ML19317G444

Vision of Hindsight:How Good Have Forecasts Been. Remarks at 680905-06 Briefing Conference on Nuclear Power

ML19317G444
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Site:	Crystal River
Issue date:	09/06/1968
From:	Coe R YANKEE ATOMIC ELECTRIC CO.
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G THE VISION OF HINDSIGHT:

HO'.'l GOOD HAVE THE FORECASTS BEEN?

Remarks by: ~Reger J. Coe, Vice President Yankee Atomic Electric Company Panel Session on: EVALUATION OF PC#lER PLANT PROPOSALS 3,

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BRIEFING CONFERENCE ON NUCLEAR PC'.'IER

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Sponsored by:

Federal Bar Association 8003180 h Atomic Industrial Forum U

l American Nuclear Society '(D.C. Chapter)

Foundation of FBA - In C'ooperation.with the Bureau of. National Affairs Washington, D. C.

September 5 and 6, 1968

n v

When Howard Shapar asked me last February it. Migmi to particip' ate

.in this Briefing Conference, I accepted quite readily for two reasons:

first,-I had not participated in previous conferences of this nature and

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had heard favorable reports on them; and, secondly, the date was far enough in the future so that, as usual, I foresaw no difficult'y in preparing a paper.

The appointed day, however, inevitably arrives and last minute preparation of a paper seems to be the order of the day, -- at least in my case. I have had a lot of work to do in the last week.

Somewhat later I was assigned the topic which is the title of this paper, "The Vision o,f Hindsight: How Good Have the Foreca'sts Been?"

It is an intriguing title, but after some reflection I think you all will agree that while innumerable forecasts have been made for particular plants, and for nuclear pcwer in general, there is as yet very little information in the way of " hindsight". There is quite a bit of performance and cost infor-mation available on the Yankee, Rowe plant which has now been in commercial C

operation for something over 7 years. Dresden, which has been in operation somewhat longer, is kind of a'special case since not all of the costs were booked as utility plant and the fuel cost target was guaranteed.

Further, I am not aware of any long term economic projections that were made at the outset.: Dresden, I believe, like Yankee was authorized, not on the basis of an economic comparison with a fossil fuel alternate, but on the basis that nuclear power was coming into the picture and that utilities must develop

,.xperience and know-how for the future.

1 Bits and pieces of information are'available for other, plants, but_ cover shorter periods of time and do not really provide much " Vision of Hindsight". I should like to give you some operating fesults ' compared to the forecast'for Yankee Atomic Electric Company, and then add some early information on Connecticut Yankee covering the first 7 months of commercial operation in l'968.

In the case of Yankee the earliest reliable economic forecast or projection was made in mid-1958 soon after the construction permit had been issued and heavy construction commenced.' It was a year by year projection I

for 10 years, based on costs and performance which we thought could surely j

be achieved.

It would perhaps be well to try to re-create the state of the

s 2.

Aq:

art and the climate that existed in the period from mid-1955 to mid-1958 s when plans were being made and designs developed for the Yankee plant. It was pessimistic, to say the least, for a number of reasons:

1.

Nobody knew what nuclear plants would finally cost. Many stories were circulating of sky-rocketing costs at Shippingport which was then under construction. For example, we heard that each main coolant pipe weld at Shippingport had required 800 man hours of labor.

2.

The calculational methods and codes for core design were in a primitive state with the reault that very conservative numbers had to be used as the input for these cr.!culations.

For example, the originally calculated figure for the hot channel factor (F )

q for Yankee was 5.17, whereas the highest figure that has been measured from the beginning of operation is about 3.75.

3.

Along the saec line, reactivity lifetime of a given core could not be predicted'with any certainty.

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Nobodydaredtogoabovefuelburnupsof10,000MND/ Tonne.

4.

5.

Reliability of components was in question following steam generator and pump failures at Shippingport.

6.

Fuel costs could not be accurat'e'iy-estimated because of the many uncertainties in reactivity lifetime, achievable burnup,g

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and reprocessing costs.

The previously mentioned forecasts were definitely on the con-servative side for the reasons just given but were perhaps even more so fo'r an additional reason. Yankee, being a separate company, had to finance F

every dollar that was spent through the use of long term deb't and bank loans obtained by public financing and by equity money supplied by the Sponsors.

