Data Source: Energy Information Administration
If one considers nuclear plant capacity (the amount of electricity a plant could generate if it ran at full power) plotted against plant age for all US reactors, one sees a clear cut tendency for capacities to be higher for newer plants. While this may in part have to do with technological advances that have allowed larger plants to be made, it is emblematic of beliefs about economies of scale in nuclear power plants. In essence, if a 1000 Megawatt (MW) plant doesn’t cost twice as much to build as a 500 MW plant, there is an incentive to build the larger plant. This has been the prevailing notion for quite some time, and it has had a profound influence on the nature of the development of nuclear power globally.
Over the years, some have questioned this thinking about economies of scale. A notable example comes from Marshall and Navarro who wrote in the Rand Journal of Economics in 1991. Marshall and Navarro essentially argue that economies of scale for nuclear power plants are an illusion created by a false paradigm of not accounting for the cost of money over time. That is, if the measure of cost one uses is the lump sum value of present-day dollars one would have to pay today for the plant, then these economies of scale clearly exist. However, in reality plants have to be financed, and there is a long period during which they are being paid for but are not yet generating revenue. If a measure of cost is used that accounts for the effects of interest payments, the economies of scale effect becomes statistically insignificant.
It should be noted that electricity is an interesting beast as a commodity. Not only is there a constant need to balance supply and demand in real-time because storage is not possible, but the farther a plant is away from the the consumer the more waste occurs. Electricity is not like oil with which there is a time delay in getting the product from producer to consumer but without significant loss enroute, but, instead, is more like oil if there was a leak in the tanker. In such a case, there would be very little loss if the producer were near the consumer, but could be vast losses if they are far apart. For example, according to data from the Energy Information Administration, the US (a geographically big country and a huge electricity consumer) lost more electricity to distribution losses in 2005 than the entire country of Spain consumed in that year.
I mention this because one can imagine that if smaller plants could be built that would be more proximal to customers on average, there would be advantages to be had over massive plants that are more distal to consumers on average. Nuclear power has an interesting intensity in that 0.6% of US generating plants constitute 10% of the capacity, but, because of limited shut-downs and the ability to run these at near capacity much of the time, they produce 20% of US electricity. However, as nuclear plants are substantially larger than other plants (and because people don’t want them too close to large metropolitan areas) one would expect they have much higher distribution losses on average than other types of plants which are typically of much smaller scale. (I use the fudge words because I am not an engineer but rather an economist, and my assumptions may lack technical merit.)
For nuclear power to be a feasible option for some of the nations that have expressed interest in it, it would have to be cost effective to make plants on a smaller scale. Having one plant make up too high a proportion of a given electrical grid’s power is apparently problematic. The risk of system collapse becomes much larger if a lot of the power is coming from one source. When the plant has to shut down, and the remaining generators cannot meet the base load, the precarious balance between supply and demand is disrupted. The problem is that some of the developing countries that would like to develop nuclear power would derive a high proportion of their overall electricity (well over 10-15%) from one reactor built on the scale typically seen these days in places like France, Japan, China, or, soon, the US.
I am interested in the feasibility of small reactors. There are a wide range of possibilities- from the floating power plants that the Russians have been working on to smaller fixed plants. In some cases these raise interesting questions about nonproliferation and spent fuel management that must be worked out in advance. While the financial arguments about the lack of economies of scale under realistic assumptions about cost are intriguing, there is no indication that they are swaying behavior. It may, therefore, take technological advancements rather than economic ones to change the trend toward bigger plants. Small reactors could change the nature of the nuclear renaissance, and such a flowering of nuclear power in the developing world is probably unlikely to occur under the current notions of scale in any but a few emerging economies.
I am interested as an electrical power neophyte to here more informed views on this post.
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I too am still learning the technology. I do believe that very small nuclear generators are actually available. For instance, deep space satellites have been powered by very small reactors that have performed for decades, obviously without intervention.
A technical problem as important to the wider use of nuclear reactors as the question posed by this article, is the problem of designing reactors that can be used to supply “peak” load. Commercial power reactors cannot be ramped up or down in response to rapidly changing demand, so they are used only to supply “baseload,” that part of demand that is unchanging.
I’ve seen hints that naval reactors can have their output changed quickly, but they use weapons grade uranium as fuel, which would pose a truely serious threat of nuclear bomb proliferation, as it is relatively easy to make a uranium bomb in contrast to the extreme difficulty of making a plutonium bomb.
By: Norman meadow on October 31, 2008
at 11:04 pm
There are small reactors. The Russians have worked on floating reactors that could be used for either power or desalination operations. These are often attempts to recycle naval reactors. Of course, they have to be converted to use Low Enriched Uranium (LEU) fuel in order to have viability in the face of global proliferation concerns, and, as I understand it [though it is way outside of my area of expertise], often times conversion of reactors from Highly Enriched Uranium (HEU) fuel to LEU operation may bring with it an issue of greater heat production and the need to safely deal with that.
However, there doesn’t seem to be any indication that small scale plants are considered viable by utilities. I would assume that some of these small countries whose total electricity generation is relatively tiny and, therefore, it isn’t feasible to produce even base-load generation with plants on the order of 1000 MW(e) could probably benefit from nuclear as base-load power source if the scale were small enough.
I am also wondering if the idea of standardized vetted designs won’t definitively kill the idea of small nuclear power plants. That is, there is a movement to have a few designs that are standard and have been pre-approved by the Nuclear Regulatory Commission (NRC) or whatever other nation’s nuclear regulatory body is reviewing applications. This will cut costs by reducing the time required to vet the applications. That is, because individual nuclear plants won’t be idiosyncratic in design, the regulatory body can concern itself more with the issues that are idiosyncratic such as the geology (e.g. earthquake proneness) of the area the plant is being put in rather than the design which will approved before hand to a large extend. There is some evidence that being an approved design influences the utilities decision making. If these designs tend to be on a certain scale, it will be yet harder for small plants to break in, unless there is an incentive to produce such a design. For there to be such an incentive, I think there would have to be confidence that some of these smaller countries will follow through on their plans to cultivate nuclear power. I don’t think this confidence exists presently.
By: B Gourley on November 3, 2008
at 1:22 pm
Neat information. hope to definitely come back soon..
By: JenMildneinue on May 21, 2009
at 2:18 am