Small reactors and the “second nuclear era”

Small reactors and the “second nuclear era”

Ene%v Vol. 9. No. 9/10. PD. 865-874. Printed in the U.S.A. 0360-w2/84 53.00 + .I0 0 1985 Pergamon Pres Ltd. 1984 SMALL REACTORS AND THE “SECOND NUC...

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Ene%v Vol. 9. No. 9/10. PD. 865-874. Printed in the U.S.A.

0360-w2/84 53.00 + .I0 0 1985 Pergamon Pres Ltd.


SMALL REACTORS AND THE “SECOND NUCLEAR ERA” JOSEPHR. EGAN 500W. l22nd St., New York, NY 10027, U.S.A. (Received 2 June 1983) Abstract-Predictions of the nuclear industry’s demise are premature and distort both history and politics. The industry is reemerging in a form commensurate with the priorities of those people and nations controlling the global forces of production. The current lull in plant orders is due primarily to the world recession and to factors related specifically to reactor six-e. Traditional economies of scale for nuclear plants have been greatly exaggerated. Reactor vendors and governments in Great Britain, France, West Germany, Japan, the United States, Sweden, Canada, and the Soviet Union are developing small reactors for both domestic applications and export to the Third World. The prefabricated, factory-assembled plants under 5OOMWe may alleviate many of the existing socioeconomic constraints on nuclear manufacturing, construction, and operation. In the industrialized world, small reactors could furnish a qualitatively new energy option for utilities. But developing nations hold the largest potential market for small reactors due to the modest sixe of their electrical systems. These units could double or triple the market potential for nuclear power in this century. Small reactors will both qualitatively and quantitatively change the nature of nuclear technology transfers, offering unique advantages and problems vis-a-vis conventional arrangements. Safeguards concerns are paramount, yet they remain unaddressed. Additional study of small reactors is thus both prudent and necessary.


Many writers (liberal, conservative, pronuclear, and antinuclear) claim that the nuclear industry is dying. Few write to the contrary. But “death” is a much too simplistic prognosis that distorts both history and politics. Industrial development, particularly in the Western world, is and always has been a dialectical process, not a static one. Political and economic changes stimulate technological ones. Although technology plays an important role, it does not dominate history and does not “live” or “die” independently. Rather, it expresses the will of governments and private organizations most in control of the forces of production which, unless challenged, shape society’s productive tools to suit their own needs and priorities. The nuclear industry as we know it, rather, is dying. One must assume, therefore, that those people and those needs for which nuclear power was originally brought to bear will soon seek to be satisfied by an alternative system of production. As A. Weinberg and others have noted, we are today at the advent of what might be called a “second nuclear era” But how, and in what shape or form, will the industry reemerge during the next two decades? More important, who will do the reshaping, and for what (and whose) purpose will the reshaping be done? Answers to those questions will determine whether the second nuclear era parallels or surpasses the first. THE






Examples abound of how old assumptions, unquestioned only yesterday, are today both invalid and incapacitating for nuclear industry planners due to the shifting conditions and priorities of contemporary global society. One such assumption is that “big is better” in nuciear power production. Previously, sharp economies of scale associated ‘with plant construction at individual sites caused manufacturers to effectively standardize reactors at around the lOOO-MWe size. Unable to compete with giant reactors in the burgeoning industrialized world market, smaller units were scrapped from drawing boards in the late sixties. When most giant reactors were ordered, however, interest rates were well below the double-digit rates of 865


