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A Survey of Nuclear Powerin Developing Countriesby O.B. Falls, Jr.
It is generally recognized that within the coming decades nuclear power is likely to play animportant role in many developing countries because, usually, such countries have limitedindigenous energy resources and, in recent years, have been adversely affected by increasesin world oil prices. Consequently, many of the smaller, less-developed countries haveexpressed concern about the unavailability of nuclear power reactors of a suitablesize for application in their system.
At present only eight developing countries have nuclear power plants in operation orunder construction — Argentina, Brazil, Bulgaria, the Czechoslovak Socialist Republic,India, the Republic of Korea, Mexico and Pakistan. The total of their nuclear powercommitments to date is only about 5200 MW, as compared to an estimated 1972 installedelectric generation capacity for these eight countries of about 56000 MW. It isestimated that by 1980 only 8% of the installed electrical capacity of all developingcountries of the world will be nuclear. In contrast, in the industrialized countries morethan 16% of total electrical capacity will be nuclear by 1980.
The Agency has been fully aware of this potential need for nuclear power and has activelypursued a programme of assisting such countries with the development of their nuclearprogrammes. Consequently, in view of the indicated need for nuclear power indeveloping countries, it was recommended at the Fourth International Conference on thePeaceful Uses of Atomic Energy, held in Geneva in 1971, and at the fifteenth regularsession of the IAEA's General Conference, that efforts should be intensified toassist these countries in planning for nuclear power. In response to those recommendationsthe Agency convened a Working Group on Nuclear Power Plants of Interest toDeveloping Countries in October 1971 to review the then current status of the potentialfor nuclear power plants in these countries, and to advise on the desirability of carryingout a detailed market survey for such plants.
OBJECTIVE AND IMPLEMENTATION
In response to the recommendations of the Working Group, the Director General decidedthat a survey should be conducted. The major objectives of the survey, as finallyundertaken, were to determine the size and timing of the installation of nuclear powerplants in each participating country that, for economic reasons, could justifiably becommissioned during the period of 1980 to 1989 (study period) and to determine thesensitivity of the results to certain key economic and technical parameters. Fourteen ofthese countries expressed an interest in participating in the survey and agreed to providerelevant basic data and provide counterpart staff to work with the visiting teams of experts.These countries are:
Argentina Egypt Korea Philippines TurkeyBangladesh Greece Mexico Singapore YugoslaviaChile Jamaica Pakistan Thailand
1 As classified under the United Nations Development Programme.
27
The market survey project cost in total more than US $600,000 and was supportedfinancially partially from the IAEA funds and staff but, also, substantially by cashcontributions from the Federal Republic of Germany, the Inter-American DevelopmentBank, the International Bank for Reconstruction and Development and the UnitedStates through its Agency for International Development, Atomic Energy Commission andExport-Import Bank. In addition numerous experts were provided on a cost-free basis by:
Canada JapanFrance SwedenGermany, Fed. Rep. United KingdomIndia United States
The participating countries contributed counterpart personnel and bore the expenses ofeach survey mission.
THE ANALYSES
Most of the data, on which the analyses werebased, was provided directly by thecountries concerned. Other data wasdeveloped by the survey staff and theirconsultants. A total of 26 experts qualifiedin various fields from the eight countriesreferred to above, and 11 Agencyspecialists assisted in this work.
The analyses included consideration ofpower flows in the basic inter-connectedsystem under normal operating conditions,the possible differences in transmissionsystem requirements under varyinggenerating capacity plans, an analysis of thetransient stability and frequency stabilityof each system following an unplannedoutage of one or more generating units, ananalysis of alternative power systemexpansion plans involving hydro, nuclear andconventional thermal plants and an estimateof the present worth of all costs for eachplan. The results served as a basis for theselection of near-optimum power systemexpansion programmes for each of thecountries. From these expansion program-mes, the number, size and timing of nuclearpower units required were determined.The financing required for the total thermalplant expansion programmes was alsoestimated.
28
It should be noted that the data acquired isnot such as to allow the findings to beconsidered the equivalent of rigorouslydetermined feasibility studies of any specificinstallations.
