,11 N.. Budani. "Power Plant Scheduling. ,:onstuction and Costs:lo-1 ear ,-knal si,.- Power 1 A-,Igust Olds, -NuclearPower Filyineermg: tit 1".-end, in Polk- and technology,- Power

Pas3,

54Atomic Industrial Forum. -Licensing. lisigrt and Construction Prob-lems: Priorities for Solution.- Xashington, January 1978.

Kamiation. r 1'/:,:t t 0.4

56. NIonagement problems at U.S. nuclear protects ihed in John F.bAea Rerne. Iii Before the Ameriean Nuclear Si. Cornell Univer-

sity. May 1-1, 1'182. and Mintz, -How the Fogini.ers are Sinking NuclearPower.-

57 Alvin Veinberg. "Nuclear Power t three Mile' Island," Wilson Quar-terly, Spring' P9040,

58, Matthew- I.. tVaid, -The Highlair!,. I totes. n 15, 1481.

..ow-Cost N tear ['owe

59, Clark Mort .Nziclear Inc,: The .heir 'Old A ley 711Clear EU(New N ork. Pantheon Books. 1983).

60. Remy Carle, -How France Went Nuclear. Neu Scientist, January 13,1983; in C. Bupp. "The French Nuclear Harvest: Abundant Energy orBitter Fruit?" lechitiflosi/ Rez.ieie. November-December 1980,

61. S. David Freeman, "Nuclear Power Isn't ScaryThese Reactors Are,"IVIP=imieton Post, November 28. 19:42, Peter A. linidford. "Reagan and NuclearPower," Los Auseles Tiotes, lane' 6. 1982.

62. t taitc'mint made to 'Amore Lovins in 1981. private communication,October 14, 1983.

63. Ronnie D. Lipschutz, Railioactiee Waste: Politics, Technology and Risk(Cambrid ye. Ni ass.: Ballinger Publishing Co. 1980); Fred C. Shapiro, Rail-'Paste. A -'s Intvstigation of a Growing ,Nlutlear Menace (New York: Ran-dom House, 1981).

64. U.S. Congress, Office of Technology Assessment, Managing Commercialtlrth -I ta'l'l Railioactii,e Waste (tVashington, D.C.: 1982); Luther J. Carter, "TheRadwake Paradox." Scioto-, Janu..iry 7, 1983; Walter Sullivan, -NuclearWaste Disposal: Bold Innovations Abroad,- Neu, York Times, August 31, 1982;U.S. Congress Nuc/oir Waste 1-1,3licit Act at /982 (Washington, D.C.: 1982).

73

65. 1 estunont ht fienry i (Ntice. betort.'the .+LiKorliltriM.v tin Colt,cr nurgv and 'lateral Resoun.e- Lit theCommittee oil (.0, rnment i.1 Tailor's, February 23. 19.70; Shapiro. Ra,i-wo,te.

66. C..s Department Lit hnergv. 1,P"lrfrf, . lea? Poker -Thiligton,D.C.: Icis2); Richard t ivIlman and 1. aniline I.0 C. I .11maii, /he Comp./awetwitoutl., Ccal Port-o- (LeIngtor 1.e\ington Books,19S2)

67. Freel liarbash ,1110. Milton R. Benjamin, "States Can Curb A-Plants: Cal-ifornia torium Upheld." Wash/in:to,: Post. April 21, 1983; John kV,polvett. p,t tit 1,ipaiL- 81a/ctot ot Iii,. Atortit, N.,t.trttq7=, Mav 1983.

68. Salk I lindman. !!!..!!=: CriticatExamination OVaNhirigton, Crim-ol Mass, forthcoming): U.S. NuclearRegulatory Commission, -Draft .nyironmental IISiJ itt +taterrICIii On Decom-missioning of Nuclear Facilities,- kVashiogton. D,C.. 1981; Atomic IndustrialForum. "An Ovorview of Decommissioning Nticle.tr Power Hants," Wash-ington, D.C,, IL34,3; II:NOph A. Selcik, "Decommissioning Commercial NuclearReactors," tecluie/eNii Reviere, June July 1979,

