COMPARSION OF POWERPLANT TECHNOLOGY AND COSTS IN THE USSR AND TH

Created: 11/1/1965

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CIA/RR ERS

C1AH!STOROLREWEWP^-NT RELEASE IN

INTELLIGENCE REPORT

-:'Srr i" COMPARISON .OF POWERPLANT TECHNOLOGY AND COSTS IN THE USSR AND THE UNITED STATES

OF INTELLIGENCE Office of Research and Reports

Technological advances Id the electric power Industry are Instituted almost exclusively to reduce costs of fuel, capital, and labor. Emphasis on technological improvement and on reducing costs associatedarticular factor depends on the relative importance of that factor in the total cost of producing electric power.

This report discusses the economic gain3 resulting from technological advances in the electric pover industries of the USSR, of the United States, and,esser extent, of some Western European countries. Focuslog on technological developments thatignificant difference in factor inputs, this report is concerned primarily with the gains being achieved through improved technology in thermal electric poverplants, vhlch account for more thanercent of total electric powerIn both the USSR and the United States.

Soviet cost data have been presented in rubles and US cost data in dollars. Because of the variation in ruble-dollar ratios implicit in data pertaining to various aspects of tbe electric power industry, no conversionommon currency was made-. The official rate of exchange0 ruble to USoes not accurately reflect the relationship existing between various costs in the electric power industriec of the USSR and the United States. Moreover, no monetary conversion wasas all International comparisons have been based on internal coopurlsons of other factors, such as efficiency of fuel consumption, numbers of production personnel per megawatt of capacity, internal savings achieved by economies of scale, and Internal differences in costs of hydroelectric and thermal capacity.

cormoiTS

Page

Summary and

Technological Efforts to Economize in the Use of Fuel

in Soviet Thermal Electric Powerplants

of Improving

Use of Higher

Tne Special Case of Supercritical Technology -

Operating Regimes of Power Systems

n. Technological Efforts to Economize in the Use

of

A.

of Saving

of Scale in Thermal Electric

from Improved Techniques

of Design and

Cost of Adding Mew

III. Technological Efforts to Economize in tho Use

of

A.

C. Economies of

Appendix

Source References

Tables

1. Average Heat Rates ln Thermal ElectricPublic Utility Systems of

j blank J

2. Investment in Generating Capacity Installed

ln the USSR

Charts

Figure 1. OSSR and US: Heat Rates in the Electric Power

ollowing page

Figure 2. USSR and US: Ratios of Average Costs perGenerating Capacity Installed inund Thermal Electric Powerplants

FigureSSR and US: ffumber of Production Personnelof Capacity ln Thermal2

17

CCKPARISOH OF POWERFLAfPT TECffllOLCOY AHDE USSR AKD THE UNITED STATES

Summary and Conclusions

The Soviet electric power industry has achieved substantial gains in efficiency in utilization of capital, fuel, and labor during the past decade. 8 the Investment required per kilowatt of nev generating capacity has been reduced by about one-third. Operating efficiency has also Increased in thermal electric powerplants, as the heat rate (that is, tbe expenditure of fuel required to produce one kilowatt-hourkwhof electricity) declined at an average rateercent5 The number of production personnel per megawatt of capacity at thermal powerplants declined at an average annual rateercent8 the Soviot electric power Industry otlll lags behind that of the United States in effective utilization of these factors.

The USSR uses aboutercent more fuel per kilowatt-hour produced In thermal powerplants than docs the United States, and lt employs more thanimes the number of production porsonnel per megawatt ofcapacity. Estimated investment in generating capacity installed in the Soviet electric power industryxceeds planned costs by at leastercent. Soviet data, however, indicate that by increasing the average size of new generating units In thermal power-plants to the average size being installed in US thermal powerplants the average cost per kilowatt of new capacity in Soviet thermal powerplants could bo reduced by aboutercent. Hydroelectric capacity is more expensive than capacity in thermal powerplants in both the USSR and the United States. The disparity between the costs of hydroelectric and thermal capacity in the USSR, however, is only about hO percent as great as in the United States.

The disparities ln the effectiveness of utilization of fuel, capital, and labor directly reflect the relative technological levels attained in the electric power industries of the two countries. Fuel coats2 represented aboutercent of the total cost of power produced in regional thermal powerplants In the USSR but onlyercent of the total cost of power produced ln thermal powerplants in the United States. Labor costs accounted forercent of total cost in the United States, compared with only lU percent in the USSR. Consequently, It is not surprising that thc Soviet efforts at technologicalstress fuel economy, whereas ln the United States, technological improvement aimed at saving labor is deemed more significant. charges in the USSR represent aboutercent of total costs, compared withercent in the United States, and both countries show an appropriate interest in achieving economy in capital Inputs.

