1.

2.

3.

Timely development of an efficient and economically superior advanced reactor system for application on the nation's electric power systems, building on the vast base of LWR experience and the knowledge gained from 40 years of applied R&D, both here and overseas.

Maintenance of U.S. influence in international policy-making concerning civilian nuclear power and non-proliferation by remaining in the vanguard of advanced reactor R&D and sharing on appropriate bases the generic results with the rest of the world.

Maintenance of the U.S. as a competitive supplier of nuclear power systems to the world markets by assisting the U.S. industrial community in development of superior proprietary designs, products, and skills through transfer of technology from its advanced R&D program.

Proceeding toward these goals provides an opportunity for the U.S. to act so as to help maintain our non-proliferation objectives while helping our friends and becoming leaders in the attempt to develop an energy secure world. The opportunity arises because present breeder development programs outside the United States may be going down the wrong track. The developmental breeders already built and being built today are technically successful, but are so costly as to be economically inpractical. The plans abroad are to serially build additional large multi-billion dollar plants with the hope that the experience gained will ultimately lead to an economically practical plant. But each plant costs billions of dollars and takes of the order of a decade to put into operation. It is not clear that the process will converge. Indeed, in Japan high costs have led to a slowdown in the program, and in Europe where the high costs have dictated a multi-nation approach it has been difficult to reach agreements on the next proposed plant.

In recognition of this situation the Department of Energy program has been investigating a new approach to breeder development. The idea is to look at small sized units of the order of 100 to 300 megawatts which can be joined in arrays to form large plants. Because of their small size the "modular" units can have the advantage of shop fabrication. In addition, the small size permits fail safe emergency

cooling systems which are independent of the balance of plant outside of the modules. The balance of plant can therefore be constructed to high quality industrial standards, rather than to the astronomically expensive nuclear safety standards. Further, because of the small size a demonstration module is relatively inexpensive to build. Once it is built, tested, and licensed as a result of the demonstration test, the module becomes the actual building block for the commercial plants.

We are encouraged with the progress of the modular reactor concept. We believe this technology offers a unique potential for a fully self protecting reactor assembly. This in turn can provide the basis for major reduction of institutional constraints that have led to the current high costs of the large monolithic systems. With regulatory controls limited to a smaller portion of the plant, nuclear plants should have scaling factors more like fossil plants which show only a minor cost penalty with small capacity levels. This would then open the opportunity for unit sizes that greatly reduce financial risks and provide the utilities with the ability to economically meet their load growth patterns.

In view of this promise, we believe the maintained and expanded when appropriate. degree of confidence necessary to proceed

modular reactor development should be Limited studies will never provide the with commercialization of this concept.

Only with a final design and regulatory certification will it be possible to assure such a concept can realize their full potential.

With future constraints on funding expected we believe it important to proceed with such a focused advanced reactor program. If there is any one lesson we should have learned from our past nuclear experience, it is that basic technology without the generally larger and higher risk effort of integration into specific proven designs does not lead to the development of viable plants to meet our electrical needs. Therefore the development programs should concentrate on developing economic plant designs, with the technology programs providing only the critical information necessary to carry out the design.

Our planning shows development, design, construction and operation of a modular reactor assembly test could be completed in about 8 years for a total cost of about 600 million dollars. This effort would provide the basis for a final regulatory certification of the assembly. The program would be expected to prove the reactor assembly's self-protection features and provide the public and political confidence that will be necessary for limiting regulatory control to the reactor assembly and fuel handling facilities of the plant. It would also provide the confidence that plant cost estimates are predictable and can be reasonably assured.

There are, of course, risks in such a venture. As indicated earlier, the economics of the modular approaches are primarily based on constructing a standardized modular plant with practices and procedures more like a fossil plant than those of today's nuclear plants. Studies by our Power Reactor Inherently Safe Module (PRISM) team have shown the cost of vendor supplied components and materials are essentially equal for the average U.S. nuclear and coal plant. However, the site field labor for the average nuclear plant exceeds that for a coal plant by a factor of two and the indirect site labor costs are five times higher. While standardization and experience can reduce the differences, less regulatory control of the construction process is necessary to reduce the cost of the construction process to a level that would make the modular system fully competitive. We do not believe studies or technology developments, regardless of how promising, can assure this one basic goal can be realized but it may be possible to gain this assurance through a successful full scale reactor assembly test. Therefore, we propose that the commitment be made to proceed with a reactor test of the most promising concept and reach a conclusion through final regulatory certification.

International Cooperation

We believe it is possible to gain overseas participation in the development and proof of our modular innovative concepts. The overseas development of new large monolithic systems has proven to be extremely expensive and none has proven to be economically competitive. Therefore we have found a growing overseas interest in our PRISM concept. A selection and firm commitment to a reactor test could bring about a major overseas participation in such projects. We have in the past enjoyed overseas participation in our developments and can likely regain this advantage with a firm commitment to a promising concept.

I should also emphasize the great importance of such a program to our foreign policy non-proliferation objectives. We presently have the self inflicted situation of trying to address the proliferation issue by threatening an embargo on export of U.S. technology to non-cooperating nations, while at the same time slowing the progress of nuclear energy in this country. There is presently a worldwide surplus of supply capacity in every phase of nuclear power. What is it that we will embargo if present trends continue and we lose technological leadership? The suggested program described above can lead not only to increased well-being in the U.S. due to

assurance of energy supply; but also to worldwide well-being as the U.S. is able to maintain its constructive nuclear technological leadership on an international basis; and to influence developments in ways which reduce the threat of spread of nuclear weapons.

