Nuclear Power Plant: West German Management of Risk — A Problem Analysis

Abstract

The expansion of nuclear energy use in the Federal Republic of Germany has almost come to a standstill. In 1980, not only did no new nuclear power plant go into operation, but not one single construction permit was granted. And only one order was placed in the entire country (A letter of intent for Block 2 of the nuclear power plant ISAR was given to the Kraftwerk Union, a subsidiary of Siemens) . Every one of the nuclear power plants presently under construction is several years behind its scheduled completion date (11 blocks with a little under 13,000 MWe) [1]. Naturally, the resulting cost overruns, from inflation, interest, etc., are considerable. Licensing delays, experts say, are holding up an estimated $15 billion of investments for nuclear power plants. Safety measures and quality demanded by German licensing authorities make German nuclear power plants much more expensive than those of other countries with which Germany is competing in the nuclear export business. Nevertheless, some feel that in the post-Three-Mile Island era, these expensive safety and quality control features will pay off. It is still too early to tell.