For this' reason, financing plans based on'these estimates and projections were made for a total of S57.0 Million, a conservative estimate, so as to obviate the need to go back for additional funds once arrangements had been ma de.. All of these background facts should be borne in mind as I present a

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series of charts showing comparisons between the forecasts and the results

! attained during the first 7 years of commercial operation.

e n

3.

3 F!GURE 1.

NET CA? ABILITY --- The forecasts were made on the basis of 114 MN capability the firs; year, 120 MW the second year, 132 MN the third

. year and 134 MW, the nominal design capability of the plant, for the ensu-i

'ing years. Actually, the net capability was considerably higher, -- 140 MW the first year, 160 in the second year and 175 from the third year on. This i

favorable result'.can be attributed to the extreme conse:vatis: used in the original calculations of core performance.

FIGURE

2. CA?ACITY FACTCR --- As in other respects, the predicted capacity factors for the first two years were set at a vdry low level but were sub-stantially exceeded in actual operation during those years. However, a

' capacity factor of 80% was predicted for the third year and beyond, and a

these have not been attained in actuality for a number of reasons.

First ofall,ratherlongrefuelingoutagesoccurredinthethirdandfifthyearsi and in every core cycle we engaged in core life extension at reduced pcwer

' which, of course, affects 'the espacity factor. I should add that the capac-ity factor is computed in each period for the authorized capability of the plant during that particular period.

FIGURE 3.

NET GENERATION --- In all -7 years of. operation net generation

.has exceede'd the forecast and in some years this has been substantial. The extra capability that has been available has more than offset the somewhat lower capacity factors that have been experienced. The average net general tion over the 7-year' period has been 1.04 Billion KWH against a' prediction,

of.833 Billion KWH.

FIGURE 4.

FIXE 3 COSTS --- Fixed costs which include cost of =cney, depre-

'ciation, operation and maintenance, Federal and local taxes,,and insurance o

have been substantially 1cwer, both in dollars and in mills per KWH, than were predicted in 1958. Fixed costs have averaged 56.9 Million a year as agains; a prediction of 59.1 Million. This.is due almost entirely to.:he fact that the final capital requirements were S43.7 Million rather than the 557.0 Million which was used in the forecast, and was the basis for the -

financing arrangements..As the chart shows, they have averaged 6.60 agains:

s the predicticn of 10.8 mills per K'.yH.

Both lower capital costs and increased XXH production contribute to this decrease.

w

$8.

a F' EL COSTS --- Fuel costs have been substantially icwer ever FIGURE 5.

the 7-year period than predicted, showing an average of 2.24 agci.qst.the foreccst of 4.13 mills. Fuoi costs for the firct year of operation were so:cwhat high beccuse of limited burnup in this core and were increased in the second year for the.same reason, plus the fact that sny items of replacement hardware such as new control rods and control rod followers a

were charged o fuel accounts at that time.

From that point on, actual fuel costs have been quite stable in spite of the fact tha: the use charge on the inventory began in the 5th year. This icerease in fuel cycle ex-pense was more than offset by increase in burnup attained in this and.later

. Cores.

?!GURE 6.

PO?:ER COSTS --- Fower Costs in mills per KiiH are, of course, the sum of fixed costs and fuel costs. ' As would be expected frc the pre

• I vicus charts, the year by year power costs have been substantially icwer than the forecast, averaging 9.45 mills per'KilH against the forecas: cf 15 mills over the 7-year period.

The overall pictura presented by this series of charts indicates

. how conservative the forecast was in the first place and.the extent to which' performance of the plant has exceeded expectations. Le :e remind you again that there.were many reasons for g.aking the ferecast on a con-servative basis and just as many retaons 'for uhder-estimating the actual performance of the plant.

f Turning now to the time - 1963 - when forecasts were m de for, a

the Connecticut Yankee project, we have to. say -hat this was quite a dif-ferent setting than was the case for Yankee Atomic.

In qhe intervening years, the state of the art and calculational metteds had advanced greatly, we had several years of operating experience with the' Yankee plant at Rcwe, and we had (we thought) much better informatica on which to base estimates of construction costs. As a result we adopted a much less conservative attitude in-cur estimates of costs and plant performance.

