The economic history of nuclear energy in spain governance, business and finance

The International Atomic Energy Agency oversee these projects and the implied governments have negotiated with China and Russia, who seem willing to provide the know-how and the massive

THE ECONOMIC HISTORY OF NUCLEAR ENERGY IN SPAIN

Edited by

M.d.Mar Rubio-Varas

and Joseba De la Torre

Governance, Business and Finance

Series editor

Kent DengLondon School of Economics

London, United Kingdom

the past The series covers a vast range of topics including financial tory, labour history, development economics, commercialisation, urban-isation, industrialisation, modernisation, globalisation, and changes in world economic orders.

his-More information about this series at

http://www.palgrave.com/series/14632

Editors The Economic

History of Nuclear Energy in Spain

Governance, Business and Finance

Palgrave Studies in Economic History

ISBN 978-3-319-59866-6 ISBN 978-3-319-59867-3 (eBook)

DOI 10.1007/978-3-319-59867-3

Library of Congress Control Number: 2017954913

© The Editor(s) (if applicable) and The Author(s) 2017

This work is subject to copyright All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and trans- mission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed.

The use of general descriptive names, registered names, trademarks, service marks, etc in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use.

The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Cover illustration: Cultura Creative (RF) / Alamy Stock Photo

Printed on acid-free paper

This Palgrave Macmillan imprint is published by Springer Nature

The registered company is Springer International Publishing AG

The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Department of Economics

Universidad Pública de Navarra

Pamplona, Spain

Department of Economics Universidad Pública de Navarra Pamplona, Spain

While writing this book some countries have announced the launch

of a nuclear power plant construction program and others are ing to do so in the coming years According to data from the Nuclear News Agency NUCNET, at the beginning of 2017, 59 new reactors are being built in the world and another 143 are planned for the next three decades In terms of electricity production, these new reactors would add 211,000 MWe of installed nuclear capacity, equivalent to 54% of all the power currently installed in the 448 nuclear power plants operating on our planet Each nuclear project continues to pose technological, eco-nomic and security challenges of enormous dimensions, with environ-mental, social and political effects that prompt action from international organizations, governments, companies and society

prepar-The promoters of the atom argue that, assuring safety, nuclear opment is necessary as a base-load energy to combat climate change, the volatility of oil prices and a guarantee for electricity supply However, recalling the accidents at Chernobyl (1986) and Fukushima (2011), the debate over the extension of the licenses to continue the operation nuclear power plants beyond the 40 years originally granted, and finding permanent storage solutions for spent fuel and irradiated materials pro-voke the distrust sections of the population (with large variation across countries in scale and scope) One of the many paradoxes of this sce-nario is that, within the European Union, while Germany plans to phase

devel-nuclear power by 2022, the UK, France, Hungary, Poland and Bulgaria have decided to develop new atomic plants Far from being a contro-versial subject of the past, nuclear power is still on the front page in the present and will remain so in the future.

The arguments of current energy officials in countries as diverse as Turkey, Egypt, Iran, Bangladesh, Sudan and Ghana are reminiscent

of those used by pioneers of nuclear power in the 1960s and 1970s Governments, agencies and companies back then proclaimed that nuclear programs would provide safe and cheap electricity, boost industrializa-tion and reduce energy dependency There is hardly any information on how and who will pay for such projects in Africa and Asia, or whether the technological, business and financial capacities have been considered The International Atomic Energy Agency oversee these projects and the implied governments have negotiated with China and Russia, who seem willing to provide the know-how and the massive financial support that building a nuclear power plant requires In this sense, the nuclear history

of Spain that we present in this volume can be paradigmatic to stand the present, the expectations and the foreseeable successes and mis-takes that these emerging economies may face in the coming years.Most of the history of nuclear energy written to this day has focused

under-on the study of the industrial countries that piunder-oneered all relevant aspects this source of electricity The US first, immediately followed by the Soviet Union, the UK, Canada, France and West Germany were innovators of this new technological challenge, diffusers of their industrial, health and alimentary applications, which promised eternal prosperity for humanity, but also posed known and unknown risks

In that first phase of nuclear history, there were other countries with economic potentials a priori insufficient to sustain a project of the scale required to deploy this expensive and complex technology Spain was one of them but its history has gone quite unnoticed In the middle of the twentieth century Spain decided to promote a program of nuclear power plants that, at the time of its maximum splendor, sought to install reactors in forecasted amounts that surpassed those planned by economic powers such as West Germany or Japan Other developing countries that pursued nuclear power at the time, such as India, Pakistan, Argentina and Brazil, did so with proposals more modest than the Spanish one

Perhaps South Korea and Taiwan are examples of greater similarity to Spain The three countries shared strategic economic objectives and authoritarian political regimes In fact, Spain was the only country of the Western Bloc that successfully propelled an atomic program, while at the same time abominating liberal democracy From a modest start, and with the full support of part of the regime leaders, private utilities and foreign aid, Spain emerged as an early adopter and champion importer of com-mercial nuclear equipment In fact, by the mid-1970s, Spain became the largest customer of the US—the world’s largest provider of nuclear tech-nology At its maximum, the utilities formally applied to install reactors with a combined capacity of nearly 35,000 MWe The government pre-authorized the installation of over 15,000 MWe Yet, a combination of economic, political and social factors led the curtailment of the Spanish nuclear program to just ten reactors connected to the grid by 1988, just over 7,500 MWe The seven reactors in operation in 2017 provide about 20% of electric power.

This book aims at solving some of the paradoxes that arise from this story, which chronology runs from 1950 to 1985 We seek to explain how Spain, one of the least developed economies of the southern European periphery, with a scant initial technological and industrial level, with companies barely subject to international competition and, moreover, governed by a dictatorship, could successfully insert itself among the pio-neers of the world’s nuclear energy The economic and industrial take-off

of Spain between 1960 and 1975 served to leave behind the autarkic economic policy and to deploy the atomic project However, the nuclear excitement failed to reach all its objectives It was possible to build power plants with foreign technology (mostly North American but also French and German), and gradually increase the local technological content, innovating and competing internationally But at the end, just a frac-tion of the forecasted plants achieved operation, and the manufacture of

a Spanish reactor fueled by domestically enriched uranium never pened The nuclear industry narrative justifies this partially frustrated success by holding the Socialist government accountable for paralyzing the nuclear program decreeing a nuclear moratorium in 1984 On the contrary, the antinuclear movements allege they forced the moratorium with their protests As historians, we intertwine a mass of qualitative and

hap-quantitative evidence for explaining how a young democracy assimilated the dictatorship’s nuclear legacy within a context of a crude economic and financial recession, the raise of social demands and the threats to democratic consolidation.

