Cost Analysis of Light Water Reactor Power Plants

98 Pages·2008·2.84 MB·English

by  W. E. Mooz

COST ANALYSIS OF LIGHT WATER
REACTOR POWER PLANTS

PREPARED FOR THE DEPARTMENT OF ENERGY

WILLIAM E. MOOZ

R-2304-DOE
JUNE 1978

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‘The work upon which this publicalion is based was povineme pursuit to
Cinlract Noy EX-?6:0-01-2937 with the Depurtment of Bnengy. Reports of
The Run Corporation do noc neceatwily reflect the opinions or policies
of the sponsors of Rand resoareh

Rost aialyeda af sagt epter caactos sever
sre

eStats Sees
sand Gorzataeloe,

Publidhed by The Rand Corporation
COST ANALYSIS OF LIGHT WATER
REACTOR POWER PLANTS

PREPARED FOR THE DEPARTMENT OF ENERGY

WILLIAM E. MOOZ

R-2304-DOE
JUNE 1978

| Rand

are

‘PRERACE

Folicy decision= renarding energy eupply ragatre knowledge abet
che coats of various fome of supply. This observetion applies not

only to existing form, tut also to future mppty techmutagien, This
report discusges a atatisrical anclysie of data on light sater reactor

(3) power plants. The remuite should be useful im two distinctly

ddsferenc ways. Piret, ney provide innighes inca shat has happened
with respect to the tige that 49 requived co obtain a construction
permit,” construe! fou times, aml coxty of IWR plants, infaemt fom Ut

may be used in estinating the coats of incomplete or aa yet uelatle

plants. Susond, they provide s useful analogy for whet might happen

with new technologies under consideration, In particular, che Ciadinge
SILI respece co the LWE east Learning curve, the effect of plant size
ou anit coats, and tumoral cose increases may be Sinilar ep what es

be expected im any ne energy techarlogy ax complex aa the LVR.

Im addition, the arudy produced a tool fer usc in ontiuering, Light
woter reactor power plont capital costs. Goats eetimared in this way
ave probably auperior, for analyrieal purposse, to cost exttoaLen made
by other means, because’ they take into accom! trends wut ducluded
the otler wethole, this, the tool should help energy polley planners
to evaluate the cost implications of various altersstives tmolving
the TAR, and to assess the efZect of the tiatag of these policies on
coste, hare other tetimalogies are tavolved, ouch af coal Liguetace
tion of other relatively new energy processes, assumptions regarding
the cupital casts of sliese Lechpologiee ean be weighted against tha
Lk experience.

The study remilte ehould be useful to ucility planets ay vel.
Experience hay denonstreted that WR power plant cost estimates are
Frequeotly low by a substantial anount. The study helps to explain
sty this ie the case. The estimating methodelogy that is developed

"The elapeed time vetueen the appltestion fer a construction per-
de and ehe deoumce of a construction permit (elao referred to at
Licensing cine)
eo

ere abould
final BALL for their new LAR fv presented.

yo ULILEttes a better idea of wnat to expec? when the
sinus

aid etudy ix a atatZeciaal analysis of che capital coscs of
Light water reactor (IWR) cloctriea: power plants. Tus objective 18
twofold: to deteruine what factors are staltatically related £0
capite) woaze and to produce # neliadulogy fer estimating these costs,

oat previous xtndies of LUE capital costs have been base: on
engineering cont eaLizates, which, beomuse they were made ac a single
point de tine, failed to recognize, explicitly, poverful trends iv
TR cost. Only owe gravious etudy yas Frond ta use eenmmenede tech
nigues, and although it was dupaded by luck of data, tt included the
Edzet quantitative vecogrition of these trends.

‘Te analyadn in the present study 1s baged on the time and cost

data Unit ave aveklable on U.S, miclesr power plants. Gut of 3 total
of about (il operating plaate, useful capital-cost dats wre available
on only 39 plants. In addition, comstructiou-time data were available
fon about 65 plants, and data on completed construct fon perait apeli-
cottons were available for shout 182 pleace.

The cost A

2 were first eyatematically edlusted co const

dudlavs. Then mibcivariate cegresstes apalyece were performed by

using independent variables consisting of vartous physical aud Toca

tional cheracterivties of the plaats. The dependent variablex

mmolyaed were the tine requited to obtain a coutruction persit, the
construction cine, and ihe cxpital cost.

Anslysis of Lie tire required to obtain « construction permit
shevad chat 1: increased steadily at the rate of about 5 months per
year for avplicatians mada between 1966 and 1971. The data sre onty
poflially complete thereafter, bot s visual exen/nacion of the plotted
Anforsation sugkeste that che sdeuation change! after 1970 or 1971,
and that perhaps 2 chird of the applicetivaa wade between 1977 and
1877 Look 30 moeths or less to proven. Testa were mde to determine
whether plant locat‘on, the euparience of the erchitect-eugineer, and
simflar factors affected the length of time required to obtain the

permit. None were found to be significant.
Construction time vss found to be increasing at a rate ul about

4 months per year, after controil iy fur che other plant,

‘characterderie!