69, Colin Norman, "A Lone, -Fenn Problem for the Nuclear Industry,'our, lanuary 12. 1982; Jim liardin&, "The 'Ugh Price of L3urving Dead Reac-tors." Not M(711 ..114;rt, December 180, David E Greenwood et A., Analusis ofNiii/nir Reactor Pecommissioninx Cots, (V ashington, D,C.: Atomic IndustrialForum, 1981); Duane Chapman, \.'heltwr Economics: Taxation, Fut,1 Costs andnvommisstoiting (SaCro mo n to, Calif.: California Ener y Commission, 1980):"General Electric Has Won the Sot) to S70 -million ecommissioning Con-tract:. ,,,,,:uchlinics week, October 27, 1983.

70. West German figure from Horentin Krause, Friends of the Earthcommunication, September 28, 1983; liindman, "Decommissioning 1R.S. Wood, "Assuring the Availability of Funds for DecommissioningNuclear Facilities," Nuclear Regulator' Commission, Washington, D.C.,1982; Robert F, Burns et al., nolitins N'ilc/ear Power Nam' Deeenzini:4sionnis(Columbus, Ohio: Nuclear Regulatory Research institute, 1982).

71. Atomic Industrial Forum, "Historical Profile of U.S, Nuclear PowerDevelopment," Washington, D.C., January 1983.

72. Atomic Industrial Forum, "Historical Profile": update from Mary EllenWarren, Atomic Industrial Forum, private communication, October 26, 1983;coal plant data from Atomic Industrial Forum, "Inti,.rollice Memorandum,March 22, 1983.

74

73. figures are to t:ur_renk el olldr and arean.

Departmenhierw. Plant CaticcItatioilif , C1101.!, Cttlicquncc: (4Vash-ington. I ).(...: 1983),

74. t. 1)epartmnt tat Energy. ,doirttili I 1:cr,:t1 RiTicti, September 1-33r ual Electrical industry Forecast, I September 1L. _b. C. A.nt`ral Accounting .1,1a/its's of fIct frit" Littittu I.rtttrt FOreitt5WN(VaNilin WI I) : IL15 ), L.S. Department tat Energy. 1In 1 uture tit Electric

in ilia 1.oti, inn Sultltlit tor I.Lono)ru, t.rozetii (). ashmgton, D.c.:198.3)_

75. -1983 ,rnnual St.itistical Report,- Hectrical , Nlarch 1983. \dditionaldata obtained from unpublished documents of the Edison ElectricInstitute and the American Public Power Association. These numbers were

impares_l t ith capital litirtao tII tit'Maismactuwrs (Washington, 1983).

76. U.S. Department to Energy. / lame ot Hectric Power.

77. Leon.ird Hyman, -Utility Industry: Congressional Hearings tin NuclearEnergy,- Merrill Lynch, Pierce, Fenner & Smith Inc., New York, October 26,1981, R.1. Nesse. "The Effect of Nuclear Ownership on Utility Bond Ratingsand Yields." _Battelle Pacific Northwest Laboratory, Richland, Washington,February 19,82. 1 he initial rate increases that occur when nuclear plants begingene rating power are higher in real terms thazi the lifetime generating cost ofthe plant. This is because the capital cost of the plants must hi repaid duringthe first 10-15 years tat operation.

78. John R. Emshwiller. -Some Investors Shun Nuclear-Powered Utilities,leopardizine Funds to Build New Atomic Planb.." StreetNovember 20, 1981

79. Suitt A. Fenn, America's Electric Eltiltties: tinder Siege 111111 m tralysition(1A'ashington, D.C.: investor Responsibility Research Center, 19h1) ThomasWatterson. -Generating Capital: Utilities Look to Rest tit the Century,"Christian 8c.citLe .%lonttor, July 28, 1983.

80. 'Midland Deal Conies Unglued,- Emergif Path', July 19, 19

81. U.S. Department of Encrgy. Monthly Energy ReVieW, _ ember 1983.Individual rate request are from variouli sources, including mown': Fac-tors Engult Seabrook,- New York Times, September 12, 1983. The initial rateincreases that occur when nuclear plants begin generating power are higherin real terms than the lifetime generating cost of the plant. This is because thecapital cost of the plants must be repaid during the first 10-15 Years ofoperation.

