April 01, 1998
WHICH NUCLEAR PLANTS WILL SURVIVE competition? To answer that question, senior managers at electric utilities must know a nuclear plant's true economic potential. Without an accurate understanding of operating economics, a utility might lose a good plant or waste resources on poorer plants that should be closed.
Of course, a shutdown may be appropriate at some plants (em perhaps a few situated in the most competitive regions, or others plagued by poor inherent physical characteristics. However, most U.S. nuclear plants show a significant potential for improvement in operating costs. That fact warrants a closer look (em otherwise, some owners could miss opportunities for improvement and close plants needlessly. Others might cut costs too aggressively or in the wrong areas, incurring expensive downtime because of mechanical or regulatory problems.
To identify opportunities to improve nuclear operations, we conducted a detailed analysis of more than 2,000 reactor-years of operating data. We culled this data both from sources in the public domain, such as U.S. Energy Information Administration and the Federal Energy Regulatory Commission's Form 1, and from privately gathered industry data. Our findings help explain why individual plants vary so dramatically in their economic performance. Our work should also offer managers the information they need to define the most efficient staffing levels at any nuclear power plant.
To be sure, one can improve performance in only two simple ways: boost output or cut costs. Nevertheless, this truism hides a wealth of insight. Our study of long-term cost and output trends reveals some interesting facts.
Industry Trends: Looking for Weak Spots