APRIL 1969

Aaorts

lopmeat end Technology

Prepared by

 

i

Division of Resctor Deva

P sl by the

 
 

i

FREFACK

The widespread and mccntrat“’ efforts being devoted on a national
and international basis to do%dop a breedsr reactor clearly evidences
man's intense desire to free himself from limited and costly energy
sources. The introduction of the dreeder resctor into the utility
market will provide virtually unlimited energy which can bde used to
elevate the standard of livin:? and, with proper attention, improve

man's enviromment,

The basic importance of major sustained commitments of managerial and
financial resources by covornp;ont_. private irdustry and the utilities
to the overall success o!’th.;brtodor program cannot be over-emphasized.
Experience in the devclopuontémd application of civilian nuclear power
reactors has estadblished that such commitments are essential to bring
into being the technologies, t%'uunch and development facilities,
trained personnel, components, systems, and production facilittes
necessary to assure the ouccoéntul introduction of the bdreeder into

the commercial market. In vlfi of the sudstantial invastment of the
nation's resources that the é#volopntnt of the Dreeder entails, it
seems highly appropriste that in uhiu the decision to proceed with
this program, estimated costs b. unaaured asgainst the denefits expected

to derive from the investment.,

In recognition of the desirability of detter dafining the commitments
and benefits implicit {n the bdreeder development program, the 1. S.

nt and Technology

 

Atomlc Enargy Coemisation, Dlviaion of Reactor Developme

ftt
 

 

undertook the task o_t conducting the otudy described in this “Cost-
Benefit Analysis o! th'u. 8. liutht ludtor Progran.” The optinmi-
zation of the U. s. Qlectuc oum Qcm over a 30-year period
sexves as abuu tormmsdy A Mmrptogr-in:sodol of the
United States olcctrtcal cmm ecomuy developed by Pacific Morth-
west lLadorvatory, ad principal menders of other sectors of the nuclesr
community was used in the a;my-u. 1t 18 important to note that the
model utilized in this iqainin is in an early stage of development

and {s deing continually tnrmd to better simulate the c!nuctoflotiu
of the nation's power oconoieny. |

The benefits considered in ftho calculations are those that are clearly
quantifiadle and take the %om of low-cost electrical energy, reductions
in uranium ore roqultmnu: and in uparnt.tn work demand, {ncrease in
plutonium production, and ufn of uranium tailings. Also, the report
makes veference to other benefits of msjor importance which are not
quantifiadle, at least not at the present time. Such benefits include
those associated with rodm;um of air pollution and with new uses for |
low cost electricity and M}t such as large scale desalting of sea water.
Weighed against the quantifiadle denefits are the costas expected to de
incurred by the Covermment in the d.viloput of the dreeder. This
spproach appears uumhlo_ in view of the fact that the coatinuing
progran of systems mlyal;. vhich provides input for studies of this
nature, has as {ts major objecttn the deternination of the GCovernmeat's

future role in advanced ru:ctor development.

1

tw

 

 

 

 
The funds and other resources which the Govermment, the large industrisl
couplex, and the utilities fino alndy.‘mtttd to the breeder pm
and to companion nm-brudor progrens coupled to the urenium-plutonium
cycle, have mt_;__.,"*“ Wdimuy, nor have future expenditures by
the utilities ul mnfumficubm!umd fato the study. Use charges
for plutonium used in the MAD program amounting to sbout $A0 million
discounted to 1970 were not;ineluded. These represent sbout 1% of the
R&D discounted mndltuno"ud would not effect numerical vesults to -
any noticeable degres. mihmn. 0o weight has deen given to the

quite evident priority and si3adle commitnents which have also been

made to breeder programs by the other countries with strong progreme

for the exploitation of miur pover,

Cost-benefit analysis ohoulil be considered as only one of the many
elements of input pertinent to dcéutcn-unu. Exsmination of results
of cost-denefits analyses conducted {n the past, when compared to actusl
program progress and unuoi, lndont‘utu well those limitations inhereat
in any such analyses and the continuiag need to insure compatidility of
assumptions {n the mlyou%vttb tfio assumptions {n the program plan.
The degree of .ophutuauofi of the wodel devel oped, the validity of

the assumptions wade, the quality of the anslysis involved, and the |
sature of the analysis tmim. and the nature of the sudject studied
all will affect the use of such an anslysis in decision making. Particular
care must be taken to avoid the tendency to regard cost-benefit analysis
as an end unto itself; it will de a useful tool only {f it {s properly

applied vith full realfization of the {nherent limitations of such studies.
 

 

assuzptions m: h"'dmlopd u m fmto o! mnsblo faformation and
indicated -tvends in the mlur mm program. As & logical cousequence,

therefore, the actual _mltg - tn the future will de predicated on which
values of the paremeters bom valid. Ve believe that the acticas to de
taken over the mext fev years will significently affect the outcome. |
Such sctions include the dogm of KD support givea to the dreeder pro-
gram by doth the Govermment tnd hdultty. a9 it will affect the date of
introduction of the dreeder} pm;u promulgated in fossil fuel costs; and
changes affecting capital cu;n snd fuel cjch costs, including uranium
c«ti. A parsmeter Over vhich there s little control at the present,

electrical energy demand, vilil also have an oftut on the future outcoms.

0f particular importance s tho degree to vhich sssociated programs are
given high priority md are fimlM vith the resources previously identi-
fied as essential to thetr success. 1n this vegard, the recently pudlish-
ed detailed LMFAR progran pla:n provided a losléal base for projecting costs
and schedules for the LMFBR portion of the anslysis.

1t should be recognized that the rapidly expanding electric power industry
may encounter problems, awllicablc to nuclear and/or fossil-fired power

 

 

 
 

 

 

Plant, the resolutica of which could concetvably affect the valtdity of

   

large mtm ot rmu-nm pover mm

1® is mmrun i&at cm npott plao pfluty q&uu on mluvlt:

of benefits to changes ta nrmton. and {t 1s this sensitivity vhich
should be of primery Qntctglt;to the resder. Of particulsr sote s the
significant reduction {n denefits that will develop £f (1) the nuclear
industry is not capable of n;ctiu present and projected nuclear power
commitments, (2) the mmuu date for the dreeder veactor is delayed
significantly due to tum_:mh a8 8 veduction in research and development
support or failure of the research and development program to meet program-
matic goals, (3) discount rates higher than 8 to 92 are applied, aad_lor
such larger than “t(utoé Mtitlu of low cost uranium decome availadle.

1t {s of paramount l-sorunezo that timely results be achieved with respect
to etrengthening the execution of the civilian nuclear power prograzs {n
this country, including those capadilities sssocisted with the breeder
developaent. The results of this study assume success in these necessary
strengthening actions; delays will jeopardize the success of these programs
and could seriously affect their cost sad sudstantiaslly affect bdenefits.
Accordingly, it is necessary that we proceed with the strongest possidle

engineering and quality assurence programs.

 

 
 

 

% Aw. kare

-

Milton Shaw, Director
- Division of Reactor Development
= ‘and Technology

 

 

: viit

 

 
 

i 2ABLE oF covrwTs S
- -

oooud-otojoo@q.oootoooouodo 11

 
   

Pmm '
2.0 smmnoroosr-nmm'rmmszs....................... 9
3.0 nxscmsxal OPCNT-BWI‘!' MSI&uu..uuuuu.u 14
4.0 OTHER mmmnws................................... 33

 

3.0 mmmmsmmmm BENEFIT

msmoooooc_ooo?oiq’;t_jooocoooooooooo-ooocoooooouuo 83

APPENDICES

“A" - SELECTED STATEMENTS AND REVIEWS IN SUPPORT
oF THR an mooooooooooooocoooooo--.oo 76

"B" - STATEMENTS RECARDING CORPORATE COMMITMENTS
OF MAJOR REACTOR MANUFACTURERS TO LMFBR «ccceoee 86

"C" - UTILITY INVOLVEMENT IN THE LMFBR PROGRAM
(NOVMER ‘968)20000'00oooooooooooooooo.oooo.os..o- 90

“D* - INTERNATIONAL PAST BREEDER PROGRAMS AMD
mmnms.guu....uuu........u.......... 93.

ix
—— ez,
TABLE 1 - COST-BENEFIT Amxm  GROUPS OF CASES CONSIDERED...ceseces 13
ZTABLE 2 - COST-BENEFIT AMALYSIS = SMUARY OF ESTIMATED AEC RESEARCH
" AND DEVELOPMENT COSTS = CUMULATIVE-FISCAL YEAR (FY) 1970-
zmo ’ Bmlmu...u....u..uu.uu...........e....... 18

TABLE 3 m-nwn' Aumsu cosrs. BENEFITS, AND BENEFIT/COST
IMIO roR an PROGRAM (DISCOUNTED T0 1970 @ 7R)ccccccces 20

TABLE & - mnmn AWSIS . SMMARY OF RESULTS (1970-2020)c 0. 21

TABLE 3 - cos'r BENEFIT AMALYSIS - COSTS, BENEFITS, AND BENEFIT/COST
RATIO FOR BREEDER mocun (mmm 'm 1970 @ 5R)eeccecsss A2

TABLE § - COST-BENEFIT wasxs COSTS, BENEFITS, AND BENEFIT/COST
RATIO FOR BREEDER PROGRAM (DISCOUNTED TO 1970 @ 7X)ecceccces 43

TABLR 7 - COST-BENEFIT ANALYSIS - COSTS, BENEFITS, AND BENEF1Y/COST
RATIO FOR BREEDER PROGRAM (DISCOUNTED TO 1970 @ 10%).ceec..c. A4

TABLE 8 - COST-BENEFIT ANALYSIS - COSTS, BENEFITS, AND BENEFIT/COST
RATIO FOR BREEDER PROGRAM (DISCOUNTED T0 1970 @ 12.5%).ccc.. 43

TABLR 9 « COST-BENEFIT ANALYSIS - GENERATING CAPACITY JUILT (NUMBER
0' 1000 m m) - CASES 1.1 m 1.3 00008 00SOSGERTIRESS 49

TABLE 10- COST-BENEYIT ANALYSIS - GENERATING CAPACITY BUILT (MURMBER
or 1000 m ’m) - CAS! 1.“ COQCGEINBBRGNNGEGINSNTCRBEDGIOERTS 69

 
 

 

TABLE 11. COST-BENEFIT ANALYSIS - TYPICAL REACTOR CHARACTERISTICS
”sm In msx_s................................!.l.‘l..l 67

TABLE 12. COST-BENEFIT ANALYSIS - REPRESENTATIVE FULL FABRICATION
m mmmm m'......................0.......Ql.l.l. 68

TABLE 13- COST-BENEZIT ANALYSIS - U303 RESOURCE VS. AVERAGE . 03
mmmuAmmw mmlm.............‘. 70

TABLE 14~ COST-BENEFIT ANALYSIS - U.S. AEC URANI(R RESCURCES
Mls m mu 13)...........................IC..I........ 71

 

TABLE 15- COST-BENEFIT ANALYSIS - ESTIMATES OF ELECTRICAL ENERGCY

Dm............'.............O................II......... 72

mu D"‘l - nR mm - m.....-...u...................... 97

TABLE D-2 - COST-BENEFIT ANALYSIS - LIQUID METAL coown FAST
RMCTOR mmm.........-....... ooooooooooo ses s s sensn 98

 
 

ncm 3 oosr-nmr muxsts MISOOWTD BREEDER
BENEFITS VS. LMFBR INTRODUCTION DATE FOR DIFFERENT
m m (197“2&0)..lC..O.‘....l.....‘........l. 33

FIGURE § - CNT-BWI‘! ANALYSIS Dlsm (71) BREEDER
BENEFITS VS, IMFBR INTRODUCTION DATE FOR DIFFERENT
m Dms (197&2020)Q‘C...C.Q..............‘...l‘. “

PIGURE 3 - COST-BENEFIT ARALYSIS « SENSITIVITY OF DISCOUNTED
GROSS BENEFITS TO A CHANGE IN LMYBR ENERGY COSTSeecccecs 33

PIGURE 6 - COST-BENEPIT ANALYSIS - PRESENT WORTH OF $100

SPENT TEN AND FIFTY YEARS 1IN THE FUTURE VERSUS
m Dlscom Mn....................l..ll......l.l...l. ‘l

PIGURE 7 - COST-BENEFIT ANALYSIS - ELASTICITY IN THE DEMAND
FOR mmclnioooo00oooo.otooooooo.oooooooooo-oooooop. 62

FIGURE 8 - COST-BENEFIT ANALYSIS - ASSUMPTION FOR CAPITAL COSTS
or m m.j.,Ol.me.toa.loooooooooaooo.coo..oooo.ooo 63

xi

 
 

 

In this snalysis, the Liquid )htal-CmM Yast Breeder Reactor (LMFER)
ls sssumed to be the initial dreeder type coumercially fntroduced into
the U. 8. electric power ecdmy. The denefite vhich have deen
salculated in this avelysis tfcaultins from the {ntroduction of the

 

are representative of t}u banefits to de achieved from the
succaesful introduction of a dreeder or sven two dresder types.

fhe results of the cost-benofit analysis depend upom assumpticns which
atentially affect the future cost of electrical energy. Since

 

the prospes
iitivities of undiscounted snd discounted denefits to
: timing of the introduction date

 

tive value of wany of these variadblee is uncertain, the

 

T
(ollowing key varisbles have been

 

 

 

>f the breeder; uranium costes; fossil fuel costs; electrical energy
costs, vhich include plent capital and fuel cycle coets; and discount

 

tates.

 
 

A
 

 

tuud ohctucn mrntm'plmq"'m (2) cmvmu- rmton'(!n).
plus adnnced cmrur mcton (m) plu____br«hr mctm (L),
plus fosail mud olcotrtcal morauu'phnn. These ulculatum

     

 

vere based ¢a @ nnur progrndug nodel o! the United States
electrical energy ezoncay amlop« by Pacific Mortiwest Laboratory.
The modal has been prepared in conjunction with the activities of the
Systems Analyses Task Yorceq which has bdeen working on civilian nuclesr
pover evaluations with the AEC Division of Reactor Development and
Technology.

The quantifiadle benefits discussed herein have been recognized since
the inception of nuclear p&\nt a8 the dasis of support for dreeder
programs ia the United sui« and in every major highly industrialized
country in the world, m:otlnr important benefits, many less tangidle
and move difficult to quantify than those quantifiadle in terms of
lover slectrical energy coaft. are of sudstantial consequence in any
maaningful review of the vole vhich nuclear power and foesil fuel plants
can play in the future to mee: the erergy demands of the United States.

 

o
 

 

 

Mm a mmuy muum m source for future genarations
«mu only be mu.m thrw» th Mnlomt and application of the
bw rmtow. ‘lh ."”?tatcmt ’-'in m«« uutm datu bnk to_. |
the Meabattsn fijecg deys, When the pmmmy ves first Tecopatsed
by ploseers 1n the suclesr f1eld, In 1943 Eurteo Farnt cbeerved cm. E
*The coustry vhich firet amxm . mm resctor will beve o grest
competitive umaun tu atonle mm. ; To obtain this advantage,

    

the U. 8, suclesr ce-muy m been mttu for over 20 yesrs on the
breeder reactor. In 1943 tho developmént of the plutonius fueled fast
breedar vas established as & major goal by the Argonne Mstionsl Ladoratory
Division of the Manhattan District Matallurgical Ladorstory. The program
has deen continuous since that time, and the momentum now has duilt up

to the point vhere the large-scale introduction and commercisl scceptance
of the dreeder will de hut}lo in the near future. Appendix A presents
some of the more significant reviews and statements that have been made
over ths years on the mtionéal importance and potential of the dreeder

progran,

Mach of the essential effort on the dreeder was conducted in the AIC
national ladoratories. The Clementine reactor was coastructed at

Los Alanos and used from lhrgb 1949 to December 1952 to demonstrate the

TR IR A PN St £t anens s o emeaen

feasidility of operating with fast neutrons, plutonium fuel and a liquid
metal coolant. The Expsrimental Breeder Reactor I (EER-1) was duilt
and cperated by Argonns National Laboratory from August 1951 through
 

 

 

mflumummmmnwuu in a fsst flux vesstox
snd to «mxm m ! fessidility of using 1iquid wetal
coolant. .

 

nlulmu uutul to the opouun {n envirooments of fast flux and
high mtm uqud unl were mmm. These developments leod
to demonstrating the flmm and safaty of & fast nu neutron
spectrum Teactor, cuhiuuu {n the coanstruction of two fast resctors
in the mid 1930%s, the 62.} Mt EBR-11 snd the 200 Mit Permi reactor.

Several factors mitigated mmt fsmediate success in terme of the
commercisl exploitation o!;tho breeder resctor: the development effort was
focused largaly on technological goals: the industrial izvolvement wes ain-
imal; and the Dreeder dmlbp-nt participation was essentially coanfined

to the national laboratories, with the exception of the Permi developmeat
effort. The industrial m concentrated on the light water reactors

and the nuclear lcvy.vbou:m«n vas nearer at hand. The 'prom

uranium resources mur«llm!nctnt to meet predicted requirements.
Though a relatively large goehnologicn base, including test facilities,
vas being developed in the laboratories, the dreeder effort was diffuse

in terma of an engineering type of undertaking. In genersl, until the
nid-1960's, there appeared to be 00 urgent requirement to concentrate

the industrial resources on the breeder program.