7D

82, Ihe in favor of grkmung 1, rate Mcre is math` in PLterNavarro. "`LUhti Bills: !he Real Price of '.1ectricity, l rttl = trt,t journal,January 13, .3 ,ink.1 Sam (...das,er. -Electricity Pricing Needs New Attitudesby State Rego! gots. UM(' i, 1'4.f:ember 6, 11)S2. orumenttor maktne bear more t)I the tiverrun 1110Lie 111 ( harlesKm-11,1mm, "Nuclear Cost Cfverrun,: Nlake Investors -Slikire tilt' BuRin:'PINCer LittC, \larch 1983 and Mark Ev.moti, "[Mgt.., Costs Shake Utility Financ-ing .wt .lafi Apart Ittli S,

83. mart I )1.inhind Shoreham: t\ hat Went 1,Vrking7,- Nczcsfiait. December6. Barron -Burden kg Lilco Bilk Could Slow Up Long Island'sEconomy.- Ncze August 14, 1983, Ron XVitisloty. -Lilco's Bid toSpread Nuclear Co,t, Custonwrs kind State Wall Street lout--Hal. Stptcrriber I, Iws3; NIattlIt.xv I Wald, -Operating Shoreham lower Plantt4 iii Not I ow Yr rZon-.,. 0,10ber 14. 19:-:k3.

84. .Tamar Lewin, -Power Group Says It Ckmnot Pay Off $2.25 Billion Debt.'lork riate, July 2t7, 1983; Michavl Blumtein. -The Lessons of a Bond

Failure," Nczc )04, August 14. 1983; Scott Ridley. "Nuclear PowerBankrupts the Northwest,- kunronmentai Action, lull: August 1983.

85. the Fallout trorn 'Whoop \ Detault Looms, Casting a Pall Over theEntire Municipal Market," Bus Week, July 1983.

86. Joseph Bow ring. , ,\'iu Power: Noictor t and thefurl Cycl (Woqiinston, L.S Departmnt ot Energy, 1981): Gen-eral ACcounting Office, Nucfrar .'fizver Lo.-;ts gm/ Subsidies (Washin) ttin, D.C.:19791

87- Dtiono'Chapinan, "The 1981 Tat, Act and the Economics of Coal andNuclear Power, Cornell Agricultural Economics Staff Paper, Ithaca, ti t'%+^

York, October 19SE Duane Chapman, "Nticloor Economics: Taxation, FuelCost and Decommissik_ming," California Energy Com_mission, Sacramento,California, 1980.

't.`t.ti Robbed: 1-ho Nuclear ry is Stealing Our Tax Dollars,_trotrottraelital ..lettott, June P483.

89. L' _S. Department of Enk.rg_ a le, tr 114ition.

90. Keiki kehtit, .Vrit-lear inqu 1,111twattabie at Any Price shin n.D.C,: Environmental Policy Center, 19801; Matthew L. Wald, "iteiictorsLose Limit tin I lability,- N't.w ,irk time-, July 27. 1983.

91. Atomic Industrial Forum. "r-VI. F.'s 1982 N1it veer Outlook," Washington,D.C., July 1982.

76

92. U.S. 1hpartme nt et Ene ,.._onupierc a/ Nut-tear PozeePer,pectizv. curreut 11 tIA'ashington. D.C.: 19821.

93. L)ti;,teel in Ilertstiaard" Nuacar lrti

94. "World Li-t oi Nialear Pinver Plant /car bi-annual, variousstates; Organisation ior Economic Co-oper.iti n and Development, llrurld1 PIC r ICOA

95, tl`illr.tm %',ilker and r.,..Eins 1.onnroth, Nitetoir Power StrtiCornprtittort and Proliferation Control (London: George Allen &

96. tti lltani Dro/dial, "Greens' Power: West German PartyIV.t,./iiiNtott Pe-t, February 19, 1983; lohn Tagliabue,

Ciash .At 7,ite 01 .A-iTint.- )era TWIC,, March

Oes: Industrialnwin, 1983).