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today. In early studies, therefore the cost of nuclear-generated electricity was projected to fall well below that from alternative forms of generation. A buying spree ensued. But the time required to construct these multi-billion-dollar mammoths climbed from 6 to 14 years or more due to new regulations, site labor problems with transient construction workers, and utility mismanagement. (It was not uncommon for site management to turn over four or five times during the span of a single construction project.) As interest rates soared, big become boondoggle for the nuclear option. Utility bond ratings dropped as cost overruns devoured shareholder dividends. And as growth rates in electricity demand fell from 6% to less than 2% per year after oil prices skyrocketed, utilities found that a single lOOO-MWe addition to their systems often gave them an oversupply of generating capacity, displeasing rate commissions and politicians while further eroding their abilities to raise new capital. Perhaps even more unsettling, the giant reactors, once operational, failed to perform as efficiently as their smaller prototypes.? A NEW SCENARIO The iatest small-reactor plans, however, paint a radical new picture, though an uncertain one, for industry. A novel, factory-based approach to manufacturing reactors under 400-MWe size may alleviate many of the pragmatic constraints on nuclear business. Such an approach is under investigation or actual development in France, West Germany, Japan, Great Britain, Sweden, and the United States. According to industry spokesmen in these countries, prefabrication and standardization of major plant components could lower dollar-per-kilowatt capital costs to levels now boasted by lOOO-MW models. Generic licensing, they say, could unravel regulatory knots that now plague one-of-a-kind projects. And assembly-line production of small plants at single factory locations could shorten construction times to five years or less, resulting in fewer interest payments for purchasers and in lixed, stable employment for construction workers. Moreover, quality assurance deficiencies now hampering site construction projects could be at least partially ameliorated through factory assembly. The reactors, once assembled on barges (or even railroad cars, in one case), would be floated across oceans, up rivers, or be carted cross-country to operating sites. There, purchasers would anchor the plants and simply “turn the key” for 200-400 MWe of instant power. Wishful thinking? Maybe. But some utility managers have noted still other advantages. Installation of small units, they say, would reduce the risk of overshooting electrical demand forecasts while at the same time permitting lower overall investments than those now required for large units. The small plants would free them from lengthy construction hassles, occupy less land, require less cooling water, emit less waste heat, and could be sited closer to population centers than large reactors. Plant employees could be transferred between reactors or between utilities (or even countries) to operate identical units. And regulatory oversight tasks, claim managers, might be simplified with prefabricated plants. THIRD



But were industrialized world prospects the only enticing feature of small reactors, their development might seem premature to even the most ardent industry enthusiasts. In the Third World, small reactors could play an even larger role in provoking new nuclear business. Indeed, most of the latest small-reactor plans are predicated on the assumption that developing nations will provide the most lucrative new market for small power plants. There are now 40 nuclear power plants in operation, under construction or on order in 11 Third World nations (excluding East European socialist countries).’ Based on electrical system size considerations alone, small reactors could extend the potential market, in this century, by up to 100 units in more than 56 additional developing nations.’ tT’he antinuclear climate of modem politics is often blamed for the apparent demise of the nuclear option in the eighties. But the current lull in industrial enthusiasm for nuclear power owes little, in fact, to the antinuclear movement, despite self-indulgent claims to the contrary by both pronuclear and antinuclear lobbyists.

Small reactors and the “second nuclear era”


Previously, most Third World states were technically disqualified from the nuclear market because their electrical systems were too small to handle giant reactors. An engineering rule of thumb designed to avert blackouts and equipment damage dictates that no single generating unit should supply more than 12-15x of the total generating capacity of an electrical system.3 Thus, only 10 Third World countries today have electrical systems large enough to allow reliable operation of a lOOO-MW reactor. But based on the World Bank’s latest electrical demand growth projections for developing countries, at least 57 nations will have electrical systems large enough to accommodate a 200-MWe reactor by 1990, and 72 by the year 2000.t Even if, as the International Atomic Energy Agency (IAEA) has pessimistically assumed in its own analysis, small reactors would be purchased only by those nations in a “demand window” in which electrical systems are big enough for a small reactor but not so big as to warrant purchase of a large reactor, the potential market for small units at any given time in this century will still include at least 10-15 new countries whose residence-time in the window, as electricity demand grows, is typically 15 years.4 Whatever the apparent market uncertainties regarding small reactors, their significant market potential is enough to have enticed many reactor manufacturers and governments to launch small-reactor development programs. HISTORICAL


