The USAEC’s Report on the Need for Nuclear Power

Our technological society requires abundant sources of energy. Although large, the supplies of fossil fuels are not unlimited, and these materials are precious for many specific purposes such as transportation, small isolated heat and power installations, and as sources of industrial chemicals. Reasonable amounts should be preserved for future generations.

A comparison of estimates of fossil fuel resources with projections of the rapidly increasing rate of energy consumption predicts that if no additional forms of energy were utilized, we would exhaust our readily available, low-cost fossil fuels in a century or less, and our presently visualized total supplies in about another century. Long before they become exhausted, we must taper off their use rate by supplementing them increasingly from other sources.

In contrast, our supplies of uranium and thorium contain almost unlimited amounts of latent energy that can be tapped provided “breeder” reactors are developed to convert the fertile materials, uranium-238 and thorium-232, to fissionable plutonium-239 and uranium-233, respectively. Successfully done, this will render the cost of nuclear raw materials relatively unimportant so that even very low-grade sources will become economically acceptable.

Using nuclear energy for electric power and, less immediately, for industrial process heat and other purposes is technically feasible and economically reasonable. In addition to its utmost importance as a means of exploiting a sizeable new energy resource, nuclear electric power holds significant near-term possibilities: as a means of significantly reducing power generation costs, especially in areas where fossil fuel costs are high; as an essential contributor to new industrial technology and our technological world leadership; as a significant positive element in our foreign trade; and, potentially, as a means of strengthening our national defense.

Given the above, we have concluded that: Nuclear energy can and should make an important and, ultimately, a vital contribution toward meeting our long-term energy requirements, and, in particular, that: the development and exploitation of nuclear electric power are clearly in the near- and long-term national interest and should be vigorously pursued.

The technological development of nuclear power is expensive. The reactors are complex, and operating units must be extensive and costly, even of a scaled-down test variety. Furthermore, nuclear power does not meet a hitherto unfilled need but must depend on marketability on purely economic advantages that will return the development investment slowly. Hence, the equipment industry could not have afforded to undertake the program alone. The Government must play a role.

An early objective should be to reach the point where, with appropriate encouragement and support, the industry can provide nuclear power installations of economic attractiveness sufficient to induce utilities to install them at their own expense. Once this is achieved, the Government should devote itself to advanced developments designed to meet long-range objectives, leaving to industry responsible for nearer-term improvements. Gradually, as technological maturity is reached, the transition to the sector should become complete.

Thus, the proper role of the Government is to take the lead in developing and demonstrating the technology so that economic factors will promote industrial applications in the public interest and lead to a self-sustaining and growing nuclear power industry.

Accordingly, in keeping with national policy and with the responsibilities assigned to it by the Atomic Energy Act, the Atomic Energy Commission has conducted and encouraged a vigorous program directed toward developing and extensively exploiting nuclear energy for civilian purposes, emphasizing nuclear electric power. About $1.275 billion has been expended by the AEC to date on the civilian power program. This program has included research and development and a “power demonstration” program involving aid in constructing and operating experimental reactors on utility grids. Several reactor types are under development. Most highly developed are “converter” reactors that produce less fissionable material than they consume; much less far along are “breeder” reactors that have more.

In one segment of the power demonstration program, Commission-built and -owned “prototype” reactors are operated by utilities that buy the steam; in another part, utilities are given research and development assistance in designing and constructing their reactors and, for a few years, no charge is made for the lease of Government-owned nuclear fuel. Six sizeable reactors of the more highly developed types are in successful operation on utility grids (the two largest without AEC assistance); seven more will be completed by the end of 1963; a few others are under construction or nearly so. Experience has shown that nuclear electric power is readily achieved technically, but difficulties have been met in developing an economically competitive technology with conventional power generation methods. Happily, in recent years these difficulties have been progressively overcome.

Certain power reactors, notably water-cooled converters producing saturated steam, are now on the threshold of economic competitiveness with conventional power in large installations in the country’s high fossil fuel cost areas. Foreseeable improvements will substantially increase the size of competitiveness.