Forces NuclearWest Germans

97. Hem/ Gunter Kemmer, 'Era of Cheap Electricity Coming to an End,"Cent: n Tribune, August 22. 19S2: -Regenerating the Nuclear Option,- WorldPu,..iness Weetati. February 23. 1981,

98. -.West Germany Breaks Through Five Years of Paper Chains," Financialr!r`r,', ruCrs:V f:Lo September 1982; %Volker and Lonnroth, Nuclear Power

99. -West Germany: Can a Nuclear 'Convoy' Run Over Its Opposition?"Pu-ease, Week, August 9. 1982. Information on concern within the WestGerman utility industry is from Florentin Krause, Friends of the Earth,private communication, September 28, 1983_

100. "World List of Nuclear Power Plants,' 7 InternationalAtomic Energy Agency, The Annual Report for 19,

Carole Collins, "Framatome: French Nuclear Monopoly Finds FertileGround Abroad," Multiitational ,lfettitor, Jul v 1983; "Creusot-Loire to ReduceStake in Framalome," 1Val/ Street Journal, October 4, 1983.

102, Irvin C. Bupp, "The French Nuclear Harvest: Abundant Energy or Bitterflaryestr techrib(cg Ry eview, November/December 1980; Judith Miller, "ParisPushes Drive for Atomic Ener, Socialist Government Has Only SlightlyChanged Program Undertaken v Giscard," New York Times, March 14, 1982;David Fishlock, "The Future Fcr French Nuclear Power," _Fit:am-ill/ Times,August 25, 1982.

103, "French Ener v Forecasts Fall." Nature, NE ember 11, 1982; "StudyGroup C ,all for French Nuclear Restrenehrrtent Sends Shock Waves,

7r

NW, /CO / Mai; I4, 1983. -Nuclear Power: Cooling (Mt,"lul 10. 1983. -French Planner. Accused tit Cheating,- Europ,miReport, September 3n, 1983; "I Ill. Seeking Maxiinum HesibAltv in c)perotionof its Nuclear Units. Wce.k, Febrii.lry 17, 198.3.

104. -France Nuclear Over-La awits Even Before 1985, Eur an erNiiF. !Ilk- I. 1483, -EDF FOCVN Bid ri,k in I rogramming Ink stry to Use

1 %c4 \larch 4. 1

lectricite de Irance S pent 9,76-Billion Francs in 1981," \`utletrtr isebrilary 25. 1982, "EL 1 'schedules Debt," European Energy Report,

lux '1. P483; "Nu. lear Po ,r: Cooling Off,- The Ecoriorniq, July 30, 1983.

06. -. f t.I. Group's Call for French Nuclear Retrenchment Set; Is ShockWaves' , Ichvrucs Week, Nlay 19, 1983; "France Eases Up on Pace of N-Power," 1= uroptan Enerkm &port, August 5, 1983; "Fram.nome is Bracing forEmployment Problems. Beginning in Mid-1984," Nuckonies WU, November4, 1983; -Slowed Rhythm of French Ordering to Force Nuclear Plant PricesUp," Nue/6.)rue,-; Week, April 21, 1983,

109. Walker and Lor roth, :\'uclettr Po

108'. Andrew Holmes, "Sizewell Inquiry Reveals U.K. Policy Vacuum,"Emancial Dynes Enervy Economist, October 1983; Czech Conroy. "Why BritainDoes Nut Need a PWR," N'eze Seieptist, August 19, 1982,

109. Andres Ames, "Nuclear: World Status, Financial Times £eicrtiy Ecmist, January 1983.

110, "Sweden Proposes Ph., Out Its Nuclear Power Plants," WorldEnvironment Report, April 27, 1 'Fhomas Land, "Sweden Count', NuclearPower's Real Cost," Amnia/ of Commerce, March 4, 1983.

M. U.S. Congress, Office of Technology Assessment, Technotovii & SovietEtrerNy (W.Ishington, D,C,: 1981); Leslie Dienes and TheodoreShabad, -The Soviet Energy System: Resource Use and PaliCie$ (Washington, D.C.:V.1-1. Winston & Sons, 1979); "Comecon Nuclear Industry Set for RapidExpansion," European Energy Report, July 8, 1983.