Table 1 shows the present and projectedpopulation and gross national product (GNP)for each of the countries studied. Forecastsof energy, demand and load factor for eachcountry are summarized in Table 2. Twoforecasts were considered for each country.The forecast prepared by the survey staff(usually lower than the country forecast)used a world-wide generalized correlation ofelectricity consumption per capita andGNP per capita. This assumed thateach country's future electricity consump-tion will follow a characteristic path whichdepends on the historical relationshipbetween these two factors. The countryforecasts were taken as submitted by them.Where there were substantial differencesbetween the forecasts analyses were madeusing both projections.External costs were not taken into account,nor were taxes and restraints on foreigncapital. The values of the economicparameters selected for the reference studiesand for sensitivity studies are given inTable 3. In the sensitivity studies, thereference parameters were kept constantexcept for the single parameter being studied.
TABLE 1. SUMMARY OF POPULATION AND
Country
ArgentinaBangladeshChileEgyptGreeceJamaicaKorea, Republic ofMexicoPakistanPhilippinesc
SingaporeThailandTurkeyYugoslavia
a Population forecastb In 1 January 1973c Luzon only
1972
24.072.110.234.7
8.9
1.9
32.354.255.720.7
2.1
38.337.320.8
used forJS dollars
Population3
<106)1980
27.388.611.940.6
9.3
2.2
36.571.565.225.2
2.4
48.645.422.5
GNP
1990
31.8114.514.549.5
9.9
2.6
42.396.079.530.9
2.8
62.558.224.9
viarket Survey forecast(converted from 1964 US $
1972
28.93.8
6.7
7.4
10.61.3
10.039.411.35.7
2.7
8.3
16.416.5
at a 4%/year
GNPb
(109 US$/yr)1980
45.46.1
10.011.917.32.2
19.068.317.99.9
5.6
15.127.327.1
inflation rate)
1990
73.211.016.421.529.8
4.2
37.7129.331.718.79.8
29.248.549.0
TABLE 2. FORECASTS OF SYSTEM LOAD CHARACTERISTICS
Country8
ArgentinaBangladesh-LBangladesh-HChileEgyptGreeceJamaica-LJamaica-HKoreaMexicoPakistanPhilippinesSingapore-LSingapore-HThailandTurkey-LTurkey-HYugoslavia-LYugoslavia-H
a L = Market
Energy generationMWh X 106
1980
42.03.14.8
11.420.726.8
3.9
4.8
31.272.717.014.88.5
9.1
15.723.429.064.487.5
1990
84.28.1
21.723.747.055.3
8.3
13.376.7
178.936.235.217.327.839.351.381.5
122.4165.5
survey forecasts H
Energy generationgrowth rate1980-1990
%/year
7.2
10.116.37.6
8.5
7.5
8.0
10.89.4
9.57.9
9.0
7.4
11.89.7
8.2
10.96.7
6.6
System loadfactor (%)
1980- 1990
58.355.055.060.568.065.068.068.066.061.258.265.065.068.066.063.763.767.567.5
= Country forecasts Luzon
Peak demand in MW
1980
8 230640
1 0002 1503 2804710
650
810
5 36013 5003 3202 6101 5001 5202 7104 2005 190
10 90014810
only
1990
16 5001 6904 5004 4708 3809 7201 4002 240
13 20033 200
7 0906 1903 0404 6506 8009 200
14 60020 70027 990
29
TABLE 3. ECONOMIC
Discount rate
Capital and 0 & M costescalation
Fuel oil and gas priceescalation rate
Coal price escalation rate
Nuclear fuel priceescalation rate
Capital cost of plants0
Depreciation"
Ratio of exchange rateused to official ratee
3ARAMETERS USED IN THE STUDY
Reference studies
Studyvaluesa
8%0%
2%
2%
0%
ORCOST-3
Linear
1.0
Approximateequivalent
"real values"
12%
4%
6%
6%
4%
a The general inflation rate was assumed constant at 4% per year
This value was used for sensitivity studies in onlyc See text for discussion of ORCOST cost model
Used as a basis of estimating plant salvage valuese This is intended to show the effect of scarcity of
devaluation of the U.S.
Sensitivity
Studyvaluesa
6%, 10%
0%,4%
0%
2 % b
ORCOST-1
Sinking
fund
1.1- 1.3b
a few selected cases
foreign capital on capital intensive
studies
Approximateequivalent
"real values"
10%, 14%_
4%, 8%
4%
6%
projects. Thedollar in March 1973 was not taken into account in this study.