There are now roughly 140 operating reactors under 600 MWe worldwide and about 70 under 400 MWe. Most of these reactors are either prototypes, one-of-a-kind models, or outdated reactors no longer being ordered or built. There might have been a much greater number of small units in operation today were it not for historical disincentives to their development, most unrelated to technology and many unrelated to economics. International and unilateral initiatives following the 1974 detonation of a nuclear explosive device by India have been credited with stunting, throughout the seventies, interest in Third World nuclear sales, and hence, small reactors. For example, the only major study of Third World nuclear prospects not performed by the IAEA was conducted during the hectic period following the explosion. Commissioned by the U.S. Atomic Energy Commission in 1974, the so-called Barber Study (for its author, Richard J. Barber Associates in Washington, D.C.) significantly influenced the subsequent nuclear policy decisions of the Carter Administration. Completed in 1975 under Energy Research and Development Administration auspices, the study concluded that only 5 developing countries would be physically capable of accommodating nuclear power by 1980, 13 by 1990, and 20 by the year 2000 (Ref. 5, p. x). This conclusion was based largely on assumptions related specifically to reactor size (Ref. 5, pp. ii, x-xii): (1) that Third World electrical systems could accommodate a maximum unit size of only 5% of installed capacity (actual numbers, based on a wide range of then-existing data, were 12-15x); (2) that nuclear units under 600 MWe would not be available through 1990; and (3) that worst-case economies of scale applied to reactor fabricati0n.S The Barber Study, with its pessimistic assessment of Third World nuclear prospects, served as input to the 1976 Ford Foundation/MITRE Corporation report, which formed the basis of the Carter nuclear policies and the U.S. Nuclear Non-proliferation Act of 1978 (Ref. 6, pp. l-24). From the standpoint of many politicians of the time, it was reasonable to believe that little love would be lost by restricting nuclear technology from nations that, it was said by reputable studies, could not physically accommodate this technology anyway. tThis analysis is based on conservative electrical system growth projections using 1982 baseline data obtained from the United Nations and the World Bank. :The study used a relationship wherein capital costs are proportional to unit size to the 0.55 power. At the time of the study, however, published IAEA surveys were showing capital costs to be proportional to unit size to the 0.70 power. The power factor conclusion is based on examination of a curve plotted through capital cost data in the Barber Report. p. II-lOa. The slope of the curve is -0.45, yielding a capital cost vs. size exponent of 0.55. If the curve is drawn through the 1974 IAEA-165 data. the slope is -0.30. yielding an exponent of 0.70.



Thus the United States, which, with its giant vendors, might have led the field in developing small reactors for export, became the last major industrialized country to undertake such a program. Another key historical disincentive for building small was the marked incentive for building big. Huge economies of scale, valid in the sixties and early seventies, became unquestioned assumptions later on. The degree to which these economies were due to progress in the design and manufacture of power reactors for a specific market was never analyzed. Formerly, the industrialized world held the vast bulk of the market for nuclear power plants. But these nations, at this time, demanded large reactors. Euphoria over the apparently limitless economies of scale proved eventually to be a self-defeating philosophy. Small reactors, on the other hand, remained experimental prototypes, stepping stones to the big markets for big reactors in the industrialized world. Progress in the design, development, manufacture, and use of nuclear power remained concentrated in the arena of the largest units. As a result, nobody today can say with certainty what the economies of scale for nuclear plants really are. But many vendors have now correctly realized that past economic data housed a rather significant bias against small units. As early as 1974, the lack of a commercially available small reactor was the subject of the eighteenth session of the IAEA General Conference.’ It was then estimated that 40 Third World countries would find nuclear power economically attractive if small reactors became commercially available. Oil prices have since risen sharply. Nuclear technology has advanced. Third World electrical systems have grown. And developing nations are now more technically sophisticated than they were. International competition among the industrial powers, moreover, is emerging as the modus operandi of the eighties. Understandably, several reactor vendors are gearing up to meet the challenge. GLOBAL




Lack of space prohibits a full description of the many small-reactor concepts now under development. A brief summary of the programs of vendors and governments developing small reactors follows. Great Britain Rolls Royce and Associates. In 1978, Rolls announced

plans to market a 200-MWe prelicensed, standardized, prefabricated pressurized-water reactor (PWR) that would be barge-mounted for export to developing countries.* The firm also anticipated a domestic market for the reactor. With this new concept, Rolls became the first vendor to seriously challenge old assumptions about small reactors. A 15month market study by Rolls, which included overtures to China, Australia, Ghana, the Canary and Channel Islands, Isle of Man, and other areas, revealed wide interest in the reactor, but no takers.3 Having experienced licensing difficulties for the concept with the British Nuclear Installations Inspectorate, the Rolls small-reactor program slowed to a near standstill in 1981, but not before inspiring other vendors to explore the concept. Capital costs of the Rolls reactor were estimated at about $30OO/KWe (1981 U.S. dollars). Construction times were slated at five to six years per unit following assembly of a prototype model.’ National Nuclear Corporation. NNC has been working on its 300-MWe Magnox design. Because the Magnox reactor offers substantial advantages over most light-water reactors (LWR’s) in terms of both safety and nonproliferation safeguards, the reactor is emerging as a contender in the international market. Venezuela has expressed interest in the reactor. And several oil companies have explored use of Magnox-generated steam for oil extraction. One such project, in fact, was being explored for use in the Pacific Islands region but faced local opposition and was soon halted.