 

 
e Moo e e+ ot we eens s e s e e e

In 1962, the AZC issued its h&port to the President on Civilisn Nuclear
Pover. This report clearly ;t-anphallsed that the use of dreeders
could solve the prodles of an adequate ind economic energy supply for
the future. The report coucindod that nuclear energy can and should
aske sn important and mntufally: 8 vital contridution toward uweseting
our long term energy rtquire;.uto. and that econocmic bdreeders were
essential to the long range major hao of nuclear energy. The report
included & detailed discussion of the place to de occupied by the

breeders in the ov.rill program.

Faced with the question of d;torndnins the future course to be taken

by the U, $. advanced roacto; development programs, the AEC, in early
1965, initiated » series of ?vnrnll technical reviews. These reviews

of the reactor program indicated a lack of important engineering
information, and an 1nadoquaci of facilities and other resources necessary
to obtain that information ithcrt vas clear evidence of the need to
build up the engineering cap;htllttos in the ladboratories and {n i{ndustry
and to aspemble necessary an@ adequate resources to develop and produce

safe, reliadle and ocononicnl dbreeder power plants for operation in the

vtility enviromment. These early overall reviews further indicated a
requirement for in-depth reviews of each of the technical elements of
the dreeder program. Concurrently, it was necessary to initiate detailed

plans for each of the elements of the dreeder prograa.
 

 

 

mrm:usm«l reusrkable advances were taking place in the
development o! n;m: water resctor power plants. As a result,
mlmnmmd tmfi.fid«wofimmmuamm
of electricsl cwu The resultsnt unprecedented demand for light
vator power resctor plants, mauolod by grestly incressed uranium
demands snd Yy projected large-scale plutonium production, provided
sdditional incentives for a move direct and concentrated effort on &
vaified dreeder development progrea than hitherto schieved. It was
recognized that the plutonium produced in light water resctors

could de most efficiently used in the fast bdreeder reactors sand that
the breeder would measuredly reduce uranium ore requirements. The
breeder development pto&n wvas thus invested with a sense of urgency
which had deen lacking up to then.

In early 1967, the Ato_-ic Pnargy Comnisetion fssued the 1967 Supplement
to the 1962 Report to the President oa Civilisn Wuclesr Fower. The
Supplement set forth the changes that had occurred simce 1962, and
considered the ongoing AIC reactor programs im relation to the
recozmendations of the 1962 veport. The Supplement resffirmed the
promise of the dreesder for meeting our long term energy needs snd
sstadlished the LMFBR program as the highest priority civiliasn resctor
development effort vhich would lesd to full commercisl scceptance of
the Dreeder. Ths continuing AEC role of leadership was reviewed
relative to the development of nuclesr technology required to sssure

the nation that large amounts of low cost energy would be availadle

 

 

 
 

 

 

o LS 5 A

for the growing Mu!t-. The steps taken to strengthen the industrial
snd utility cspadility requisite to the succeasful introduction of
the LR and the timely development and commsercial utilisstiocn of the
fast breeders, in putfcularly the LMFER, vere discussed.

In view of the utobuqh«l'unt priority, tha level of activity cn
the LXFER wae cmtdou;bly increased in Fiscal Years 1967, 1968 and
1969. The duildup to bring together the required resocurces, including
msnpover, fscilities, and funds has continued within the AEC, the ARC
laboratories, snd in other sectors of the nuclesr community. New
major test facilities én under construction snd other existing
facilities are dDeing upgraded. Encoursged dy the increased attention
snd efforts of the Covernment, substantial commitments have been nsde
by the major reactor nénutacturor- and the utilities with & view to
naking large-scale c@ltmto to the first LMFBR demonstration plants
in the 1970%s. Thn?o tn§ootnaati are in addition to the heavy LWR

commitnents.

In recognition of the importance of the fast dreeder, the Edison
Electric Institute (ui). sn association of the private utilities,
conducted a detailed study of the status of fast dreeder reactor
development. Their report was pudlished in April 1969. In the
Foreword of this report, the situation was stated as follows:

“1he Subcommittee (EE1) on Fast Breeder Reactor Development

 

urges that all EEI members give the most careful consideration

to this report and to ways and means of {mplementing the

 

 

mmendaotions set forth., In the entire industrial history

y
 

~ veactors 19 jJust aun.__ tnto cmulfim. u h duucult |
_uxmly to lbouuor__: ttn problu. o! !«uflu n onuuly

 

h m mcpt. _ .' . ‘the uprt ‘brings out, tluu are
momln uum. both in terms of opportmity end tupoul-

biuty. to do s0 .nd strong incentives to do so promptly.”

The LMFBR Program Office at the Argonne Mational Ladoratory has prepared
¥R Program Plans#, under the direction of the AXC, vhich have recently
been relesased. The Program Plans are national in scope and represent
the results of many mthni of discussions, reviews, and assessuents
withia the nuclear cmiiy. The Plans represent a major sdvance in
the LMFBR program by uttfu forth in a comprehensive manner those
courses of action w«ufy for achieving the o&}utim of the LYOFBR
program. The Joint Mtf« on Atomic Energy of the Congress of

the Congress of the United States has odserved that the LMFBR Progrem
Plans vepresent one of the most carefully thought-out long range
davelopmental efforts ever pursued dy the U. S. Covernment.

 

*Report Numbers WASR 1101 through 1110.

 
 

  

This emt-bemut mlyl imlud an utmtva systens analysis effort -

and the dmlopunt o! memo for the' zu:y ym period 1970 « 2020, - ‘o:
Eight m o! ulmhum voro por!onnd to mvutiuu the effects

of varying assumptions uaon bm!ttn accrued from an economy with a v
breeder reactor as caplnd vtth an econony without a breeder, The

sajor umum relute tO umh- cocu. t_oun fuel costs, oloctrtcal _
energy demands, electrical mrn cocto. uul the intreduction date of |

the breeder.

Three major quantifisble conclusions from the snalysis are:

1. The breeder can produce not ocnly large direct mooey benafits from
the low cost of electrical energy, but also other tangible quantitative
beneiits, such as those a,oochtod vith reduced uranium requirements,
reduced uranium separative work requirements, and the large productiocn

of plutonium.

2. The benefit/cost ratio is significantly greater thsn cne for wmost of
the cases having & discount rate of 7% or less. The denefit to coat ratios

fall delow 1, for @ Mt of cases dased on discount rates adbove 7%.

3. Deferring the presently planned LMFER R&D progran with consequent
delays in the introduction date does uot substantially reduce the
present worth of the R&D expenditures. 1In all cases, deferring the

LMFBR R&D program incresses the undiscounted R&D costs.

 
 

 

 

pattma ufl mnm umum. anfl & 30-year time period during
which many thlm tocholonul sdvances may be anticipated,

Yollowing are othor hportmt conclusions:

1.

2.

3.

&.

The increased dollar benefits from reduced costs of electrical energy
alone, resulting from the early introduction of the breeder, provide
a major incentive for a timely and strong research and development

progrem, and even make & strong point for its acceleraticn.

Although an incresse in uranium ore costs is highly prodable, even &
constant U40g cost ($8/1d), with constant fossil fuel costs, and with
an early introduction of the LMFBR, provides mbotandu benefits for
discount rates delow 7%, and sudbstantial danefits for a 1980 Introduction

at 7% discount rate.

Early introduction of the dreeder substantially reduces future uranium
ore demands.

Barly introduction of the breeder substantially reduces !utuu'urmtm

separative vork dewand.

10

 

 

 
  

6.

7.

9

10.

11,

 

 

mi.ns-;a___ducml:inn o! :'72 o _I____hu md uuning 1984 or earlier
mtrmtim zmmn honl!u progran mld. in =08t cases,

   

 

m mlyou shows a niptflmt nm'uu in bmfl.u vith a higher
energy dunnd pmjoctton. o

The benefits nccrutns from tho introduction of the breeder are affected
by changes in fouil fuel costs. These benefits would be increased
significantly if increases in foaeil fuel costs are experienced.

Small changes in the cost of electrical energy from the breeder
cause significant changes in the benefits, with capital coets
being more important in this regard than fuel cycle costs.

In all cases considered vwith dreedsr introduction, thes nuclear
generating capacity by year 2020 represents an extremsly large
percentage of the total electrical generating capacity available

for competition between fossil fusled and nuclear fueled power plants.

Discount rates substantially above 7% seriously affect dollar benefits
because of low present worth in 1970 of large undiscounted gross
bdenefits for the latter part of the 50 year period as compared

vith the high present worth in 1970 of RSD sxpenditures in the

early part of the 50 year pericd.

Other benefits not as readily susceptible to quantitative analysis

|

 
 

d.

G

£.

 

_ 10w cost electrictty to aress vhich have

Virtual elimination of air pollution from electrical power
plantse,

Assursnce that low coat uranium ore reserves will de most
efficiently used, :

A preniun warket for pln'gmu produced by 1light water

reactors.

-ty

-
b

The efficlent and economic utilization of the depleted uranium
stockpile,

The e¢fficient use of the resources committed to ths breeder
program in the AEC natiomal lsboratories, in the U. S. industry
in the U. 8. utilities.

 

12

 

 
 

 

 

e
   

 

 

electrical energy duindo. .lutriul energy mto. . tining

of the introduction of the breeder. The charscteristics of the .
eight groups are sumarized in Tadle 1. Each group consists

of a base case without a breeder compared with cases with a dreeder
represented by the LMFBR. Case 1.3a and other “a" cases cover

a parsllel breeder program. The benefits of introducing the
breeder in different years were determined by comparison with the
bese cases without a dreeder. The four parameters studied included
the intreduction date of the breeder, the cost of uranium, the
cost of fossil fuel, and the energy demand. Groups 1, 3, 4,

and 6, provide & measure of how varying energy demands affect
benafits for assumed rising uranium costs and constant iossil

fuel costs. Similarly, groups 2, 7, and 8 provide a measure of how
varying energy demands affect benefits for assumed constant $8 per

pound uranius costs and constant fossil fuel costs. Group 5 examines

14

These _Iumum nlato to :’nraniu tml e«u, fou;l t«l coms .

 

AN

 
 

 
 

ssE

..
i

 
  
   

 

Rising Rising
" -
" "
[ -
“ L
“» -
- »

Rising | Constant
“ »
“» »

? 7.1 [ Nove mlb. Constant
7.2 1984 - "
7.22]1984 - -

8 | 8.1 [Mone | $8/1d,. | Constant
8.2 11984 -
5.20] 1584 " »

 

 

* PFarallel breeder program. The parallel breeder is introduced in 1992,
*% Current dreeder program with delay of two years in demonstration plants,

1s
 

% i

for a sartes of posstble

elactricity grovth patterms, Esch calculaticn simulatel the grevth

 

  

 

   

“

 

of the mm as wlon«d by & set of foimhtd paramaters

 

The 30-yesr ensrgy cugd a systen with a breeder coupared vith

the SO-yesr enargy 206t of a system vhich does not include a breeder
provides an estinmate o_! the principal incremental dollar benefits
expected from wmmc in 8 bresder program. The dollar value of
other benefite which have or could be quintitatively obtained are

not imlud_m the susmary or in the derived benefit/cost ratios.

 
 

 

 

 

umu fato tho_nuuty mm. 'm [ costs umc u mu 2

mm«mmmmmms

Pl A, u.hemmannumcmmm )

?lan B, MR + HICR + LMFER with § slternstives listed delow,
including @ persllel Breeder program:

 

3-1  Currently plsnned breeder progrem 1984 o,
B2  Accelerated dreeder program 1980
B-3  Current dreeder progrem with s delsy 1986

{a dencnstration plants of 2 years

B-4 LMIIR technology progrsa at $40 milliom 1990
per sooum 197177 ‘

B+3  LMFER technology prograa st $13 millica 1994
per anmwm 197177

Parallel breeder program « Parallel breeder 1984
{ntroduced 1992

All plans include competitive fossil fual systems.

The results of the RAD cost snalysis indicate that undiscounted R&D
costs for the dreedsr progrem vary from $3.5 dillion for an accelerated
program introducing sn IMFER in 1980 to $3.6 billion for a parsllel

17
 

 

 

 

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1ed

 

breeder progran. Dased efin 7R discount rate, the discounted
weeder RED costs vary m-b.z di1lion to $2.2 billion.
Significantly, dimud R&D costs actually imxcrease for delays
to 1986 and 1990, Costs of $2.3 billion for the current progrem
mu to $2.6 dillion for 1988 and 1990 fatroductioa.

 

Dasic vesson for the increase or relatively small changs {n discounted
RED costs for delayed introduction of the breeder, is the sdditiomsl
R&D costs incurred in the stretchout of a program. The stretchout
involves expenditures {n pbniu-dcfi or phasing-out progreme; and
expenditures in re-starting a program, including those coets associated
vith the difficulc task of vreassemdling resources, replacing lost
personnel, retraining of persoanel, and the updating of deteriorated

facilitiea and equipment.

 

The results of the cost-denefit anmalysis which include costs,
benefits, denefit/cost ratics, uranium demsnd, separstive work
desand and nuclesr capacities are summarised in Tables I and 4.

Discounted present valuss are based oa a discount rats of 7X.

 

The undiscounted groes benefits (Madle I) directly resulting
from dollar savings in cost of electric energy associated with the
currently planned dreeder program (1984 introductioa) range from
$53 to $288 dillion (Case 8.2 to Case 5.3) in the 50 year period

1970-2020, depending on the assumptions assigned to uraniun costs,

19'

   

s T .

 

R Mt e
 

 

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L ,
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- - - w1021 193.0 | o 2.3 .4 )
1z f 187f1rs.0 | 0 22 | 2 2.2
ul“ Conatond Lew % ae M, oe .. - -
- » - 2| % |1y |se . 1.9 1.4
. - - s | [y | oo u .8 1.3
- . . 1303 | 34| 2039 | 0.9 2.0 4.3 K
. . - 139 1 308 ) 30,86 | 15.3] 2, 1.7 6.1
- . . 1001 100 2006 | 0.2} 32 12.0 a3
- . . 13221 133 | e ‘t' 2.6 10.9 3.0
. . W | 109 | 2100 3] 20 3.6 3.2
. s 1 19 s AN 2.2 2.1 2.0
eing | Cmetant] Utgh 19 ] .« % - e . -
. . . 193 | 00 | 2350 | 12.9] 29 10.4 3.2
1603 | 200 f200 | 12.9] 3.2 9.7 4.0
/1. | Constant} Righ 172 | - m.: .o .- = -
- - - 160 ] o ] M8, s.ol 2.3 1.
- - . 1S ksl BYIRS ‘.:::) o,:
s | g HBE [ [~ ove [ = [ = | - -
. . 1 3) -3 1.8§ 1.3 -0.7 o
- - - 1102 9 \n.2 1.9 3.2 {-1.4) e.8

 

 

 

 

 

izanple: Colwwm I devivation fue Case 1.2: (Columa (1) Casw 1.1 . Colusm (1) Case 1.2] » [214.7 - 2G2.7) = 12.0
* Parallel Nresder casee.