Each of the eight chapters of this volume analyze and solve some cific elements of the institutional, economic, financial, business, techno-logical and social architecture that configure the essence of that history The book presents a case study, that of the economic history of nuclear power in Spain, yet it does so in permanent contact with an international context nourished from multiple historiographical sources The subtitle

spe-Governance, Business and Finance seeks to identify the processes of

inter-action and decision-making among the actors involved in the atomic project Those interactions lead to the creation and management of new laws, rules and institutions, administered by an authoritarian political regime What the Spanish example shows is that the relations between the state and the market under a dictatorship facilitated the collaboration between government and companies to undertake this megaproject, in the absence of checks and balances to supervise the decisions made.Chapter 1 offers a global overview synthetizing the macro-economic and political developments on which the nuclear programs rooted around the world, from the golden age and until after the two oil crises This approach serves to contextualize the Spanish case within these worldwide dynamics, offering the key elements to build a comparative history, and some initial indications about the true dimensions of the Spanish nuclear program In the next step, in Chap 2, we identify and dissect the main actors involved in the Spanish atomic project Experts, scientist, military, policymakers, promoters, engineers, consultants and energy consumers articulated a project forced to evolve with the changes in the political economy of the dictatorship and in the technological model finally fol-lowed After 40 years, the transition to democracy changed many things

in Spain, but in our context two issues stand out First, voicing cal arguments from antinuclear movements became legally possible and socially noticeable Second, the new institutional framework replaced most of the actors involved, except a crucial stakeholder: the directors of the electric companies, who would have to negotiate the atomic halt of 1984

criti-Chapter 3 explains the origins and the behavior of the electro-nuclear lobby during the decisive decision-making phase about who would own the nuclear business in Spain, the state or the market Or rather how the costs and benefits of an energy that everyone understood as strategic for the country’s development and economic well-being would be shared The developmentalist economic policy and the influence of the promot-ers tilt the balance in favor of the lobby Thus, the private companies led the development of nuclear power in Spain However, as Spain could not develop a nuclear program on its own, the collaboration of the techno-logical leaders came about In fact, the Spanish scientific and industrial system had been establishing contacts with French and German experts and entrepreneurs since the 1950s, which came to fruition years later As shown in Chap 4, the contacts of JEN—the Spanish nuclear agency—physicists with German, French and American laboratories led to a swift supply of the highly specialized human capital required for the develop-ment of a thermonuclear civil program.

The private sector could afford to take bold nuclear investment sions because it counted on the state backup Chapter 5 reveals it In a very short time Spain became the “billion-dollar client” of the Exim Bank due to the purchases of US nuclear equipment and enriched fuel The breakdown of dollar borrowing by company—until now unknown in its magnitude—confirms the level of indebtedness that the electric sector incurred to build thermonuclear plants The debasement of the exchange rate and increase of the price of money, between the end of the Carter administration and the arrival of Reagan to the White House, trapped the promoters in a spiral of negative cash flows This explains why the state came to the rescue of companies and that, in return, they accept the nationalization of the electricity grid In the meantime, the export

deci-of the North American technological model to a selective club deci-of the nuclear countries played an essential role in maximizing the huge invest-ments made in the US since the 1950s The American multinationals had been supported by US economic diplomacy and the abundant financ-ing from their public and private banking It was very difficult for third parties to compete and win international nuclear contracts under these conditions Only the industry of France and West Germany managed to

obtain contracts in the very active Spanish nuclear market, as discussed

in Chaps 6 and 7

The capture of contracts to launch the Vandellós and Trillo nuclear power plants with the industry of France and the German Federal Republic, in which business networks entwined with the political inter-ests of the governments involved, constituted pyrrhic victories against the North American nuclear commercial hegemony Both examples offer similarities and differences of interest On the one hand, the French nuclear route activated very soon after 1945 It sought to guarantee national independence in the bipolar world of the Cold War It used its own technological development, that of the reactors that used natu-ral uranium created in alliance between the public and private sectors, and a permanent connection with the military uses of plutonium West Germany, on the other hand, saw its strategy tied up by the Allies’ mis-trust during the postwar period, although it tried to revive a network of atomic research laboratories that would eventually connect with private industry

Chapter 8, as an epilogue, establishes a balance between the objectives

of the Spanish nuclear program, the promises made in the years of atomic optimism, and their results We examine the compliance of the objectives

in the energy field by looking at the impact of nuclear energy on energy issues such as the actual changes in energy matrix, the external energy dependency and the security of supply Our review of historical evidence provides some rebuttals to the principal promises that pushed the Spanish nuclear program since its inception But it also finds some accomplish-ments about how nuclear power helped to modernize the country.Being the first economic history of the sector we have given priority

to establishing a state-of-the-art that has left out some pieces that will require further study Thus, the avid reader would surely miss the history

of the antinuclear movements, the local impacts at sitting places or a more comprehensive description of the vicissitudes of the configuration

of the fuel cycle from uranium mining to waste management

Except for a few of the balances established in the last chapter, this is

a story that ends in 1985 It remains pending the analysis of what has happened since then to our days, both in the Spanish dimension and the international dimension One of the merits of this book is an effort of

analysis and conceptualization that incorporates, from a dual macro- and microeconomic perspective, the study of the decision-making and the configuration of a business ecosystem with international ramifications And this case study shows that the economic history of nuclear energy must necessarily be studied within a global context that integrates the economic, political and social dimensions.

1948 A secret nuclear energy program (EPALE) started by Franco dictatorship.

1951 Nuclear Energy Board (JEN) created for nuclear research.

1956 Two consortia founded by private electricity utilities to build nuclear

plants: NUCLENOR and CENUSA.

1957 TECNATOM founded by Banco Urquijo to develop nuclear activities.

1957 The Ministry of Industry creates the Directorate General of Nuclear

Energy.

1958 The first experimental swimming pool reactor built in Madrid (Moncloa

facilities) by JEN and General Electric.

1959 The government opens a factory to process natural uranium from the

Southern areas of the Iberian Peninsula.

1961 ARGOS experimental reactor at the School of Industrial Engineering of

Barcelona.

1962 ARBI experimental reactor at the School of Industrial Engineering of

Bilbao.

1962 The nuclear industry creates the lobby Spanish Atomic Forum.

1964 First nuclear Law: planning of nuclear energy policy, safety, risks and

insurances.

1964 First Eximbank credit authorization for the export of a turnkey nuclear

project to Zorita NPP.

1964 First Development Plan establishes a high degree of Spanish

participation in nuclear projects which set it at a minimum of 40%.