Small reactors and the “second nuclear era”


Construction times for the 300-MWe Magnox have been placed at five to six years. Capital costs for a twin 300-MWe station have been estimated at about $2600/kWe (1981 U.S. dollars), though a single unit would cost significantly more? France TechnicatomelFramatome /CEA /ALwhom. In early 198 1, Commissariat a I’Energie Atomique (CEA), a government agency, announced plans to begin developing small reactors for export to developing countries. io Technicatome, a subsidiary of CEA and Electricite de France, was to have overseen development efforts. Technicatome/CEA has conducted marketing negotiations for 125MWe and 300MWe reactors with Greece, Portugal, Ireland, Bangladesh, Morocco, Gabon, Tunisia, Libya, Algeria, Singapore, Burma, Indonesia, the Philippines, Australia, United Arab Emirates, and others.“-‘* The standard safety report for the Technicatome 300-MWe reactor is being prepared. A finished design, including price information from contractors and component suppliers, is anticipated by mid-1984. Licensing of the reactor in France is not expected to pose difficulties. Construction times for the units are estimated at five to six years. Capital costs have been projected to run from $2000 to %3000/KWe for the 300- and 125-MWe models, respectively (198 1 U.S. dollars).” In early 1983, Framatome and Alsthom-Atlantique formed a partnership to take over the small-reactor development program from Technicatome, although the latter firm will still be involved in the program. The new partnership is exploring development of a 300-MWe demonstration reactor for heat and power generation that could be located on the outskirts of ParisI As with other small reactor designs, the use of the plants for desalination, district and central heating, industrial steam, and oil extraction are being considered. Bangladesh has long expressed interest in purchasing the French 300-MWe model.” Saudia Arabia had offered to fianance up to 67% of the unit, but lack of funds still hampers Bangladesh’s plans. Recently, however, an international group has proposed that Bangladesh be the site of an international small-reactor demonstration project to spur development of the units.lB Technicatome has also developed a lOO-MWt “Thermos” reactor for district heating that has proved difficult to site due to local political opposition. As early as 1974, Technicatome had offered a 200-MWe loop boiler (Compact Advanced System, or CAS) and a 70-MWe integrated boiler, both based on prototypes operating at the Cadarache Nuclear Research Center.” Japan MKT.. The Agency of NaturaI Resources and Energy, an agency of the Ministry of International Trade and Industry (MITI), announced on January 14, 1981, that it would undertake development of small LWRs in the 50-300-MWe range for both electricity and process heating/cooling applications (Ref. 20, p. 32). The multipurpose reactor will be geared to domestic markets in Japan, where acquisition of sites for larger reactors is posing a problem for industry. The MIT1 concept incorporates prefabricated modular design of major components to facilitate line production and increase factory fabrication rates; reduced construction times; simplicity of operation, fuel handling, and maintenance; and a marketing strategy geared eventually to developing countries. Conceptual design studies for the reactor are now underway. Trial production could begin as early as 1984.21 Hitachi. Hitachi announced on 13 January 1981, that it was beginning development of a 200-MWe BWR intended mainly for export to developing countries.x’ Marketing discussions have apparently begun with Southeast Asian countries. JAERZ. The Japan Atomic Energy Research Institute is also exploring development of a small reactor. A multipurpose HTGR of 50-MWt size, it would be used primarily for industrial process heat and similar applications. Construction is scheduled to begin in 1986.”