4-

The gap between tbe USSR and the United States In efficiency of fuel cons-jcptlon probably will narrow lo future years, projection of present rates of decrease in the beat rates of the two countries vould mean that the average heat rate in thc USSR would not equal that of the United States before aboutears. The rate of improvement la the Soviet industry undoubtedly will decline, however, aa technical gains become harder to achieve. Because of the Soviet policy of standardization of equlpcscnt design, which sacrifices opportunity for rapid incorporation of technical advances in the interest of store immediate gains from reduced construction tiroes and costs, it may be longer thanears before the Soviet heat rote equals thnt. of the United States.

Gains in thermal efficiency are being accosrpllshed in the USSR by employing larger boiler sizes that operate at higher temperatures and pressures. Until recently the standard equipment Installed ln large regional thermal powerplants ln thc USSR consisted of unitscgawatt (mw)aw capacity that operateounds per square inch (psi) andFahrenheit Soviet power engineers, however, are nowew newly designedw units intended to operatesi andF. Installation by the end5 oftw units, instead of approximately the same capacityw units, is supposed to resultlanned economy ofillion rubles in investment and subsequentillion rubles ln operating costs. w units went into serial production, however, without sufficient operation of theto eliminate difficulties, and apparently thus far none are operating at either design or supercritical levels. If they cannot be operated at design level, much if not all of the planned savings may be lost. Experimental work is also being done in the USSR on even larger unitswv capacity.

Further economies In fuel consumption are being achieved bypower distribution networks to take advantage of diversity ln loads, thus achieving more constant demand andigher rate of utilization of the larger, most efficient generating units. Small power systems have, in the past, contributed to the lag in Soviet development of larger units.

The Soviet electric power industry is very slowly reducing the number of employees per unit of capacity by increasing the size of generating units and of powerplant capacities and by introduction of automation. Soviet powerplants not only lag behind those of the United States and Western Kurope in extent of automation but arcfarther behindult ofrapid rate of Western advance in this field. The USSR apparently is not planning an extensiveto overcome this lag completely, because Soviet planning data for future large generating units call for approximately twice the number of operating personnel per unit of capacity that isin plants scheduled for construction in the United States.

I. Techno1ogleal Efforts to Economize in the Use of Furl In Soviet Thermal Electric Povcrplants

A. Incentive

Expenditures for fuel constitute the largest item ofurrently aboutercentin the cost of electric pover produced ln regional thermal pcverplants in thehereas they amount to only aboutercent in the United States. 2/ Increased use of oil and gas and location of powerplants near sources of cheap coal supply have tended to reduce the cost of fuel to powerplants. The cost of fuel, however, is largely governed by factors outside thc control of the pover industry. Reductions in the expenditure for fuel have been achieved mainly through reduction of the heat rate. National beat rates offer perhaps the bcBt gauge of the extent cfountry's power industry because they reflect the weighted averages of both efficient and inefficient generating units thatto the total national production of electric power.

3 the USSR occupied fourth place among leading power producers in terms of fuel consumption per klrOvatt-bour of electricity produced. The United States has the lowest rate of fuel consumption. Second place is held by France and third place by West Germany, as is shown in Table 1.

The average heat rate in thc USSR, whichercentthe average rate in the United States inl6 per-

cent greater Projection of tbe rates of decreasendicates that tbe average heat rate in the USSR will not equalthe United States before aboutears (see In fact, how-

ever, it may be even longer before the average Soviet heat ratethat of the United States. The rate of decrease ln the heat rate in the USSR is likely to slow down more than in thc United Statesesult of the Soviet practice of standardizing designs with consequent loss of opportunity to improve efficiency. In the United States, each generating unit is built essentiallyustom design and incorporates the latest technology almost as soon as It is developed.

There ln considerable economic incentive forln fuel saving. The average coot of fuel burned inin the USSR0 wasopecksmillionnd ic believed aot to have changed significantlyis estlmuled that the net production of Soviet

For serially numbered source references, see the Appendix. "" The avuruge cost per million btu in thc United States Is. k/ Thc average cost of fuel in the United States, as ln the USSR, has remained relatively static over thc past five years.

regional thermal powerplants3 vaeillion kwh. If thermal efficiency in these plants had been equal to thc efficiency in US plants iu that year, there would haveaving of1 million rubles (about lk percent of the total cost of fuel used)esult of the reduction in fuel consumed.