1966 Palomares accident: four hydrogen bombs drop from a US bomber

landing near the small fishing village of Palomares (Almería) One of the earliest civil contaminations by plutonium in the world.

1967 First administrative complaint filed against Irta NPP by a local group

defending tourism activities.

Program

1968 Zorita NPP by Westinghouse becomes the first to supply commercial

electricity to the grid.

1968 The Spanish Government refused to sign the Nuclear Non-Proliferation

Treaty (NPT).

1969 National Electricity Plan revised the local participation in nuclear

projects until it got to 50% in 1972, 60% in 1975, and 75% in 1978.

1971 Garoña NPP by GE connected to a regional grid.

1971 Accidental Discharge of radioactive water from the JEN facilities into

the river Manzanares in Madrid.

1972 National Energy Plan foresees the installation of new nuclear 22.7 GW

by 1985 (requiring at least two new nuclear stations per year).

1972 A new Decree on Nuclear and Radioactive Regulations introduced the

process to authorize a NPP: siting, construction and operation.

1973 Government plans for new National companies for supply nuclear

equipment (ENSA) and fuel cycle (ENUSA).

1976 Emergent local environmental antinuclear groups around the country

go into the public eye.

1977 Moncloa Pacts included the agreement on energy policy and nuclear

matters.

1978 ETA, first terrorist attacks against Lemóniz NPP.

1979 First Nuclear debate in a new democratic Parliament.

1979 The Civil Guard killed an antinuclear militant in an antinuclear protest

in Tudela (Navarra).

1980 Law creating the CSN (Nuclear Safety Board) as the only competent

body for nuclear safety and radiation protection, as an independent organism.

1981 ETA kills the engineering Director of Lemóniz NP. A year later his

substitute too.

1984 The Socialist Party’s Government establishes a nuclear moratorium and

the electric utilities financial rescue.

1984 Spanish Parliament creates ENRESA as a public, non-profit organization

responsible for the management of radioactive waste.

1988 The last of 10 nuclear reactors become operational Nuclear provides

almost half of the electricity in mainland Spain.

1989 Vandellós I accident: a fire in one of the turbines-generator (classified

3 in INES) Closure of the reactor Decommission ordered.

1994 As a consequence of the restructuring of the electricity sector, large

shares of previously NPP private property ends up on the hands of ENDESA the public electricity company.

2006 Zorita NNP, closes down after 38 years of operation initiating its

decommission by 2009–10.

2015 Spanish consumers finish paying the cost of the nuclear moratorium.

This book is the result of research work that explores unpublished sources

of archives, parts of which have been submitted for discussion in different seminars and congresses over the years That is why our list of thanks to the colleagues with whom we have discussed topics and exchanged ideas

is extensive We have also accumulated a better and qualified knowledge

of the sector thanks to oral history by some of the protagonists The

three workshops on Economy and Nuclear Energy in Spain, c 1950–2010

held at the Public Universities of Navarra, Pompeu Fabra and Autónoma

de Madrid have given us the testimony of Jorge Fabra (one of the ators of Red Eléctrica Española), Martín Gallego (Secretary of State for Energy in 1983), Gonzalo Madrid (first director of Ciemat) and Alberto Lafuente (Director General of Energy in the early 1990s and member of the Governing Board of the International Atomic Energy Organization), whose premature death we regret

cre-The two sessions that we organized in the XVIIth World Economic History Congress (Kyoto, Japan, August 2015), and in the First Congress

on Business History/20th Congress of The European Business History Association (University of Bergen, Norway, August 2016), and the

participation of any of the authors in the International Meeting

Electric Worlds/Mondes électriques (Paris, December 2014), The Energy Economics Iberian Conference EEIC (Lisbon, 2016), and The International Conference on Energy Research and Social Science (Sitges,

2017) have served as a meeting point to present results and to discuss with Martin Chick, Duncan P. Connors, Marly Kamioji, Chris Pokarier, Mauro Elli, Elisabetta Bini, Michael Camp, Niall MacKenzie, Pierre Lanthier and Takeo Kikkawa, among others The colleagues from the Basque Country University and the Universidad Autónoma de Madrid invited us to present some sections of the project, just as we did in

the XI Congreso Internacional de la Asociación Española de Historia Económica (CUNEF, Madrid, 2014) and in the two International Congress on Historical Links between Spain and North America (Franklin

Institute, Alcalá de Henares, 2014 and CUNY, New  York, 2015)

We want to mention Santiago López, Paloma Fernández, Jesús Mª Valdaliso, Emiliano Fernández de Pinedo, Rafael Uriarte, Patricio Saiz, Rafael Castro, Pablo Díaz Morlán, Adoración Álvaro, Carlos Aguasaco, Elena Martínez-Ruiz, Isabel Bartolomé, Bernardo Batiz-Lazo, Ernesto López, Emilio Huerta, Julio Tascón, Misael López Zapico, María Jesús Santesmases, Raquel Lázaro, José Ramón Rodríguez Lago, Ana Romero

de Pablo, Fernando Guirao, Xavier Tafunell, Michael Aaron Rockland and Clemens Zimmermann

In 2015 three of us joined the consortium formed to research the History of Nuclear Energy and Society (HoNESt) a project financed by the EU under the Horizon2020 program We have learned a great deal of the interaction with the colleagues of across Europe and beyond The list

of names of a consortium of 23 institutions would exceed the patience of our readers, but we would like to mention at least those that directly con-tributed to this volume by sharing materials, bibliography and knowledge: Stuart Buttler and Nalalia Melnikova Also to those that organized and attended the two sessions within the panel entitled “History of Nuclear

Energy and Society” at the European Social Sciences History Conference

(ESSHC 2016): Christian Forstner, Jan-Henrik Meyer, Arne Kaijser, Wilfried Konrad, Karl-Erik Michelsen, Ioan Parry, John Whitton and Josep Lluís Espluga The research objectives of HoNESt brought us to meet the stakeholders of Spanish industry Even when they may not share our views, we feel obliged with CEIDEN (the R&D platform of the Spanish nuclear industry), ENSA, ENUSA, Tecnatom and Foro Nuclear, who received us and answered our questions, which directly and indi-rectly inform parts of this volume

We also must also offer thanks for the support received by the vists and technicians of a score of libraries and archives scattered among Spain, the United States, Germany, France and the United Kingdom All the authors of this book belong to two intersecting research projects We are indebted with the generosity of the whole research team when shar-ing their materials to the benefit of this volume: Albert Presas facilitating

archi-us the access to the British sources fetched by him and to the complete

digitalized collection of the magazine Energía Nuclear; Josean Garrues

providing the documentation he obtained at the archives from Nuclenor; Esther Sanchez sharing relevant sources and documents obtained in her field trips to France and Vandellós Sharing resources made possible cross examining information and filling the gaps

