FINAL REPORT TONATIONAL COUNCIL FOR SOVIET AND EAST EUROPEAN RESEARC H

TITLE :

THE IMPACT OF NUCLEAR POWER O NTHE COST OF CAPITAL FORMA-TION IN SOVIET ELECTRI C

POWE R

AUTHOR :

Judith Thornto nDepartment of Economic sUniversity of Washingto n

CONTRACTOR :

The University of Washingto n

PRINCIPAL INVESTIGATOR :

Judith Thornto n

COUNCIL CONTRACT NUMBER :

624- 3

DATE :

May 7, 198 2

The work leading to this report was supported in whole or i npart from funds provided by the National Council for Sovie tand East European Research .

THE IMPACT OF NUCLEAR POWER ON THE COS TOF CAPITAL FORMATION IN SOVIET ELECTRIC POWER

Abstrac t

If we define the size of capital stock in Soviet electric power t o

equal power capacity, the capability of the system to supply a given leve l

of power flow at a moment in time, then we may derive a number of results .

Defined in this way, the investment cost of new capital formation has bee n

rising at an annual rate of 3 .6 to 6 percent per year, and officia l

" constant price" valuations of the book value of capital stock have been

rising at an annual rate of 3 .3 percent . These numbers imply that rea l

capital stock in this industry has been growing less rapidly than we thought .

They indicate that the level of real capital formation in electric powe r

actually fell during the Tenth Five Year Plan, which could account for muc h

of the reduction in the growth of power output .

Valued at Gosplan estimate costs, the cost of new capital stock fo r

electric power during the current Five Year Plan is estimated to be 25 . 8

billion rubles, including 9 .3 billion rubles for nuclear power . Capita l

costs in nuclear power consist of 5 .9 billion rubles for generating capacit y

and 3 .4 billion rubles for transmission costs, training facilities, and the

cost of the external fuel cycle--enrichment of uranium, manufacture of fue l

elements, and waste disposal . If the cost of new capacity continues t o

rise at 3 .3 percent per year, then the investment budget for power wil l

have to be 44 percent higher than the amount budgeted in the last Five Yea r

Plan . In order to meet its plans, power will be taking a larger share o f

a very tight investment budget .

THE IMPACT OF NUCLEAR POWER ON THE COST OF CAPITAL IN SOVIET ELECTRIC POWE R

Judith Thornto n

The estimation of the size and rate of growth of Soviet capital stock i s

an intractable problem. We can estimate the value of investment expenditure s

at current prices for aggregate sectors of the economy, but we cannot partitio n

the year-to-year change in value into a change in real capital and a change i n

the price of investment goods . For individual industries, we do not hav e

current-price investment series ; we have Soviet official "constant-price "

series, fragments of which are in the constant prices of different years .

Although we might like to take the word of our Soviet sources that their serie s

at constant prices would satisfy both Etienne Laspeyres and Hermann Paasche, th e

generally accepted evidence on inflation in the official machinery productio n

indices raises questions about the investment and capital stock series as well .

For capital stock itself, we have two accounts of the value of capital stoc k

at current prices for 1960 and 1972, but to move between or beyond these two year s

there are only official constant price series again .

Recently, in an exchange in Soviet Studies, two knowledgeable students o f

Soviet investment, Alec Nove and Stanley Cohn, raised some puzzling questions .

Nove postulates that, if the real cost of capital goods has been rising faste r

than the money allocated for expenditure, then a moderate rise in the financing

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of capital investment might be hiding a decrease in the acquisition of rea l

capital goods . Cohn argues that there is no evidence for more than a trivial- -

less than one percent per year--increase in the cost of capital goods . '

We need more evidence to tell what is happening to real capital formation ,

and the sort of evidence we need is found most easily in an industry lik e

electric power where there is a clear engineering definition of what is meant b y

a unit of capital stock . (It turns out that the economist ' s and the engineer ' s

definitions of capital stock are not identical, but we can overlook that issu e

for the moment .) In electric power, the capability of a system to supply a give n

level of power flow at a moment in time is defined by its capacity, measured i n

megawatts . So we can look at what has been happening to the cost of capacity i n

electric power as a case study of what may have been happening to the cost o f

capital in general . Since we know that there is a strong tendency for the uni t

cost of power capacity to fall with increased unit size, any evidence of risin g

capital cost would imply an inflationary process strong enough to offse t

underlying economies of scale .

I am interested in what is happening to the cost of capital in electri c

power for reasons that go beyond resolving a dispute between Alec Nove and Stanle y

Cohn . During the Tenth Five Year Plan, new capacity in the high-priority electri c

power sector fell short of plan--the construction of nuclear power plants fel l

disastrously behind plan--and power interruptions and drops in frequency an d

voltage impeded the operation of other sectors . 2

Capital investment will be a binding constraint again in the Eleventh Fiv e

Year Plan . The financing of capital investment is to grow at about 2 .6 percen t

per year, but the three most capital intensive industries, electric power, oil

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extraction, and natural gas, all face still higher capital costs per unit o f

output . In electric power, more than 70 percent of the planned increase i n

productive capacity is to come from new nuclear and hydroelectric capacity . 3

All of the growth of power capacity in the Western regions will come from

these sources . But the capital cost of a nuclear plant is about twice tha t

of a gas-fired thermal electric plant ; the capital cost of pumped-storag e

hydroelectric capacity is at least three times higher than gas-fired . 4 S o

the new plans for electric power will make heavy demands on the capita l

allocated to industry .