The present-worth of costs associated witheach configuration was determined usinga computer programme. This programme,called the Wien Automatic System PlanningPackage (WASP), estimated the capitalcosts of all plant additions and the operatingcosts of all plants during the period1980-2000, less a salvage value in the year2000. The two decade period was used inthe evaluation in order to minimize theeffect of not operating plants built duringthe study period to the end of theireconomic lifetime, even though the studywas specifically interested only in the firstdecade of this period. All costs werediscounted to 1 January 1973, to determinethe present worth of these costs.By varying the mixture of nuclear andconventional plants addedduring the study period, it was possible tofind, in each case, that combination ofplants which is referred toas the "near-optimum" expansion plan.
30
The costing of environmental considerationsin the participating countries was difficultto establish; therefore no allowance wasmade for these costs except that capital costsfor fossil-fuelled plants included electrostaticprecipitators to clean up particulate matterin the stack gases. If future environmentalconsiderations require the use of lowsulphur fuels, or equipment to alleviatedeleterious effects such as thermal or gaseousdischarges, capital and/or operating costscould increase and thereby influence thecompetitive relationship between fossil andnuclear plants. If the full complement ofenvironmental control equipment wereadded to both nuclear and conventionalplants it appears that the costs of fossil-firedplants would be increased substantiallymore than those of nuclear plants. Thisfactor was not treated in a rigorousquantitative manner in these studies; how-ever, a qualitative and approximatequantitative analysis was undertaken.
ISites visited by the Power Survey Mission.This selection of photographs is from some of the 14 countries which were visited by thePower Survey Mission. Some are from our IAEA Photo Library files, sent by theAtomic Energy Commissions in the country concerned, and others are amateur momentostaken by members of the Survey Mission themselves.
The Market Survey team which studied Argentian requirements, outside the Atucha Nuclear Power Plant.
The Puerto Nuevo SteamPlaj5t16ygjwAir^Argginjna1jjisjted by the Survey tean
Members of the Market Survey Mission outside the Unit No.3 of the "Old Harbour" power plant"Old Harbour" power plant in Jamaica. owned by the Jamaica Public Service Company,
which the IAEA team inspected.
An aerial view of the National Institute of Nuclear Energy, Mexico.
The Kori plant construction superintendant explains the plant layout to the visiting Market Survey teamin Korea.
In Greece the Market Survey included the Kremasta Hydro Plant.
The Pakistan Institute of Nuclear Science and Technology in Nilore, Islamabad. The main research™facility is a 5 MW research reactor which became critical in December 1965.
The Philippine Atomic Research Centre at Diliman, Quezon City, showing the water storage tank (left)and the reactor building (right).
CHARACTERISTICS OF POWERSYSTEMS EVALUATED
System capacities at start of study period
The system assumed to be in existence atthe start of the study period in each countryincluded (a) all of the generating unitsactually existing and those firmly committed(which generally were sufficient to meetpeak load demands up to 1975-77), and(b) generating units, of the same typeas included in (a), in the sizes and on suchschedules as to meet the forecasted systemdemand and provide adequate reservemargins at the end of 1979.
Capacity additions during study period
The capacity additions required each year,to provide adequate reserve margins over theforecasted peak demands, were determinedby using the WASP programme. Thecriterion for adequate reserve margin wasthat the average annual loss-of-loadprobability (LOLP) should be about 0.005.Having found the required total capacityadditions, the capacity available from theinstalled hydro and pumped storage plantswas subtracted to determine the requirednet thermal capacity additions. Suchadditions represent the total "market" fornew capacity to be shared by nuclear andconventional plants.
In regard to hydro and pumped storageadditions, these were assumed to follow eachcountry's existing plans, or an extensionof these. Once a schedule of hydro andpumped storage units was established, it washeld constant throughout all of the studycases for a given country and, therefore,did not directly affect the comparativeeconomic evaluation of nuclear versusconventional thermal units.
LOLP is defined as that percentage (or fraction) oftime that the system cannot meet the expected load.
Capacity additions following study period
A single expansion plan for the 1990-2000period was developed to meet the forecastedload growths for each country as referredto above. These expansion schedules wereselected to provide essentially the same LOLPas that achieved during the study periodand were attached to each alternativeplan being evaluated. In the second decadeschedules, hydro capacity additions weregenerally based on the country's own plans,and the required thermal capacity additionswere divided roughly equally betweennuclear and conventional plants.