Saturated steam reactors, however, have certain inherent limitations. They produce relatively low-temperature saturated steam, which limits their efficiencies and requires large, expensive turbines; they are only moderately effective converters. Consequently, converter concepts utilizing other moderators and coolants and promising improved economics and fuel utilization are being actively pursued with encouraging results; early competitiveness seems assured for some of them. All of these are “thermal” t reactors. They include the “spectral shift” reactor, the high-temperature gas-cooled reactor, and the sodium-graphite reactor. All have relatively high efficiencies and excellent economic promise. The first two will have excellent conversion ratios; indeed, they may eventually be made to breed in the thorium-uranium cycle. The sodium-graphite reactor can achieve high temperatures, has good safety features, and helps develop the liquid sodium technology necessary for fast breeders. The heavy water moderated reactor also shows promise of high conversion ratios, but present designs are less economically attractive than other types in the United States. The organic-cooled and -moderated reactor may have applications for process heat. Some of these should be carried to the operating prototype stage for several years, and some will reach the full-scale operational phase by the early 1970s. Operating reactors of these types will help accelerate the industry, increase operational experience, and will help provide plutonium needed for the breeder program.

Although much technical progress has been made, breeder reactors have not yet reached an economically valuable stage of development. Even when they do, they will not, initially at least, create new material fast enough to provide the fuel for new plants at the rate required if nuclear power is to increase its proportional share of the national electric power load. Hence, even after breeders become available, it will be necessary to fuel some portion of the installations with uranium-235 until improved breeding gains and reductions in the relative rate of growth in power consumption enable the breeders to be self-sufficient. For the thermal reactors used to make U-233 from thorium, this need can be met by substituting U-235 for U-233 in some of them, at a sacrifice in fuel produced. A similar procedure would, however, be uneconomic in the “fast” reactors required to breed plutonium. Hence, in the transition stage, which will last for many decades, fast breeders that burn as well as make plutonium will probably be augmented by thermal converters both for economic reasons and because the combination of breeders and converters must reach an overall net breeding capability, or very nearly so, while relatively cheap fuel supplies are still available.

In our opinion, economical nuclear power is so near at hand that only a modest additional incentive is required to initiate its appreciable early use by the utilities. Should this occur, the standard economic processes would, we feel, result in expansion at a rapid rate. The Government’s investment would be augmented manifold by industry. Equipment manufacturers could finance significant technical developments, thus reducing the future need for Government participation.

Continuation of the Commission’s current effort, with some augmentation in support of the power demonstration program and with program adjustments to give added emphasis to breeders, would, we believe, provide the industry with the needed stimulus to build a significant number of large reactors shortly, would bring nuclear power to competitive status with conventional power throughout most of the country during the 1970s, and would make breeder reactors economically attractive by the 1980s.

Under these conditions, we estimate that by the end of the century, nuclear power will assume the total increase in national electric energy requirements and provide half the energy generated. This rate of progress, projected into the next century, would be an essential step in conserving fossil fuels and, unless breeders lagged the converters much more than we predict, would raise no problems in nuclear fuel supplies.

Under conservative cost assumptions, it is estimated that by the end of the century, the above-projected use of nuclear power would result in cumulative savings in generation costs of about $30 billion. The annual protection would be between $4 and $5 billion. High-cost power areas would no longer exist since nuclear power costs are essentially the same everywhere without significant fuel transportation expenses. This would be an economic boon to areas of high-cost fossil fuels and, by enabling them to compete better, should increase the industrial potential of the entire country.

More generally, introducing nuclear power technology on a significant scale would add to the health and vigor of our industry and the general economy. Technical progress would assist the space and military programs and have other ancillary benefits. Our international leadership in the field would be maintained, benefiting our prestige and foreign trade. Nuclear power could also improve our defense posture; it would not burden the transportation system during national emergencies; furthermore, the “containment” required for safety reasons could, if desired, be achieved at little, if any, extra cost by underground installations, thus “hardening” the plants against nuclear attack.

A substantially lesser program would sharply reduce these benefits. Too great a slowdown could result in losing significant portions of the industry’s nuclear capability, thereby seriously delaying the time it would assume a substantial share of the development costs.

On the other hand, we do not believe that a significant step up in the Commission program is appropriate. Overall, the support of the scientists and engineers engaged in developmental work is adequate. Given the country’s other needs, it would seem unwarranted to appreciably increase such a workforce in this field.

We have concluded that the nuclear power program should continue expeditiously. Commission support should continue with added emphasis on stimulating industrial participation. The program should include the following:

  1. Early construction of plants of the presently most competitive reactor types
  2. Development, construction, and demonstration of advanced converters to improve the economics and the use of nuclear fuels
  3. Intensive development and demonstration of breeder reactors to fill the long-range needs of utilizing fertile and fissile fuels.

A vital corollary area is the development of economical chemical reprocessing methods whereby functional fissile and fertile materials are recaptured from used fuel assemblies, and the fission products are removed. Another important line of work concerns the ultimate storage or disposal of the large amounts of radioactive fission products generated when a significant power industry comes into being.