The pages that follow discuss four aspects of the issue . The firs t

section provides a brief overview of the status of the electric power industry .

The next section describes evidence on the cost of fixed capital in electri c

power and presents my estimates of constant-price capital stock . The following

pages provide information on the cost of nuclear capacity and estimates of th e

"overnight capital cost " of Soviet nuclear plants . Finally, the pape r

provides some preliminary estimates of the capital cost of the new Five Yea r

Plan for electric power .

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Soviet Electric Power in 1980

At the end of the Tenth Five Year Plan most electric power was produced i n

conventional fossil-fired thermal electric plants . Nuclear plants contribute d

5 .4 percent and hydroelectric plants 13 .7 percent of total output . Co-generatin g

capacity was an important component of the Soviet power system, contributin g

about one-fourth of power output .

Although power output kept pace with industrial output during the Fiv e

Year Plan, both output and capacity in electric power lagged far behind origina l

plan targets . The 1980 output of 1295 billion kwh . represented a five-year growt h

rate of 4 .5 percent, a percentage point lower than planned . Output of nuclea r

power was only 88 percent of target .

The short-fall is clearest in the indices for completion of new capacity .

Actual new capacity of 49 .5 million kilowatts was only 69 .7 percent of origina l

plan . Nuclear capacity completed stood at 56 .5 percent of plan, and there wa s

some question as to whether all of the completed capacity was in actual operation .

For electric power, the answer to Alec Nove ' s question was clear : there was a

decrease in the completion of new capacity between the Ninth and Tenth Fiv e

Year Plans .

There was considerable evidence that the decline generated shortages .

Izvestia cited M . Styrikovich as follows : 5

"Because of a shortage of capacity during peak-load hours, the suppl yof power to consumers is frequently limited or shut off . This lead sto extensive losses . However, still more important is the fact tha tthe Unified Power System, covering the European USSR, the Urals an dTranscaucasus operates at a reduced frequency a large part of the tim ebecause of the inadequate supply of fuel to power stations . Thismethod of reducing the consumption of eleotric power leads to huge

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losses, since the rotational speed of most electric motors and th eproductivity of the equipment fall off in proportion to the reductionin frequency .

" It seems advisable to cut back somewhat on capital investments i nthe construction of new enterprises that will be consumers of electricpower and to channel the funds freed thereby to the development of th epower-engineering base .

" It should be noted that, in addition to a uniformly reduced frequencyfor the entire Unified Power System, reduced voltage also occurs . "

Styrikovich was not exaggerating the costs . Reduced frequency slows small

machinery ; reduced voltage can cause machines to burn out . Two days later ,

Izvestia quoted A . P . Kirilenko saying that several million more kilowatts o f

capacity would have to be installed during the Eleventh Five Year Plan tha n

had been installed during the Tenth if the economy were to be provided with a

dependable supply of power in 1981-85 . 6

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The Cost of Fixed Capita l

There are two sets of data that might yield information on the cost o f

capital stock in electric power . One is investment data, the other capital stoc k

data . Presumably, it should be possible to reconstruct either series from th e

other . Unfortunately, that is not true in the Soviet case .

Turn first to the fixed capital series . After the revaluation of capita l

stock in 1960, the Soviets published percentages from which one could calculat e

the value of capital stock in the " constant prices " of 1960 . Table 4 gives th e

estimated value of productive fixed capital in electric power at constant price s

in column 1 . This series covers the post-war period from 1950 to 1973 . In

column 2 I list Robert Campbell ' s estimates of the value of capital stock whic h

appear to be based on the Soviet official series in column 1 . 7

In 1973, there was a revaluation of the book value of capital stock to brin g

these values closer to current replacement costs . After this revaluation, capita l

stock was valued approximately 20 percent higher than before . Again, the Sovie t

handbooks provided capital series--now at the " constant prices " of 1973 . Table 5

gives these series, together with Stanley Cohn ' s estimates of capital stock whic h

appear to be based on the two Soviet official series linking them by the 20 percen t

differential between them . 8

Using the data in Tables 4 and 5, we can calculate what was happening to th e

implied price of capacity to produce and deliver power in the so-called constan t

price series . In the 1960 constant-price series, the implied price of capacit y

actually rose from 127 rubles in 1950 to 231 .2 rubles in 1972 . In the 197 3

constant-price series, the implied price of capacity rose from 282 .9 rubles in

1972 to 322 .2 rubles in 1979 . Where we have actual current-price values o f

capital stock, between 1972 and 1960, the cost of capacity in current rubles wa s

rising at an average rate of 4 .7 percent per year . Even using the constant price

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series for the Fifties and the Seventies, the implied price of capacity was

rising at 3 .3 percent per year for the whole period 1950 to 1979 . So, at

least in the case of electric power, Cohn ' s confidence in the official Soviet

series seems to be misplaced .

Would these numbers have been different, had we measured the capital cos t

of output rather than of capacity? Using Robert Campbell ' s estimates o f

power available for consumption of 255 .8 billion kwh . in 1960 and 887 .6 billio n

kwh . in 1975, the value of capital per unit of output grew from 3 .7 kopeks

in 1960 to 6 .75 kopeks in 1975, an increase of 4 .1 percent per year .