We want to express our gratitude to our research assistants at Public University of Navarra: Elena Aramendia for her help gathering and digi-talizing sources and with the editing process; Cristina Greño and Diego Sesma for their data-mining work In any case, our institutional and per-sonal debts are numerous

Finally, none of this would have been possible without the lic funding achieved in competitive calls and provided the resources for the authors to complete fieldwork, attend conferences and pay for many of the services required for bringing research to the public Among the funding bodies, we must thank the Spanish Ministry of

pub-Economics and Competitiveness (projects: The Deployment of Nuclear Energy in Spain from an International Perspective: Economics, Business and Finance, c 1950–1985 [HAR 2014/53825 R]; The Livelihood of Man [HAR2013–40760-R]; Industrial Crisis and Productive Recovery in Spanish History, 1686–2018 [HAR2015–64769-P); the Spanish Ministry

of Defence (El factor internacional y la transformación de las Fuerzas Armadas (1953–1982): diplomacia de defensa y transferencia de tecnología, [ref 2014–09]); the Bank of Spain (The External Financing of Spanish Industrial Development through the IEME (1950–1982)), and, last but

not least, the European Commission/Euratom research and training

pro-gram 2014–2018 (History of Nuclear Energy and Society (HoNESt), grant

agreement No 662268)

1 Seeking the Perennial Fountain of the World’s Prosperity 1

M.d.Mar Rubio-Varas and Joseba De la Torre

2 Who was Who in the Making of Spanish Nuclear

Joseba De la Torre

3 The Nuclear Business and the Spanish Electric-Banking

Josean Garrués-Irurzun and Juan A Rubio-Mondéjar

4 Human Capital and Physics Research for the Spanish

Albert Presas i Puig

5 How did Spain Become the Major US Nuclear Client? 119

M.d.Mar Rubio-Varas and Joseba De la Torre

6 An Alternative Route? France’s Position in the Spanish

Esther M Sánchez-Sánchez

Gloria Sanz Lafuente

Beatriz Muñoz-Delgado and M.d.Mar Rubio-Varas

Appendix A. List of Nuclear Projects in Spain

BOE Boletin Oficial del Estado (Official State Bulletin, the

place for publishing laws)BWR Boiling Water Reactor

CENUSA Centrales Nucleares SA (a private joint venture for

nuclear power in the South of the country)CERN Center of the European Organization for Nuclear

ResearchCIEMAT Centro de Investigaciones Energéticas

Medioambientales y Tecnológicas (Public Research Agency for Energy, Environment and Technologies)CSN Consejo de Seguridad Nuclear (Nuclear Safety Board)CSNI Consejo de Seguridad de Instalaciones Nucleares

(Nuclear Plants Safety Board)EDF Electricite de France

ENDESA Empresa Nacional de Electricidad SA (National

Company for Electricity)ENEA European Nuclear Energy Agency

ENRESA Empresa Nacional de Residuos Radioactivos SA

(National Company for Nuclear Waste)ENSA Equipos Nucleares SA (National Company for

Nuclear Equipment)

ENUSA Empresa Nacional de Uranio SA (National Company

for Uranium cycle)EPALE Estudios y Patentes de Aleaciones Especiales (the first

Spanish nuclear research public body)FECSA Fuerzas Eléctricas de Cataluña (a private electricity

utility)FORO Forum Atómico Español (today known as Foro

Nuclear) (Nuclear Industry lobby)

GIFT The Inter-University Group on Theoretical PhysicsHECSA Hidroeléctrica de Cataluña (a private electricity

utility)HIDROLA Hidroeléctrica Española (a private electricity utility)HIFRENSA Hispano-francesa de Energía Nuclear (French and

Spanish joint venture for Vandellós I)IAEA International Atomic Energy Agency

IBERDUERO A private electricity utility

IEN Instituto de Energía Nuclear (Nuclear Energy

Institute)INI Instituto Nacional de Industria (National Industry

Institute)INPO Institute of Nuclear Power Operations

JEN Junta Energía Nuclear (Nuclear Energy Board)KWU Kraftwerk Uninion (AG plus Siemens branch for

nuclear development)NUCLENOR Centrales Nucleares del Norte (Nuclear Power Plants

of the North)PEN Plan Energético Nacional (Energy National Planning)PWR Pressurized Water Reactor

TECNATOM Técnicas Atómicas SA (engineering company

provid-ing services for nuclear plants)UEM Union Electrica Madrileña (the pioneer utility on

nuclear power in Spain)UNESA Unidad Eléctrica SA (Electrical management

Association)

WANO World Association of Nuclear Operators

WNA World Nuclear Association

and electricity and auxiliary industries (1960) Sphere:

Electricity companies; banks and auxiliary industries;

Square: UNESA The thickness of the links depends on

Fig 3.2 Egonets of Bank of Vizcaya, Bank of Bilbao, Iberduero and

Hidroeléctrica Española (Hidrola) in 1960 The relations of the Banco de Vizcaya (also known as “Electric Bank”) with

other banks, utilities and auxiliary companies have marked

Fig 5.1 Global Nuclear Export Orders (no of reactors) and share

Fig 5.3 Cumulative applications, pre-authorizations and nuclear

capacity connected Spain (1959–88) Distribution of nuclear

Fig 5.4 Nuclear capacity planned by Spanish utilities 1959–1975 135 Fig 5.5 Scheduled repayment instalments by Spanish electricity

Fig 5.6 Accumulated costs of the Spanish nuclear project

Fig 5.7 Declining US share on Spanish nuclear project costs,

1964–77 (and Exim Finance share on US costs of Spanish

projects) 143 Fig 8.1 Forecast for electricity consumption and nuclear needs by

MacVeigh (1957) vs historical data of electricity

Fig 8.2 Map of Spanish provincial industrial electricity consumption

Fig 8.3 Electric intensity of Spanish GDP, 1950–2000 (MWh per

Fig 8.5 Primary energy consumption in Spain by source,

Fig 8.6 Electricity generation in Spain by source,

Fig 8.7 Energy Mix Concentration Index (EMCI) in Spain with

Fig 8.8 Spain and EU-15 vs France electricity prices

comparison for industrial and domestic consumers in

Fig 8.9 Spanish net trade of nuclear equipment and fuel elements

Table 5.2 The Spanish nuclear market for nuclear reactors (successful

Table 5.3 Stakeholders and interest in the Spanish electricity sector

© The Author(s) 2017

M.d.Mar Rubio-Varas, J De la Torre (eds.), The Economic History of Nuclear Energy in