112, Peter Wood, "Nuclear Power in Eastern Europe," The Ecott isf, January1980 ['tiler Holt. "Nucle.ir Power in Eastern Europe: Progress & Problems,'Energy in Countries with Planiud Economies, December 1981; Torn Sealy, "Corn-econ Presses Forward," Financial Tzttie Energy Economist, August 1983.

77

113 Comecon pre, r 1,1

!ems litt S.S R Nuclear Con eruct ion ME stry,3, I LiS,3: Nlark ord. kir Plant Nlishai

110-t. kik 21. 1981.

t-commust: " "Prtalpt_nerpr RE-port.

it by Soviets,-

_ Nuclear Industry For Rapid F\p, Eur!Lily ti. In,S3.

115. lohn PEn 11 -Nuclear Power in lapoi PPul/t ^tirefist:, May 1087, Power: IVhat Role inI 9s

lit Atomic scum-vck, August 12,

116. \uclear'`t leper Cater to laraneNe \t "etis A Thov Wait Out Lull in1..:S DEinand, ,r anti I c,,, r. ItInt P7 2; !arm: i ne L niikelyNucle.ir Giant."' litiniess ember 19, 1983; "Japan a Closed Shop forOutsiders. lapane-,e Facv un lem Onshore,- Nudeonics Week, Nlav 5,19.83.

117. A Nuclear Power Plant in lapan Springs i ti LL ' WorldRIN11:1', IV eek iti , Ni.tv 11, 1981; Henry SE:ott Stokes, "Fur Japan, utidenNildeor Misgivings." New York Titne Nlav 17, 1981; Geoffrey Murray, "SubCrash, Waste Leak Shake lapan's Trust in A-Power, Chritian Science Monitor,April 23; 1981; "rroiest Demonstrations Mark Gov't Hearing on Net N-Plants." Iii rnitcs. December 3, 1980.

Steve Dun , -Worldwide Nuclear Plant Performance Revisited: Ant vsis of P47 tit, Futter s, December 1982; -Japanese Nuclear PowerPlants Have Everie net 1 FeW Problems,'" Nuc/conics Week, July 17,Ni 1, P.tul Danish. -japan Delays Building of Coal -Fired Plants,- journal ofCommerce, OctoF,er i 983; E ne rg Forecasts from Yoke° Suggest GrowingUncertainty,- I worttitii limes Encro Economist, Jule 1982; "Latest Revision ofJapanese Nuclear. Program Calk loc Nearly 580-Billion,- Nucleonics Week, Julyi, 1982.

119. InternationalI )CZT/111,17/.,' fICN:

tic Energy Agents, Market St o 'nelear Power ineral Report (Vienna: 1973).

120. "World List of Nuclear Power Plants," Nuclear News, August JaneHouse, "The Third World Goes Nuclear,- South, December

121. Richard J. Barber Associates, WC Nuclear Power Prospects, 1975-1990:Commerctal. Lcouumie e.:.= Security implications (Washington, D.C.: U.S. EnergyResearch and Development Administration, 1975).

79

122. FZ1,11,1r_l I. Barber ciotes. 1,1_1C l ttr /lowiikqicrnon. Amor\ II I o. in and I . limner 1 0. in,.

iar iNely 'lurk. \Valiant Nlorrolv anti Con-irony Inc..

Patrick1VOrfil

123. linto k \kn./h.. 010..'-.1. ii i al rt,s:. It'ort(:il etCouunerke. \torch S. 1982. I iit. in I` 1)tla. °s FYoNucli..%ir Projects.- 1 anSoct fonriat. July 13. 1982_

123. -1-4.11. 0 mg C ttn truction ttt \t.14. 1 I 12 Nuclear Power Plants,July 17 IsnN2.; "..tIouth Korea: I lit Nucluar

Industry's Iast Iliirrah, 1 WO: Iq Quartrli, Rcz,ieze, A.nI 13, No, 1.1w,s1; iirn !4lorrol, .111,lilt kin iii N Ut:Icar Powetin Isoreo," Corporate

Ri-scat; tt C.nttl, 1983; unpublished_

125. payob Scherr. -Nuclear Power in the Philippines In Kant and r-h, it'd, Patt,- irr DcelopuN Cozoitrie.