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

™
' Neell vy
Group 3 w ehl E 119 1306 ; 113 1M1 | e 1443
2 W/ih: Cstant D 139 M ] I 1IN | A 13
3 BRisteg Coeustsat Intevandtists uss - unn . . .
& Rislng Condtast L ) o 9 .o . .-
$ NMaing Mailng B 1y 1993 | 1\ Y9 A3 | e W
endtsoountod Sensltte, Tian B (0 Si3iiene) o]
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3 e N e 33 b - 333
: -e - ‘ - -e -n
. - -n : - - -
Fvessnt Warth of Custe @ 7% (P NMiltam)
cosng ) 3347 | 2.7 | 209.4 42.3] 1147 | 1119
’ 2004 | 2002 § 202} | r00.8] 2002 | WOAG
& 140.3 - 13,3 - .- -
3 3.8 | 205,90 ] 300.6 | niej 1148 | 1203
: M9 . nLe | - e -
. ”‘o. -l ”n. - - -
1.0 - 1783 e - o=
Stosomteold Bonnfile, Ml b
. . 128 nt | r.e ‘e 18
’ .. 4.3 .3 | v 6.2 ] (-0.2)
’ - - ‘.' ' -— - “~a
& - - ‘.. - - -n
3 .e 18.9 15.2 f12.9 .2 4.3
: -8 il ‘::: - o . -
. - - ‘.. -l - -
L1stens Byl Cumletive
Ceonp | 1303 3 1913 1000 1499 1
3 o8 i 12 1790 453) A3
’ m - '“ - - -
. e . 7% v - e
$ ne» o 1308 uweo 11 111
® %03 oo 1243 .. - .e
} “ - ”” - P -
o AN .. 159 .- .- -
Seperettve Yanh Sumsad, Riletenmee/W,
Rendoun (hoough 3016
trong | 120.9 el NI » 43, 3.7
: 19%.9 1.0 &4 3 113.3F 1.0
3 163.) - »n.? - e -
& ’lo. - ”.’ .- - -
» .3 M.1] &Y 9 80, .3
° 134.3 .- 42.93 . on an
? 9.9 - 2.9 .o .o ~
e 146.9 = 1 4.1 - v am
Pett laow Capaaity Oparsting, ON{e), 3020
Croup 1 19% 7 1 e 15% 13048 | 1
3 p: £ ) M3 e Boo M | 1318
3 1442 as nn e - -
& 1083 .o 1512 . .- .-
’ a2 me | 28°0 wo0 | 174
. 1993 .- ms | .- .- -
r W72 .- W2 -- .- -
. 1992 .- 192 - - -

 

 

 

 

 

 

 

 
 

 

 

013.3 filnm m Mgmt value is associated with rising foseil
M and miu costs (Case 35.3), while the lowest is associated
with constant fossil fuel and urenium costs and an intsrmediate
enazgy demand (Cace 8.2). Other major tangidle denefits are
veduction in air pollution, the production of & large supply of
energy producing plutonium, the large reduction in sepsrative
worh demand, and efficient and economic use of the depleted
uranium stockpile,

 

Of the cases studied, the most prodable case is asscoiated

with rising uranium costs, constant fcssil fuel costs,

a dase energy demand, and with the curreatly plamned fatrodustion of
the breeder in 1984 (Case 1.3, Tadles 3 and 4). The results of this
case show undiscounted gross densfits of $207 dillion, gross discounted
denefits of $9.1 dillion, net benefits sccruing to the breeder program
of $6.6 dillion, and a denefit/cost ratio of 3.6. This case would also
result in a reduction in U:,O; requirements of 1450 kilotons, and a
reduction in maximum separative work demand 02'85 kilotonnes per year.

9

 

 
 

3.3.3 Early Iutroduction o! the Breeder
Bmfi.tlcou utm unsin; from 7.9 to 0.7 result from those

cases vit.h an mtroducuon o! tho b:udor u 1984 or earlier, for
all 8 mo mlyud. as ahova in Table 3. The higher values are
umutd wvith rulng touu fuel costs,

3.3.4 Parallel Breeder Program
Based on assumptions delineated below, a tentative case can de

made to {mprove the industrial breeder base by establishing a parallel
breeder program. 7The bditita of the LMFBR program would de sufficient
to maintain benefit/cost ratios in excess of one for a 1984, or earlier
introduction of the LMFER and a 1992 introduction of the parallel breeder
for 8 of the 11 cases considered, and using discount rates of 7% or
less. Because of the technical status and other factors, the decision
ca whether to establish a parallel breeder program would have to swait
further analyses of alternative breeder concepts, such as the light
vater breeder reactor, the molten salt breeder resctor, or the gss-
cooled fast breeder. Such analyses would lead to eo#nidoutim for
possibly selecting one of these as a basis for initiating a full scale
parallel bdreeder dovelopment program.

If justified Dy further analysis, a parallel dreeder program could
strengthen the nuclear posture of the U. 8. by providing for increasing
industrial competition, by broadening the industrisl nuclear manufacturing

base, by broadening the base of other associated sectors, and by strengthening

the industrial dase of nuclear technology. The cost-benefit analysis has
assumed the possibility of such a parallel breeder program in each of

23

 

 
 

 

 

pureuit of eltemte _.and/or backnpe. "":Por purponee of Lth.ie analyaie,'

gty R w gl R Iy

'the decu:lon m ulumed to be that other alternatee end/or beckupe

o i E et

" would not be purseed afl:er the PBR deeiuon date. '

The following 1list 's&meriees and expands the assumptions stated:
Assumptions for Parallel Breeder
(1) It is assumed that the PBR would benefit from the IMFBR
'prog{ranf:’e?e"'";’iedfc?et‘:ed in Table 2. The total costs of the
'R&D for Other Bree;lere, ehown 1n Teble 2, ere lower than |
for the LMFBR: $2.0 billion LMFBR undiscounted direct
costs va, $1.6 billion Other Breeder undiecounted direct

costs, o L

(2) The LMFBR R&D progrem would be the same as for Plan B-1
with a 1984 LMFBR introduction,

(3) Decision to proceed with PBR to be made in FY 1972.

(4) No support for alternates or backups after FYy 1972.

M

 

 
 

(5) The PBR“prosram'wouldfbefieOnducted*withietnentially the -
7 same: diaciplined engineering approach and with development of
F 8 viable:and competitive‘industrial capnbility as for the'"

  

"-.‘b.é. i‘j f § “ ; \%g,,fl SRR DR RN e Y A PN

e tH?BR program.eif

 

1..\.{.: gg’f i)j){;}%l

‘N(G) The;PBR demonstration plants would be authorized two yearc o

e *fif* Gy Pty .*i‘ Sl Etasr Lt gt
apart, beginning FY 1978.

{ ":‘-_-o ’.'i‘.‘""' }" & 5, TR0 i F-._,f r: 0 T . i -y o SR i T

(7) PBR introduced ;n 1992.
(8) ‘Gross'benefits would be ‘the same as for R&D Plan B-1, with the
LMFBR rEfireeehttng breeder benefits, Thie"may er'may not be

N
oA ’

valid,

Dtscussion of Parallel Breeder Results

Table 2 indicates that a parallel fqll_scale development program will cost
$5.6 billion undiscounted, or an additional $1.6 billion ebove the current
breeder program, assuming 1ntroduction of the LHFBR 1n 1984 and the parallel

breeder in 1992, Discounted at 72 the additional Present worth {n 1970

will be $0,7 billion.

The benefit/cost ratios rarge from 4.8 to 0.6 for a parallel breeder program
for all 8 groups, assuming.a 1984 introductionof the LMFBR and a 1992 intro-
duction of the PBR as contrasted to a range from 6.1 to 0.7 for the current
breeder program for all 8 groups (Table 3). The results indicate that the
early introduction of the LMFBR provides tangible, quantifiable benefits
sufficiently large to adequately support the cost of a parallel breeder
program for most of the cases studies at discount rates of 7% or less, and
at discount rates up to 10% with both rising foassil and rising uranium

costs and with a base energy demand.

25

 

 

 

e
 

 

  
   
  
  

_,__nefi.t:s of tho breeder wvhich are not

     

aubject: to adniniatu_tiva deciaionf(for e:umple: _'_1evel of R&D suppor t),

 

on‘:':themprevnflinsl toul ecbxiomic st.ructure, includo

 

' breeder :ln""'oducl:i.on date, uunitn cost structure,
ey LR AR _._a? L 3

foufl. fuel costo. electr:lcal energy demnd, and electrical energy

costs (1nc1ud1n3 plant capiul and £uel cycle)o |

The '?“9?;‘“157!°f_benefif’-Fp}9h““333_19'¢}plgqmgggg provides an indication
of the extent tg}uhich uncertainty plays a part in the perturbations
associated with this change, The following summarizes the sensitivity

of the parameters noted.

1. Bfeedef Introduciion Date

Thofigh, for moatMCases, benefits result from savings in
energy ¢ost§.regard1eaa of its date of introduction into the commercial
market, these benefits are substantially affected by the date of
breeder introduction, For ;xample, examination of'Tablea 3 and 4
shows, for Groups 1 and 2, that a ten year delay in the current
date of breeder 1ntroductiofi will result in an increased 50-year
energy cost of $131 billion ‘dollars (undiscounted) with rising
uranium costs (Group 1), and $54 billion (undiscounted) with constant
uranivm costs (Group 2). Figures 1 and 2 show IMFBR program un-
discounted and discounted benefits for different IMFBR introduction
dates assuming constant fossil fuel costs,and a base energy demand

for both rising and constant uranium costs (Groups 1 and 2). The

26

 

 
 

 

 

L . o

 

 

 

 

27 -.
 

 

EFITS, ¢ BILLIOI

 

 

 

 

   
  

1

  

 

 

 

 

" Group!
RISING URANIUM COSTS

 

~ Group 2
CONSTANT URANIUM COSTS

1984 I | I
~ LMFBR INTRODUCTION DATE

28

 

 

 

 
DISCOUNTED BENEFITS, $ BILLIONS

 

 

1

 
 
    

 

 

   

   

 

 

RISING URANIUM.COSTS-

s b g e npaN ey

 

        

    
 

 

. s : i ) .
. t . » ; . ;o #
. o
. 1
A T E
.
e ey T
. Vrartlok s
..

 

- Group 2 . .
CONSTANT URANIUM
_ COsTS

A,

 

 

 

'%fl.

  

 

 

 

 

1

 

29

 
 

et e
 

'Cases 1.3b, 2.3b, and.5.3b (R&D Plan B-3) involving a two year delay
in the introduction of the brcedcr were extrapolated from computer
results for Cases 1.3-1.4; 2.3-2:4§ ;Aa 5,3-5, 4; i.e., years 1984
and 1990. Discounted groas benefita for Group 1 Case 1.3b will be |
reduced to $7 4 billicn aa compared to $9 1 billion for 1984 1ntro-
” duct\!,on Case 1 3, or a net re\_dcction of 81.7 billion, net benefits are
reduced from $6.6 billion to '$4.8 billion and benefit/coat ratio is
reduced from 3.6 to 2.8. Of interest 1s-the fact tfict the preacnt
worth of the R&D costs is actually increased by-$6.1 billion, 1i.e.,
R&D costs are $2.6 billion for 1986 introducficn ve., $2.5 billion for

1984 introduction., Results of Cases 2.3b and 5.3b are shown in Table 3.

2, Uranium Cost
The effect of uranium cost is indicated by comparing

Cases 1.1 and 2.1 with Cases 1.3 and 2.3 in Table 3 for LMFBR
introduction in 1984. The only parameter changed from Group 1 to
Group 2wes the uranium cost. The discounted cumulative energy cost
-increases by $10,3 billion over 50 years forlan economy without an
LMFBR (Case 2.1 to Case 1.1) with an average increase of $12.60 per
pound of U30g, compared with a $3.5 billion increase for an economy
with an LMFBR (Case 2,3 to Case 1.3) and an average increase of

$2.50 per pound of U30g.

3. Fossil Fuel Costs
Increased discounted gross benefits for the breeder of
$6.1 billion ($15.2 billion less $9.1 billion) accrue with a 1984

LMFBR introduction, assuming rising fossil fuel and uranium costs

30

 

 
     

(GrouPVS'JflCase 5.3 in Thbla 3)5555'comparédfwith-conatant fossil ¢
fuel costa and ‘rising uranium costs (Group 1 - Casa 1.3 in Table 3).
The reaulting sensittvity is about a 7% change 1n discounted gross

benefita for each O.Iz'per year 1ncraaae in foatil fuel costs. ! The -

 

striking effhct of thia seniitivity 13 111ultrated by noting that!

0.5 cent’ par ton per year-incraasa in the cqs:~o£{coal ($5 per~ton—1n¢
_1970'ah baié)“could resulfiinfiflcreased diiééfififéd benefits of about: -
$600 million accruing over thaZSO-year period to.hn economy with a :
breeder. The converse with decreasing fossil fual costs would hold to

a lesser extent.

b, .Electrical Energy Demand
The following table shows the projections used in the analysis for
the total electrical energy demand growth rate percefitages and associated
doubling times for the demand. These projections were averaged for 1970-
2020 and in great measure do not reflect the decelerated rate growth

which occurs for the intermediate and low energy demands in the later

 

 

years,
Growth Rate Doubling Time

Projection % Per Year . = -  Years ;
High energy demand 6.5 . 10.9 é
Base energy demand - 6.3 - 11.4 . . %
Intermediate energy demand 5.8 12.6 |
Low energy demand 4.8 - - 15.1

Historical Growth 7.0 10.0

 

 

31
 

 

 

5. Energy COst (Capi.tal and 'Fual' Cycla)' o

  

The total discounted energy costs are quite aiefis.ii;.itfi\r; éo
changes in the LMFBR energy costs. The following IMFBR energy cost
breakdown is provided as an-fipproximte reference. for a 1990 IMFBR:

- Mills/Kwhr
- Capital T 3.2
Operation and Maintenance : - 0.3
‘Fuel Cycle o | 0.6 . -
TOTAL 4.i

Figure 5 shows the diacount{; 'bgnefita for an economy with an IMFBR
with rising uranium costs and constant fossil fuel costs as a
function of the change in IMFBR energy cost, Over the range
investigated, ‘the benefits ?.ncréau about $1,6 billion for each

0.1 mill/kwhr decrease in energy cost. The sensitivity of capital
costs 1s such that a 17 decrease in capital cost will cause about
4% increase in discounted benefits, Because the fuel cycle cost

is a smaller absolute number, a 5% reduction in fuel cycle cost

is required to provide an equivalent 4% increase in discounted benefits.

32

 

 

 
 

 

 

 

 

 

 

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34
_’Discount:ed Benefi__ta, $ Bij.l:lom

 
  
 

FLEFY e s vt e i e e 2T Em e

 

4 COST-BBNBFIT ANALYSIS
SENSITIVITY OF DIBCOUNTBD GROBB BENEFR1TS

 

 

; Co . . . ¥ i .
L x ¢ K % N ¥ _§ _F _J§ |

ToogboropbEye AL TE LY ety

—
+0.1 40,2

Change in IMFBR Energy Cost, Mills/KwWhr.

35

     
    

'
+0.3

o &
Change in Benefits, $ Billions

¢
N

'
&

'
-4
6. Uranium Requirements

Table 4 provides an indication of the substantial savings
in uranium tojbejkaihcd from the early development of the breeder.
Assuning Gtoup 1 parameters of rising uranium costs, constant fosail
costs, and base electrical demands, the results shows a reduction
in 50-year U30g requivements of 1449 kilotons of U30g for an economy
‘with a 1984 breedexn as ¢omphfe& t&fan dconomy~w1thout an IMFBR
(0305_1.3 vs. Case 1.1). A 10-year delay or a 1994 introduction
of tflb breeder results in a reduction of only 750 kilotons of
0303, .aa compared to an economy with no LMFBR (Casé 1,5 vs, Case 1.1),
Assuming Group 2 constant uranium costs, constant fossil costs,
and base electrical demands, the results show a reduction in uranium
requirements of 3211 kilotons for the 1984 breeder introduction
date as compared to no LMFBR (Case 2,3 vs, Case 2.1), A 10«ear
delay or a 1994 introduction of the breeder in this situation
results in a reduction in uranium requirements of only 136 kilotons

of U30g as compared to no IMFBR (Case 2.5 vs. Case 2.1).

7. Separative Work Demand
The cost-benefit analysis provides no treatment of the
effect of the breeder on uranium separation capacity. Table 4 does
provide a quantitative set of numbers for the separative work demand
for each of the cases listed., Considerable reductions in separative
work demand can be effected by introducing the breeder. Separative

work demands are subject to changes in uranium cost as discussed

below:

36
 

 

(1) "-?'M—.:incressc in ursnium».: costs serves: to :xeduce: the: sspsrstivs i

  
   
    

E*wo::'k dsmand for s11 cssss of LHFBR introduotion becsuu ,-:z;:_fi--—f"“:?

Jta:?n fi @fi%

out 36 kilotonncs

;ysz*Wf”:; P S w0

   

eyt ’3

 

| por' yosr (Caso | 1 3). |

(2) 'Assuming constant uranium costs , bsss energy demand cnd 1ol

SRrete éfi SR ' E"" by ng A v I""fi .3 U'C-"
delay t:o 1990 in the int:roduction of the IMFBR, maximm sep-
Sl e atey S s hin mu,f T RN ek L

srativo work domand would bo 123 kilotonnes per yecr (Case 2, &),

and for a 1984 introduction of the IMFBR--47 kilotonnes pér : .

yaflr (caflé 2.3). Pl e

. 4 -’ B - . . - . -
tate fh S el L s Ty e ety

8. The Use of Varying Discount Rates and Sensitivity of ™’ '
Benefits to Varying Discount Rates’” ' ‘i

The Use of Varying Discount Rates.

Mo . . - v ot

Ths basic purposo undcrlying tho vast and’ complex engincoring
.g,g- o F

task inhcrent in successfully implementing tho DIFBR program is to o

develop a power source that can confer subst,sntial;{bcnofits. upon tha :

 

general well-being of the American public as wcll as the industrial -

4

et

community which forms the base for this well-boing.

. t oL - Y Lo oo b
< S 1 v T Lt ce f Tag Febo

Factors to,bs;’considered i”:n detemining Itho.t _n_ccd for gfvoment sponsorship
are many and varied., They include the magnitude of the program which

may exceed industry's capability and resources, prospects for returns

far off in time, and wide dispersion of program bensfits throughout
society. Other factours have been discussed in tho Introduction,

the Summary, and under Other Considerations.