Spain, Palgrave Studies in Economic History, DOI 10.1007/978-3-319-59867-3_1

1

Seeking the Perennial Fountain

of the World’s Prosperity

M.d.Mar Rubio-Varas and Joseba De la Torre

Nuclear fission was discovered in 1939, and the world’s first chain reaction was achieved by the Manhattan Project on 2 December 1942 at the University of Chicago However, it was not until after World War II, on

20 December 1951, that electricity was first generated from nuclear power Yet, the beginning of civil nuclear power is commonly set at President Eisenhower’s address to the General Assembly of the United Nations on 8 December 1953, later called the “Atoms for Peace” speech.1 At the time, only four nations—US, UK, Canada and the Soviet Union—possessed the atomic secret The nations of the world began striving for a solution to the dilemma posed by the atom: it embedded the greatest danger ever known to humankind but also the potential to become the “perennial

M.d.Mar Rubio-Varas ( * ) • J De la Torre

Institute for Advanced Research in Business and Economics (INARBE), Universidad Publica de Navarra, Spain

Research for this chapter was financed by the Spanish Ministry of Economy and Competitiveness (project ref HAR2014-53825-R) and by the European Commission and Euratom research and

training program 2014–2018 (History of Nuclear Energy and Society (HoNESt), grant agreement

No 662268).

fountain of world prosperity.”2 Forecasted applications of atomic power included atomic-powered ships, submarines, aircrafts, trains, automobiles and even farm tractors.3 Specialist envisaged atomic energy to be used in intensive energy sectors such as aluminum, phosphates, cement, bricks, flat glass iron and steel but also in residential heating.4 Including the pro-duction of electric power from atomic piles, the agricultural and medical applications were all on their way Yet nuclear power failed to become the ubiquitous technology the early advocates anticipated.

A review of the literature of the origins of nuclear power reveals that economic history has been mostly absent from the analysis Maybe because many analysts concluded that the economic aspects ranked well below other crucial issues: geopolitical status, technological and institu-tional systems, scientific knowledge, social perception of risk and safety

or ideological opposition against and in favor the uses of the atom Without disregarding all these other important surroundings, this chap-ter focuses on the economic forces that played a role in the development

of nuclear programs around the world

The point is that we do not have an economic history of nuclear energy

In fact, it is possible to say that a history that includes the economy, the companies and the finances of this energy with the tools of economic historians has scarcely begun However, we have a very marked narrative for the great milestones of atomic history in which the economy seems marginal: the bombs on Japan, the optimism of peaceful uses, the spread

of nuclear programs in both sides of the Iron Curtain and nuclear mism following the accidents of Three Mile Island and Chernobyl, and the media battle won by the antinuclear against the pronuclear discourse

pessi-of the state and the industry At least social history and the history pessi-of ence and technology have progressed and offer a theoretical framework that the economic historian must consider The sociological approach has coined the concept of “technopolitics,” which includes the political, social and cultural impact of what Hetch (2014) calls “nuclear exception-alism” confronting utopian dreams and dystopian nightmares.5 In this sense, Balog’s (1991) analysis of bureaucratic politics in the nuclear power industry is useful.6 Science historians provide as a key factor the develop-ment of scientific systems of nuclear energy and their political impact in each country and in international organizations.7 These two historio-

sci-graphical currents show the value of historical actors to understand such

a complex phenomenon On the other hand, the history of international relations offers relevant elements of the nuclear puzzle in the context of the Cold War, atomic weapons, the Non-Proliferation Treaty and the political intrigues.8

This absence of economic history is surprising because from the ning of the nuclear age there was a concern about the financing of nuclear power plants National and international institutions considered the eco-nomic aspects as strategic.9 A large part of the bill would come out of public budgets In addition, much of the literature on nuclear economics and energy policy in the 1970s and 1980s attempted to explain the finan-cial impact before and after the Harrisburg accident, especially in the context in which US companies suspended more than half of their projects.10

begin-Perhaps the temporal proximity and the sensitive nature of the topic added to the difficult access to the archieves The fact that from the 1990s nuclear energy mostly disappeared from the public debate may have also played a role We need an economic history that includes its economic and financial significance and scope, the actors (regulators and policy-makers, scientific experts and engineers, promoters and industrialists, citizens and consumers) Neither is there a business history that explains the nuclear ecosystem,11 the industrial infrastructures, the markets, the attitudes of the entrepreneurs and the institutional influence

The challenge of securing an adequate supply of affordable energy is inherent to modern societies Over the past 60 years, additional require-ments have been added to the desirable energy qualities: secure, sus-tainable, clean and so on This chapter makes use of economic history

as a mean for clarifying those aspects of the historical framework that influenced the outcome of the decisions From this perspective, the interaction of the macro-economy, in combination with economic pol-icy and the industrial structure, defined the energy requirements and the country’s ability to meet energy demand by choosing among the competing technologies Beyond setting the energy requirements and limiting the financially feasible options, the institutional setting also defined how and who took (or influenced) the decision-making process

The Macro-economic Background

to the Nuclear Decision-making

The overall positive correlation between economic growth and energy growth remains one of the most important stylized facts we can draw from history There has been a stable relationship between countries’ GDP per capita and per capita energy use over the last 40 years.12 For longer periods of time the extent of this correlation and its patterns over time are highly variable, and the direction of the causality remains unclear Whether highly energy-consuming countries are richer because they con-sume more energy than the others, or they consume more energy pre-cisely because they are richer, is still an open question.13 But the fact is that economic history makes it evident that the industrial standing of any country may be gauged, with a fair degree of accuracy, from its level of energy consumption

Even when correlation between economic output and energy sumption is strong and positive, not all forms of energy have the same impact on economic output While remaining trapped in traditional/organic forms of energy seems to have a negative correlation with the level

con-of development attained by any one country,14 electrification seems to be highly correlated with economic growth since its qualities make it far more productive than other forms of energy.15 These basic energy economic principles have been known and used as tools of political economy from the beginning of the twentieth century.16 The nuclear option therefore, with its promise to supply enormous quantities of electricity, was from the beginning associated to economic progress and industrialization

Given the relations just explained, economic growth appears cally connected to energy consumption, and electricity consumption in particular Therefore, economic cycles determine a good deal of the energy planning, options, efforts and decisions taken We need to understand the different macro-economic frameworks that affected the nuclear system There exists a wide consensus about the general traits of global macro-economic history since World War II to the present Even when each country and region may have experienced slight variations, any economic history textbook provides general traits shared across the world in three

intrinsi-stages:17 the golden age from the end of World War II to 1971, the eration and crisis that followed the end of the Bretton Woods system and the oil crises (1971–81), and the restructuring and change of the 1980s and 1990s and the new challenges that closed the century Each of those provided distinct scenarios for the nuclear system decision-making.