Characteristics of generating units consideredas expansion alternatives
(a) Capital costs
These costs were determined by the ORCOSTcomputer programme (see Table 3).ORCOST-1 costs are based on mid-1971 inthe USA updated to 1 January 1973 byescalating equipment at 5% per year andmaterials at 15% per year. They show a ratioof nuclear to oil-fired plants of 1.4 to 1.8depending on country and MW rating.ORCOST-3 costs include added costsreflecting recent sharp increases in nuclearplant construction costs in the USA up to1 January 1973 with very minor changes infossil-fired plant costs. They show a ratioof nuclear to oil-fired plant costs of 1.7to 2.2 depending on country and MW rating.In general, the costs of gas-fired plantswere about 10% below the costs of the oil-fired units, while the costs of coal- andlignite-fired plants were 12% and 23% abovethe oil-fired plant costs respectively.
(b) Fuel costs
Unescalated prices for imported fuel oildelivered to the plant sites ranged from130-200 US d/106 kcal. Nuclear fuel costswere about 50-60 US d/10 kcal. Costsof indigenous fuels, such as natural gas, coaland lignite, were based on informationsupplied by each country.
35
(c) Other dataOther data required for the evaluationincluded minimum operating load levels ofeach plant (in MW); base load andincremental heat rates (in kcal/kWh); forcedoutage rates (in %/year), scheduledmaintenance days per year; and operatingand maintenance costs (in $/kW/month).Where these data were available from acountry it was used. Where the data was notavailable and, in special cases, standardizeddata were used for the evaluation.
PROJECTED NUCLEAR POWER MARKETSThe market for nuclear plants under
reference conditions
The projected markets for nuclear plantswhich will be commissioned in eachparticipating country during the study periodare shown in Table 4 based on the referenceeconomic parameters. Also shown in thetable are the percentage of total thermalmarket, for each country during the studyperiod, which might be met by nuclear plants.This ranges from zero to over 95% with anoverall average in the range of 70-75%. It isseen that during the early years of thestudy period, the percentage of thetotal thermal capacity additions served bynuclear plants is relatively small; however,from 1983 onwards the nuclear portionis more than 70%.One of the specific objectives for the marketsurvey was to investigate the potentialusage of small reactor power plants.Inquiries to the reactor manufacturingindustry indicated substantially no interestin or acceptable price data on sizes below400-600 MW. Nevertheless, a decision wastaken to establish costs for sizes of 100,200, 300 and 400 MW to use in theevaluation studies. However, the studiesindicated that the 100 MW size was noteconomically justifiable in any of thecountries, under the conditions assumed.The smallest size resulting from the studieswas 200 MW and only a very few units inthis size were indicated. The first size
36
showing any appreciable market quantitywas 300 MW.
The distribution of market by sizes of units
Table 5 shows the market for nuclear plantsunder reference conditions and underconditions which tend to favourconventional plants and nuclear plantsrespectively. As seen in this table, themarket for small nuclear plants (200-400 MW)is very sensitive to oil-price escalation.With 0% escalation on oil prices, thepotential market drops to zero from thereference case range of 3200-3500 MW. At4% oil price escalation rate (or use ofORCOST-1 capital costs which giveessentially the same result) the market forsmall nuclear plants increases to the range of6500-7800 MW.
The market for medium size (600 MW)nuclear plants would be affected by changesin these same parameters. Here it is seenthat the market under reference conditionsof 24600 - 27600 MW drops to the minimummarket level of 10200 - 10800 MW with 0%escalation on oil prices. The maximumnuclear market was encountered with a 6%discount rate or 2% escalation on oil prices.In this case, the potential market wasincreased to the range of 24600 - 31200 MW.