37
~ The: Inreroepartmental Energy Study report, prepared by the Energy

"”Study Group 1n 1964, "Energy R&D and National Progress," states that
”p_rtioulerf; 1n reference to R&D, 1e en unreeolved problem, involving
fimeny<viewpointe, eubtle end controvereiel issues, and differing value
:judgmente. The report ‘adds that the determinetion (both qualitiative
end quentitetive) of the dieoount rate that the Government might usge
1e a matter of oontinuing oontroverey emong profeeeional economiete.

Testimony given in 1967 and 1968 at hearings before the Subcommittee

on Economy 1n Government of the Joint Economic Committee brought out

a wide range of judgmente eppliceble to this problem, and indicated that
much work lies ahead before reasonable objective criteria can be
established to serve as guidelines in the selection of discount rates
for application to Government progreme.' A common understanding and
agreement on the conceptual basis for discounting must be achieved,
following which agreement must be reached on the method or methods for
calculating discount retee to be ueed.‘

In the Cost-Benefit-Analysis, benefits were calculated after taxes, R&D
costs were enumerated without reference to taxes and a discount rate
repreoenting the after-tax return for utilities was used. If one

- were performing the enelyeie on a social account basis, as favored by
gome economists, one would calculate benefits and costs on a pre-tax
basis and use a discount rate representing the pre-tax rate of return
of the relevant portion of the private sector.

The LMFBR program can be identified with the utility sector of the

U. 8. economy, and the rate of return applicable to that sector has
been congsidered as the criterion rate for evaluation of public
investments in this area. The discount rates applicable to the electric
utility industry would most nearly comply with this criterion. While

it 18 doubtful, as stated, that the electric utility industry would
undertake a program of this magnitude, it is this sector of the economy
which will be in the money market to obtain funds with which to finance
capital investments, and it is in this sector in which benefits accruing
to the public good will be obtained,

38

 
Proceeding on thiofbasis v our enalye:l

   

   
  
 

howse that a: d!.lcountrsrate

of 77: ie compatible w:l.th and direotly releteo to: the after tax cost
of money to the utilities, refleoting both debt and. equity finanoing“ban

on the fol lowings ATl deet n IR T

    

. 5. '1{ f_"‘- . C"- ";"l' By

Fraction of oapital 1n bonda 0,52 R
D ";..a' “i | _!' 4 ) ;;E '.’- z} P 'g‘. : i ‘, g}f%!i ?.- ‘;’e;‘, + f t-’i . ?._:. f- i% £ ! {5 « ¥ A
Praction of cepital 1n equity 0.48 |
bk e Poooann 000U by
Interest rete on bonde o 4.237.
. i vt e ppal ol iy
Earning rate on equity | 10.00%
septe oo, s bivdert oo tay g

The actual averege'rate-of return for all electric utilities privately

 

owned in the U. S. was 6.7% in 1964, 6,9% {n 1965, and was
estimated to be 6,9% for 1966, The actual average fraction of
capital in bonds for all electric utilities privately owned was
0.523 in 1966 and 0,515 in 1965 with fraction 1o equity - 0,477 and

0.485 respectively.

It 13 recognized that the coet of money has mcreased since 1967,

when the asaumptions noted above were made for a systemo analyo:ls )
study. Asouming a 10% return on equi.ty and an increeee to 6% on
corporate bonds, and meinte:ln:lng the seme equity- to-bond rat:lo,

the cost of money would 1nc1ieaee to 7 92% versus 7, 0% used in the
analysis. Since the essumptions for the lineer progreming analysis
were made in 1967 and, to maintain the time schedule for this analysis,

the 7% cost of money has been retained. Further, the 7% cost was

based on private investment, A mixture of private plus local, state,

 

 

 

regional, and Federal investments would more closely approximate the

7%, even today.

39
 

   

*§§;emponditureflfpresent-worthed et a rste of 7Z*per year, ' The *”?*¥'“
:r'm°d°1‘"33 ¢13° Pr°8remmed to provide, from the 7% optimized solution,

”?the present worth of the totsl energy cost 1970-2020 for discount |
f ??Jx ij i i { * SYOONNE L

rstes of 5, 10 snd 12 5%.: The results of the computetions with the

Bu il Gl by s e
5, 7, 10 end 12,5% sre given in stles 5 through 8. stle 6 is a
AL ad o e
repeet of Teble 3. However, before discussing the results given in
NN G SRV
these tebles, it 1s worthwhile to consider the effect the choice

£

~:-of’discount\rste'cen have over the 50-yes:-period.considered in this
study. Figure 6, Present Worth of $100 Spent Tem and Fifty Years in the
Future Versus the Discount Rate, indicates that an increase from

5 to 12.5% in the discount rate results in a reduction of the present
worth by about a factor of 30 for expenditures 50 years in the future.
This large sensitivity of benefits from events in the distant future
as a fnnction of discount rate becomes resdily apparent in the results.
The effect of expenditures 10 years in the future on preeent*worth,es
compsred to 50 yeers in the future,is olearly shown in Figure 6.

Tables 5 through 8 show thet the maximum net discounted benefits range
from $38.7 billion for the 5% discount rste to net dollar losses for

most of the 10 and 12 5% discount rete cages,

40

 

 

 

 

 
 

= R e S L et

 COST-BENEPIT ANALYSIS |

 

i

- i
o i T R, P AR bl g g

 

    
 

 

 

Fifty Years

  

 

13

12

 

—_—

 

 

30 =f=

i
'
]
<
(sxe1104q) Y3lxoM JUsBIAY

10 evfdun

 

Discount Rate - 7%

41
TABLE 3
COST~-BENEVIT ANALYSIS

 

COSTS, BENEPITS, AND FENEPIT/COST RATIO FOR BREEDER PROGRAM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UND1ISCOUNTED
ASSUMPTIONS 8 BILLIONS DISCOUNTED 10 1970 @ 5%, § BILLIONS
(L) () { (3
- . NET BENEYIT 10
SROUH CASE R | UrANIUM] roSS1L ENERGY |[ENERGY| GROSS| ENERGY [OROSS | R&D BENEF1Y COBT RATIV
No.| Wo. J COST FUEL DEMAND | COST [pZNEFIF COST [DIDNEFIT COST (2) = (3) j(2)+4 ()
DATR COST

1 1.1 [Wone | Rising ] Constant| Base 1539 | == 143,.4 .- o .o -
1.2 [1980 " " 1300 | 239 | 315.8 | 27.6 | 2.6 25,0 10,6
1.3 |1984 " " ". 1332 1 207 | 321.4 | 22.0} 2.8 19,2 7.8
*1.,32{198% " " " 1332 | 207 ] 321.4 | 22.0] 3.6 18,4 6.1
1.3b§1986 " " " 1361 | 178 | 325.1 | 18.3] 3.0 15.3 6.1
1.4 {1990 " " " 1619 | 120 {1332.6 | 10.81] 3.0 7.8 3.6
1.5 {1994 " " " 1463 | 76 |1337.9 5.5 1 2,7 2,8 2,0

2 | 2.1 [mone | $8/1b, | Constant| Base 1359 | .. 320.9 .- .- - .
2.2 {1980 L " 1276 | 8s | a11.4 9.5 2.6 6.9 3.6
2.3 11984 " " " 1296 | 63 | 31%.0 5.91] 2.8 3.1 2.1
#2.3a]1984 " " " 1296 63 | 315.0 3.9 | 3.6 2.3 1,6
2.35]1986 " " : 1311 | 48 | 316.6 4,3 1 3,0 1.3 1.4
2.4 1990 " " . 1341 § 18 |319.8 1.1] 3.0 (-1.9) 0.3
205 199‘ " " 1350 9 320.8 0.1 207 (.206) 00‘

-fltfi-

3 3.1 |None | Rising | Constant iate | 1295 | .. 2%0.3 - - - -
3.2 |1984 " " " 1128 273.1 17,21 2.8 14.4 6.1
*3,.2a1198% " " " 1128 lfl 273.1 17.2 | 3.6 13,6 4,7

4 4.1 {None | Rising | Constant] Low 930 | .. 219.3 - - . -
5.2 11984 " " " 832 209,2 10.1 | 2.8 7.3 3.6
4,2a[1984 " " " 832 33 209.2 10,1 | 3.6 6.5 2.8

s | 5.1 |wone | nistog | Ristng | sase | 1627 | -- |360.9 - | .. .
5.2 {1980 " " " 1303 | 324 |119.8 51.1 | 2.6 38.5 15.8
5.3 |1984 " " " 1339 | 288 {326.6 3%.3] 2.8 31,58 12,2
*s,3a} 1984 " " " 1339 288 |326.6 |34.3 ] 3.6 30.7 9.5
3.3b11986 " " " 1372 1255 |331.4 | 29.%1 3.0 26.5 9.8
S.5 1990 " " " 1438 | 189 ]341.1 19.8 | 3.0 16.8 6.6
5.5 11995 " W " 1494 | 133 [349,2 11.7 | 2,7 9.0 4.3

6 6.1 [Mone | Rising | Constant| High 1979 | -- 430,3 .. .. ve e
6.2 {1984 " ” " 1693 | 286 |399.3 31.0 | 2.8 28,2 11,0
*6¢2. 19“ H " " 1693 286 39903 3100 306 270& 806

7 7.1 [Mone | 88/1b. ] Constant] High 1726 | -- 397.9 - - . .
7.2 | 1984 " " " 1650 | 84 [390.2 7.7 ] 2.8 4.9 2.7
*7'2. 19“ H " " 1640 8‘6 39002 7.1 3.6 6.1 2.;

" INtEY=

8 8.1 [Nons | $8/1b, | Constant| mediate | 1155 | .- 273.1 - .o .- .-
8.2 11984 " " " 1102 1 53 J268.1 5.0 | 2.8 2.2 1.7
*3,2s} 1984 " " " 1102 | 53 268,11 5.0 | 3,6 1.4 1.3

Bxasple: Colum 2 derivation for Case 1,2:[Coluvmn (1) Case 1.1 - Column (1) Case 1.2] =(343.4 - 315.8] = 27.6

* Parallel bracder cases.

42

 
TABLE 6
COST-BENEVIT ANALYSIS
COSTS, BENEPITS, AND BINEFIT/COST RATIO POR BREEDER PROGRAM

 

 

 

 

 

 

 

 

 

 

ASSUHPTIONS ",“’;ififi,”m"‘g" DIBCOUNTED TO 1970 @ 7%, $ BILLIONS
1y § @ 1)
NET BENEFIT T0
EROUH CASE wBR | uraNIvM | vussiL ENERGY [ENERGY| OROSS| ENERGY lGROSS | RraD BENEFIT | COST RATIO
No.] No. ENTRO.] cOsT PUEL DEMAND | COST IBENEFIY COST [BENEFIT COST | (2) - (3) () + )
DATE CoST
1 1.1 [Mone | Riefng ] Constant] Base 1539 | -- 214,7 -- .- - .-
1.2 {1980 L H " 1300 | 239 | 202.7 12.0}) 2.4 9,6 5.9
1.3 [1984 " " " 1332 ] 207 | 208.6 9,11 2.8 6.6 3,6
*1.3a(1984 " " " 1332 | 207 | 208.6 9, 1] 3.2 5.9 2.8
1.35]1986 " " " 1361 | t78 | 2072,3 7,4F 2.6 4.8 2.8
1.4 {1990 " " " 1419 | 120 | 210.7 4,0 2.6 1.4 1.9,
1.5 |1994 " " " 1463 76 | 212,9 1.81 2.2 (-0.4) 0.8
2 2.1 [Mone | $8/1b. | Constant| Base 1359 | -- 204,54 -- - - .-
2.2 {1980 " " " ] 1276] 85} 200.2 | 4.2 | 2.4 1.8 1.8
2.3 |198s " " " 1296 63 | 202,1 | 2.3 | 2.5 (-0.2) 0.9
*2.38f1984 " " " 1296 6) 202.1 2.3 3.2 (-0.9) 0.7
2.35]1936 " " " 1311 48 | 202.8 1.6 2,6 {(-1.0) 0.6
2.“ 1990 " " " 1341 18 206.2 002 206 (“20"} o‘t
2.5 |1994 " I " 1350 91 204,6 K-0.2)f 2.2 (-2.4) -0.1
INLer«
3 3.1 [None | Rising | Constant{ mediate 1298 | ~- 181.9 .. . .- .o
302 1984 " " " 1123 167 175.0 609 205 "o" 2'8
*3,2a}1984 " " " 1128 | 167 ] 135,0 6.9 | 3.2 3.7 2,2
4 4.1 |None | Rising | Constant| Low 930 {| -~ 140.3 - - - -
4.2 [1984 " " " 832 98 | 136.3 4.0 1 2.8 1.5 1.6
*4,2a1984 " " " 832 98 | 136.3 4,0 3,2 0.8 1.3
5 5.1 [None | Rising Rising Base 1627 - 224,8 -- - .- .-
5.2 |1980 " o " 1303 | 1324 | 208.9 18.9] 2.4 16.5 7.9.
5.3 {1984 " " " 1339 288 | 209.6 13.21 2.5 12,7 6.1
+5,32]{1984 " " " 1339 | 288 | 209.6 15.2 | 3.2 12.0 4.8
5.3b]1986 " " " 1372 § 258 | 211.9 12.9} 2.6 10.3 5.0
5.4 [1990 " " " 1438 | 189 | 216.6 8.21 2.6 5.6 3.2
5.5 1994 " " " 1494 | 133 © 220.58 4.3 2.2 2.1 2,0
6 6.1 [None | Rising | Constant| High 1979 | .. 265.9 - .. - .-
6.2 {1984 " " " 1693 1 286 | 2%3.0 12,91 2.5 10.4 5.2
*6,2a] 1984 L " " 1693 1 286 { 253.0 12,9} 3.2 9,7 4,0
7 7.1 [Nons | $88/1b. | Constant| High 1724 | =~ 2351.0 .- - . -
7.2 11984 " " " 1640 84 | 248.0 3.0l 2.5 0.5 1.2
*7.2s[1986 | ’ " 1640 | 84 | 248.0 | 55} 3.2 | (4 0.9
Inter=
8 8.1 [None | $38/1b, | Constapt| mediaste | 1155 | -~ 174.0 .- - - --
8.2 {1984 " " " 1102 s3 1 172.2 1.8 2.5 €-0.7) 0.7
«8,2af1986 . " " H 1102 53 §{172,2 1.8 3.2 (-1.4) 0.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Example: Coluen 2 derivation for Case 1.2  [Column- (1) Case 1.1 - Column (1) Case 1,2) =[214.7 - 202.7}) = 12.0
* Parallel breeder cases

43
TABLE 7

COST-BENEFIT ANALYBIS
COSTS, BENEYITS, AND BENEFIT/COST RATIO FOR BREEDER PROGRAM

 

 

 

 

 

 

 

 

 

 

 

ASSTHPTIONS ‘?,‘”;2“,3,“:,,’:” DYSCOUNTED TO 1970 @ 10X, § BILLIONS
(1) (2) | (3)
NET BENEFIT TO
wtm URANIUM| rOsSSiL DIZRCY |EwERGY ] OROSS| ENERGY [GROSS | RSD SDNETIT COST RATTD
No.| Mo. 4 cost FJURL DEMAND | COST [pENERIY COST ”mlm- cost| (2) - (3) (2) 4 (3)
DATE COST
1 1.1 [scas | Rising ] Constant] Base 1339 § -~ 120,13 .o .- o .-
1.2 [1980 " " " 1300 1239 [116.9 3.4 2.1 1.3 1.6
1.3 |1984 " " " 1332 | 207 1131 2.2 2.2 0.0 1,0
*1.3a]1984 " " " 1332 | 207 . 2.2 2.6 (-0.4) 0.8
1.3b{1986 » " " 1361 ] 178 j118.6 1.7 2.2 (-0.5) 0.7
1.4 {1990 " " " 1519 1120 |119.6 0.7 2.1 (-1.4) 0.3
1.5 [1994 " " " 1463 | 76 |120,2 0.1 | 1.6 (-0.5) 0.1
2 | 2.1 Inons | $8/1b, | Constant| Base 1359 | .. 117.1 .- .. - -
2.2 {1980 " " " 1276 | ss [115.9 1.2 2.1 (-0.9) 0.5
203 19“ " " " 1296 63 11606 o.s 2.2 ('107) 002
*2,3al1984 " " " 1296 | 63 |116.6 0.5 2.6 (-2.1) 0.2
2.35]1986 " " " 1311 | 48 [116.8 0.3 2,2 (-1.9) 0.1
2.4 1990 " " " 1341 | 18 j117.3 [¢0.2) | 2.1 (-2.3) {-0.1)
2.5 |199% " " " 1350 9 |117.5 Jeo0.8)] 1.6 (-2.9) (-0.2)
~—Totér=
3 3.1 [none | Rising | Constant ..d‘t.g" 1295 | -- 102,33 | ~- - .= .o
3.2 [1984 " " ' 1128 | 167 ]100.8 1.5 2,2 (-0.7) 0.6
*3,2a]1984 " " » 1128 | 167 [100.8 1.5 2.6 (-1.1) 0.5
‘ ‘cl m u.m COflltlnt 1.0' 930 - 81.3 - - - .=
4.2 [1984 " " " 832 | 98 | 80.4 0.9 2.2 (-1.3) 0.4
*“2‘ 1934 o H " 832 98 8006 0.9 2.6 (".7) 0.3
S 5.1 [Ncne | Rising Rising Base 1627 | -- 125.2 on o - -
5.2 j1980 " " " 1303 | 324 |119.2 6,0 | 2.1 3.9 2.8
5.3 |1984 " " " 1339 }288 [120,8 5.4 | 2.2 2.2 2.0
*3.3a[1984 " " " 1339 288 {120,8 4.6 | 2.6 1.8 1.6
5.3511986 " " " 1372 | 238 ]121.6 3,6 | 2.2 1.4 1.6
5.4 [1990 " " " 15638 | 189 |123.2 2,0 | 2.1 (-0.1) 0.9
5.5 {1994 " " " 1494 133 (124.4 0.8 | 1.6 (-0.8) 0.5
6 6.1 INone | Rising | Constant| High 1979 | -- |146.6 - .- o e
6.2 1984 » " " 1693 | 286 [143.4 3.2 2,2 1.0 1.4
*6,2a] 1984 " " " 1693 | 286 j§143.4 3.2 2.6 0.6 1.2
7 7.1 IMone | $8/1b, | Constant] High 1724 {.. 141,8 - .- - —
7.2 |1984 " " " 1040 32 141.3 0.5 2,2 (1.7 0.2
*7.2. 1984 " H “ 1640 141.3 0.3 2.6 ("2.1) 0.2
Inter
8 8.1 [None | 88/1b, | Constant 1188 | -- 99.9 - e’ -e -
8.2 1984 " " med atd 1102 33 | 99.3 0.4 2.2 (-1.8) 0.1
»8,2al 1984 " " i 1102 53 9.5 0.4 2.6 (-2.2) 0.1