1950s–1971: Hyper-growth After World War II—The

Golden Age

The 1950s emerged from the ashes of the two world wars and the nomic Great Depression in between The lessons learned the hard way during the previous 30 years opened the door to new policies of greater international collaboration, solidarity and coordination The interna-tional order that emerged from the Bretton Woods conference in 1944 provided the basis for the reconstruction and the growth that would mark the issuing decades International institutions such as the World Bank, the International Monetary Fund (IMF), the General Agreement for Tariff and Trade (GATT latter evolved into the World Trade Organization—WTO) all arose from Bretton Woods Also, the International Atomic Energy Agency (IAEA), drawing on the precedents set by other organizations, developed into a charter of an international agency, which 81 nations unanimously approved in October 1956 As indirect consequences of those, other multilateral organizations such as the European Organization Economic for Cooperation (OEEC) and its Nuclear Energy Agency (ENEA) and Development and the European Treaty of Rome, the germ of the current European Union, and the birth-place of EURATOM itself, also contributed to the new mutual assistance climate

eco-The new supranational institutions brought macro-economic ity—and a fixed exchange rate to the dollar—and together with the reconstruction effort, new technologies and new business organizations fostered global economic growth to unprecedented levels Income per capita almost doubled in the world from 1950 to 1971—it tripled in the Western world In the same period the world’s primary energy consump-tion quadrupled, mostly due to the growth of energy consumption in

stabil-developed countries.18 Energy demand surged around the world for industry, transport, commercial and domestic uses The development in oil and gas fields supplied cheap and abundant fossil fuels for the growing demand Among final energy sources, electricity grew faster than any other source including oil In many parts of the Western world, electricity demand grew at rates well above 7%, which implied it doubled every decade (for Spain see Chap 8).

Accompanying the worldwide economic growth, two other nomic characters emerge in this period: the consolidation of the multi-national firms and the active participation of governments in the economy State intervention in economic activity was ubiquitous prior

eco-to World War I in places as varied as Viceco-torian Britain, republican Brazil and Bismarck’s Germany After steering their economies through two world wars and a depression, by 1950, railways, airlines, coal, elec-tricity, iron and steel, gas and telecommunications were fully or partly government owned mostly everywhere in Western Europe—even though public ownership had emerged in a variety of ideological set-tings—socialist, fascist, pro- market.19 Governments across the globe would create large state-owned enterprises (SOE) and multiple eco-nomic agencies for intervening in the most varied aspects of economic activity: industry, banking, trade and so on

Most nuclear programs began and grew from the 1950s to the 1970s The developments in the nuclear system mirrored the key macro- economic characteristics of the period: the need to match the ever- growing electric-ity demand, setting multilateral international collaboration agencies, the strong intervention of the state and increasing role of few multinationals

By the early 1960s, demonstration power reactors were in operation in all the leading industrial countries, although the economic competitiveness

of nuclear energy was still in question and the competition among the technological alternatives for reactor design remained unsettled.20

The first nuclear reactors connected to the electricity grid, Obninsk in the Soviet Union by 1954, Calder Hall in the UK by 1956 and Shippingport in the US by 1957, proved the concept, but were far from been commercially viable They were small (5 MWe, 50 MWe and

90 MWe respectively), each applying dissimilar technologies and with plenty of unknowns to be solved The announcement of the first

commercial contract for a civil nuclear plant in the US, Oyster Creek, came in December 1962 General Electric (GE) and Westinghouse (WH) threw themselves into conquering both the US and the international market with a successful marketing campaign For these two companies,

it was time to monetize the enormous effort they had been putting into developing the technology since the 1940s, with the support of the fed-eral government and large private companies The sales pitch of GE and

WH stated that atomic energy was close to being able to compete with conventional sources of electricity It would soon be cheaper to build a nuclear power plant than a conventional one.21

In a frenzy of optimism for atomic technology, public decision-makers from many countries accepted these predictions and rushed to embrace the nuclear option Western governments persuaded themselves that nuclear power plants were a good choice to guarantee cheap electricity, reduce their dependence on fossil fuels, and sustain medium-term eco-nomic development Yet, until the late 1960s, nuclear plants were built for gaining construction and operating experience with new technologies rather than for an inherent economic profit of nuclear power.22 By 1967,

US utilities alone had ordered more than 50 power reactors, with an aggregate capacity larger than that of all orders in the US for coal- and oil-fired plants.23 Internationally, the turnkey projects implied a cascade

of orders in the second half of the 1960s (see Chap 5 of this volume) But turnkey projects were also a sort of investment for obtaining infor-mation through “learning by doing” in an effort to capture rents from the second-generation reactors.24 The potential was there, but it was not until utilities gained confidence that light-water reactors were reliable and could become economically competitive that nuclear power stations began to be constructed on a large scale

Slowdown and Oil Crisis

The surge of orders of nuclear power installations in the early 1970s was more in anticipation of favorable future conditions with larger reactor units than a reflection of actual economics at the time.25 The nuclear power boom will soon encounter, as the world economy, a major

slowdown which then will turn into the worst economic crisis since the Great Depression The end of the golden-age cycle began with the “tem-porary” suspension of the dollar–gold standard in August 1971 While the dollar devaluations of the Nixon’s Administration made the prices of

US goods and services competitive in world markets for the first time in

a decade, it also ended the stability brought by the Bretton Woods tem in the international currency markets Soon after, in October 1973,

sys-an astronomical increase in oil prices consequence of the OPEC ade, initiated a worldwide economic crisis For a short while, the oil crisis of 1973–74 looked like an opportunity to foster nuclear power, as

block-a solution for the now onerous oil imports.26 But the economy slum proved otherwise Planners had overestimated countries’ electricity needs assuming that demand would increase steadily at a rate exceeding that of economic growth As the economy slowed down, so did the elec-tric demand By 1975, the curve of nuclear orders had already passed its peak Furthermore, over two-thirds of all nuclear plants ordered after January 1970 were eventually cancelled.27 In the US nuclear invest-ments stalled in the late 1970s, with no new plants ordered after 1978

On the other side of the Iron Curtain, where the first oil crisis was hardly felt and markets’ logic did not apply, the Soviet Union received export orders for 28 reactors during the 1970s Most of the orders were from East European countries, but customers included Finland, Cuba and Libya.28

