Nuclear Fuel Industry: Investment and Cost Trends

Abstract

N UCLEAR POWER is assuming an increasingly 11portant role in meeting our country's energy needs. During 1967, thirty nuclear reactors were placed on order, many of which represented individual investments of well over $100 million each. Though this commitment o atomic power continues to exceed most expectations, the major impact of the trend toward nuclear power has yet to be felt. This is because the fuel required over the 30-year lifetime of a reactor represents an expenditure substantially in excess of the original capital plant investment. With only about 15 operable nuclear plants now, and a 5-7 year lead time for new plants, fuel supply activities cannot yet boast of a business volume comparable to reactor manufacturing. However, these same reactor installations are destined to propel the nuclear fuel industry into a very prominent position in American business within a few years. This analysis is concerned with the investment and cost trends in the nuclear fuel industry. As an introduction, the importance of nuclear energy relative to conventional energy is considered and the steps in the nuclear fuel processing activities are defined. The demand for nuclear energy is then established in terms of projected sales in each phase of the fuel cycle and major attention is directed toward the capital investment required to support this projected demand. The latter part of the analysis deals more specifically with costs of the respective processing activities and projects future costs based upon empirical data from firms currently engaged in all phases of the nuclear fuel business.