TEPCO. Tokyo Electric Power Company, the world’s largest private utility, is exploring the development and application of small reactors for district heating and air conditioning. The effort is being initiated with the participation of other Japanese utilities. Sizes would range from 50 to 200 MWt (Ref. 23, p. 84). Many of the proposed Japanese projects are being explored with the assistance of U.S. and West German reactor manufacturers and architect-engineering firms. West Germany Kraftwerk Union. In April 1980, West Germany’s largest reactor vendor, Kraftwerk Union (KWU), announced its intentions to develop a novel 200-MWe reactor.2’25 The design is a crossbreed of BWR (boilding-water reactor) and PWR technology, which affords it a high degree of self-regulation and power stability. Licensing procedures for the reactor, which would be mounted on barges at a West German shipyard, are now underway. Developing countries are expected to provide the largest market for the reactor. Its cost is anticipated to about $500,000 (1981 U.S. dollars). Simultaneous uses of the KWU plant with that of electricity generation are being explored, including desalination and even coal gasification. Though the details of marketing activities for the reactor are unknown, overtures to Taiwan, Kenya, and Turkey have been publicized.M28 KWU is also exploring development of a 300-400-MWe BWR based on its standard existing BWR design (personal communication). Construction times for the small plant have been estimated at five years, while specific capital costs are anticipated to run about 50% higher than those of its lOOO-MWe BWR. Interatom. A wholly owned subsidiary of KWU, Interatom has developed a small integrated pressurized-water reactor (IPWR) for electricity production and other uses. Kuwait was interested in purchasing the 60-MWe version of this design during the late seventies (personal communication with U.S.-based French embassy, 1979). Now, however, most LWR activities of Interatom have been consigned to the parent KWU. BBC/HRB. Brown Boveri Company (BBC) and its subsidiary, HochtemperaturReaktorbau (HRB, owned 55% by BBC and 45% by General Atomic Co. of the United States) has been exploring development of high-temperature reactors in four sizes ranging from 100 to 1250 MWe.2gs30Three of the sizes fall under 450 MWe. This effort is being launched with the participation of the Kemforschungsanlage Jiilich Laboratory, which is government run. BBC/HRB also has a prototype 300-MWe thorium high-temperature reactor under construction at Uentrop which is more than half complete. GHT. A subsidiary of Interatom, Gesellschaft fiir Hochtemperaturreaktor Technik (GHT) is another West German firm exploring development of a small reactor. The 200-MWt modular high-temperature reactor design is similar to that of existing prototypes now under development. Construction times for this model have been slated at four years.31 Sweden ASEA -Atom. The Swedish reactor manufacturer is developing two novel small reactors, SECURE and SECTUS, the former a heat-only reactor and the latter for electricity generation. A model similar to the French Thermos design, SECURE (for Safe, Environmentally Clean Urban Reactor) comes in 200- and 400-MWt versions.32 The pool-type reactor has built-in natural safety features and is considered to be one of the simplest and safest reactor designs in existence. SECTUS, a 250-MWe power reactor, is based on the SECURE design and incorporates similar passive safety. features. Both reactors are expected to encounter few licensing difficulties in Sweden. Another small Swedish system, and perhaps the most promising of all small reactors now under development, is the PIUS reactor, a pool-type natural circulation PWR which has been dubbed meltdown-proof. According to studies, a 400-MWe PIUS would be cheaper to build than a conventional PWR and could be constructed in as few as five years.33 In April 1983, the Tennessee Valley Authority announced that it found the PIUS


reactorsand the “second nuclear era”

design so attractive for potential applications support further development of the reactor.33