126. Herr ord C,wertzman. and China DiscussinF Eport NuclearTechnology to Peking.- Ncw York Times, Punt 2; 1982; Christopher S. Wren,'China Is Building .Atom Power Plant.- Now York fun Y, September _30, 1982;E Sti.lit3intn of Nuclear Power Will Meet Needs," china October 16,

. Milton R. Benjamin. "Westinghouse Seeks Nuclear Sale to China,''Wash:it:00u Po=t, December 16, 1982; -U.K. and Franco Get Footholds inChinese Nuclear Program.- Nut:icon/es Week, March 31, 1983.

127. R.R. Subramanian and C. Rafe Mohan, "NUClear Power in inkit, and MarwahVniricar Power in ne.-.'loriv Countries; Trevor Drieberg,India's Nuclear Program Encountennk.: Difficulties," journal Limmerce,

November 4, 1982; R.K. Pachauri and koshmi Pachauri, "India Seeks NewSolutions to Primitive Problems,- I mmiciai.fimes httcrsit I-Aim/must, June 1963.

128. Katz And \larwah, Nuclear Pozr iii Ileirelopin, Lninitrrs; House, "lheThird tVorld Cites Nuclear"; Muriel Allen, "Egypt Rethinking Plans for

- Reactor; Due to Sakti' Fears,- journal of Commove, May 3, 1981.

129. Burt Solomon, "Argentina: Bent on 4 Home-Grown Nuclear Program,-rtter,,:ti HinIlL Nov vnilior 9, 1982: lacksbn Diehl, -Ambitious ArgentineNuclear Development Program Flits Snags," 1Vashinstou Post, Au mst 31,1982: Jeremy Nlorgan. Argentine Nuke Program Proct_.,eds," foot -na! Com-/tierce, \iav 13, 1983.

130. \'ittitria !Allison. -Nuclear Power in il,- in Katz and Nlarwah,Nuclear Poici.r to PeiVii, -UN ( Olittilit'7,; Riclhird 'Brazil: Nuclear u ..0.14,..f titthe Fijture 'lakes a Fur:: tor the kVors,- I inalicial (-tal= blerS11 ECtilitilniSt, May1983

80

80

131. Juan Liu, tear Power in

Nuclear Lmt,

uclear Pottier iii \1e -Oco." in Katz and Nlarwah,tin/tries; Having Difficulty Completing,1,-atric4 1Vcck, June 23, N83.

132. Lstimaty based en itti,luai plants inidel t_nnsti ut,tion and opyrating inmid-1483 as listed in -World List tit Nuclear Power Plants.- Nudear News,August 1983.

133_ O 1Iri_tern.tn, I.ot ins and I .ins, I trst Nuclear ',it'd IVar.

134. Ibiti

135. Hobart Rowyn, "Nuclear Reactors: Fear of Losing Expor ,",Wash-itivett Post M.-iv 17i 148-1: "France A Two-Pronged Spur for 1Vuclt ar Reac-tors,- 8lismess INt-ek February 23. 1981; Gloria C. Dufty and Goictrin Adams,Power Polates, 'Hie Nuclear Indu-ti-u and Nuclear Exports (New York: Council onEconomic Priorities, 1978); Peter Hayes and -rim Shorrock, "Dumping Reac-tors in Asia: The U.S. Export-Import Bank and Nuclear Power in SouthKorea, ,-1,1.11'1 t : Ouarterlu Revitw, Vol. 14, No 1 1983 Kai --nSmith, -Atoms for the Poor, Cash for the Rich," Ecoloruin, December 19:2.

136, Atomic Industrial Forum, annual press releases on international out-look, various V ears; Nuclear Energy Agency. Nuclear Etrgy and its Fuel Lticie(Paris: Organisation for Economic Co-operation and Development, 1982).

Department of Energy, Montitly Energy Review, September 1983.

