The Future of the U.S. Nuclear Energy Industry

Paul Joskow and Martin L. Baughman

Bell Journal of Economics, 1976, vol. 7, issue 1, 3-32

Abstract: This paper examines the demands for nuclear reactors, raw uranium, and fuel cycle requirements by the U.S. electric utility industry over the next twenty years, and under a number of different possible states of the world. The analysis is performed by using the MIT Regional Electricity Model (REM) developed by the authors. This model is an engineering-econometric-financial simulation model of the electric utility industry in the United States. It includes a supply submodel, a demand submodel, and a regulatory financial submodel. The analysis indicates that demands for reactors, raw uranium, and uranium enrichment will be substantially below the projections made by government agencies such as the atomic Energy Commission. These demands are shown to be very sensitive to the costs of air pollution control affecting coal utilization, the costs of uranium and uranium enrichment, the price of oil, and electric utility regulatory practices. It appears that in almost all cases existing plus planned expansion of government-owned enrichment facilities will be sufficient to meet domestic needs until the mid-1980s. However, the continued financial viability of the five reactor vendors servicing the domestic market is doubtful. Two or three of these vendors will either have to drop out of the market or obtain increased nuclear steam supply system orders from foreign countries.

Date: 1976
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