in the United States that it intended to

Canada AECL. Atomic Energy of Canada Ltd. (AECL) has developed a microreactor for heat generation which is expected to serve as a prototype for future small power reactors. The 2-MWt Slowpoke III reactor, based on the pool-type Slowpoke II research reactor now widely deployed, could see final governmental approval sometime in 1984 (personal Production would be geared to both local and foreign communication with AECL). 34*35 markets. The Slowpoke III is designed for large buildings such as schools, offices, commercial centers, and small industries. As designed, the reactor is unattended and has been advertised as “walk-away safe”. Total capital costs for the unit are estimated at $1,040,000 (1981 U.S. dollars) with an annual fuel cost of about %146,000.36 AECL is also investigating development of a 300-MWe reactor based on its standard 600-MWe CANDU model (personal communication with AECL). Soviet Union The Soviets have developed an intermediate-size reactor, the WER-440-MWe model, which is standardized and has been widely deployed. In 1981, there were as many as 43 of these reactors operating, under construction, or on order in the Soviet Union and in 11 other countries.* Many developing countries, particularly among the members of the Council for Mutual Economic Assistance, have expressed interest in the reactor. Recent orders, with apparent subsequent cancellations, include those from Cuba, Turkey, and Libya. The Soviets have offered their reactor at capital costs well below any obtainable in the West due to significant subsidies.3 India India has been said to be a potential small power reactor supplier, particularly for other developing nations. India’s standardized 220-MWe CANDU-type.pressurized heavy-water reactor has a proven track record, and as many as seven additional units were at one time being planned.37 United States A number of small reactor assessment programs are underway in the United States, and recently actual development programs have reluctantly begun. The U.S. Department of Energy has begun a Small Reactor Assessment Program in conjunction with the G&X of International Energy Programs at Argonne National Laboratory. Under that program, domestic and international small reactor market surveys were conducted in 1981 and 1982. Moreover, an assessment of foreign small reactor supplier activity was conducted by Sener Engineering and Systems, a Spanish firm, for the U.S. pr0gram.u Also as part of the U.S. program, Babcock and Wilcox, with United Engineers and Constructors, has been updating old small-reactor feasibility studies conducted in the mid-1970s. More recently, the U.S. Congressional OfIice of Technology Assessment began a short study of the future of conventional nuclear technology in the United States. One of four parts of this study, performed in the fall of 1982, included an analysis of the effects of reactqr size on the overall status of nuclear power. The report of the study, performed by ENSA, Inc., contained little by way of new information on the subject;)* the United States is clearly still in need of new and up-to-date data on the myriad ways in which reactor size affects the overall acceptability of nuclear energy in the industrialized world. General Electric Co. With Department of Energy support, GE has explored development of a “pebble-bed” reactor that is small enough to be mounted on a railroad car (personal communication with General Electric and the M.I.T. Power Systems Engineering Laboratory, 1981-82). The 150-MWt high-temperature gas reactor is similar in design to units now under development in West Germany. In 1982, the Massachusetts



Institute of Technology sought to organize a funding consortium of oil, chemical, and nuclear firms to support continued development of the pebble-bed reactor, or alternatively, to engage in a private small-reactor feasibility study. One potential member of the consortium, Gulf Oil, has explored use of small reactors for oil recovery and other purposes. Westinghouse. The American giant recently announced a novel approach to manufacturing power reactors of intermediate size using modular, barge-mounted packages. The concept, called NUPACK (for nuclear packages), is being developed in anticipation of developing-country markets. 39A NUPACK reactor of 600 MWe would be constructed in five modular, barge-mounted packages at a U.S. or a Japanese shipyard. The modules would subsequently be transported to the purchasing country and assembled. Several Japanese utilities have expressed interest in the NUPACK concept, which employs standard Westinghouse PWR technology containing proven components. The Japanese, who have encountered siting difficulties, are investigating the prospects of floating a NUPACK reactor into a mountain tunnel (personal communication with Westinghouse). This concept was advertised in the 26 October, 1982, edition of Japan’s Denki Shinbun. NUPACK was publicly announced in the United States in November 1982. Both General Electric and Westinghouse, in addition to U.S. architect-engineering firms, are engaging in a number of proposed projects with Japanese utilities and reactor vendors. Conventional U.S. BWR and PWR technology is being transferred to Japan under contracts signed since 1980. IMPLICATIONS

For developing countries, small reactor developments raise intriguing prospects and concerns. Should existing export plans succeed, small reactors will qualitatively change the nature of nuclear technology transfers, bringing unique advantages and unique difficulties over traditional arrangements. Previous nuclear plant exports to developing nations have involved subcontracting back to local industries, on-site construction, gradual development of the interface between purchaser and supplier, and continuous interaction between purchaser and supplier throughout the lO-14-year duration of site preparation and construction. Transitions between initial and final stages of the projects were smooth, with some degree of developing-nation participation in many aspects of the construction, initial operation, and even design. Still, conventional nuclear technology transfers to the Third World have not been easy exercises, as experiences in Brazil, Iran, and the Phillipines illustrate. The new prefabricated, barge-mounted reactors would be built in the supplier countries, involving little, if any, subcontracting or participation by the recipient. They would be introduced .almost instantaneously in much the same way that aircraft and military technology are now transferred. In some respects, the transfers would be simplified; uniformity of equipment and standards would be better guaranteed for example, when most of the purchased equipment originated from a single supplier. Moreover, the undeveloped industrial infrastructures of many developing countries would be less likely to encumber the abilities of these nations to acquire and install the new plants. Financing for small reactors, therefore, could prove to be easier to obtain from banks and export credit agencies than are funds for conventional Third World nuclear projects. Small units might also lend themselves to novel supply options such as leasing power or to such arrangements as manpower pools for operations. On the other hand, these technology transfers would be sudden, perhaps dramatic, with unique social, political, and economic impacts. The projects, in most cases, would be financed by scarce foreign exchange and development capital. Regulatory, environmental, security, and operating needs would require the rapid development of institutions and programs employing highly skilled labor, the bulk of which would be imported. And the questions remain: Will this new, literally turn-key mode of introducing nuclear technology impede or enhance the ability of Third World nations to safely operate and efficiently maintain nuclear power plants? Will it bring new freedom or new dependency? And