The second oil crisis, in 1979, hardened the world’s economic outlook and implied a definitive change in energy policy concentrating efforts in reducing energy consumption The uncertainties over the world economy translated into falling energy consumption in many countries, more expensive dollars, and soaring interest rates, particularly after 1981 For the nuclear system, the uncertainties and economic adversities only got worse after the Three Mile Island (TMI) incident of 1979 In most coun-tries operating or planning nuclear plants, the financial situation grew more serious as new, stricter safety regulations (the so-called TMI effect) made it harder for bidding companies to meet project deadlines

In parallel, the 1970s saw a surge in environmentalism, resulting in new environmental legislation, environmental ministries and, in several coun-tries, the founding of formal Green political parties, all anti-nuclear.29

1982–1990s: Restructuring the World Economy

The last 20 years of the twentieth century brought about the most far- reaching changes in the world’s scene since 1945 It also provided wider variety in economic occurrences The end of the Cold War and of the fear

of a nuclear Armageddon came accompanied by a major economic, social, and political crisis in Eastern Europe before and after the fall of the Berlin Wall in 1989 The early 1980s also resulted in the major sovereign debt crisis in peace times affecting large parts of Latin America, Eastern Europe, and Africa Meanwhile, the rapid economic progress in China and in the “tigers” of North East and South East Asia astonished the world and the old continent progressed towards a European Union For the first time energy consumption delinked from economic growth in developed countries (slower growth on energy consumption than in the economy) while energy consumption in the developing world continued

to outgrow economic activity

In terms of economic policy, the deep crisis of the 1970s brought about new paradigms which would win the day from 1982 onwards The ideas of economists Friedrich Hayek and Milton Friedman—advocating monetarism, a greater scope for markets and limited government—won out over the state ownership and protection of industry of the previous decades These policies in Europe and Japan manifested clearly in the privatization of large state-owned enterprises, the end of subsidies and the reduction or elimination of economic government agencies For the nuclear sector, the change in the political economy implied the end of subsidized loans—at least those of the Eximbank for exports of US nuclear technology, crucial in the previous decades as we shall see in Chap 530—and in many countries the privatization of electricity utili-ties, that had ordered nuclear plants previously, had to continue without state support

The explosion of the Chernobyl reactor unit 4 in April 1986 in Ukraine,

at the time the flagship of the USSR’s nuclear power program, broadened the opposition to nuclear power worldwide Countries that were plan-ning to build nuclear power plants abandoned them after Chernobyl (Egypt, Italy and Poland), and countries that had slowed down their pro-grams or declared moratoriums before the accident (Austria, Spain) ratified

their decision Security became the major issue for nuclear ing countries Beyond the nuclear sector, the accident had further politi-cal implications in the Eastern Bloc.31

power-operat-During the 1980s, pairing with the energy crisis, the concern ued to deepen about humankind’s ability to sustain economic develop-ment without further injury to the planet’s natural environment The decision to hold the United Nations Conference on Environment and Development in Rio de Janeiro in June 1992, added two new concepts into the political agenda: sustainability and climate change In September

contin-1995, the IAEA Secretariat provided the Board with a detailed survey of nuclear power contribution to sustainable development, and presented hydropower and nuclear power as the only available large-scale energy sources that had relatively low “external” costs (i.e indirect costs besides capital, operating and maintenance costs) fighting greenhouse emis-sions.32 In the meantime, the monitoring and control agencies for com-mercial nuclear power had been set up Established by the nuclear power industry the Institute of Nuclear Power Operations (INPO) was born to investigate the TMI accident The World Association of Nuclear Operators (WANO) is an international group of nuclear power plant operators, formed in 1989, following the Chernobyl accident Both are charged to promote the highest levels of safety and reliability in the oper-ation of commercial nuclear power plants worldwide and improve per-formance through mutual support, exchange of information and emulation of best practices.33

Against the different macro-economic backgrounds just described, we can now observe the development of nuclear power worldwide with more precision Figure 1.1 shows the world’s 478 reactors in operation by

2011, by their construction start date and capacity, labelled by each of the 32 hosting countries It makes evident that most nuclear programs started and grew during the golden age, with a big spur from the late 1960s to the mid-1970s The economics of the nuclear system shared the macro-economic glooms and uncertainty of the late 1970s and early 1980s, except in the Soviet Union and Eastern Europe where the dollar devaluations and the first oil crisis were hardly felt For the last quarter of the twentieth century only Asia, where economic growth continued at high levels, saw more nuclear power built

Figure 1.1 also makes evident a paradox: a technology that aspired to become the perennial fountain of world’s prosperity was adopted by little more than 30 of the almost 200 nations of the world And it was a deci-sion taken (or not) well before any major accident took place In fact, almost 65% of the world’s reactors (308 of the 478 reactors) started their construction before TMI, and about half of the nuclear countries had already halted nuclear orders before 1979.34 No new country entered the list of nuclear-powered nations after that date, with one notable excep-tion: China, which began its commercial nuclear power projects in the 1980s, even when it had mastered the military uses since 1964 The rela-tively short list of nuclear-powered nations contrast with the number of

Obninsk(RU)Calder Hall(GB)

Shippingport(US)

GB ES IN

US

CH

FR CA

PK

SE JP

RO RU AR BE

DE

BG FI BR

SK

TW KR

UA NL

CH

AR HU

BR

SI IR

AM FI ZA

MX LT

MX

LT

US BE

CZ HU

SE BG DE

TW

RO

SK CN

CA RU CZ GB FR

IN

JP

CN KR

plants that had been decommissioned before that date for Spain, and the starting date of construction for

Obninsk, Calder Hall and Shippingport which compete to be the first nuclear power plants ever connected

to the electricity grid The lines mark the accidents of Three Mile Island and Chernobyl

respectively For each country the first and last nuclear plant by construction date has been labeled using

their ISO 2 codes.