The changes in accounting values were distributed fairly evenly amon g

different types of capacity . Table 6 gives a breakdown of productive fixed

capital assigned to thermal and hydroelectric production, transmission network ,

and other for the years 1970 and 1975 as well as the planned values for 1980 .

If we calculate the changes in costs per unit of the individual types of capacity ,

then, the cost of a unit of capacity was rising at the following rates : 3 .4 percen t

for total capacity, 2 .4 percent for hydroelectric capacity, 3 .2 percent for therma l

electric capacity, and 2 .7 percent for transmission capacity (assumed proportiona l

to the total length of lines .) The growing other category includes training

facilities for nuclear engineers, some repair facilities, and possibly facilitie s

for the production of nuclear fuel elements .

The levels of cost in Table 6 coincide with other cost information that i s

available . A recent handbook on the construction of electric power station s

provides the estimate costs for 28 turbine, 38 co-generating, and six nuclea r

plants that were constructed or under construction during the 1970 ' s . For

51 .8 million kilowatts of turbine capacity, the unit capital cost was 124 . 9

rubles per kilowatt ; for 3 .1 million kilowatts of co-generating capacity, th e

unit cost was 215 .3 rubles per kilowatt of power only, making no allocation for

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heat ; for 8 .6 million kilowatts of nuclear capacity, the unit capital cos t

was 213 .8 The capital costs of the transmission network network were almos t

as large as productinn capital costs, and they added a substantial incremen t

to the capital cost of delivering electric power .

The capital stock series provide measures of the average cost of past capita l

acquisitions . Presumably, when the cost of new capital goods rises, the ris e

brings up the cost of total capital stock slowly since most of the existin g

capital stock was purchased in earlier periods . So a rise in the cost o f

acquisitions of new capital should show up more strongly in current investmen t

costs . However, Soviet handbooks have published current-price measures fo r

newly commissioned capital for the years 1964-67 only . For other years there

are investment series described as being in constant prices again--in the price s

of 1969 for the last decade . Still, we can pursue the exercise of comparing

investment allocations with capacity completions in various periods to see wha t

was happening to apparent investment cost . These numbers are likely to be les s

stable than the capital series since there are long time lags between appropriation s

of finance and completions of capacity, since I have made no adjustment fo r

changes in unfinished construction, and since capacity is completed in large units .

Unit investment costs are probably biased downward in the last year of each Fiv e

Year Plan and biased upward slightly in the other years by the tendency to finis h

capacities in the last year of a plan .

Still, with all these reservations, the investment data generally confirm th e

results of the capital stock calculations . Table 8 gives the allocation o f

investment, completion of capacity, and unit investment cost for 1970, 1975, an d

1977 . In that period, the unit investment cost of capacity rose from 251 ruble s

to 378 .5 rubles, at a rate of 6 percent per year ; the unit cost of thermal

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electric power rose from 146 to 234 rubles, and the unit cost of hydroelectric

power fell from 412 .5 rubles to 318 rubles . There is one exception to the pattern

of rising capital costs . Although a unit of nuclear capacity was twice as costl y

as a unit of thermal capacity in 1975, the level of nuclear unit costs fel l

between 1970 and 1975 and was expected to fall still further in the estimat e

values of the 1976-80 plan . Nuclear capacity is discussed in detail later .

Since the existing capital stock series do contain implicit price inflation ,

I include an estimate of the value of capital stock at the constant prices of 197 3

in Table 7 .

Table 9 presents investment data for the period 1966-70, 1971-75 and 1976-80 .

According to these data, unit investment costs rose from 275 to 296 rubles betwee n

the Eighth and Ninth Five Year Plans and rose to 390 rubles during the Tenth

Five Year Plan (assuming that total investment in electric power was actuall y

about 19 .3 billion rubles .) This was an average rate of increase of 3 .6 percent

per year . In these series, the calculated investment cost of all three types o f

power, non-nuclear thermal, nuclear and hydroelectric fell during the Ninth Fiv e

Year Plan and then wen up, if those sectors actually received the planned allocations .

(Since both sectors failed to meet targets, it is possible that the financing o f

investment was behind plan as well .) The authors of Teploenergetika i teplotekhnika

derive their own estimates of capital investment per kilowatt of capacity b y

correcting the data in Table 9 for a change in unfinished construction of 15 percen t

for thermal power and of 28 percent for hydroelectric power, taking account o f

capital initiated in the Sixties and completed in the period 1971-75 . 10

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1966-70 1971-75

Thermal 154 204Hydroelectric 337 355Network 56 .2 62 . 8Thermal heat network 7 .5 9 .9

Their estimates imply a rise of 6 percent per year in the cost of therma l

electric capacity and a rise of 1 percent per year in the unit cost of hydro -

electric capacity .

In sum, unit capital costs seem to have been rising at 3 .3 percent per

year, based on the constant price capital stock data and 3 .6 to 6 percen t

based on the investment data . But the measured cost of nuclear power appears

to be falling . Still, the shift toward nuclear and hydroelectric capacity i s

a factor in the over-all rise in unit investment costs since both types o f

capacity are more capital-intensive than traditional turbine plants .

If real capital stock has been growing less rapidly than we thought, then

conventional measures of capital productivity are better than we thought previously .

Perhaps the most important implication of these numbers is that Alec Nove i s

right--at least in the case of this sector . The actual level of real capital formation

did fall in the last Five Year Plan, which must be a major factor in the declinin g

rate of growth .