An overriding consideration is that of safety. Not only must inherent safety be assured, but its existence must be conclusively demonstrated to the public. With adequate technical improvements and the accumulation of satisfactory experience, it should be possible gradually to remove many of the siting restrictions in force today, thus permitting plant locations closer to the large load centers.

A composite construction program for the next dozen years might entail the following: (1) the construction and placing into operation of seven or eight power-producing prototype reactors, approximately half of which would be advanced converters and the rest breeders; most of their cost would probably be borne by the AEC; (2) assistance, as necessary, to the industry in the construction of 10- 12 full-scale power plants of improving the design as time goes on; hopefully, the industry will concurrently bear total costs of many more of well-proven design.

This construction would be backed by specific development programs directed at the more advanced reactor types, especially breeders, and by research and development related to the underlying technology.

Careful attention must be paid to several legal, financial, and administrative questions, among them (1) private ownership of unique nuclear materials and related policies on fuel pricing and “toll enrichment”; (2) policies relating to the raw material and other supporting industries; (3) licensing and regulation, including reactor siting criteria.

The Commission has recommended that private ownership of unique nuclear materials be authorized early, thus permitting the free play of regular economic forces and minimizing economic distortions of the technology. Such requests should not be mandatory for a decade to prevent sudden dislocations.

The Commission further believes that a “toll enrichment” or equivalent policy should be adopted. The industry could then buy its raw materials on the open market, use privately owned plants to prepare them for enrichment, and depend upon the Government only for the actual enrichment in the diffusion plants. This service should also be extended to our friends abroad, subject to proper safeguards against diversion for military use.

Before and during the transition period to private ownership, the value set by the Commission on enriched uranium for lease or sale should, as at present, be determined by the actual cost, with appropriate allowances for depreciation and other indirect expenses. The Commission has recommended that prices for the purchase of plutonium be by its “near-term” value as reactor fuel. We believe that consideration should be given to scaling the price by the content of fissionable isotopes. The exact pricing policies should apply to purchases abroad of plutonium made from uranium enriched in the U.S.

The Commission’s contracts with uranium miners and processors expired in 1966. Since it seems probable that the requirements for new uranium for weapons, the dominating use to date, will decrease in the next decade, careful planning is necessary to guide such further procurement so that the uranium industry will be kept viable during any slack period before civilian power creates another great demand. With this in mind, the Commission is planning to offer the industry a “stretch out” program under which an AEC commitment to purchase additional material after January 1, 1967, would be used as an incentive to induce the industry to delay until after that date delivery of part of the uranium presently under contract. If successful, this program would result in a leveling-off process that should carry through the period of slack use without injuring the industry substantially or resulting in an unreasonably large surplus.

The Commission intends to continue and extend encouragement to the industrial activities ancillary to the significant equipment industry. Many that could start on a small scale are already well underway. However, a few moves, such as the chemical separation of used fuels, are attractive to industry only on a reasonably substantial scale and for which there will be little private business until civilian reactors have operated for an appreciable period. Strong encouragement is being given to private industry to embark on these fields with some prospect of success. As rapidly as a personal capability comes into being, the Commission should withdraw from all such work deriving from industry and utilize private plants to fill its requirements except for materials for weapons.

Recognizing that simplifying and streamlining licensing and regulatory procedures can significantly help encourage the utility industry to adopt nuclear power, Congress and the AEC have taken steps in this direction. A significant effort is the recent enactment of laws that will significantly reduce the number of mandatory public hearings for reactor licensing. The Commission is studying simplifying its licensing procedures by reducing the volume and complexity of administrative processes. Further operating experience should reduce the time and effort required for technical analysis and review.

Clearly: The overall objective of the Commission’s nuclear power program should be to foster and support the growing use of atomic energy and, importantly, to guide the program in such directions as to make possible the exploitation of the vast energy resources latent in the fertile materials, uranium-238 and thorium. More specific objectives may be summarized as follows:

  1. The demonstration of economical nuclear power by assuring the construction of plants incorporating the presently most competitive reactor types;
  2. The early establishment of a self-sufficient and growing nuclear power industry that will assume an increasing share of the development costs;
  3. The development of improved converter and, later, breeder reactors to convert the fertile isotopes to fissionable ones, thus making available the full potential of the nuclear fuels.
  4. The maintenance of U. S. technological leadership in the world using a vigorous domestic nuclear power program and appropriate cooperation with, and assistance to, our friends abroad.

The role of the Commission in achieving these objectives must be one of positive and vigorous leadership, both to accomplish the technical goals and to assure growing participation by the equipment and utility industry as nuclear power becomes economic in increasing areas of this country and the world at large.