 

 

 

 

 

 

 

 

 

 

 

 

 

Examsle: Column 2 devivation for Cass 1.2 {Colomm (1) Case 1.1 - Column (1) Case 1.2) = (120.3 - 116.9] = 3.4

% Paralliel breeder cases.

s

 

 
TABLE 8
COST-BENEFPIT ANALYSIS
COSTS, BENEYITS, AND BENEFPIT/COBT RATIO FUR BREEDER PROGRAM
e —

 

 

 

 

 

 

 

 

 

 

 

UNDISCOUNTED

ASBUMPTIONS § BILLIONS DISCOUNTED TO 1970 @ 12.5%, 8§ BILLIONS
(1) (2) T (B

NET BENEFIT TO

FROUH CASE LMFB. | URANIUM | rossiIL INERGY |[ENERGY| crOgs] wemoY {oRoSSs | RaD BENEYIT CO8Y RATIO

No.| Ro. BNTRO.] cosT FUEL DEMAND | COST [BENZFIF COBT #mmr' costrj (2) - (J) () =~ ()

DATE COST
1 1.1 |[Nona | Rising ] Constant| Base 1539 { -« 8t.9 - - .o -
1.2 J1980 " " " 1300 | 239 80.9 1.0 2.0 (-1.0) 0.5
1.3 {1984 o " " 1332 | 207 81.3 32 1.9 (-1.5 0,2
*1.3a(1984 " U " 1332 | 207 81.5 . 2.3 (~-1.9 0.2
1.3b[1986 " " " 1361 {178 81.6 0.31 1,9 (~1.6) 0.1
1.4 {1990 " " " 1419 | 120 81.9 0.0] 1.8 (-1.8) 0.0
1.5 1994 " " " 1463 | 76 82,8 J¢-0.9)] 1.3 (-2.2) (-0.7)
2 2.1 |None | $8/1b, | Constant] Base 1359 | .. 80.7 - -w -n —-
2.2 1980 " "’ " 1276 | s 80.3 0.6} 2.0 (-1.6) 0.2
2.3 {1984 " " " 1296 33 80.7 o.ol 1.9 (-1.9) 0.0
+2.3s]|1984 " " " 1296 80,7 0.0] 2.3 (-2.3) 0.0
2.35}1986 " " " D11 48 80.8 i¢-0.1)} 1.9 (-2.0) (-0.1)
2.4 |1990 " " " 1341 1 1a 8.1 [¢-0.4) 1.8 (-2,2) (-0.2)
2.3 {1994 " " " 1350 o 8l.1 {(.0.4)] 1.3 (-1.7) (-0.3)
Inteyx,
] 3.1 [None | Rising | Constant a.fig.t. 12908 1 _._ £§9.8 - - e .-
3.2 {1984 " " " 1128 m 69.7 0.1 1.9 (-1.8) 0.1
*3,2a[1985 " " " 1128 69.7 0.l | 2.3 (-2.2) 0.0
4 4.1 [None | Rising | Constant L?w 930 | .. 56,7 - .- va -
4.2 11984 " " ; 832 | 98 56.6 0.1] 1.9 (-1.8) 0.1
«6.2a|1984 “ " 832 | 98 %6.6 0.t ] 2.3 (-2.2) 0.0
5 3.1 {None ! Rising Rising Base 1627 | -- 84,8 ve - .- --
5.2 [1980 " " " 1303 | 324 82.5 231 2.0 0.3 1.2
5.3 {1984 " " Y 1139 j 288 83.4 1.6 1.9 (-0.5} 0.7
*5.381984 " " " 1339 | 288 83.4 .40 2.3 (-0.9) 0.6
5.3b| 1986 " " " 1372 1 253 83.6 1.2] 1.9 (-0.7) 0.6
5.4 11990 " " " 1638 1189 | g4.4 0.4] 1.8 (-1.4) 0.2
5.5 [1994 " " " 1494 | 133 85.8 0.0 1.3 (-1.3) 0.0
6 6.1 [None | Rising | Conatant] High 1979 | -- 98,7 - .- .. .-
6.2 {1986 | " " " 1693 1286 | 97,9 0.8 1.9 (-t.1) 0.4
#6.20[1986 | ¢ " " 1693 1286 | 97.9 0.8] 2.3 (-1,5) 0.3
7 7.1 [Nons | $8/1b, | Constant| High 1724 { -~ 96.9 .- — . -
7.2 | 1984 " " " 1640 | 84 96,8 0.1] 1.9 (-1.8) 0.1
*7.2s|1984 " " " 1640] 84 96.8 0.1] 2.3 (-2.2) 0.0
!Hia:h

8 8.1 [Noue | $8/1b. | Constant| mediate | 1155 |.. | 49.0 o .- . .
8.2 {1984 " " " 1102 { 53 68.9 o.1| 1.9 (-1.8) 0.1
»8,2a] 1984 L " " 1102 | 53 68.9 0.1 2.3 (-2.2) 0.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exarple: Column 2 derivation for Case 1.27[Column (1) Case 1,1 - Columm (1) Case 1.2] = (81.9 - 80.9] « 1.0

* Parallel bresder cases,

5
 

 

 
 

  

 

   

"rablc 5, for tho 5% dilcounl: rate, lhwa ‘a net benefit obtained

i

 

tho current progrm vith'fi a 1984 ':LHPBR 1nt:roducl::lon, tho ml:
| bmfl.tl ars 319.2 bilnon and bonefl.tlcosl: ratio is 7.8, For

T1‘1.31113 fouil cc:m:c,E benefitlcost ratios are as high as 15.8.

oo

| mu 6 for the 7% dmoune rate, which rate 1s the reference rate
uud for discussion :ln tbh rcport, begins to show some degradation
in the benefit/cost ral:io, but for urly introduction of the breeder
(1984 or 1980), still shows ratios substantially above One for 9 out
of the 11 cases studied,

Table 7, for the 10% discount rate shows seven cases vhere there is

a net discounted benefit, with benefit/cost ratios varying from 2.8

to 1.2 for these cases. Group 1 net dismunted benefit of $1.3

billion is obtainedl for the 1980 breeder introduction and,_ for

Group 5 net benefits of $3.9 billion and $2,” billion are obtained

for the 1980 and 1984 breeder introdnction.reapectively.with benefit/cost
ratios of 2.8 and 2,0, respectively. Group 6, Case 6.2, for 1984
{ntroduction, shows a net discounted benefit of $1.0 billion and a

benflfitlcost ratio of 1l.4.

46
'rablo 8 for the 12.5% ducounl: rate,contains no instances where
.thora u ‘a net bmfl.l:“. m Group l,cau 1.3,benefit/cost ratio for
tho curnnt pmgrn (1984 nmm) falh to 0.2, -

Cmclusiona ruchnd lron tbo reaultl of varyins the discount rates are:

    

  

:__?:,r.““ 1n26 of 28 cuu cxanimd

(2) Even with ducount rates of 102. bcnoutlcon: ratios of 1. 6
are obtainqd for a 1980 introduction of the breeder and
reudnablc assumptions of rising uranium costs, constant
fossil fuel costs, and base energy demand., Benefit ratios
greater than 1.0 are obtained for assumptions of early
introduction of the breeder, rising uranium costs, rising
fossil fuel costs, and base energy demand (Croup 3), and
for early introduction of the breeder, rising uranium
costs, constant fossil fuel costs, and high energy demand
(Group 6). |

(3) Discount rates of 12,5% result in benefit/cost ratios below

one for all but one case.

3.3.6 Electrical Cecerating Capacity
Tables 9 and 10 are indicative of the electrical generating

capacity allocations between fossil, LWR, HICR, and LMFBR systems
determined in this analysis for two of the base reference cases,
Case 1.3 and Case 1.4, 1in Tables 3 and 4, Also, they are indicative
of (1) the trend for HIGR penetration, (2) the trend for the LWR

47

 
 

 
TABLE 9

TR

COST-BENEFIT ANALYSIS

GENERATING CAPACITY BUILT iEUHBBR OF 1000 MWE PLANTS)
CASES 1.1 AND 1.3 HTGR IN 1980, RISING URANIUM PRICES
m

CONSTANT FOSSIL FUEL COSTS, BASE ENERGY DEMAND
M

 

 

 

 

 

YEAR Case 1.1 (w/o LMFBR) Case 1,3 (w/IMFBR Intro. 1984) TOTAL
Fossil | INR | HIGR | Fossil | 1R |wrGR| LiPER
1970-79 120 | 84 8 | 91 | 121 - - 212
1980-89 190 | 361 159 136 64 1 136 49 3ss
1990-99 260 | 15| 343 165 . - 453 618
2000-09f] 428 | 12| 515 168 s | - 733 955
2010-19| _687 | _ 1} 706 I 25 1 1,369 1,39
Total 1,685 | 148 1,731 560 | 239 | 161]2,606 | 3,564

 

 

 

 

 

 

 

 

 

 

* The total of 3564 should be reduced by the initial plants whose
30 year 1ife has expired before 2020, to obtain operating capacity
in 2020 of about 3000 GW(e).

TABLE 10
COST-BENEFIT ANALYSIS
GENERATING CAPACITY BUILT (NUMBER OF 1000 MWE PLANTS) -~ CASE 1.4

JASE CASE FOR LMFBR INTROUDCED IN 1990, HTGR IN 1980, RISING URANIUM PRICES,
CONSTANT FOSSIL FUEL COSTS, BASE ENERGY DEMAND

 

 

Year I Fosail | 1wR ! HIGR | IMFBR | TOTAL |
1970-79| 117 95 - - 212 |
1980-89] 142 72 m 1 - 385
1990-99] 207 98 63 250 618
2000-09} 328 - 54 573 955
2010-19| 110 23 1 15 ] 1,136 | 1,394
Total 904 338 363 | 1,959 | 3,564*

 

 

 

 

 

 

 

 

*See note for Table 9.
49
3.3.7 Discussion of Assumptions

Fuel Cycle Costs

The fuel cycle costs annociated_with'the LMFBR are probably
conservative since theywere based on present technology modified
for an increase in scale of plants. Improvements in technology
in the next 50 years should markedly reduce these costs and

measurably increase benefits,

Energy Demand
Though the validity of any of the electrical demand projections may

be at issue, there is little question that electricity penetration of the
energy market is increasing at the expense of other forms of direct energy
use. The differential cost of producing energy which has been displaced
should appropriately be credited if the additional penetration is due

to decreased costs of a new form of energy such as that from an LMFBR.

This was not done in this analysis.

Termination of Analysis
The arbitrary termination of the analysis at the point of high

slope in kilowatt-hour additions has been too conservative. Further,
benefits from plante operating in year 2020 which lmve continuing
lives of up to 30 years are not adequately accounted for. A more

realistic model needs to be developed.

Advanced Converter
The assumption of advanced converter development program success,
followed by a large scale introduction of the advanced converter, leads

to large scale installations of the advanced converter, and substantially

50
 

 

affects LMFBR be_n_e__;f:l.to. o

  
 
  

   

ta: flm to tho mmnta. COnci.doutions of auch £lows should

N J__be accounted for '_1n:_ future analyul

   

A urani.uu cofl: lchedulo mtermdute botvoen the constant
$8/1b uranium cost and the uranium cost schedule based on the AEC
cost projections (half-way between $8/1b and Table 13 Schedule)
vas studied to further determine the sensitivity of benefits to -
uranium cost. One group included cases with constant fossil fuel
costs, a base energy demand, a non-breeder base case with LWR and -

HIGR, and cases with 1980, 1984, 1990 and 1994 IMFBR introduction,

The intermediate Uranium cost schadule (wvith advanced converters)
results in small changes in benefits as compared to cases using

Table 13 uranium costs.

51

 
 

 

 

No IMFBR
LMFBR 1980
LMFBR 1984
LMFBR 1990
LMFBR 1994

 

 

 

 
4.0 OTHER CONSIDERATIONS -

Although the results of the cou-beneflt mlynu clurly support the
development of the breedcr in accordancc with l:ho currant plannins
schedule, it is cvidenl: that tho ruultl of qunnt:iflable cconon:lc
analysis are only one clmnt to bo conudorod :l.n doumining tho
values of mh devolomntal cfforn. An ducribed :I.n thc 1962 Raport
to the President and its 1967 Supplmnt, nuclur powor, in addition
to the benefits resulting from lower cost power; has a number of other
advantages of tremendous importance and potent:la_l from a near term
and long term standpoint, both here in the United Statq and throughout
the rest of the world, Numbers cannot be assigned to intangibles,
and judgment values in many cases have to predominate, Major benefits
in many cases are not readily susceptible to measurement, but
in terms of national objectives are of substantial consequence.
For example, the success of the breeder program would, in the not: too
distant future, provide:

(1) access to virtually limitless sources of electricity at a low

cost; |
(2) an emple supply of electricity to areas which have been denied
low cost power because of distance from fossil fuel sources or
hydro resources;

(3) virtual elimination of air pollution from nuclear fueled electrical

power plants;

51

 

 

55 b T W . i ko
 

 

 

  
 

4.1

(4 assurance that ¢

-wwifilfiaaaéccnaidcraticnafihaya>lon3 baansreccgnized.aa the basis
for aupycrt of the breeder program, -

..gelection of significant statement which have been made over

Tha availability of energyand, in particnlar;low cost energy,

| and vcraatile form;of energy, haa been growing rapidly.,

 

'cc;ccatgctanicm?c:a3reaatval will be SR

  
   

 

 

‘Appendix A provides a

the .years highlighting the national importance of developing

the breeder reactor.:

’ i -‘ o
Need fbr Electrical Encrgz

holda tha kay to cbtaining significant improvements in the
standard of 1iving in developing areas and to auataining the

plannad gtcwth of the more highly industrialized areas. With

 

tha paaaaga of timc, the demand for electricity, a most useful
The
total U. S. alactric genarating capacity, which amounted to

267, 000 Mie at the end of 1967, ia expected to grow to 523,000 MWe
in 1980,and to about 1,600,000 HWe in 2000, based on the base

projection of electrical energy demand used in this analysis.

 

54 L |
.

The eieetrie utility industry of this country is increasingly
using large-scale nuclear power plants to meet the demands for
electricity. This decision to rely on nucleaxr power has -been made
in lerée;a-meunre as e-reeull:: of substantial:Government encourage-
ment end:'e?eupporl:. -The. present comitmenl: to nuclear power is:
based almoet exclusively on the use of ught vater reector

rfe
which now utilize leu than 1% of t:he energy potent:iel of neturel

¢

urenim. The lerge demend for urenitne wbich w111 reeult froe:

‘t:he lerge-ecele use o£ the light: wet:er reactor :nekee neeeeeery

L f ‘: ;,._: g it

the development of the advanced reaetore . particularly the breeder

reactors, and tbeir timely 1ntrodnc|:ion 1nto the utility environment.

Large-Scale Commitments to R&D Program

The role of the Government 18 to establish an advanced reactor
nuclear power program which has as its objective the development
of breeders, which can make available the full potential of

nucleer=fue18.