Nuclear Power Production

Nuclear capacity was intended to play a major role in the Tenth Five Yea r

Plan . That plan called for an increase of nuclear capacity from 4 .7 to 18 . 5

million kilowatts ; it was to provide 19 percent of the growth in nationa l

capacity . But, although the growth of nuclear capacity was impressive, as Tabl e

10 shows, the industry fell far behind the original targets . New capacity

completed during the Five Year Plan was only 56 .5 percent of the intended level .

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One consequence of the delay was the still-rising level of consumption o f

mazut by thermal electric plants . 1 1

Nominally, cost was not a factor in the disappointing performance . Delays

were ascribed variously to delayed documentation from the project-making organizations ,

underfulfillment of construction plans, and lags in the production of reactor unit s

and turbine generators . Lags in equipment deliveries, in turn, followed fro m

delays in the completion of manufacturing capacity . For example, the Atommas h

plant at Volgodonsk, which has responsibility for the supply of the VVER-100 0

megawatt reactor, was only half completed at the end of 1980 . The Rovno nuclea r

plant in Kuznetsovsk in the Western Ukraine, slated to receive a VVER-100 0

reactor, installed a VVER-440 reactor as its first unit instead . An alarmed

report in Pravda on July 11, 1981 describes the situation at Volgodonsk in som e

detail as follows : (in paraphrase) the Volgodonsk plant is responsible fo r

the supply of eight 1000 megawatt reactors during the coming Five Year Pla n

(one-third of the total new nuclear capacity .) But the plant is short 400 workers ,

and worker turnover is high . Construction of everything in Volgodonsk is behin d

schedule . The plant itself is only half finished . In Volgodonsk, a city o f

150,000 people, there are facilities for only 26,000 . Pre-school and school

needs are only two-thirds met, even on a double shift . Construction of facilitie s

in Volgodonsk requires 120 to 150 million rubles a year, but the Ministry o f

Power and Electrification has allocated only 85 million annually for this purpose .

The Ministry of Heavy Industry and Specialized Construction and the Ministry o f

the Food Industry are doing nothing . The Atommash factory has assigned 1500 o f

its own personnel to city construction, paying them the difference between th e

earnings of a construction worker and their 200-ruble monthly wage .

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Table 11 presents the estimate values of capital costs for several of th e

large nuclear power facilities, Chernobyl ' , Smolensk, Kursk, Kola, Armenia, an d

Beloyarsk . These, like other Soviet capital values are " overnight capita l

costs" ; they make no calculation for interest foregone during construction .

For the 8 .6 million kilowatts of capacity represented by those plants, th e

estimate value of unit capital cost was 213 .8 rubles per kilowatt . The total

capital investment of 18 .4 billion rubles in these plant consisted of 7 .4 7

billion allocated to construction and assembly and 10 .9 billion allocated t o

machinery and equipment .

Table 12 presents the 1970 estimate values for individual units of capacit y

installed at Novovoronezh between 1964 and 1980 . These estimate costs projec t

costs of 127 rubles as the unit capital costs of the VVER-440 and 130 ruble s

for the VVER-1000 . The Kola VVER-440 units installed two years later wer e

estimated to have a unit cost of 235 rubles a unit, a difference that seems

large, even in view of the remoteness of the Kola site . In 1975, Sheles t1 2

estimated that the VVER-1000 had a unit capital cost of 170-200 rubles .

So

it seems likely that the Novovoronezh plant is underpriced at estimate costs .

However, I will ignore the shortcomings of estimate costs for the moment in orde r

to calculate what the total value of Soviet nuclear power capacity would be ,

evaluated at construction industry estimate costs . For each Five Year Plan, I

use the published estimate values for identified capacity and then price an y

remaining capacity for which I lack estimate values at an average unit cost o f

the identified capacity . These calculations result in the following estimates :

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New Capital Stoc k(mil . rubles)

Average Cos t(rubles)

Prior to 1970 242 269 . 81971-75 856 .56 225 . 61976-80 1567 .5 20 1

Total Value of Capital 2666 213

How badly do the estimate values of nuclear capital stock deviate fro m

current book values? One measure is the comparison with total investment in th e

nuclear power sector between 1966 and 1980 .

Capital Investment

Investment per Uni t(mil . rubles)

(rubles )Prior to 1970 396 69 51971-75 1760 46 31976-80 4420 56 7

Total Value of Investment 6576 52 6

Clearly, the total value of investment exceeds the estimate value of capita l

created by 3910 million rubles . It is two and one-half times larger . The

difference probably consists of three parts : partly completed capacity ,

possible understatement of true capital cost of generating facilities, an d

investment in the nuclear power industry other than power plant . Can we put

values on these items? Probably not, but there is additional information

available . The value of unfinished construction in electric power is 5,51 8

in 1979 ; it was about 5711 in 1980 . Nuclear capacity constituted 16 percen t

of total capacity in electric power last year . It was planned to be 34 .5 percen t

of new capacity during the coming Five Year Plan . So we can estimate that

unfinished nuclear capacity amounted to 883 - 1904 million rubles . Using the

mid-point of those two numbers as the approximate value of unfinished construction ,

we can estimate the amount of past investment in the nuclear sector to b e

6576 less 1393, or about 5183 million rubles . This value would imply a unit

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capital cost of 286 rubles per kilowatt for the cost of past capital .