138. rtir-Cnsts 01 pollution controls for coal - tired power plants are discussedin detail in Komanolf, Pinvi,7 Plant Cost Escalation. Ross HO 1Na rd and MichaelPerlev, Acid Rain ( \t'i York: McGraw -Hill, Inc_ 1982); Swedish Ministry ofAgriculture, Aciitificabou .Togiau and remorrote (Stockholm: 1982); Council onEnironmentA Quality, Energy Futures and the Carbon Dioxieh Problem(Washington, C.: 079),

139. Solar Energy Research Institute, A New Prosperitu: Buildin a RenewableFuture (Andover, Mass.: Brick House, Mi); Northwest Power PlanningCouncil, Northwest ConserpatiOn and Electric Power Plan (Portland, Oregon:1983): David Olivier and Hugh Miall, Enerc:u Efficient Futures: Opening the Solar()ption (London: Earth Resources Resear6, 1983):

140.. Howard S. Enervt Efficient Appliances (Washington. D,C.: Ameri-can Council for an Energy-Efficient Economy, 1983).

141. Worldwatch Institute estimate based on various sou

81

142. Nil 1,V. Sant and _Dennis %V. Bo/-York: I till, hie. forthcoming).

C re atifl L ,°ll'tt iiitai%

143. Douglas Cogan. (,eliratt Frirgi, A/ternati, At .Intericii Electric Utd-The, (Washingioii, fin. estor 1,4,1.ionsiliility Research Center Inc 1983).

144. W.R..Z. Willey. -Alternative Energy Systems for Pacific Gas and ElectricCompany An Economic .Analysis," prep_lred testimony bocce the CaliforniaPublic Culities Commission, San Erancisk-o, 1978; Pacific Gas and ElectricCompany's plans os reformulated in the early eighties are described in PacificGas and Electric Company. -1.ong-Terrn Planning Results: 1982-2002,- SanFrancisco, lune 1982; Don Jordan is quoted in Dough Cogan, Generatin,eLnergu ,Iiternattve... For a detailed discussion cif new utility strategies see ScottA. Fenn. linerica Her tric Mame..

145. Electricity trends are from International Energy Agency, World EnergyOutlook, and reports in various newsletters.

146. Renewable enersy cost tigures are Vorldwatch Institute estimates basedon various sources. See Daniel Doudney and Christopher Flavin, RenewableEnervis The Porter to Choose (New York: W.W. Norton & Co_ 1983),

147: Douglas Cogan, Generating Eizergu Alternat

148. "The Vicious Circle 'Fhat Utilities Can't Seem To Break," Business t,May 23, 1983.

149. International Energoi Agency. Energy Research, Development and Demon-stration in the lEA countries, 19S1 Review of National Programntes (Paris:Organisation for Economic Co-operation and Development, 1982),

150, William N1ooz and Sidney Siege1, A Comparison of the Capital Costs of LightWater Reactor and Liquid Metal Fast P :dor Reactor Power Plant (Santa Monica,Calif.: Rand Corportation, 1979); '.._heap Uranium Dampens Fast BreederInterest," Finainera/ Time's Energy Fkotromist, December 1981; David Dickson,"Europe's Fast Breeders Move to a Slow Track," Science, December 10, 1982;Dominique Finon, "Fast Breeder Reactors: The End of a Myth?" Energy Policy,December 1982.

151. ''Penalty Set for with Balks' A-Plants," San Francisco Chionichi,September 8; 1982.

CI IRAS I UPI IT, IN is a Senior 1<esearcher w. .lorldwatchInstitute and coauthor Rot:caw/qt. l'o;oct- to Choose (W. W.Norton. Spring ILtS.3). His research deals with renewable energyh.chnologie., and policies I le R a .graeluate of College,where studied Lconoinics me Biology and 1.-larticipatecl in thelinvironmenLil Sludies Program.