The nuclear connnunity is actively involved in conducting the R&D

for the breeder program. d number of major facilit:iee are in i
operation, be:l.ng built, or are in the planning etage. In edd:ltion
to the AEC sponsored work eubetential investments have been
committed to the LMFBR program by the nuclear industry and
utilities in terms of funds, manpower, and facilities. The.
determination of the AEC to ‘carcry the LMFBR forward on a national

basis, along with the strong economic incentives, have been key

factors in obtaining commitments and participation by industry

55

 

 

 

 
o and tho ntintiu 1n ‘this RAD program. : The nuclear community,
1nc1ud1n3 tho laborntoriel, 4industry andi the utilities, have

   

;i;-?inoti.voly partioipntod in the: dovolopmnt and preparation of

 

. the mg,wpm., WASH 1101 through 1110. These plans
"'oot forth tho course of: action for oohiovins the IMFBR objective.

4,3 Induotrial and Utili%fiomitmonu

RTINS i bE s Yo

In addition to tho AEc-funded and-direotod program, the roactor

‘. ‘*f 53\‘_ LY j ol P S

mnufnotnrors and nuclear oriented utilitiu have pubucly announced

 

UL . 1 rov oF

| that: thoy Ln{ procuding with privately financed studies and

| B broad technologioal development program complementary to the

| AEc-oponsored efforts, - The reactor manufacturers are annually
investing a total of more than $20 million, Statements regarding
the corporate commitments of major reactor manufacturers to

fast breeder reactor development are presented in Appendix B.

In addition to this, approximately 50 of the leading electrical
utility companies are participating financially and technically
in one or more of the reactor manufacturer-sponsored programs.

In oho opring of 1968, the annual level of utility effort was
eotimnted to be about $6'm11110n,oxc1udin3 the continuing commit-
ments fo Foffii and SEFOR, Utility commitments are summarized in

Appendix C.

Experience has ahown that the successful power reactor

 

concepts are those in which there has been strong industrial

participation and utility involvement during the developmental

56
4.4

c’e'

period, ,(The uumu objective 1s the ostablishment, at an early
date, of a self-sufficient and competitive LMFBR nuclear power
m!u_ury_wbiqh'cgn provide the commercial breeder needed in our
economy,. - Steps to ach_t_.ovg this objectivc have been taken, and
comtdcrabh progress has been achieved,

c_o_uglggof Br;edar to LWR c@tmnth |

The early introdustion of the breeder will provide significant
zeduction :l.n tho lons rango raquirement for onriched uranium

and, in tho éau of tho ful: in.'eedafl, prov:l.do optimm utilization
of the plutonium that will be produced :ln the light water reactors.
(The AEC estimate of the plutonium contained in irradiated fuel
after final discharge from 1ight water reactors in the U. 8.
through 1980 1s more than 100,000 Kg*,)

The strong economic, technical, and industrial coupling characteristic
of the light water and fast breeder reactors employing the uranium .
238-plutmm fuel cyclowis important .'t:o"estabuahing the flexible
transition to a fast breeder dominant complex. The industrial

and utility support for the LMFBR reinforces this conclusion,

 

-

*Reference, U.S8.A.E.C. "Porecast of Growth of Nuclear Power', WASH-1084
December 1967, where the estimate was approximately 127,000 Kg,

54
 

 

   

Plutonium Availability and Demand -:

jamodnta 1s to fual the faat: breeder. The high per omance fast:

 

4.6

| uranium oré fequirements and separati.ve work requ:h:ed by the

m's and other umnimn-consuming react:ors, to a minimal amount,

Fuel Cycle

Substantial private investments have been made and industrial
competence developed with respect to the fabrication of mixed
oxide plutonium bearing fuel elements in this country for
recycle of this fuel in the LWR, as well as for eventual

use in the LMFBR. This capability over the next ten years

can be increasgd by providing fuel for plutonium recycle in the
LWR, for the Ffl'F, and for LMFBR demonstration plants. Thus,
the required fuel cycle capabilities should be well established
when the LMFBR is introduced on a commercial basis in the 1980's.
There is little question that the industrial experience with the
1ight water reactor fuel cycle will be of great importance in

establishing an LMFBR fuel cycle industry.

58
 

| A number of countries, including France, Germany, ltaly,

o Japan, the USSR, and the United Kingdom, have established a high
| priority for the development of the fast breeder reactor as a
matter of national policy. Each of these countries has committed

substantial resources toward achieving this goal. It is

 

| estimated that these countries, excluding the USSR, are spending
i over $150 million per year on fast breeder R&D programs.
Appendix D summarizes the major foreign fast breeder reactor
programs and considers the implications of these programs on

the economy and technological posture of the U. S.

4.8 World Market
The development of a commercial LMFBR by United States industry can

have a beneficial impact on the United States balance of payments
position. Though the country which is first able to produce an
economic and reliable fast breeder reactor may occupy a strong

position from the standpoint of initially capitalizing on the

 

available worldwide market for breeder reactors, the domination

of a foreign market will depend on many other factors. These

include price structure, simplicity of plant operation and maintenance,
and reactor characteristics. Several West European countries

are planning to introduce a fast breeder reactor into the commercial
enviromment in the late 1970's and early 1980's. The U. S. is

planning to ocommence LMFBR operation in the early 1980's.
Substantial sales of both LWR's and breeders will be gained

by the U. S. - both for the near and far term - if the current

programs are successfully achieved. See Appendix D for further details.

59

 

 
 
 
  
 

"f"foreign comtr:les have been bued Ion this leadership, and the

 

__ 'rechnol h 1cal'.uadeuh1 | o e
U. 8. off.oru muu be- continuad in order to maintain the technological

    

world leadarahip: which the U. 8. has acbievcd in the development of

 

reputation of. tho U, 8, in many of the natim is in no mll

4,10

T TR

measure due to :I.ta comanding pos:l.tion 1n advancing tho uses of

the atom for peacefui purposes. 'I'he U, 8. resolvn to apply nuclear

energy to paaceful applications was firsl: emmc:l.ated by President

Truman and. has been reiterat:ed by each succeedins President., Strengthening
of the IMFBR program will enhance the pesture of the United States.

There is little question that the USSR would exploit any failure

on the part of the U, 8. to maintain its leadership in this field.

To appreciate this, one need only have witnessed the aggressive

program presented by the USSR at the World Power Conference held

in Moscow in August 1968 with regard to its position in the area

of peaceful application of the atom to nuclear power.

Electricity and Other Procesgses

Whereas the most readily quantifiable benefit from the breeder
program will be the reduction in cost of electricity in mills per
kilowatt hour and of heat in cents pexr million Btu, the indirect
benefits of cheaper energy are extremely far reaching. A small

incremental savings in the cost of energy will open up new horizons
60
   
   

 

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61
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(uaysiitw)  1S0J A9¥3INI Tvo1¥I9T1 *
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62

 

 

 

 

 

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syt e R £ ot A A R L A ViR s e aominzaclhy - . : » vmbitosne oo o1 e et e i AR RS A

5.0 MAJOR ASSUMPTIONS USED IN THE COST-BENEFIT ANALYSIS

The following assumptions used in this analysis are based on presently,
available information. The results of the analysis are only as accurate
as the numbers associated with the aumpt:ions. However, as noted
elsevhere, the sensitivity of the benefits to changes in the parameters
associated with these assumptions are fairly valid and of direct

interest.

5.1 Discount Rates
Decisions on appropriate discount rates should be made on a case
by case basis. The application of high discount rat:en‘s could cause
the Government to ignore investments of great potential benefit
to the country which only the Government can undertake in favor
of continued investments by the private sector. For most of
the cases examined in this analysis a 7% discount rate has been
ugsed., The 7% discount rate was adopt:ed by the AEC Systems Analyses
Task Force in 1967 and used in the projection of the nuclear power
economy that served as a basis for this study. For purposes of
comparison and discussion, the model also discounted the objective
function, which has already been minimized with the 77 value, for
discount rates of 5, 10, and 12.5 percent. In no event was the

internal cost of money, 7%, changed in the analysis.

63
yeara, eight 1000 me plmte

.:-'_:_: 5 s“ ég.u.{ Lhi BRS¢ “;'{,‘4;'}?;” s

 

-uffor the third two years, and eeonomica dictating thereafter.
The ratea asaumed are compatible with the capability of 3to 5§

-----

SRR e TR Ao by, 4 _“n_.‘-‘- Aty

5.3 Cepital COata of Planta
The capital coate utilized in the model for the LHEBR cost benefita
study are ehown in Figure 8. Theee are estimated 1970 costs,
averaged for the(U. S. and they reflect, to the extent possible,
the follovtng factors: '
.ar”_ldcreaaed cost of'money.

b."‘Inflation in cost ot}materiala and labor to 1970,

¢. Experience with plaate constructed to date and on order,
;d, ?he:effecte_of prgjeetedjcoat reductiona.

e, Effects of mode of construction (shop versus field, improve-
- ‘ments in engineering and utilization of facilitiea), and
related quality agsurance practices,

£. COntingency allowance,

These costs represent data available in the fall of 1968, All of the
data had, as yet, not reflected Items a, b, and £f. 1t is expected that

complete factual data would increase the estimated costs,

64
“P861 ueyy

a0 =o_§ae§ Jo aep yum ca_ 10 E.a._._ 0} SYIYs sAInd 3503 YHWT 310N

i

 

 
 

 

 

 
  

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FIG.

65

 
 

5.5

Mass Balance and Reactor Performance

The mass balance of each reactor was based on reactor performance
numbers shown in Table 11. Two sets of values were assumed for
the nmg, one for the initial introduction of the LMFBR and a
second for advanced flE’BR's. The reactors inbtroduced in

thef first! 6 years woré assumed to maintain low specific power and
iggh spedific 1nventory for the 30 years of 1ife. 1In practice,

advanced cores would replace the earlier cores.

@;‘ep of the several types of 1light water reactors used in the
&alyaia are shown in Table 11, representing (1) LWR with only
enriched uranium feed, (2) LWR enriched with only plutonium
feed for first 4 years, then enriched with uranium-235, and

(3) LWR enriched with only plutonium feed for first 10 years,
uranium-235 thereafter, This simplified method was used in the

computer runs to represent non-recycle and recycle IWR's.

Fuel Cycle Costs

The systems analysis model utilized unit costs of fuel fabrication,
dhemical preparation, conversion, and chemicallreprocessing which
have been computed based on fuel mass flows for tfia entire 1ife of
each reactor considered. The code used is applicable to reactor
syatems'in which the number of reactors installed is changing

with time, and in which several different kinds of reactors are
used. Based on assumptions developed by the AEC Fuel Recycle

and Systems Analyses Task Forces, representative results are shown

in Table 12,

66
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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6 MM ey

. _-___"ren pographical resi.ona of tho U. 8. ‘were selected in which

foui 1 £u¢1 c”“ ransO fron 16 3 to 31:_8 cents per million BTU

 

3.7

Group 5 for ubich‘fcou :mcreuu o! 12 per year were assumed,

Uran imcb‘.t.*gm ey e b S

Uranium costs were assumed to be rising for 5 of the 8 groups
considered (see Table 1) in accordance with a schedplo shown in
Table 13.  This table was developed, for computer purposes,

from the AEC Uranium Reserve estimates shown in Table 14. For
Groups 2, 7, and 8 (Table 1), the uranius cost was assumed to

be constant at $8 per pound U30g. Future uranium discoveries
will probably result in an intermediate cost, more closely approxi-
mating the rising than the constant cost assumption. The analysis
did include some consideration of mtomdiato costs, as discussed
in this report. 7The analysis further gumd that there was no
import or export of fissile or fertile material.

69
 

 

 

 

 

 

 

 

 
 

 

 

 

:.u? ,ffff;iq2§§£§i1é;§ :

. COST-BENRFIT AWALYSIS

LF s 2o d gt
Tl ¥ }{ j’«\f i

 

  

  

    
 
 

    

 

 

 

 

 

 

 

 

 

 

 

 

 

{Cost per 1b, g b s
~.of U30g $50 to 100 | Total |
thte‘d i | . : el "“i 4,,?“ % |

5.8 Base Date foé.Analysis and Cut-off Dates ?w“ T o
Nuclaar.powef plants will not go into com;arcial operaéidn in |
sizoable numfieru until 1970, uhich_vns aelectedlas.theainitial |
year of this analysis and, also, a:s"'i:‘he base ‘yééi; r'for wb&.ch all
present worth costs of all future gxpanditures were determineq.

The period from 1970 to 2020 was selected as the period over
which the cost benefits are obtained.

5.9 Electrical Demand
The electrical energy demand used in the analysis is in accordance
with Table 15, This table excludes the demand associated with
peaking units and all hydro, It further assumes that nuclear and
fossil start at a 1970 baae_vhich excludes those plants in operation

before 1970,

 

* Dafined as the quantity of uranium, expressed as Us05, in all known ore deposits
for which the uranium content and other factors, sucR as size, depth, and
metallurgical characteristics, are sufficiently well defined that the cost of
production can be estimated on the basis of presently known mining and processing
technology.

%% Defined as that quantity of uranium presumed to occur in unexplored extensions of
known deposits and in known uranium-producing areas, or in areas of gimilar
geologic favorability, which it is expected can be exploited at the costs specified
in each price range.

71
 

 

 

 

 

 

 

 

 

   

 

 

 

1970M e wzso

1980% 1,377 wonizonst ) 2,000 | 2,330 |

- 1
¢ Sy .

2000 | 5,070 " |“" “'6,800°" | 8,000 | 10,000 -

 

 

 

 

 

 

 

 

2020 | 10,870 | ‘15,725 * | 18,500 | 24,210

A

*output of plants operating prior to 1970 are not included.

f

5.10 Generating Capéc:lty Load Factor
The United States yearly load factor was assumed .t:o range from .
65% in 1970 to 68% in 2020, The load factors are based on
nuclear power in competition for all estimated electrical
demand shown in Table 15, which as stated, excludes the demand
associated with peaking u;aits and all hydro.

72
 

 

 

“Presently planned program
for breedero.

3-1 umn :I.ntroduced fi: 1984

SR e LT e o
g LRSI ;‘,‘ S e

.+ B=2 1MFBR mtroduced in 1980 :

v . S
o

 

Accelerated program for
breeders.

Delay in present program demon-
stration by 2 years.

B-3 IMPBR introduced in 1986
B-4 IMFBR introduced in 1990 - A $40 million per annum ILMFBR
technology program 1971-77.

B-5 LIMFBR mtroduced in 1994 - A $15 m:l.llion per annum ILMFBR
technology program 1971-77.

B-7 IMFBR introduced in 1984 - Parallel Breeder introduced in
1992 - Parallel Breeder program.

- £

In Plan B-1 through B-5, the alternate breeders (MSBR and alternate

FBR's) are phased out subsequent to IMFBR introduction. Plan B-7

supports a level of effort for alternate breeders through 1971-

1972, at which time it was assumed that a decision is made to

73
etert 1n FY 1971 to allow for e programed reduction.

 

Additionel totel expenditureelfor the delayed programs, above and beyond
the total’ expenditures fbr the presently planned progrem*would be made
as a reeult of the pheee-down and phagse~-up during the delaying period.
In any case the plene assume that some benefits from R&D would result

during such delsaying period.

In Plan B-4, IMFBR R&D facilities are maintained to the extent necessary
for introducing the LMFBR in 1990, with the LMFBR technology effort

maintained at $40 million per year for Fiscal Years 1971-77.

Plan B-5 reduces the LMFBR technology effort to $15.0 million in the
FY 1971-77 time period, but maintains existing LMFBR R&D facilities in this

period in a manner which would allow the LMFBR to be introduced in 1994,

Supporting reactor technology programs include support of the industrial,
university and AEC laboratories. Light Water Breeder costs are not
included, since full scale designs of 1000 MWe LWBR's are not available

to date,

To establish the validity of safety criteria used in reactor design,
construction, operation and related accident analysis,

it is necessary for the AEC to continue to support safety R&D

74
 

 

75

 

 

 
 

 

 

 

APPENDIX A

Selected Statements and Reviews in Support of the Breeder Program

1,

1962 Report to the President on Civilian Nuclear Power, U, S.

Atomic Energy Commission,

"Clearly: The overall object 's

power program should be to foster and suggg the g;gggng use
of nuclear energy and, importantly, to guide the program in
such directions as to make possible the exploitation of the

vast energy regsources latent in the fertile materials,
uranium=238 and thorium,

"More specific objectives may be summarized as follows:

1.

2,

 

onstruction of plants incorporating ¢t egent gt
competitive reactor types;

The early establishment of a self-gsufficient and gfgging
nuclear power industry that will assume an increasing
gshare of the development costs;:

The development of improved converter and, later, breeder
et conver e fert t nab

 

The maintenance of U, S. technological leadership in the
world by means of a vigorous domestic nuclear power program
and appropriate cooperation with, and assistance to, our
friends abroad."

 

* % %

"Hence, it is essential that, within a reasonably short time, the
goal should be attained of making breeder reactors technologically
and economically attractive, The Government must take the lead

in this regard.'

* Kk k

"Thus, the future program should include the vigorous development
and timely introduction of improved converters and especially of
economic breeders; the latter are essential to long-range major
use of nuclear energy."