Finally, in Tables 13-16 we have the estimate values of capital cost s

used in drawing up the new Five Year Plan . Using the estimated values o f

unit capital cost of nuclear power in Table 13, we find that, at curren t

estimate values, existing nuclear facilities would be worth about 4420 millio n

rubles, or about 66 percent more than historical estimate costs .

Capital Costs in the New Five Year Plan

We can use the estimate values in Tables 12-16 to estimate the approximat e

planned cost of capital construction for electric power in the next Five Yea r

Plan . These estimates are very approximate because I have not done a carefu l

job of locating new capacity by region . At Gosplan estimate costs, the pla n

for power generation would cost 15 billion rubles--approximately 5 .9 billion

for nuclear, 4 billion for hydroelectric, and 5 .1 billion for thermal electri c

power . Using Gosplan norms, they are planning to provide another 9 .9 billion

rubles for network and other capital costs, or a total of 24 .9 billion ruble s

for electric power . This amount would be approximately 29 percent larger than

the approximately 19 .3 billion rubles actually spent between 1976 and 1980 .

Using the past ratio of network and other costs to production costs, I calculat e

that the new Five Year Plan would require at least 13 .4 billion rubles in

network and other costs, for a total capital cost in 1980 rubles of 28 .4 billion

rubles . Finally, we need to add in the additional financing required if th e

unit cost of capital continues to rise at the past rate of at least 3 .3 percent .

Taking account of price increase, the accumulated total for acquisition o f

capital goods in electric power would have to total 31 .4 billion . This number

is a full 63 percent higher than actual investment expenditure during the Tent h

Five Year Plan . It would require a shift of resource

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Five Year Plan . It would require a shift of resources away from othe r

sectors towards electric power .

In sum, what have I learned in this investigation? First, the cost of powe r

capacity has been increasing at an annual rate of at least 3 .3 percent per year .

Secondly, the amount of real capital investment in electric power actually fel l

during the Tenth Five Year Plan . This factor alone is sufficient to explain th e

slow-down in the growth of that sector . If real capital investment in othe r

sectors changed in a similar manner, then investment may be playing a muc h

larger role in the current decline in Soviet growth rates than we appreciate d

heretofore . Finally, the shift toward nuclear and hydroelectric power will

make heavier demands on planned investment . Whether the new plans will be me t

is another whole story .

FOOTNOTES

1. Cohn ' s comment and Nove ' s reply appear in Soviet Studies, Vol . 33, No . 2(April 1981), pp . 296-301 .

2. M . Styrikovich, "Present Day Problems in Planning the Development o fElectrification, " Izvestia, June 1, 1980, p . 3

3. N . A. Tikhonov, "Basic Guidelines for the Economic and Social Developmen tof the USSR in 1981-85 and in the Period up to 1990 , " Pravda, February 2 81981, pp . 2-4 .

4. A . A. Trotskii, "Basic Trends in Electric Energy Development under Condition sof the Future Fuel Balance , " Elektricheskie stantsii, December 28, 1978, p . 11-21 .

5. M . Styrikovich, op . cit ., p . 3 .

6. Izvestia, June 3, 1980, p . 2 .

7. The 1974 edition of Narodnoye khoziaistvo gives a value of 40 .55 billionrubles for 1972 as the accounting value on the books of producing unit sof electric power capital stock .

8. Unpublished estimates by Stanley Cohn, provided courtesy of the author .

9. Stroitel'stvo teplovykh i atomnykh elektrostantsii, Moscow : Stroiizdat, 197 9

10. Teploenergetika i teplotekhnika, Moscow : Energiia, 1980, p . 58 .

11. A. A . Makarov, "Problems of Power Engineering, " Ekonomika i organizatsii apromyshlennogo proizvodstva March 1981, pp . 16-39 .

12. V. A . Shelest, Regional ' nye energo-ekonomicheskie problemy SSSR, Moscow :Nauka, 1975 .

TABLE 1

ELECTRIC POWER OUTPUT AND CAPACIT Y

198 0

OUTPUT(bil .

kwh .)CAPACITY(mil .

kwt . )

Total 1295 26 7(1293) (260 )

Thermal electric stations 1114 .5 214 . 5

of which :

Nuclear 70 .5 12 . 5(12 .3 )

Non-nuclear Turbine 1036 192 . 4

including :

Condenser KES 694 est 118 . 4

Heat and Power TETS 342 est 7 4

Non-turbine (Diesel) 8 9 . 6

Hydroelectric stations 177 .5 52 . 5

Total Heat Production, All Sources 2262 mil Gca l

1150 mil Gcal

of which

TETS

(Lower output and capacity numbers in parentheses are used in later article sin Elektricheskie stantsii . )

Sources : " Itogi razvitiia elektroenergetiki za 1980 godu i zadachi na 1981, "Elektricheskie stantsii, January , 1981, pp . 2-4, "Razvitie elektroenergetik iv odinnadtsatoi piatiletke, " Elektricheskie stantsii, May, 1981, pp 2-5 .