Small reactors and the “second nuclear era”


another concern: Because there are currently few internationally agreed-upon safety requirements, competing vendors might be tempted to compromise the adopted standards of the industrialized world in hopes of lowering capital costs to remain competitive. Lastly, should their development and marketing prove to be successful, small reactors will further test the already overtested Non-Proliferation Treaty (NPT). Under Article IV, a bargain was struck between nuclear suppliers and potential Third World purchasers. In return for Third World signatories accepting international safeguards on all of their nuclear facilities, nuclear suppliers guaranteed them access to civilian nuclear technology. At the time the bargain was struck, however, the developing nations were so hindered (on the basis of physical system size and other factors) from pursuing the nuclear option that the guarantee lacked substance. With small reactors and accompanying economic and political accommodations, virtually any nation is afforded access to nuclear technology. While this has long been considered a laudable goal in diplomatic circles, it will not come without some (perhaps unanticipated) growing pains. Old tensions between the nuclear salesmen and the nuclear nonproliferators, evident in the original framing of the NPT, are sure to grow, for example. With international competition at the core of industrialized world economic policy, it is hard to imagine that safeguards concerns will precede marketing efforts for small reactors. As has historically been true, such concerns must generally be imposed upon international traders, and usually, though unfortunately, after the fact. Even assuming that the International Atomic Energy Agency can adequately meet existing demands for effective controls against inilitary diversions from the commercial nuclear fuel cycle, what is the capability of the agency to make the sort of programmatic expansion likely to be needed in the event that small reactors catch on in the Third World and elsewhere? Arguments have been waged over the ability of the IAEA to accommodate what the World Bank predicted could be a year-2000 increase of no more than 15 new nuclear power countries. 40 What then, in the case of twice or three times that number? Just as small reactors represent a dialectical change in the nuclear industry, so too, at the very least, should dialectical changes in institutional, social, political, and economic thinking accompany them. The question of who should make policy decisions regarding both the need and the appropriateness of small reactors and associated institutional arrangements is of primary concern. To entrust these new technologies only to narrow private sector or national concerns is to invoke the same pattern of discrimination and moralizing, the same pendulum of promotion and denial, and the same uncertainty that has haunted three decades of nuclear developments in the Third World. International participation in small-reactor assessments is thus a tirst critical step. In conclusion, renewed interest in small reactors is indeed a significant development in the global nuclear industry that, in many respects, was the predictable outcome of current events. It is not yet clear, however, whether existing programs will lead to substantial deployment of these units. Can small reactors be viewed as a positive development for Third World nations which will hold the largest market for them? That depends, in essence, on the policy decisions and institutional reforms that are made prior to their deployment. Accompanying small reactors are a host of issues that deserve serious analysis by national and international policy makers and independent analysts before existing development programs are carried through to fruition. REFERENCES

I. “World List of Nuclear Power Plants”, Nucl. News 26( IO), 83 (1983). 2. J. R. Egan, “Small Power Reactors in Less Developed Countries: Historical Analysis and Preliminary Market Survey”, commissioned by Argonne National Laboratory from ETA Engineering, Inc., Westmont IL (Oct. 1981). 3. J. R. Egan and S. Arungu-Olende, Tech. Rev. 82(6), 46 (1980). 4. R. Schmidt, Nucl. Engng In!. 27(333), 49 (1982). 5. “LDC Nuclear Power Prospects, 1975- 1990: Commercial, Economic and Security Implications”, Richard J. Barber Associates, Washington, DC. ERDA-52 (1975). 6. Nuclear Power: Issues & Choices, Ford Foundation/MITRE Corporation Report, Ballinger, Cambridge, Mass. (1977).



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