76
 

2,

1967 Supplement to the 1962 Report to the President on Civilian

Nuclear Power, U, S, Atomic Energy Commission.

"...Intensive development of the high gain breeder ovér the long te:
has been undertaken as recommended by the 1962 Report.

"The objectives expressed in the 1962 Report are still regarded as
valid, The Commission intends to continue to exercise positive
and vigorous leadership in achieving the technical goals and in
assuring growing participation by the nuclear industry as nuclear
power becomes economic, " - ' -
| L Rk ok | S

"The fast breeder, with a potential for a doubling time of 8 to 10
years, can most efficiently use the fertile uranium-238 in depleted

and natural uranium,

"The fast breeders of major interest are divided into three
categories - sodium cooled, gas cooled and steam cooled., The
sodium cooled fast breeder has been established as the priority
program on the basis of potential economy, reactor manufacturer
interest, and technological experience gained in the U, S. and
abroad. Worldwide interest is concentrated on the sodium cooled
breeder...." '

Energy R&D and National Progress: Findings and Conclusions, An
Interdepartmental Study, September 1966.

"While private industry will probably concentrate on improving
existing commercial reactors, the Government should play a key
role in developing more advanced reactors with better fuel
utilization. Present development schedules should be maintained
80 as to accomplish development and final commercial application
within the normally expected 15 year time period. Concurrently,
the Government should encourage development of more than one
breeder or near breeder concept as a hedge against possible
failure of any one approach.,”

Fast Breeder Reactor Report, Edison Electric Institute, April 1968,

"The long range benefits from the use of fast breeder reactors in
nucleer power generation have been recognized for two decades;
however only recently has widespread interest in the expeditious
development of breeders for commercial application become manifest.

"There are strong economic incentives for the electric utility

industry to participate in the development of the fast breeder
reactor."

77
3.

 

Speeches

b.

Remarks by W. Kenneth Davis, Director, Division of Reactor
Development, U, S. Atomic Energy Commissioh, Fagt Reactor
Information Maeting, Chicago, Illinois, November 20, 1957,

"I1f we ask ourselves why there should be a substantial effort
on fast reactors, 1 think a major reason to be given is the
promise of nuclear breeding, Fast reactors offer a proven
means of utilizing to the maximum the energy stored in
uranium - not just that in the U-235 (0.71 percent of natural
uranium) or even that which can be obtained by a plutonium
recycle in thermal reactors which is only two or three times
the natural U-235 content,

"The fast reactor systems offer, in addition to the advantagrs
of high temperature and long fuel 1life, the attractive possi-
bili.y of breeding, and thus are probably the most important
systems which we have under study when looked at from the

long range viewpoint. The idea of conservation of nuclear
fuel, which can best be realized by development of breeder
concepts, 18 of such importance to our program that we have
made it the subject of a separate objective of our long range
progranm, "

Remarks by Dr, Frank K, Pittman, Director, Division of Reactor
Development, U, S, Atomic Energy Commission, Fast Breeder
Power Conference, Detroit, Michigan, December 3, 1963,

"To this end, the objective of the Commission's nuclear power
program for the long-range future is clearly identified: 1t
is to guide the program in such direction as to make possible
the exploitation of the vast energy resources latent in the
fertile materials, thorium and uranium-238. We are still
involved in some of the first steps toward the realization of
this long-term objective., Successfully attaining this
objective will assure that we can obtain maximum benefit from
our low cost uranium reserves and render relatively unimportant
the cogt of nuclear raw materials so that even very low-grade
sources will become economically acceptable,”

78
 

 

€. Remarks by Milton Shaw, Direcgorfofgnivision ongeactor.DeveIOpmeht

d.

e e b s o b o g

and Tachndlbgy,ifi;'Sa AtomiciznqxgnyOmmiésibn,'ig‘fiflflslcdnfbrence

; DT T TN
TEEr AR v

e CR TR R SUeiE et E o i Y Lo ;
on Fast breeder Reactors, May 17q19;f1965,. B R L s,

Mn its program to'achieva,ayntéms éfi‘tfi"tll.fl!fi&fldathfi3“{'8;!!

energy resources while reducing further the cost of electrical
power, the AEC has: given:the highest:priority to. the Liquid
Metal-Cooled Fast Breeder Reactor. The potential economic
advantages far outweigh the difficult development problems and
the expenditures currently proposed; the cost-benefits of the
extensive R&D program are obvious.. The successful demonstration
of .this vital reactor concept in.a timely, effective and economic
manner depends upon verification.of the technological. and
engineering prerequisites through a planned and disciplined
research and development program...” Do =

Remarks by AEC Cofimidcioner Dr. Cerald P, Tape, Third
Intérnational Confhrenéa on tfie Paaédful Uses of Atomic

Energy, Geneva, Switzerland, August 31, 1964.

YThe basic purpose of nuclear power research and development in

the United States is to provide an additional and alternate
energy source to meet present and future demands thereby providing
timely protection for the nation against rising power costs and
eventual fuel shortages. The long term objective will be met
through the development of commercial breeder reactors capable of
utilizing the vast potential of the world's nuclear resources."

Remarks by Dr. Glenn T, Seaborg, Chairman, U, S. Atomic Energy
Commission, American Power Conference, Chgcago, Illinois,
April 25, 1967.

"In speaking to the British Nuclear Energy Society last October,
1 outlined the reasons why I believe we must move ahead rapidly
to the development of more efficient means of using our basic
nuclear energy resources - the world's vast, but not unlimited,
supply of uranium and thorium, Projections of the world's
increasing population, its rising rate of consumption of energy,
and its evea proportionally greater increase in the use of
electricity, combine to show an urgent need for developing
economically competitive nuclear reactors which will burn,

79
“not ;1ess :than one:percent of .the uranium used in today's
“1ight water reactors, but a much larger fraction, and
‘eventually almost ‘all of the uranium in our nuclear fuel
‘' resources, as might be done by the most advanced breeder
- systems of the future ' \i .. v o.ooul

  
   
 

e u?E 43 * ,y .33’ s{ Sosp b eyl if ;@ 7 “ Fooroodseer 0 EE L g .
S t“c : "1on ’.— jMican . Pw.r confer‘m.’ Chic‘so’ 11111101.,

t

R TRy R f ML ET iy
i - ;

 

- B Aprdl-23, :19684 10 s

s YAs you well ‘know, for more than ten years the utility and

- reactor manufacturing industries have been deeply involved
in the/predecessor AEC program - namely, the 1light water
‘reactor program for electric power plants., Embarkation
into the breeder generation is another important indication
of the growing maturity of our nuclear power industry,"

'8 Remarks by‘Cofiminoioner‘wilfrid E. Johnson, U. 8., Atomic
Energy Commission, ANS Topical Meeting, San Francisco, California,
April 10, 1967.

“The ultimate step in extending fuel supplies is in getting
many times the present 1 to 2% of energy latent in uranium
transformed into economically useable form., Our ability to
make more than a few percent of this latent energy available
at all, requires the breeder-type of reactor, and to get this
energy into the economy requires that nuclear breeding plants
be economic., To achieve this goal will require that Covernment
and industry each pursue complementary roles,"

h. Remarks by Congressman Chet Holifield, Chairman of JCAE,
American Public Power Association's 1965 Annual Convention
Los Angelea? California, May 4, 1965,
"1f we are successful in developing advanced converters and
near term breeders utilizing thorium we will succeed in
multiplying our energy resources as much as 50 times., If
we successfully tackle and accomplish the much more difficult

goal of high yield breeder reactors we will have achieved
unlimited supplies of energy."

80
 

 

 

Remarks by Congressman Wayne Aspinall, Twelfth Annual
Meeting of the American Nuclear sod:loty, Denver, Colorado,

June 21, 1966,

"If flt:ha breeder '-ru'cl:or can be successfully developed-~ and
we are confident that it can~- it will meet the world's

'+ energy needs for the indefinite future. I can think of no

k.

1,

finer bequest to succeeding generations than that,"
Remarks by Representative Craig Hosmer (R-Calif), ANS Meeting,
San Diego, California, June 13, 1967,

"Continued large reserch and development costs to round out
the national nuclear power capability in the form of advanced
converters and breeders makes continued substantisl government
part:lc'i'pation in these areas mandatory for another 1% years
or 80,

Statement by Philip Sporn, President of American Blectric
Power Service Corporation, before the Joint Committee on
Atomic Energy, July 17, 1964.

"This program (reactor development program) should be aimed at
the development of advanced reactors which mske more efficient
use of nuclear fuels than do our present light water reactors,
Selection of specific concepts and the setting up of develop-
ment schedules in this program must be determined so as to be
consistent with the overall and developing energy needs and
policies of this country. 1In particular, it is my judgment
that we need to focus both on reactors vhich can utilize thorium
efficiently and on fast breeders. Moreover, I believe that the
potential economic performance of each of these reactors must
be considered every bit as seriously as their ability to

extend our nuclear fuel resources, for we can afford neither
the waste of our fuel resocurces nor our manpower and other
resources all of which are integrated in the final figure of
economic performance,"

Statement by President-Elect Nixon, October 5, 1968: Acceleration
of the Atomic Energy Commission's breeder reactor project could
provide virtually inexhaustible energy at low cost.-- Reported
by New York Times, October 6, 1968,

81
 

 

6. lLetter to.t

7o

?;;being‘madc in the peaceful uses of nuclear energy, For cxsmplc,
" 'in the field of civilien nuclear power, I.look:
_ d wglmm t: iy ' . '
i which will:
 of our Nation'

 

 

 

tomic nc?syficcmmiclicn&fromaPrccidcnt;J°h°999’5

 
 
 
 

impcrtant;prcgrcss that is

 

 

   

 
  
 
   

otward to- thc

fiicquircd for. thc*mct” afiicicnt"nd&cccncmicai csc

afnucicar £uel tcncuamea.n

 

   

fnxcerpta frcmqthc Budgct of. thc;vnited States Government.

a. FY 1964 Budget.

 

e;.'Expcnditurec in 1964 for tha developmcnt of ‘economic civilian
nuclear power are estimated at $244 million, 'an increase of
$34 million over 1963, In line with the Commission's recent
Report to the President on Civilian Nuclear Power, increasiag
emphasis will be placed on reactors which produce more fuel than:
they consume ("breeders"). Breeders will be necessary 1f
nuclear energy is to make a significant contribution to the
national powcr supply in the long run.’

b. FY 1965 B“dseto

"Increancd emphasis will be placed on reactors which produce more
fuel than they consume ("breeders") and efforts will be continued
to devclop certain other advanced reactors.

"In 1965 particular cmphasis*will be given to "breeder" power
reactors, which would produce more fissionable material than
they consume, and to the area of nuclear safety."

c. FY 1966 Budgfltc

"The Commission is also working toward the long-range objective
of high-gain breeder reactors which produce significantly more
fuel than they consume, These breeders would insure a tremendous
energy source for centuries to come,"

"Continued emphasis will be given to the development of reactors
which produce significantly more fuel than they consume ("high-
gain breeders') as the long-range objective for civilian power
reactors."

82

  
   
  
 
  

 
I'Y 1967 Budget.

"With the increasingly widespread acceptance and use of
nuclear power reactors, the efforts of the Federal
Government are focused upon development of improved

designs which will use nuclear fuels more efficiently and
produce electric power at lower cost, Work on the so-called
"fast breeder" reactors--which would produce more fuel than
they consume--will be intensified, with design in 1967 of a
special test reactor, expected to cost about $75 million."

FY 1969 Budget.

"The principal element of AEC's program in this area is the
effort to develop an economic fast breeder reactor, which
promiges to produce morxe fissionable nuclear material than
is consumed in the process of producing power. This long-
texm program will be intensified further in 1969."

Excerpts from AEC Annual Reports to Congress,

a.

b,

C.

CY 1958 AEC Annual Report.

"Fast reactors occupy an important place in nuclear power
programs because their ability to produce more fuel than
they consume is potentially important to conservation of
fissionable material resources,"

CY 1963 AEC Annual Report.

"The third implementing phase of the AEC's civilian nuclear
reactor power program is the conduct of an intensive, long-
range effort to develop breeder reactors which will make
possible the use of the full potential energy available in
nuclear fuels,"

"Good technical progress has been made on the breeder concept
which has been under study for a number of years. 1Its
technology, however, is extremely complex and much research
and development remains to be done before breeder reactors
approach an economically attractive stage of development,"

CY 1967 AEC Annual Report.
"With induastry’s acceptance of the light water reactors, the

AEC has now given the higheat priority to the development of
liquid metal-cooled fast breeder reactors (IMFBR)."

83

 

 

 

L

T e AR A T e T AT A M

S e e v,
9. Excerpts from Reports of the JCAE on AEC Authorizing

Appropriations for the AEC.

FY 1965 Budget. 

. “This faar's request for the civilian fiower reactor

'»;,program‘reflects;a shift in emphasis from the first
- generation of light or ordinary water-type reactors
- to the next phase which has as its objective the

b.

C,

development of reactors which utilize nuclear fuel more
efficiently, As the AEC indicated in its November 1962
report to the President, it is only nuclear energy which
holds the promise of meeting the Nation's long-term
energy requirements and in this connection, only those
reactors which permit more efficient utilization of fuel,
or contribute to the ultimate goal of breeding, should

be pursued., In this report, the AEC indicated that the
fast reactor concept would be the main approach to
developing breeders. However, since that time, technolog-
ical developments have occurred which indicate that
breeding may also be feasible in certain types of thermal
reactors using the thorium fuel cycle. This would
represent a major advance in our reactor technology, since
it provides an alternate approach to the fast breeder
reactor., It would be an important milestone in the
national objective of conserving our fuel resources."

FY 1966 Budget.

"The AEC's civilian power reactor program represents a
planned research and development effort designed to intro-
duce a new energy source into the national economy. The
ultimate objective of this program is the development of
high-gain breeder reactors to meet the Nation's long-term
energy needs, The basic guidelines to be followed in this
development effort were stated in the AEC's November 1962
report to the President, the basic conclusions and
recommendations of which the committee continues to
endoree as a national policy for the development of civilian
nuclear power."

FY 1967 Budget.

"The civilian nuclear power program is presently proceeding
in accordance with guidelines expressed in the Atomic Energy
Commission's November 1962 report to the President, This
report has provided the program with sound objectives for
attainment of a virtually limitless supply of energy for
this country. However, the committee believes that
developments, particularly those in the past year,

84

 

 

 
d.

warrant a general updating of the program presented in this
report. The committee urges this review because of the
sharply increased rate of addition of nuclear generating
capacity, changes in estimates of future growth of nuclear
power, the more recent technical developments which have
taken place in certain of the advanced reactor fields,

and the latest information which has been developed
concerning our uranium resources," = -

FY 1968 Budget,

"A very significant point has been reached concerning test
facilities for the fast breeder program. The proposed

Fast Flux Test Facility (FFIF), for which the committee

has recommended authorization of $80 million in construction
funds beyond the previously authorized $7.5 million for
architect-engineering, is aimed at providing critically
needed test facilities for the sodium cooled fast breeder
program. In light of the complexity of this facility, test
results from it are not expected until about 1975. The
next major decision in the fast breeder program concerns the
plan for construction of demonstration fast breeder reactor
power-plants., The Commission in its testimony stated a
belief that such plants could be started as early as 1970,
The committee intends to follow the planning and scheduling
of this important phase of the program closely,"

FY 1969 Budget.

"As the Commission's highest priority civilian nuclear reactor
program, the liquid metal fast breeder reactor (LMFBR) program
is rapidly becoming a model for coordinated, long-range
planning, The Commission is to be commended for its efforts
to obtain the maximum industrial contribution toward solving
the technical problems and in broadening the base of industrial
capability in both technical and management aspects."

85

 

T T e sttt Lo S T e e TR

- T e S T O R R ¢ e e C-
APPENDIX B

Statements® Regarding Corporate Commitments
of Major Reactor Manufacturers to LMFBR

North American Rockwell Corporation

"North American Rockwell is committed as a matter of corporate
policy to becoming a supplier of fast breeder reactor power
plants to the utility industry. Beyond the integrated invest-
ment in facilities and equipment at Atomics International, the
corporation has invested to date $7 million in conceptual
design and $1.9 million in capital facilities and equipment

to support the design of a 500 Mie fast breeder plant intended
for construction on the Penelec system under the AEC demonstra-~
tion plant program. The demonstration plant is a key objective
in the corporation's plan to supply FBR's to the utility
industry. The company investment during this fiscal year
(October 1967 - September 1968) will be 4.3 million dollars

for design and development and $1.1 million for capital
facilities and equipment.”

The interest and commitment of North American Rockwell was also
stated by Mr., J. L. Atwood, President and Chief Executive Officer
of North American Rockwell, in remarks before the Commission on
January 8, 1968 during a presentation on the AI1/GPU program. A
portion of that statement i8 quoted here.