Tuere aw a strong correlation between construction
tion ant plant size, wich each il Mie increase fa size recuiving
about 4 months additions time. Alaa, daring the 1966-2971 persed,

the uae of auclear steam supply systems (HSS) manufactured by Babeor'~
Wilcox dncreavad the average eousteucLion time by bout 13 moxthe
Variant tone Le conssruction time smmg the other NSSS manufsetuzers
were not significant. Clear statistical support was found for the
hypothests chat greater experience on the part of the archicest=

engineer leads to shorter construction times, after correceicr is male

for other varlables. Tae slope of che dmplicd learning mmrve 16 auch
tat doubling the nanber of plants boflt by an architect-engincer ro~
duces construction tine to eboot 92 percent of what it was originally-
This effact opesates Independently of the temporal construcston-tine
tnerease noted above.

Sone of the indenendent variables chat vere found to be relaced
to both constrection permit application time and construction time
were also found to be related to capital costs, lut others were not.
Tor exanple, capita costs were found to be related to the plant size,
the experiance of the architect-engineer, and the calender date, But
whereas the duclusion of a dumy variable for dabcock-Wiloox bad shows

vo of 43 moths in wonattuetion Eine, the same dumy variable
proved co lack efgnificance in the cost regressions. This finding
impling ehsi ven though dulays ware encountered, they did not signifi-
cantly alter the final cost of the power plant. Sinilarly, vhen a term
‘wea included in the regression analyses that represented the varigeion
in construction tive that war unenpisined by the other independent
vartabiee {a che equation, this tem wax slsu found to lack eignificance
for plon: casi. ue conslueten that can be hypothesize Frow the lack
of siyalTismee of these two terms is that when delays occur (ouch es
wich the JW HSSS), or when other vartatfons in construction tine happen
chet are unrelated tu che independent variables in the equation, the
architect-engineer auccessfully acts te wininize their effects om Final

plone costes
weit

Ap aplaept was alee made to include in the cose regressona &
term for the tims requived to obtain # conscruction permit. ae with
tthe construction Lime,

vere wets collinearity problemn, and the cern
Uh wact dncluded represented the portion of rhta éfme that vag un-
explained oy the other variables im the equation, Thia term vas found
eo Jack atgaifdeance, implying that excent av alveady reprecenced by
the ocher dndenendent variables, the wnoont of time required to oheain
2 eonstruction permit dean aot significancly affect rapital costs
Plant capital ccete (ie constant doliars) increased over the
period examines at the rate of abut $140 per We per year when cor~
rected for the effect of oth

variables. Other factors affecting
costs wore az follove!

0 Plante buile dn EPC Region I (Northraslorm U.8.) coat asout

$130 per We more chan thowe iT! etsewbere.

nh Finets with enoling towers ext about $90 per kWe more than
ochers.

> A atrong comc-learning effect, analogens to the construction
time learning effect, reduced plant costs to sLightly over
90 percent for each doubling of che musber of plants buile
by a giver architect-snpinesr.

> Plant adze was a determinant of unit capital cases, an
fecronge in sizeof L Mie reduced caste about 80.22 por kivey

over the'range of plant sizes fo the. date base, tros about

450 ale to aboLt 1156 the. Tho statistical eigaitsance of
the offort was not eo strong ax the other effects discussed

above.

Factors that did nar have tntincical xignitteance with regard ¢0 costs
{after contvolling for ocher varfablea} vere the NSSS asmulacturer,

the colocation ot plants, construction tine, che time required to

obtain the conscruccion permit, and public financing.
The repression equecion Ja useful in projecting WK power plant

soste because ft represents the body of all know experience ag of

this tine. Tt ram Lins he wad 10 form base-case estinetes agafast
whtch och eatimates can be tested. The temporal cvsfiteteac of
write

SUE per lve per year domtmites the equation, even though the Learn=

sag curve ciminiates tte ely. ecause of this cocfffient,

the projected cuts of 18Rs on whlch constenetion beping In 1950 are
‘of che order of $2000 per Wie in 1976 dollars. Waether or not these

costs will sctua:

obtain depends on whether the tompotal increases
are ndtigared. There vas no evidence of euch mitigation in the data
used.

‘The results of chie work are useful, in + qualitative sense, for

askeaning the capiti

costs of new trehnolngtae. Questions abut the

slope of an assumed 1

arnitg entve, and changes in walt caste aes
result of ineveased plat eize, have not boon alécessed heretofore
with any statieticel evidence from the Lik exzerience. Knowledge of
che values obtadued from che daca examined ir this sludy say provide
shazper judgnents for aralyate of other sechewlugies for generating
eietrfedty, Simflerly, the quest ive af ceuporal cost increases zust
be at least ratxed with regard to other eechmolngtes. Since the
present analyeis has not auccecded in ddentsfying statistically the
rensons tor the nowertul cost trend, 4¢ offers no definitive basis
for derermining whether eimilar trends will veces ta nev technstoytes:

The experiance of the LAR indicates, sowever, that such trends cst

Gominite rants, wil that st would be a mistake to agaore the po:
bility that they will be present.