Masters Theses

Date of Award

8-1986

Degree Type

Thesis

Degree Name

Master of Science in Planning

Major

Planning

Major Professor

George E. Bowen

Committee Members

Pat Fisher, James A. Spencer

Abstract

In this thesis, modular power plant technologies are presented as a means of providing adequate generating capacity during a period of growing capital demands. Over the last few decades, the United States has developed growing investment requirements in several areas of the economy (see Chapters 2-9). Increasing capital expenditures are required for energy production and conservation, for water supply and distribution, for environmental protection and soil conservation, for roads and bridges, for new factories and technological innovation, and for housing. With the rise of the service economy, America is also confronted with the need to invest in human capital - the education and health of its work force.

As the most capital-intensive industry in the U.S., the electric utility industry is sensitive to changes in America's overall capital demands and greatly affects the amount of capital available for other types of investment. Moreover, the utility industry is the most energy-intensive industry in the U.S., and therefore, utility investments have tremendous impacts on America's energy independence and energy security. Because emissions from power plants are major contributors to America's environmental problems, utility investment decisions will also have significant effects on the future quality of the environment in the United States. For all of these reasons, utility investments are of critical importance during a time of limited capital resources (see Chapters 10-13).

Recently, electric utilities have experienced a series of financial disasters caused by rising fuel costs, higher interest rates, higher construction costs, increased regulation, and uncertain electricity demand. Modular power plant technologies may help the utility industry adjust to this new economic and political environment (see Chapters 14-18). They would give utilities several economic advantages, such as reduced construction time, increased factory fabrication, greater planning flexibility, and standardized licensing. In addition, modular technologies are generally energy efficient and environmentally clean, and they tend to use domestic energy resources such as coal, hydropower, wind power, sunlight, natural gas, and uranium.

The future investments of the utility industry constitute a matter of immense national importance because America is undergoing a profound technological transformation. The U.S. is moving from an industrial age to an information age. Since most of the new technologies ushering in this change depend on electricity for their power, the electric utility industry may have an even greater impact on the U.S. economy in the future than it does today (see Chapter 19). In this period of accelerating technological change and growing capital demands, the utility industry needs a flexible, capital-efficient investment strategy. In Chapter 20, a strategy is proposed which has three basic elements: 1) investment in conservation and load management, 2) investment in modular generating technologies, and 3) integration of modular power plants with nonelectric utility services such as the generation of process heat, wastewater treatment, and solid waste disposal. An investment strategy based on these three principles might provide a solution for meeting America's future electricity needs with an efficient use of limited investment resources.

The preceding paragraphs provide a brief abstract of the ideas included in this thesis; however, a few comments still need to be made about the organization of the manuscript. Excluding the Introduction and Conclusions, this thesis consists of four major sections. Chapters 2-9 deal with the growing capital demands that will face the United States during the next few decades. Chapters 10-13 discuss the utility industry as a key aspect of America's overall investment dilemma. Chapters 14-18 examine the potential benefits of investment in electricity conservation and selected modular generating technologies. Finally, Chapters 19-20 provide an outline of a possible alternative investment strategy for America's electric utilities as they confront the challenges of the future.

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