TABLE 2

ELECTRIC POWER OUTPUT AND CAPACIT YBY REPUBLI C

OUTPUT(bil .

kwh.)CAPACITY(mil .

kwt . )1970 1975 1980P

1980 1970 197 5

USSR 740 .9 1038 .0 1295 166 .2 217 . 2

RSFSR 470 .2 639 .9 801 .2 105 .1 132 . 5

Ukraine 137 .6 194 .5 237 .9 27 .9 38 . 2

Belorussia 15 .1 26 .7 33 .4 3 .7 5 . 6

Uzbekistan 18 .3 33 .6 31 .5 4 .7 6 . 7

Kazakhstan 34 .8 52 .4 67 .8 8 .8 11 . 5

Georgia 9 .0 11 .6 14 .6 2 .1 128 . 6

Azerbaidzhan 12 .0 14 .6 15 2 .7 3 . 0

Lithuania 7 .4 9 .0 11 .3 1 .5 2 . 1

Moldavia 7 .6 13 .7 15 .4 1 .7 2 . 3

Latvia 2 .7 2 .9 4 .4 1 .2 1 . 6

Kirgizia 3 .5 4 .3 9 .0 1 .0 2 . 3

Tadzhikistan 3 .2 4 .6 14 .4 0 .8 1 . 8

Armenia 6 .1 9 .1 13 .4 1 .7 2 . 5

Turkmen 1 .8 4 .4 6 .8 0 .7 1 . 2

Estonia 11 .6 16 .7 18 .9 2 .6 3 . 2

Source :

Teploenergetika i teplotekhnika . Moscow : Energiia,

1980, pp .

60-61

TABLE 3

NEW CAPACITY IN THE ELECTRIC POWER INDUSTRY

(mil .

kwt . )

1971-75 1976-80 Plan 1976-80 1981-85 Plan

Total 57 .5 71 .0 49 .5 7 1

Thermal electric stations 44 .6 43 .7 34 34

incl .

Condenser 31 .2 24 .9 15 . 7

TETS 13 .4 16 .3 14 . 2

Nuclear 3 .8 13 .8 7 .8 24-25

Hydro electric 9 .1 13 .5 12 12

Source : Energetika SSSR v 1976-80 godakh . Moscow : Energiia, 1977, p . 22 0

"Razvitie elektroenergetiki v odinnadtsatoi piatiletke , " Elektricheskie stantsii ,

May, 1981, pp . 2-4 .

TABLE 4

PRODUCTIVE FIXED CAPITAL IN ELECTRIC POWER AT CONSTANT PRICES OF 196 0

(Billion Rubles )

January 1of Year

Soviet Official Campbell Implied Price*(Rubles )

1950 2 .5 12 71951 2 .8 2 .8 12 71952 3 .3 13 11953 3 .7 12 91954 4 .4 4 .3 1341955 5 .3 5 .1 1421956 6 .4 6 .0 14 71957 7 .9 7 .4 16 31958 8 .8 8 .2 1641959 9 .1 9 .3 153 . 51960 9 .5 9 .5 160 . 81961 11 .9 12 .3 17 81962 13 .3 13 .4 17 91963 14 .9 15 .0 18 11964 17 .6 17 .7 18 91965 19 .9 20 .2 19 21966 22 .8 22 .8 1981967 24 .6 25 .3 2001968 26 .9 27 .4 2041969 30 .0 30 .7 210 . 51970 32 .9 33 .4 2141971 36 .1 36 .9 21 71972 40 .2 40 .7 23 11973 43 .5 44 .0

Soviet official series are estimated from the share of electric power in tota lindustrial capital stock times productive fixed capital in industry (January 1of each year, constant prices of 1960 .) Campbell series are from : RobertCampbell, Trends in the Soviet Oil and Gas Industry, Baltimore : Johns Hopkins ,1975 and Robert Campbell, Basic Data on Soviet Energy Branches, Rand ,December 1979 .

* Implied price is estimated as the value of capital stock per unit of capacity .

TABLE 5

PRODUCTIVE FIXED CAPITAL IN ELECTRIC POWER AT OFFICIAL CONSTANT PRICES OF 197 3

(Billion Rubles )

*End of Year Soviet Official Cohn Estimates Implied Price

(Rubles )1957 9 . 81958 11 . 61959 13 . 41960 15 . 81961 18 . 71962 20 . 71963 22 . 81964 25 . 21965 27 . 51966 30 . 31967 33 . 41968 37 . 11969 40 .9 265 . 91970 44 .37 45 .0 267 . 01971 48 .79 48 .6 278 . 21972 52 .70 52 . 71973 56 .09 56 .3 286 . 81974 59 .94 59 .9 291 . 81975 64 .60 63 .9 297 . 01976 68 .59 300 . 01977 72 .98 78 .8 306 . 91978 77 .76 84 .6 316 . 81979 82 .24 322 .2

Soviet official series are estimated from the share of electric power in tota lindustrial capital stock times productive fixed capital in industry (end o fyear, constant prices of 1973 .) Cohn series are unpublished estimates provide dby the author .

* Implied price is estimated as the value of capital stock per unit of capacity .

TABLE 6

STRUCTURE OF PRODUCTIVE FIXED CAPITAL IN ELECTRIC POWE R

(Billion Rubles )and

(Implied Price )

End of Year Total

Hydro

Thermal

Nuclear*

Network

OtherIncl .Nuclear

1970

35 .0

6 .6

14 .0

.24

12 .9

1 . 5

210 r

210 r

104 r

270 r

.029 r

1975

54 .0

9 .6

21 .5

1 .10

20 .1

2 . 8

248 r

237 r

121 .5r

226 r

.033 r

1980P

76 .6

13 .7

28 .1

2 .69

26 .6

8 . 2

287 r

261 r

137 r

201 r

.035 r

Source : Teploenergetika i teplotekhnika. Moscow : Energiia, 1980 ; slightl ydifferent figures are also in Energetika SSSR v 1976-80 godakh . Moscow :Energiia, 1977 .