"North American Rockwell is prepared to commit the management
and financial resources required over the next ten years to
demonstrate the technical and economic feasibility of the
1iquid metal cooled fast breeder reactor concept. Our
conmitment is predicated on anticipated progress in the AEC
Liquid Metal Fast Breeder Reactor Program, successful
development and test in the current NR-GPU program and
appropriate support from the AEC for our demonstration plant
program leading to commercial operation in 1976."

* Excerpts from submissions in reply to AEC invitation for
expressions of interest in cost-reimbursement, task-type
contracts for LMFBR plant design R&D work.

86

 
 

 

 

 

General Electric Company

"It is a matter of record that General Electric Company is
committed as a point of corporate policy to develop and
demongtrate the successful operation of the IMFBR in the
electric utility industry on a true scale, consistent with
‘the commercial availability of plutonium from the thermal
reactor systems, - Cera B e _ ._

"With the door thus effectively closed on early development
of a steam cooled fast reactor, General Electric has taken
the position that it will concentrate its technical resources
on meeting the date of 1980 with the liquid metal fast
breeder reactor. :

"On September 5, 1967 General Electric entered into a contract
with the Empire State Atomic Development Associates for a $5
million research and development program, whose stated
objective is to develop information which will significantly
strengthen the basis for a demonstration plant commitment in
1969-1970. General Electric has undertaken to submit to
ESADA not later than September 30, 1969, provided that it 1is
technically feasible and safe to proceed, an offer to supply a
sodium cooled fast breeder nuclear power plant with a design

- target output of approximately 300 MJ. Although it is c¢laar
that implementation of this agreement depends on the prior
successful operation of the SEF(R reactor, and on General
Electric's assessment of the state of development of the sodium
cooled fast breeder technology generally (which obviously
depends in large part on :he results from current AEC LMFBR
programs), it is also clear that such an undertaking with soma
of General Electric's major customers represents a serious
gstatement of intent," '

87
 

Westinghouse Electric Coxrporation

Weatinghouse "has committed $50 million for facilities and
development'” in the fast reactor area. ''In addition, more
than $10 million in facilities are 1n place and more under
construction." :

""We have also joined 22 utilities and one consultant engineer
- to participate in our work to lead toward a demonstration plant,

“To support this approach, Westinghouse has comuitted more of
its resources, including capital, to breeder development than
to any other single technological development. The Westinghouse
~ approach 18 a three-phase program leading to construction of
a sodium-cooled fast breeder reactor. This demonstration
plant, with a rating of 200 to 400 megawatts, will be the
prototype design for a full-scale 1000-MW plant. The program's
first phase, which will continue until 1970, encompasses the
study and research needed to commit the demonstration plant to
detailed design; the second phase is plant construction,
expected to take about five years; in the final phase, the
plant will be operated to optimize the design and determine the
technological and economic feasibility of the full-scale fast
breeder plant,

"This development program can be successful only if it receives
the active support of both the utility industry and the Atomic
Energy Commission, The first phase of the program, already
underway, is receiving financial support from several utilities,
some of which may also provide manpower. A number of other
utility companies, along with the Atomic Energy Commission, have
been invited to join the first phase, Similar cooperation will
be required to complete the second and third phases.

"As a part of the Westinghouse commitment, the facilities of
the Advanced Reactors Division are undergoing a five million
dollar expansion program. The building expansion, due for
completion in early 1969, will provide administration and
engineering offices, high and low bay testing and analytical
laboratories, machine and instrument shops, and other
migcellaneous gsupport facilities for design, experimentation
and testing in the areas of:

Plant Systems and Components Development
Reactor Mechanical Development

Fuels and Materials Development

Sodium Technology"

88

 

 

 
Babcock & Wilcox Company

"A recent comprehensive evaluation by corporate management
confirmed that substantial amounts of money, personnel and
facilities will continue to be invested in the LMFBR and
other advanced R&D to secure a place in the breeder market
when it develops. The Company has spent millions of dollars
to date in nuclear R&D of which a large portion is directly
and indirectly related to breeder reactor development,
Planned expenditures approximate $36 million in the next

ten years on breeder reactors alone,

"At this time, the Company is pPreparing the groundwork for
a joint BSW-utility LMFBR engineering program., Over thirty
electrical utilities have been presented with background
information as to B&W performance and capability in the
fast breeder field., Discussions are now being held with
certain of these utilities for the purpose of laying the
foundation for the referenced joint venture.

"The proposed association with the utility industry will
provide for active and objective communication between B&W
and the electrical utilities. The information and analysis
developed by this joint venture will provide a sound basis
for the decisions required relative to the construction of
a demonstrator plant," -

Combustion Engineering, Inc.

"The ultimate importance of the fast breeder for the generation
of economic electrical power was recognized some years ago by
Combustion Engineering, and the Company has consistently
promoted this concept as a means to decrease dependence upon
the limited source of low cost uranium ore,

"We are, consequently, pursuing the development of a sodium-
cooled fast breeder with a core geometry optimized for economics
using sodium-bonded carbide fuel. We expect that this development
‘will take several years, that it will require substantial support
from the USAEC and from the utility industry and that it will
involve the construction of a demonstration plant at an
appropriate time,

"Combustion Engineering 18 actively engaged in obtaining utilit
support for its research and development program. .

"One utility has given us a letter of intent to support this program,
Several other utilities have expressed considerable interest in the
program, and we expect to receive several more favorable responses.
In addition, there are a number of other utilities we plan to contact
about this program which would ultimately place us in a position to
work on a firm design for a demonstration plant."

89

 
 

 

Jorsoy Central Power & Light Company
' Metropolitan' Edison Company
' New ‘Jersey Power & Light: Company

Ponnaylvania Electric Company -

':} 3 i A

Pennsylvania Eloctric has aelectod a aite in northeastern

 

Pennsylvania on the Suaquohanna River near Tonawanda that
could he used for an LMFBR.
b. General Electric
(1) Wi.th the SAEA group and fom.' other utilities - a $750,000
| design study of a 200 mo prototype oodium-cooled plant,
Construot:ion deciaion 1n 1969.

SAEA - Southwoat Atom:lc Energy Aasociatea (SEFOR)
Arkansas - H:luour:l. Power Company
Arkansas Power & Light Company
Central Louisiana Electric Company

.. - .The Central Kansas Power Company*

. * " The Empire District Electric Company
Culf States Utilities Company
Kansas Gas and Electric Company
‘Louisiana- Power & Light Company
Mississippi Power and Light Company
Migssouri Puyblic Service Company
Missouri Utilities Company*

 

* Not included in initial list of fifteen.
90

 
 

Niagara Mohawk::f Pover: COrporat::lon
- Lo Central:Hudson!Gas & Electric Corporation
Consolidated Edison Company of New York, Inec,
'iz-Long Island: Lighting :Company
Rochester Gas & Electric Corporation
: Orange: and '‘Rockland Utilities, Inc, - -
New York State Electric and Gas Corporation

Westinghouse . | |

with 21 utflities and an A/; ’flrw ‘fdur-yéar proéram for
development of sodium-cooled plant. Looking toward
construction decision on 200 to 400 MWe prototype unit
in 1970, This has been reported in the trade press as
a $100 million program, First phase from-Apfil 1967 to
April 1970 is a $1,000,000 demonstration plant study to
help establish the technical basis.
Westinghouse Group

Baltimore Gas & Electric

Boston Edison

Cleveland Electric Illuminating
Commonwealth Asgsociates, Inc,

91
20 Dosign Studies o L
a, Atomlcs | Internatlonel ’ (North'Amer:loao Rocionll)

 

With ESADA 3100 000 for duign otudy of e sodlm-cooled systen,

  

which will drow on; aodlua hendllngf technology developed under

earlier AI/ESADA cont:recta. Technology ond economics of a

1,000 Mie plant: t:o be cooo:ldered.

 

 

 

ESADA - See liot:ing on pago 94 of Appendix c. |
Y Allegheny PowerfSyetomés{ e :
2/ Texas Utilities Company .- v o
3/ Ohio Edison System L e
ot

92

 
 

Ce

use vaiver and use of zr- m 311.9 unm fro- utilities
and Hul: comny and 312.7 nillion fron tbo m aro coilins figures,

 

SAEA ~ See liuing on pagn 93 and 94 of Appcndtx C.

Power Reactor Davelopmnc Canpany
Fermi: 60 Mie sodium coolcd"fuc ‘breeder

PRIC = Power Reactor Davelomnt anpany (Fermi)

Allis-mulun Manufacturing Company

The Babcock & Wilcox Company

Burroughs Corporation

Central Hudson Gas & Electric Corporation
The Cincinnati Cas & Electric Cowmpsny
.Columbus and Southern Ohio Electric Company
Eombustion hginporins s Inc,

 

. .:'::...’ L.

93

 

 
4.

 

Other Activities

nc, as representatives of:
ithern Compar

Allit-Chalmrs Hnnufacturing Company

' Babcock’& Wilcox Company: .« ¢! .
Baltimore Gas and Electric Company
Central Hudson Gas & Electric Corporation
Cincinnati Cas & Electric Company |
Cleveland Electric Illuminating Company .
Commonwealth Associates

_Consolidated Edison Cmnpany of New York, Inc.
" Consolidation Coal Company =~

., Delmarva Power & Light Company

" Detroit Ed:lson cOmpany-a_-_-_..&-r..

Indiampolis Power & Lighl: Company

Leeds. & !Iorthrup Cmpany

Long Island ‘Lighting. Company

. New.York State Electr:lc & Gas Corporation
Niagara ‘Mohawk ‘Power Corporation
'Philadelphia Electric Company

Potomac Electric Power Company

Public Service Electric and Gas Company
Rochester Gas and Klectric Corporation
Toledo Edison Company

Wisconsin Power and Light Company

Edison Electric Institute, Detroit Edison, and APDA

$0.8 million to demongtrate Pu0
in an operating reactor.

= 1102 fuel performance

9%

 

 
APPENDIX D

 

International Fast Breeder Programs and Implications

In this study the expenditures on the different foreign programs have
not been placed on a comparable basis with those of the U. S. since
accessibility to information on foreign expenditures and budgets is
limited. However, as the attached table. (Table D-1) from the EEI

Fast Breeder Reactor Report* shows, it is estimated that other countries,
excluding the USSR, are spending over $150 million per year on fast
breeder R&D programs, - :

The French have spent about $160 million through 1967 on their LMFBR
program,and expect to spend over $100 million more for the Phoenix
Reactor and critical experiments through 1972, Germany has spent $100
million on R&D and, in cooperation with Belgium and the Netherlands,
plans to spend $300 million additional on R&D and prototype design,
$100 million on prototype construction, and $500 million on development
and construction of commercial plant., Most of these expenditures are
on the LMFBR,

It is estimated that the Euratom members (German, Prance, Netherlands,
Belgium, Italy) will have spent at least $2 billion by 1978 on the
LMFBR, including two pPrototype-and two commercfal-scale LMFBR plants,
Attempts are being made by Euratom to consolidate R&D activities of
member countries, and to construct two pPrototype and only one commercial
Plant, thereby reducing their expenditures,

The United Kingdom has spent about $130 million over the last five
years specifically on the LMFBR,and another $55 million on general
reactor technology, a major share of which is oriented toward the

fast breeder. These expenditures represent about 457 of their reactor
R&D budget. Construction of the LMFBR Prototype Fast Reactor (PFR)

is underway, and the total cost is estimated to be $70 million,

The attached table (Table D-2) shows the operational dates of fast
reactors, past and future,in various interested countries. The U.S.
Program has been on an extended time scale when compared with other
countries. This approach has been taken for a number of reasons.
However, at this time, continued emphasis and strengthening of the
U. 8. efforts are required to permit this country to establish an
advantageous position in a competitive market,

 

*Fast Breeder Reactor Report, Edison Electric Institute, April 1968,

95
Substantial sales of light water and breeder reactors will be obtained,
both for the near and far term . with the successful achievement of
the objectives of the U. S. reactor programs. ' !

The development of a commercial LMFBR by United Stated industry can
have a beneficial impact on the United States balance of payments
position. Though the country which is first able to produce an
economic and reliable fast breeder reactor may occupy a strong
position from the standpoint of initially capitalizing on the
available worldwide market for breeder reactors, the domination of

a foreign market will depend on many other factors., These include
price structure, simplicity of plant operation and maintenance, and
reactor characteristics. Several West European countries are
planning to introduce a fast breeder reactor into the commercial
environment in the late 1970's and early 1980's, The U. S. is planning
to commence LMFBR operation in the early 1980's., Substantial sales
of both INR's and breeders will be gained by the U. 8., both for the
near and far term, if the current programs are successfully achieved.

 

 

The following simplified calculation provides an indication of the
financial implications of a worldwide free market for nuclear reactors.
Asstming a parallel introduction of the breeder by the various competing
free world countries in 1984 and electricity demands of the U. S.

equal to the rest of the free world, the total IMFBR demand for the
free world in the 1984-1995 period would equal 640,000 Mde, representing
about $100.billion dollars in investment.

On the basis of the above assumptions, the U, 8. industry has the potential
of competing not only for the $50 billion domestic market, but also 1is

in the position of competing in an overseas market of equal size. Each
percent of the overseas market represents about $500 million.

 

 

 

 

96
TABLE D-1
FBR, PROGRAMS -~ MILESTONES ¥

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

o ' . «MELOTLIM
"aA CYYRN . Bl maxs ~OLAS ALY JAPNN
T DOTIA. WL M [ 1999 « 1950° : MLo1) | '-
PP e - I‘ ew B gih . .m. o ’., w ¢-.#‘-, % ’Wa B *'} 1 . *' .j
| \ . |
: ' : . y : T
FIRET (AITICAL - . ' : T ee e t .. -’ '
PACILITY Crmes - & ‘ % 5 % ifi i b 6é - . 26y '
. ' s . : o
| i :
; ! ‘ . :
. o A0S {Chmmuse) | - o é Ce
COMDENNAL ARACKS CRITICH.  [1963 {Luewa : »m3 ) {apa0ess Ox-) e ’
! 163 I-I‘; m ,M; 1059 () wh ) fl; ‘ll-ll; m .‘“,
PRRP [N . TIENAL LI f: - . : 1968 . .
=;rnq - vaeum o .k 1964 1968 1960 1968 wy
1
§
« |
TROT ATICIOR CRITICAL S e - . . :
%%m)’ 1968 (xn) e () :
¢
LANCE THIE {> 50 on 1966 (scm1 1956 ROdY 2000 e puy) ;0 : n'% %’2- 1972 {30 W ro
LS OPERATION >3000 gym) 1970 fw; :al*uu- -m as ..’2‘5. Arg n-mr‘ » oneiteretise)
. 50 s 20) 1970(50 :
20 Wt Ban)
. !
PRSI 1963 (Permi . - m Poanis ,. 3
REACTOR CRIYICAL mumt;nm) '32‘{(@”2) _9m (m) 1973 (Paentn) % :3.) 78 »wn
; ' J 1 : : 17 ' 1908 1987
OMERCIA. ATACIOR CRTTICAL (estisate) 901 : 19 v | % :L,
' :
m BT 1966-1967 1000 ? ~§Bo 700 m !-mu ~100 ~ 1%
R0y . TIOUE 1967 o ' ! ‘“int&) s 1
LW $ - 1967 ~10 ' ~p ~ 0 40 (219 o) - ~10
- 0 - T3 AWML Al IMREANE DRgAS L IREARe MO IR 20 Larag
PLOKE COTMETION | - AXLOY MLy 9 . X o 1 arsoots o ... .0
” “on piscusemn ’”'{m o e 100 yiax o = ’“'1.':’,_. = - Do
ey '
3 bese. 5t ou.
0.8.A. v.5.5.%, " .k macs QEANY TEALY JAP AR
-MOIWN
~ILLAN

*EE1 Fast Breeder Report, April 1968

97

 
 

 

 

 

 

 

  

 

 

 

 

 

i  §:w
e 1
RAPSODIE | 1!
seroR | wNrmep smms‘r ‘ 1
BR-60 (BOR) | USSR 60,0 - i
BN-350 ‘| wvsse 1000.0 | Na 1970
PFR. |  GREAT BRITAIN 600,0 Na 1971
PEC 1 roawy 140,0 Na 1973
JEFR " JAPAN 100, 0 Na 1973
PHENIX FRANCE 600.0 Na 1973
NA-2 W. GERMANY3 750.0 Na 1975
FFIF | vwitep stares 400,0 Na 1974
JPFR | oaesw | 900.0 Na 1976
DEMO ;1 | - uNITED STATES »900,0 | Na 1976
BN-600 USSR 14000 | Na 1976
DEMO -2 - UNITED STATES 900,0 Na 1978
CFR UKARA 2500,0 Na 1979
1000 Mle FRANCE 2500,0 | Na 1980
1000 MWe GERMANY 2500,0 Na 1980
DEMO 3 UNITED STATES »900,0 Na 1980
1000 Mie UNITED STATES 2500.0 Na 1984
1 Estimated beyond 1969
2 Being increased to over 40 MWt in 1969.
z With Belgium and Netherlands,

With Germany and Euratom,

98

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