The forecast which I will refer to for Connecticut Yankee was i

made in 1963, before the design of the plant had been fully developed and v

called for total capital requirements of 591 Millica, including cost of racrication of the first core, working capital, operator training, prelim

w 5.

incry operatica and organi:stional and administrative expense.

As in the case with. Yankee, every doller to be spent hed to be included in tr.e financ-ing plans.. Sc ewhat later this figure was raised to S93.5 Million, chiefly to include grecter allowances for contingencies, escciation and owners' ex-Tha final figure for the capitalization of Connecticut Yankee was, pense.

,$103 Millica, an increase of $4.5 Million over the authorized estimate. The' principcl factors contributing to this overrun ware -- premium time and icss of productivity resulting frc the'use of. extended work week and overtime, greater than expected escalation, and a number o,f items that had to be back fitted during the final stages of construction.- Also centributing was an increase in interest during construction due to a delay of some three conths from the scheduled date in placing the plant in commercial operation.

Connecticut Yankee wen into ec :ercial operation January 1st, 1963, at its licensed capability of 490 M'3.

We now have 7 full =cn hs of operating results. I have two slides which 1 will show that depic: these results.

FIGUEE 7.

?!.OX HLY AND CCiULA~IVE CAPACITY FACTORS --- As the char; shows,

=cathly capacity factors have been rather spotty with March and April being particularly disappointing. The poor results in these two acnths can be attributed to a number of troubles with the turbine generator which took the plant off the line for most of March.and half of April. Following these repairs, the plan: has operated in a generally satisfacto(y manher, although4

-here are still seca problems which must be cc rected. Our forecast called" -

for an 8C% capacity factor in this firs; year and the results so far have T

not been up to this, as the cumulative capacity factor stands at 66%.?

F:GURE 8.

7 ?!.CNTMS C?ERATION -- FORICAST AND ACTUAL --- I rather hesitate h

to show you this chart since it could be somewhat misleading.' The chart shcws among other things that for 7 months pcwer c'sts were 6.62 mi.ls o

against a forecast of 5.33 milas.

ane increase is due to several factors, sc:e of which have an offsetting effect. Firs of all, the bocks are being kep: en a 25 year plant life basis, rather than 30 years as used in the

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forecast; second, the fixed costs are more than

$1.0 "illion per year

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higher'because of the higher capital costs and higher local taxes and opera-

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ting expense. In terms of mills per K?.E this effect is exaggerated because of tha icwer capacity factor and the resulting lower K7.5 production. Off-se ting-this effect, hcwever, are the slightly better fuel costs.

1 s

6.

'in the icwc right hand corner are actual 1968 figures adjusted

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for SQ3 capacity (factor and 30 yes: deprecia. tion, showing an*cverc11 power

. cost of 5.62 mills.per KWH cs compared to-the forecast of 5.33 mills per h"e..i.

To su= up for Connecticut Yankoo, we can say that our experience

.in this limited period of time has been somewhat disappointing; but when the various troubles we have experienced have been corrected, we can look forward to performance and costs not substantially different or nigher than those predicted in 1963.

In addition to the foregoing, some information is available on the Humbcid 3ay uni which has been operating for 5 years. Power costs have been higher than forecast for several reasons.

Firsi, the capital cost of the u. lit was some 15% higher than estimated because of design changes made during

' tion and also because of back fitting that has been required over years. Secondly, capacity factors have been icw in sev'eral years because of reduced pcwer. operation in order to realize opti-

=um use of the original stainless steel clad fuel. Now that he core con-sis s only of zircaloy clad fuel, operation at higher capacity factors is expected.

On the other hand, fuel costs ate lower than originally estimated.

' Fuel costs were estimated to be 4.0 mills per K'iH initially, dropping to f,,

3.0 mills for the second core and stabilizing at that figure. This reduc-tien has been realized with the second core which is now in service, but I

fuel costs of 2.0 mills par K!H are projected for the third core and beyond.

.is fair to say, I think, ths; while operating results nave : allen short e

of the projections in the~early years, the prospects are good for meeting

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i these projections frc= this point cn.

l Thi's abou sums up the information availablo at this time. Three' t

to five' years hence, when.a number of plants now.under construction will be in operation,.it should ha =ost interesting to apply the " Vision of Hih.dsight" to their results.

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