The potential market for large (800-1000 MW)nuclear plants, in contrast to the situationpertaining to small nuclear plants, isrelatively insensitive to changes in theeconomic parameters applied. The reasonfor this is that when systems become largeenough to accept units in this size range,nuclear plants capture essentially all of themarket even under conditions which tendto favour conventional plants. Thus,changing these conditions to make themmore favourable to nuclear plants does notincrease the market for such plants.Studies were also carried out for severalcountries to evaluate the effect of varyingother parameters. It was found thatpenalizing foreign exchange costs by using ashadow exchange rate of 1.1 to 1.3 had
TABLE 4. PROJECTED ANNUAL NUCLEAR I
Country'
ArgentinaBangladesh-LBangladesh-HChileEgyptGreeceJamaica-LJamaica-HRepublic of
KoreaMexico
PakistanPhilippinesSingapore-LSingapore-HThailandTurkey-LTurkey-H
Yugoslavia-LYugoslavia-HTotal nuclear <L)Total nuclear (H)Nuclear % oftotal thermal (L)Nuclear % oftotal thermal (H)
1980
600
600600
13.5
12.5
1981
600
600
12001200
26.4
24.0
a Under reference conditions
1982
400
600
600
600
60022002800
44.0
51.9
L denotes market based on Market Survey (lowc Market for unmarked countries (witli one load
3LANT ADDITIONS
1983
600
600400
600
600+800
600800
42004400
73.7
70.4
1984
2X600
300
400
2X600
800
600
400
600800
55005700
75.3
68.3
BY COUNTRYa'b IN MW
1985
300600600
600
3X800
400
800800
57005700
86.4
83.2
1986
800
300600600
2X600
3X800
600800
600600
600
2X8007900
10700
86.3
89.9
1987
800
600600
2X600
1000
800
600
600
8002X80058007800
78.4
83.0
1988
1000
2X600600
600+800
2X8001000
600600600600+800
100010009000
10400
87.3
88.9
1989
1000
600300600600
300600+800
3X1000
1000
800600600600
10002X10001010012800
94.8
98.5
load) forecast; H denotes market based on country (high load) forecastforecast) were included in both low and tigh load totals
Totalnuclear
additions(MW)
6000
600120042004200
3008800
14800
6003800
2600260012003200
48009200
5220062100
Totalthermalmarket(MW)
680013003850175048004500100015509100
19600
2000540021004700385030004850
6000106007120083350
Nuclear% of
totalmarket
88.20
15.668.687.593.3
019.396.7
75.6
30.070.30
55.367.540.066.0
80.086.873.374.5
TABLE 5. POTENTIAL MARKET FOR NUCLEAR PLANTS IN MW
Sizeclassification
Small(200-400 MW)
Sub-totalMedium(600 MW)Sub-totalLarge(800-1000 MW)Sub-total
Totals
Market underreference conditions8
Lowforecast
-
4X 3005X 400
3 200
41 X 600
24 60018 X 80010 X 1000
24 400
52 200
Parameter conditions:abcde
Highforecast
-
5X 3005X 400
3 500
46 X 600
27 60025 X 80011 X 1000
31 000
62 100
Discount rate8886
6,8,10
Minimum nuclearmarket conditions
Lowforecast
none
none
18 X 600
10 80017 X 80010 X 1000
23 600
34 400
Highforecast
none
none
17 X 600
10 20023 X 80011 X 1000
29 400
39 600
Oil price escalationandandandand
2042
Maximum nuclearmarket conditions
Lowforecast2X 200
11 X 3007 X 400
6 500°
44 X 600
26 400d
18 X 80010 X 1000
24 400e
57 300
rate
and 2,4 (all combinations)
Highforecast2 X 200
10 X 30011 X 400
7 800c
52 X 600
31 200d
25 X 80011 X 1000
31 000e
70 000
essentially no effect on the nuclear market.This was because the higher foreigninvestment costs in the case of nuclear plantswere balanced by the effective higher costsof imported oil for the oil-fired plants.The use of sinking fund rather than lineardepreciation was found to increase thenuclear market by about 4%; on the otherhand, use of a 2%/yr escalation rate onnuclear fuel prices would have lowered themarket by about 8%.
FINANCING
Calculation of annual cash flows
In order to determine the year-by-yeardomestic and foreign investmentrequirements for the expansion programmesa special computer programme determinedthe annual domestic and foreignexpenditures associated with each plantunder reference conditions. Plants wereassumed to become operational on1 January each year and their capital costexpenditures were assumed to reach 100%by the end of the preceding year.
38
Financing requirements for the total thermalplant expansion programmes include onlythe investment costs associated with thethermal plants added during the study periodplus the nuclear fuel cycle working capital.It was found that with the low load forecast,domestic financing requirements amountto US $8251 million while foreign financingrequirements reach US $12405 million.For the high forecast, correspondingamounts are US $9292 million andUS $15157 million respectively. Asmentioned above, costs refer only to thoseplants commissioned during the period1980-1989.
The financing requirements for the nuclearfuel cycle investment were determinedseparately because the financingarrangements for these costs may differ fromthose for the plant construction. Theinvestment associated with the nuclear fuelamounts to US $1262 X 106 for the lowforecast and US $1548 X 106 with the highforecast. Essentially all of the nuclear fuelinvestment costs will be foreign.