Table 1

Average Heat Rates in Thermal Electric Powerplants in Public Utility Systems of Selected Countries a/ Selected

Year

States ty

ermany s/

5/

ingdom &

Thermal Units per Kilowatt-Hour Produced

e/

Annual Rate of Decrease5"

(Percent)

Data have been rounded to theritish thermal units per net kilowatt-hour produced.

otherwise Indicated, data are from Datahave been adjustedrOHS basiset basisercent.

on unrounded data.

/

I

t

/

/

f

mm

in capital stem from use of the "block" designhich unites into oneoiler, turbogenerator, and transformer. (Older designs called for spare boilers, which required expensive croaa-connections.) The simplified block design saves on the cost ofand reduces the volume of buildings needed to enclose thebut increases possible losses from malfunction of the equipment. Practically all thermal powerplants built in the united States for moreecade have Incorporated block designs. The USSR has used block designs only ins and haa Just lately begun to construct TETs on block principles- Tho USSR lagged behind thc United States in block design primarily because the USSR bad not developed boilers with thc necessary reliability.

Additional savings in capital are being attempted in the USSR: by construction of open-air powerplants, in which generating equipment is installeduilding enclosure; by increased utilization of oil and natural gas as fuel, thus reducing the problems of storage and the labor force and eliminating the conveying andequipment required for coal-fired plants; and by streamlinedtechniques employing prefabricated parts and rigid schedules for delivery of materials. Open-air powerplants have been constructed in the USSR onlyrincipally in the Caucasus and Central Asian regions, whereas such planta have long been common in the United States with its milder climate, which is more suitable for open-ulr construction. While the USSR is utilizing liquid and gaseous fuels in increasing amounts, leas thac one-fourth of ita total power generation is based on these fuels, compared with more than one-third in the United States. Although Soviet construction techniques are improving,schedules are rarely fulfilled, and generating units seldom go into operation in less than three years from the start of powerplant In thc United States the first generating units often are placed in operation about two years after the beginning of powerplant The additional construction time naturally adds to Soviet capital costs.

Soviet hydroelectric powerplants have the largest generating units, the largest total capacities, and the cheapest cost por kilowatt of capacity ln the world. Substantial reductions In the capital costs of hydroelectric capacity in thc USSR have been brought about largely by careful selection of favorable natural building sites. Reductions in the amount of earthworks and concrete required are responsible for most of the cost reduction. These reductions are evident in the comparison below of the Kuybyshev Hydroelectric Powerplant, which was put into operationnd the Bratsk Hydroelectric Powerplant, which was put into Initial operationl.

Coat of Capacity ofEarthwork

Capacity (Rubles

(Megawatts) per Kilowatt) CubicMeters]

Kuybyshev

Bratsk a/ IhO

a. The installed capacity of the Bratsk Hydroelectric Powerplant hasw. The remaining generating units are scheduled for Installation during the next two years.

C. Comparative Cost of Adding New Capacity

The USSR is achieving substantial reductions in the average cost per kilowatt of new electric generating capacity installed, although planned reductions in such costs are not being fully attained. The planned average cost per kilowatt of generating capacityeduction ofercent below the averageubles achieved. It is estimated that the average cost of capacity actually installed during the current plan period will be moreubles pereduction of approximatelyercent below the level of the previous period. The plan called for the addition00 mw, with an investment0 billion rubles. It appears that the goal for addition to capacity will be fulfilled. Hew capacity added'during the period will total an0 mw, of whichow will be thermal powerplant capacity and0 mw will be hydroelectric capacity-It is estimated, however, that total investment will be at least lO.kO billionercent in excess of plan (see It seems likely that most of the overexpenditures can be attributed toin construction projects, caused by late delivery of materials and equipment, and to underestimation of the time required to introduce and perfect new models of generating units.

* The actual cost of construction in the electric power industryeportedly willillion rubles more thanf whichillion rubles would be allocated for generating capacity and the remainder for transmission lines and heating networks. Recent reporting that the actual cost of many projects has been in excess of planontinuing problem. The cost of construction of electric powerplantseportedly was approximately at the planned If overexpenditures during the entireere at the rate indicated for the last two years, the total overexpenditureould be as highillion rubles rather thanillion shown above-

Investment In Generating Capacity Installed in the USSR/

Installed

Investment 'Billion Rubles'

Average Cost per Kilowatt of Capacity {Rubles)

3

//

Est'.rated Planned 9 b/

0 0

oco 0

Thermal electric capacity 0 ydroelectric capacity Average investment c/

l

193

figures arc as officially given except for the average coat per kilowatt ofis calculated on the basis of the midpoint of planned capacity.

that the overexpendlture should be apportioned according to the shares ofhydroelectric capacity in the total new capacity added (see

capacity makes up aboutercent and hydroelectric capacity makes upf total capacity.

