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Numbers That Make Sense: Gauging Nuclear Cost Performance

Fortnightly Magazine - June 15 1996

the behavior of all performance criteria for U.S. nuclear plants:

1) Time (specific year of operation)

2) Number of units

3) Reactor type (Pressurized [PWR] or Boiling Water [BWR])

4) Plant size in megawatts (design electric rating, or "DER")

5) Plant vintage (issue date for operating license, or "OL")

6) Regional location.

These variables allow one to construct analytical models that will describe the behavior of 90 to 95 percent of all operating plants, within a confidence interval of 6 to 8 percent. Moreover, the analytical technique allows an observer to isolate the impact of each variable from all others. This method gives a simple visual understanding of what is currently happening in the industry, not unlike operating control curves.

1. Time-Related

Findings

s In 1980, the year following the Three Mile Island (TMI) accident, O&M costs rose 55 percent for single-unit plants, but only 35 percent for dual units. Thus, "site-related" nonreactor costs were primarily impacted.

s Since TMI (1979), "reactor-related" costs (predominantly O&M) have doubled, while site-related costs (such as administration and support services) have increased 15-fold. This escalation in costs is especially striking in comparison with the French nuclear program.

s From 1987 to 1992, FERC operating costs at single-unit plants increased by 27 percent, while at dual-unit plants they escalated 44 percent (em primarily due to increased labor requirements. Thus, some of the historical cost advantages of dual-unit plants over single-unit plants are eroding.

s More recently, analyses show that FERC maintenance costs across the industry fell by almost 10 percent between 1993 and 1994. At the same time, FERC operations costs fell a mere 3 percent. However, comparisons to the French system suggest that the latter area offers the greatest potential for economic improvement.

2. Findings Related

to Number of Units

s Dual-unit plants still possess distinct economic advantages. On a per-unit basis, single units range from being 20 percent more expensive for maintenance, to 60 percent more expensive for plant administration. Other operating criteria lie between these two extremes.

3. Findings Related

to Reactor Type

s Over the years, BWRs have proven consistently more expensive to operate than PWRs. This cost disadvantage is gradually being reduced, but still ranges from 15 percent higher for O&M to 25 percent more for fuel costs.

As is always the case, we cannot say whether these differences are inherent, or driven by different regulatory treatment. An examination of foreign BWRs and PWRs might help answer some of these questions. For now, at least, we can quantify these differences and monitor their behavior over time.

4. Findings Related

to Unit Size

The single most important finding regarding size is that U.S. plants do not behave as one single population.

s There are three distinct groups of plant data: small (470-700 Mw), medium (780-970 Mw), and large (1040-1270 Mw). These three groups behave similarly but independently of each other.

In general, within each group, plants overlap one another and exhibit non-economies of size. Furthermore, the largest plants in a smaller size group cost more in absolute dollar terms than smaller plants in