* Thornton estimates described later .

TABLE 7

ELECTRIC POWER CAPACITY AND CAPACITY-DERIVED CAPITAL STOC K

End of Year

Capacity

Capital Stock(Million kilowatts)

(Billion rubles )

1955 37 .246 10 . 7

1960 66 .721 19 . 1

1965 115 .033 33 . 0

1970 166 .150 47 . 7

1971 175 .365 50 . 3

1972 186 .239 53 . 4

1973 195 .560 56 . 1

1974 205 .442 58 . 9

1975 217 .484 62 . 4

1976 228 .307 65 . 5

1977 237 .805 68 . 2

1978 245 .441 70 . 4

1979 255 .282 73 . 2

1980 267* 76 . 6

Source : Capacity and 1973 Capital Stock from Narodnoye Khoziaistvo ,various years .

Other capital stock figures estimated using th econstant price of capital of 1973 .

* 1980 capacity from Elektricheskie stantsii, May 1981 .

TABLE 8

UNIT INVESTMENT COST IN ELECTRIC POWER

Total

Thermal

Hydro

Network*

Othe rIncl .Nuclear

196 0Investment

168 7(Million Rubles )

New Capacity

7 .45(Million Kwt . )

Implied Cost

19 9(Rubles)

1970Investment

3103

1551 .5

713 .7

657 .8

18 0(Million Rubles )

New Capacity

12 .36

10 .64

1 .73

31 . 8(Million Kwt . )

Implied Cost

251

146

412 .5

.0207

197 5Investment

3747

1888 .5

704

798

35 6(Million Rubles )

New Capacity

12 .0

8 .5

3 .54

34 . 7(Million Kwt . )

Implied Cost

312

222

199

.023 0(Rubles )

197 7Investment

3596

1729 .7

665

791

406(Million Rubles )

New Capacity

9 .5

7 .4

2 .1

31 . 9(Million Kwt . )

Implied Cost

378 .5

234

318

24 8(Rubles )

*Network capacity is estimated from transmission lines (Km . )

Source : Total investment from Norodnoye Khoziastvo, various years ; structureof investment from A . A. Chernukhin, Iu . N. Flakserman . Ekonomika energetikiSSSR . Moscow : Energiia, 1980 .

TABLE 9

CAPITAL INVESTMENT IN ELECTRIC ENERGY CAPACITY BY FIVE YEAR PLA N(Billion Rubles )

Sector 1966-70 1971-75

22

1976-8 0

26Electric Investment 17 . 2All Industrie s

Other Industries 3.5

5 5

Electric PowerNew Capacit yImplied Cost

14 .0

1 751

57 . 5274 .5

295 .7

21 *49 . 5

390

Non-NuclearNew Capacit yImplied

Thermal

7 .05 7 .04 7 .5434

22 2

4 .4 27 . 8

56 7

4 .161 2

34 6

35 .4

41 . 2Cost

199

17 1

NuclearNew Capacit yImplied

HydroNew Capacity

.396

.571 .763 . 8

Cost

695

46 3

3 .068 .4

3 .1 99 . 1

Implied Cost

364

35 0

Network

5 .85 7 .15 6 .7 6

Heat Transmission

.40 .66 .7 0

Other

.45 2 .2 2 .4 2

Source :

Teploenergetika i teplotekhnika . Moscow : Energiia,

1980, pp .

58-9 .

*Reported total investment in 1976-80 sums to approximately 19 . 3billion rubles in the constant price snumber to estimate implied cost .

of 1973 .

I have used that

TABLE 1 0

NUCLEAR POWER OUTPUT AND CAPACITY

CAPACITY(Mil . Kwt .)

OUTPUT(Bil . KWH)

1964 .3 . 11965 .3 1 . 41966 .3 1 . 71967 .5 1 . 81968 .5 2 . 91969 .9 2 . 31970 .9 3 . 71971 1 .3 3 . 91972 1 .8 7 . 31973 3 .2 11 . 71974 3 .7 18 . 01975 4 .7 20. 21976 6 .1 25 . 01977 7 .1 34 . 01978 8 .1 4 51979 9 . 61980 12 .5* 70 .5

Sources : Output from Teploenergetika i teplotekhnika . Moscow : Energiia ,1980 and Elektricheskie stantsii, May, 1981 ; Capacity from dates givenin V . Iu Steklov . Razvitie elektroenergeticheskogo khoziaistva SSSR .Moscow : Energiia, 1979 and, for 1978 and 1979, various issues ofElektricheskie stantsii . These numbers differ slightly from thos ein Robert Campbell, Basic Data on Soviet Energy Branches . Rand : December1979 .

*The 1980 capacity figure given in Elektricheskie stantsii in May 198 1is 12 .3 . I have identified new nuclear capacity amounting to a tota lcapacity of 11 .6 .