Soviet investment in thermal powerplants is less effective than such investment in the United States,greater economies of scale are realized. The Soviet ruble buys slightly less capacity in thcraal powerplants than does the US dollar, primarily because generating units of larger sizes are installed in US plants. The average cost perof capacity addeds as follows:

USSRStates

$)

Thermal electric

Hydroelectric

a. The estimated average cost per kilowatt ofthe USSRs based on Table 2. ubles per kilowatt for thermal powerplants

was adjustedubles to eliminate the cost of items not found in US coststhe share of TETs-type power-plants, which cost about l6 percent more than condensiilg-typend the cost of housing and communal facilities, which make up aboutercent of total costs of thermal

In the United Statee the average unit size installed has increasedw9wnd tov By comparison, units scheduled forin the USSR5 will average nearlyv each. 2U/ Soviet data indicatew increase in the average size of generating units would reduce current Soviet investment costs per kilovatt by about/

The advantage enj.oyed by the USSR over the United States vhen investing in hydroelectric capacity, on the other hand, can be demonstratedomparison of the relative costs of hydroelectric capacity and thermal capacity in the two countries- As indicated in the above tabulation, investment in hydroelectric capacityubles per kilowatt in the USSR0 per kilowatt in the United States- Within the USSR, then, hydroelectric capacity costsimes as much per kilowatt as thermal power-plant capacity, vhereas tn the United States, hydroelectric capacityimes as much per kilowatt as thermal powerplant capacity (see These ratios show that in the United States the cost of hydroelectric capacity in relation to thermal capacity is moreimes the same cost relationship in the USSR. Much of the difference In the ratios probably Is accounted for by thc availability in the USSR of choice natural hydroelectric sites which have no counterpart in.the United States.

the number of personnel per megawatt of capacity declining^* Thus the gap appears to be widening steadily (see Figure The improvement in labor productivity that is occurring in the USSR is being accomplished through increased automation of powerplants and economies of scale resulting from operation of larger generating units and of powerplants with larger capacities.

ussr and

number of production personnel per megawatt of capacity in thermal electric2

B. Automation

* Comparable data for hydroelectric powerplants are not available, but it is likely that Soviet requirements for labor per unit of capacity are roughly the same as in the United States.

Although some degree of automation has been in evidence in the USSR for decades, extensive application of this technology Is BtiU in its infancy. The degree of automation in large hydroelectric power-plants is probably greater than in any other Soviet industry and isto bear with achievements in the United States. As early

ne-third of the hydroelectric generating capacity in the USSR wae remotely controlled, go/ Because of the number of largeprojects under construction in the USSR, there Is thethat the latter may become the leader in control techniques in this field. Automation of thermal powerplants in the USSR, on the other hand, not only lags behind similar automation in Western countries but is believed to be falling farther behindesult of the rapid rate of Western advances. ajor cause of this lag is the inadequateof digital computers, which are needed to function as data-loggers and to control the production process. Soviet progress in automation of power system control also is retardedhortage oflthoughesser extent than automation of thermal powerplants. The USSR has no powerplant that is computer controlled, compared withn Western Europe andn the United

C. Economies of Scale

Reductions in labor requirements accompany the lower investment associated with economies of scale in thermal powerplants. Few more men are required toaw unit than touch smaller unit. Planning criteria for the USSR show that as the size of the generating unit increases, the labor force required per megawatt. With each doubling of capacity the labor force may be reduced byercent toercent, depending on the size of the units involved. The planned shiftw generating unitsaw generating unite in the USSR5 is scheduled toen for other If carried out, this reduction in labor would produce annualofillion rubles in wages.

Planned reductions in labor requirements per megawatt ofcapacity in the USSR, however, are less than current US Soviet data for thermal powerplantswtw generating units callperational personnel perrespectively. Several US powerplantsO were operating with lessen per megawatt, and forecasts of future requirements reduce that figure by one-half. Failure to achieve greater reduction In personnel by installing larger units apparently indicates that the USSR docs not plan asrogram of automation as will be prevalent in thc United States. airly high degree of automation, however, will be necessary in the USSR. Use of larger generating units employing higher steam parameters requires that computer-controlled operations become more widespread, inasmuch as humun judgment may be incorrect or may be too slow to avert damage to the generating unit.

e references

8.

10.

12.

13-

19-

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