3

THE WORLDWATCH PAPER SERIES

The Other Energy Crisis: Firewood try Lrik2 The Politics and Responsibility of itie North American Breadbas,ket

b Lester R BrownWomen in Politics: A Global Review by KatMeen Newland

4 Energy: The Case for Conservation by Dents HayesTwenty-two Dimensions of the Population Problem

Ley Lester R Brown Patricia L klaitath. and BILICO IpkesNuclear Power: The Firth Horseman try Denis /law,The Unfinished Assignment: Equal Education for Women

ny Patricia L McGrath6 World Population Trends: Signs of Hope, Signs of Stress

by Lester R BrownThe Two Faces of Malnutrition by Erik Eckholrn and Frank Recorc-1_

10 Health: The Family Planning Factor by Erik Eckholm aid Kathteo 7=1Newland

Energy: The Solar Prospect Lay ueriis itaytm12 Filling The Family Planning Gap by Bruce Stokes3 Spreading DesertsThe Hand of Man by Erik Eckholr- d Lester

Brown14 Redefining National Security by Lester R BrownI Energy for Development: Third World Options by Denis Hayes_in Women and Population Growth: Choice Beyond Childbearing by

Kathleen NewlandLocal Responses to Global Problems: A Key to Meeting Basic

Human Needs by 13, uce 5tek.esd Cutting Tobacco's Toll by Erik Eckholrn9 The Solar Energy Timetable by Denis Hayes

20 The Global Economic Prospect: New Sources of EconomicStress by Lester H Brown

21 Soft Technologies, Hard Choices by Cohn Norman22 Disappearing Species: The Social Challenge by Erik Eckholm.23 Repairs, Reuse, RecyclingFirst Steps Toward a Sustainable

Society by Denis Hayes.24 The Worldwide Loss of Cropland by Lester R. Brown.25 Worker ParticipationProductivity and the Quality of Work Life by

Bruce Stokes26 Planting for the Future: Forestry for Human Needs by Erik; Eckho!rn.27 Pollution: The Neglected Dimensions by Denis Hayes28 Global EmbloyMent and Economic Justice: The Policy Challenge

by Kathleen Newland29, Resource Trends and'Pooulation Policy: A Time for Reassessment

by Lester R .3reyyn30 The Dispossessed of the Earth: Land Reform and Sustainable

Development by Erik EckholrnKnowledge and Power: The Global Research and Development

Budget by Cohn Norman.The Future of the Automobile in an Oil-Short World by Lester R _

Brown. Christopher Flavin. and Cohn Norman.International Migration: Thb. Search for Work

by Kathleen Newland34 Inflation; The Rising Cost or L lying on a Small Planet

by Robert Fuller.35 Food or Fuel: New Competition for the World's Cropland

by Lester R Brown36: The Future of Synthetic Materials: The Petroleum Connection

by Christopher Flavin37. WOmen, Men, and The DivisiOn of Labor by Kathleen Newland.

84

18 City Limits: Emerging Constraints on Urban Growth by Kathleen

19 Microelectronics at Work: Productivity and Jobs in the WorldEconomy by Orlin Norman

40 Energy and Architecture: The Solar and Conservation Potentialby Christopher Flavin

Men and Family Planning by Bruce Stokes,Wood: An Ancient Fuel with a New Future by Nigel Smith.Refugees: The New International Politics of Displacement

by Kathleen Newland44 Rivers of Energy: The Hydropower Potential by Daniel Deudney45 Wind Power: A Turning Point by Christopher Flavin46 Global Housing Prospects: The Resource Constraints

by Bruce Stokes47 Infant Mortality and the Health of Societies by Kathleen Newland.48 Six Steps to a Sustainable Society by Lester R Brown and Pamela

-Shaw49 Productivity: The New Economic Context by Kathleen Newland,

Space; The High Frontier in Perspective by Danlei Deutiney61 U.S, and Soviet Agriculture: The Shifting Balance of Power

by Lester R BrownElectricity from Sunlight: The Future of Photovoltaics

ny Christopher Flavin6.1 Population Policies for a New Economic Era by Lester R. Brown.9a Promoting Population Stabilization: Incentives for Small Families

by Judith JacobsenWhole Earth Security: A Geopolitics of Peace by Daniel DeudneyMaterials Recycling: The Virtue of Necessity by Wil:iam U. Chandler

57 Nuclear Power: The Market Test by Christopher Flavin

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Calendar Year Subscription (1983 subscription begins with Paper 53)525 00

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