TABLE 1 1

CAPITAL COST OF INDIVIDUAL ELECTRIC POWER PLANT S

Nuclear Plant s

Chernobyl' RBMK-1000 2000 500 379 .9 155 .7 224 .2 19 0

Smolensk RBMK-1000 2000 500 396 .6 166 .7 229 .9 198 . 5

Kursk

RBMK-1000 2000 500 349 .4 153 .2 196 .2 17 5

Kola

VVER-440 880 440/ 206 .7 105 .8 100 .9 23 5220

Armenia VVER-405,410 815 440/ 205 .64 45 .9 159 .74 262 . 5220

Beloyarsk AMB-100,200 900 100 299 .1 120 .1 179 332 . 5BN-600

These numbers refer to estimate values used in construction .

Source : Stroitel ' stvo teplovykh j atomnvkh elektrostantsii, Moscow : Stroiizdat ,1979, p . 894 .

TABLE 1 2

ESTIMATE VALUES OF CAPITAL COSTS FOR NOVOVORONEZH NUCLEAR POWE R

Unit Capacit y(Megawatts)

Unit Capita lCost(Rubles)

Implied TotalCos t(Mil . Rubles )

-1 210 326 68 .46

-2 365 186 67 .89

-3 440 127 (235) 55 .88 (103 .4 )

-4 440 127 (235) 55 .88 (103 .4 )

-5 1000 130 (200) 130 . (200 .

)

Source : Elektrifikatsiia SSSR . Moscow : Energiia, 1970 .

Numbers in parentheses refer to unit costs at Kola for -3 and -4 an da unit cost from V . A . Shelest . Regional ' nye energo-ekonomicheski eproblemy SSSR . Moscow : Nauka, 1975 .

TABLE 1 3

PRODUCTION COSTS OF ELECTRIC POWER : ESTIMATE VALUES USED IN PLANNIN G

300

24 0

250

27 0

12 5

16 5

14 0

16 0

15 0

15 0

Power Station Sit e

Hydroelectri c

Siberi a

Nuclea r

Cente r

Ural s

Siberi a

GRES, gas

Center

Surgut

GRES, Ekibastuz coal

GRES, Kansk-Achinsk coal

Siberia

GRES, Kuznets coal

Center

Ural s

4400 0 .2 0 . 1

6700 7 0 .364

6700 7 0 .37 9

6700 7 0 .41 0

313 6700 3 0 .20 1

313 6700 3 0 .26 6

339 6700 5 0 .230

328 6700 5 0.263

323 6700 4 0 .24 5

323 6700 4 0 .245

Source : A . A . Trotskii, U .S .S .R . Gosplan, " Basic Trends in Electrical Energ yDevelopment under Conditions of the Future Fuel Balance , " Elektricheskie stantsii ,December 1978, pp . 1-18 .

TABLE 1 4

COSTS OF ELECTRIC POWE RIN CENTRAL USS R

Source

Capital Investment

Operating Cost Total Cos tPer Unit of Capacity

of Output

of Outpu t(rubles/kwt)

(Sebestoimost ' )(kopeks/kwh)

(kopeks/kwh )

Hydroelectricin Siberia 498 .7 0 .355 1 .4 6

Nuclearin the Center 380 0 .697 1 .1 5

GRES, gas-fire din the Center 328 0 .854 1 .08

in Surgut 407 0 .753 1 .32

GRES, coal-fire din Ekibastuz 374 .8 0 .624 1 .2 2

in Kansk-Achinsk basin 389 .5 0 .672 1 .2 8

GRES, Kuznets coalin Center 343 .5 1 .075 1 .35

Source : A . A . Trotskii, USSR Gosplan, " Basic Trends in Electrical Energ yDevelopment under Conditions of the Future Fuel Balance, " Elektricheski estantsii, December 1978, pp . 1-18 .

TABLE 1 5

COSTS OF ELECTRIC POWERDELIVERED TO THE URALS

Source Capital InvestmentPer Unit o fCapacity(rubles/kwt)

Operating Costof Output(Sebestoimost ' )(kopeks/kwh)

Total Cos tof Output

(kopeks/kwh )

Hydroelectricin Siberia 466 .5 0 .331 1 .3 8

Nuclea rin the Urals 391 .5 0.709 1 .1 9

GRES, ga sin Surgut 324 .9 0 .654 1 .0 8

GRES, coa lin Ekibastuz 287 .0 0 .520 0 .9 6

in Kansk-Achinsk basin 360 .3 0 .630 1 .1 8

GRES, Kuznets coalin the Urals 274 .5 0 .744 1 .02

Source : A . A . Trotskii, USSR Gosplan, "Basic Trends in Electrical Energy Developmen tunder Conditions of the Future Fuel Balance , " Elektricheskie stantsii, December 1978 ,

pp . 1-18 .

TABLE 1 64

COSTS OF ELECTRIC POWERIN SIBERIA

Source Capital Investmen tPer Unit of Capacit y

(rubles/kwt)

Operating Cos tof Outpu t(Sebestoimost ' )(kopeks/kwh)

Total Cos tof Outpu t

(kopeks/kwh )

Hydroelectri cin Siberia 300 0 .100 0 .9 2

Nuclearin Siberia 413 0 .740 1 .2 5

GRES,coa lin Ekibastuz 278 .2 0 .508 0 .9 3

in Kansk-Achinsk basin 213 .8 0 .443 0 .74

Source : A . A . Trotskii, USSR Gosplan, "Basic Trends in Electrical Energ yDevelopment under Conditions of the Future Fuel Balance, " Elektricheskiestantsii, December 1978, pp . 1-18 .