Soaring Costs May Halt Construction Of Nuclear Plants

The spiraling construction costs of nuclear power plants could prior them out of the market as sources of energy, according to a study prepared by a B School lecturer and three MIT researchers.

The report says that although businessmen and public officials throughout the world agree that nuclear reactors will probably provide the cheapest source of electricity in the future, the construction costs of reactor systems are climbing "at alarming rates."

The report says that the Federal Energy Administration may have seriously underestimated the cost of new reactors over the next nine years.

If present cost trends continue, the number of reactors constructed in the U.S. may be far fewer than planned because "they will be challenged, on strictly economic grounds, by an alternate technology," the report says. The trends could "significantly narrow the economic gap" between nuclear power and the presently more expensive coal power.

The study, which will appear in the upcoming issue of Technology Review, a journal published at MIT, was co-authored by Irwin C. Bupp, research fellow in Business Administration at the Business School, and Jean-Claude Derian, Marie Poule Domsimoni and Robert Treitel of the Center for Policy Alternatives of MIT's School of Engineering.

Public concern about reactor safety over the past few years, which has forced construction delays and changes in reactor design, has been the primary factor producing the cost increases, according to the report.

Derian emphasized in an interview last night that the report should not be regarded as a prediction of the future but as an assessment of the present situation.