CONCLUSIONS

Proceeding with a focused program toward revival of the LWR option should be our highest priority. In a competitive world the U.S. is one of the few countries which denies itself the use of low cost nuclear power. The need is evident. A nuclear option provides competition and a choice for the utilities when they begin replacing their aging capacity and satisfying the current growth in demand. The action is clear. Prove through a binding regulatory certification that our advanced LWR plants can be constructed and operated in the United States under conditions that permit standardization and reduces the uncertainty associated with our current plants. The cost is modest. New final advanced designs exist through our cooperstive efforts with our overseas partners so we can proceed directly with their certification. And we have in place, the industrial infrastructure necessary to provide this option when it is clear we have an environment more conducive to the acceptance of nuclear power.

Proceeding with a balanced advanced reactors program will likely require some critical and difficult decisions. A comprehensive program would include continuation of our base technology developments and proceeding toward the final design and certification of our current innovative reactor concepts. For the LMR, it also includes closing the fuel cycle if we are to realize the full potential of this technology. We believe it would be in the nation's best interest to carry out a comprehensive program, but the current FY86 budget is not sufficient to carry out such a program and the proposed FY87 budget appears to demand further Hmits to the advanced reactors program.

We now face the possibility that maintaining the expensive technology and fuel development programs and facilities will leave the Advanced Reactors Program with insufficient resources to carry out the most important mission, advanced reactor development. Therefore, we urge the Committee to address this issue and provide guidance on priorities for the advanced reactor program. While we recognize the value of our base technology developments, we do not believe fuel developments deserve our top priority. We, as well as other countries, have sufficient oxide fuel operating_experience today. All countries, however, are struggling to reduce plant costs. This is where the problem is, this is where the U.S. program has a lead, and this is where we should focus our resources.

Senator Domenici. Thank you very much, Dr. Armijo.

Dr. Arnold, Westinghouse Advanced Energy Systems, you are our last witness. We are delighted to have you here.

STATEMENT OF DR. W.H. ARNOLD, GENERAL MANAGER, ADVANCED ENERGY SYSTEMS DIVISION, WESTINGHOUSE ELECTRIC CORP.

Dr. ARNOLD. Thank you, Mr. Chairman.

I appreciate this opportunity to comment on DOE's civilian reactor development program. Since joining Westinghouse in 1955, I have been personally involved in technical and management positions in our pressurized water reactor programs, both domestic and international, in the NERVA program for development of compact gas reactors for nuclear rockets, and in our liquid metal reactor development programs.

I will concentrate my remarks today on the liquid metal reactor, although my prepared testimony, which I also submit for the record, also addresses light water reactors and supports strongly DOE's current initiatives in the light water reactor.

Of course, the light water reactor option must remain viable before there will be a need for advanced reactors of any type. Assuming that, the rationale for the breeder still holds on the basis that uranium is a finite resource. The world choice for nuclear power generation in the long term is clearly liquid metal fast breeder reactor.

There are currently 14 of these in operation, under construction, or in design around the world, and nearly 3,000 megawatts of electricity are being produced by them. The most successful of these programs is in France, where the Phoenix reactor has been producing electricity since 1972. In January of this year, the 1,000 megawatt electric Super-Phoenix reactor also began producing power to the European grid, and is expected to be operating at full power by mid-1986.

This is a major achievement, attained through the collaboration of various European governments, utilities, and manufacturers in a focused program.

The U.S. program has also been successful. EBR-II, on which we have just heard some remarkable tests, has been in operation since 1964, and the fast flux test facility, FFTF, has been operating since 1980. In 1985, FFTF achieved a capacity factor of 71 percent, also truly remarkable for a test reactor that is carrying out a complex experimental mission.

Operating experience gained at FFTF is available to apply to the next generation liquid metal reactors in areas of both safety and economics. The major technical challenge for breeder development is achieving a reduction in capital costs to reach economic parity with other generating sources, while maintaining the highest level of safety.

It is our opinion at Westinghouse that this difficult cost target can be met by the time breeders are required. We are currently working under DOE contract, in cooperation with Mitsubishi Heavy Industries of Japan and independently owned corporate funds, to achieve these objectives. Among the innovations we are

developing are the significant economies associated with inherent safety and the use of long-life cores, especially with oxide cores where we have the experience base.

Advances in inherent safety capability and in the burnup capability of oxide fuel permit new design approaches for liquid metal reactors. These can be designed to operate for ten years or more without refueling. They are more efficient users of our fuel resources and can be started with uranium fuel.

Plutonium is formed and burned in place. It need not be reprocessed or handled.

The potential for long-life cores is great, as was recognized by the Energy Research Advisory Board Subpanel on Advanced Reactors, which rated further development of long-life cores as one of the highest priority areas. Yet, the DOE-proposed liquid metal reactor development budget for fiscal year 1987 allocates less than one percent to this area. I think this is an area that clearly deserves more emphasis in DOE's program.

Inherent safety testing in FFTF is also vital because it will demonstrate that passive design features, relying just on the laws of nature, are effective in terminating off-normal conditions. Proof testing these systems in an instrumented LMR environment under controlled conditions is an important step in the development of inherently safe designs.

In summary, we believe that the advanced reactor program should focus on a liquid metal reactor based on these initiatives, because: First, it will result in a safe, simple reactor that has potential to compete economically with other electrical energy sources; second, it can use enriched uranium dioxide fuel, so that no new fabrication plants are required; third, it makes and uses plutonium as it operates, so reprocessing is not required. Since the plutonium is not separated, it is free from proliferation concerns; fourth, less waste results because fewer assemblies are discharged with a long-life core; fifth, the major program assets, such as EBRII and FFTF, are already in place.

And finally, since the plant technology does not change, a very straightforward transition to breeding can be made when the need arrives.

Thank you, Mr. Chairman, for the opportunity to provide our views.

[The prepared statement of Dr. Arnold follows:]