Fig 1.1 World’s nuclear reactors by construction start date and capacity,

1950–2011

nations that showed interest at the dawn of the industry: by the end of

1959, the US had concluded agreements for cooperation in the peaceful uses of atomic energy with 42 countries; a decade later, the Soviet Union had nuclear cooperation agreements with an additional 26 countries.35

Do the nuclear-powered nations share any common traits? The list

of countries with operating nuclear facilities in 2011, ordered by the starting construction date of their first commercial plant, include: Russia, UK, US, West and East Germany, Spain, India, Switzerland, France, Canada, Sweden, Pakistan, Japan, Romania, Argentina, Belgium, Bulgaria, Finland, Brazil, Slovakia, Taiwan, South Korea, Ukraine, Netherlands, Hungary, Slovenia, Iran, Armenia, South Africa, Mexico, Lithuania, Czech Republic and China.36 Beyond all the other plausible explanations for this paradox (cultural, geostrategic etc.), the next section explores the political economy, industrial economics and business decision- making influencing the resolution about joining the nuclear club

Economic Policy, Industrial Economics

and Business Decision-making

The atomic choice had more economic policy implications than just the average pick of an energy technology over another to meet future electric-ity demands Although this book focuses on the civil uses of the atom, it should not be ignored that very few of the nuclear-powered countries in the list openly sidelined the military uses of the atom from the start of their civil programs The superpowers of the Cold War were all nuclear countries of dual use The rest of the list contains countries that were part

of the wider strategies of the superpowers during the Cold War, and had their own military aspirations As least until the safeguards first and the non-proliferation policies later, forced some countries to reluctantly shelve their atomic military plans sooner or later (for Spain see Chap

2).37 Some others, like India in 1974, Pakistan in 1982 or North Korea in

2005, achieved their objectives Israel is widely known to have developed nuclear weapons, but has not acknowledged its atomic forces

Building nuclear power plants required strong governments The risks involved in many fronts—security, financial, environmental—could only

be addressed with the supervision of the state The countries betting on nuclear power had hard-wearing governments actively involved in the economic affairs of their territories Governments leading the industrial policies in their nations maintained some form of nationwide energy planning and scientific institutions with governmental research pro-grams Whether through the central planning of the Soviet Bloc, the indicative planning of the Western nations, Japan, Taiwan or South Korea, or the Import Substitution Industrialization policies of Latin America, the governments on the nuclear list all had a heavy hand on their economies Every country aiming at having a nuclear program started by creating a state-level agency for the purpose: some notorious examples include the AEC (US), CEA (France), UKAEA (UK), JEN (Spain) and so on

The implicit promise of modernization brought by the abundant tricity of the atomic reactors was paired with the pulling effect that the nuclear industry was expected to play in countries aiming to fast-track to the developed world Nuclear reactors, for better or worse, become the vis-ible symbol of technical progress and national attainment.38 Consequently, many governments made nuclear programs a central piece of their indus-trialization strategies The nuclear system became a pulling force for the national industry This manifested in different forms After the nuclear pioneering countries, some follower countries started to erect their own nuclear power plants—Germany, France, Sweden, South Korea and Japan Other significant nuclear-importing countries took the opportunity to develop their auxiliary industry by pushing hard for increasing local par-ticipation in imported nuclear projects.39 Spain will be one of those, as we will see in several of the chapters of this volume

elec-As can be observed in Fig 1.1, from the late 1960s it was becoming clear that the trend was towards larger nuclear power plants Those countries that were in the market for nuclear power had to have sufficiently large and integrated electrical networks to accommodate nuclear plants of standard sizes—about 500–1000 MWe The belief that the transition from low- to high-capacity reactors (from 500 MWe to over 1000 MWe) could be achieved simply through economies of scale was shattered by a reality

fraught with technical problems, the need to review safety standards, failure

to meet deadlines, and, ultimately, swollen funding costs.40 From the start

of commercial nuclear reactor construction in the mid- 1960s through the 1980s, capital costs (dollars per kilowatt of capacity) for building nuclear reactors escalated dramatically Although unit costs for technology usually decrease with volume of production because of scale factors and techno-logical learning, the case of nuclear power has been seen largely as an excep-tion that reflects the idiosyncrasies of the regulatory environment as public opposition grew, regulations were tightened, and construction times increased.41

The trend towards larger reactors left out many nations that had ular or insufficient electricity demand and inadequate grid connections They simply could not take advantage of an uninterrupted supply of large amounts of electricity However, nuclear manufacturers, flooded with orders for larger plants, showed little enthusiasm for pursuing the pro-duction of smaller ones.42 Only Pakistan and India kept ordering small reactors that accommodated their electricity network needs (see Fig 1.1) Portugal had to renounce to the idea to install a nuclear plant, in part for the lack of an integrated electricity network In fact, the world’s nuclear largest manufacturer, the US, recognized in the early 1980s that if the rational economic development of the customer nations was to be con-sidered, only a few Asian, African and Latin American countries had power grids large enough to distribute electricity produced by even the smallest commercially available US nuclear reactor.43

irreg-By concentrating in larger units in the hope of lower construction cost the nuclear industry missed the opportunity of achieving lower costs associated with manufacturing many units of the same type.44 Learning effects suggest that standardization is a successful strategy to overcome delays and uncertainties during the construction process and thus reduce the cost of the following reactors of the same series.45 Nuclear power plants are “site-built” which have difficulties to standardize since each project has to adapt to the specific location Yet, if a company could build the same reactor over and over under consistent conditions, then learning

by doing—the efficiency gains that arise from perfecting processes—is more likely to occur This can lead to efficiency gains: saving on site-

related costs (like evacuation plans), getting specialized equipment and workers, and consolidating control rooms.46

Again, the question is whether customers could afford buying reactors

in groups and digest so much electricity at a single site The data in Fig 1.1can be used as distant proxy for observing standardization France, South Korea, Russia, Ukraine, India and to some extent China, built reactors of identical capacity In the US, Spain, Sweden and Germany nuclear reac-tors came in different sizes, often individually ordered and built

In most parts of the world, many aspects of the nuclear system involve business decisions Where the private initiative prevailed, decisions tended to be market oriented; where state intervention took the upper hand, profits remained optional and losses could be sustained for longer periods of time From a business perspective, nuclear projects rank among the largest and lengthiest to complete, which contributes to make them riskier Most large infrastructure projects fall within this category: build-ing dams, transport and telecommunication infrastructure and so on The nuclear system classifies as a not-perfectly-competitive-market Non- perfectly- competitive refers to the fact that competition is restricted either because there are very few suppliers (oligopoly)—in the extreme with only one supplier, it becomes a monopoly—or because there are very few buyers (monopsony)—as conventional and nuclear power plants, aircrafts, telecommunications equipment, and construction and mining machinery Either extreme provides the ability to exert certain control over prices in the market

Yet building a power plant requires the contribution of wide branches

of industry, which may be perfectly competitive Coordinating their effort obliges complex logistics and planning Roughly speaking the business involved can be classified as either suppliers or buyers, among the former the over 1000 contractors required for building a single nuclear power plant, with the reactor manufacturer as the key figure The implication for nations aspiring to build commercial nuclear power plants is that it required some minimum-level domestic industrial base to contribute to the non-critical elements of the project (civil and auxiliary engineering).The buyers of nuclear power plants typically were electric utilities of above certain size Yet, in many occasions large reactor manufacturers and utilities may hold ownership participation on each other’s shareholding,