Proposal preview

The atomic business: Industrial, financial and economic issues of the development of nuclear power over the 20th century

Nuclear power plants rank among the largest export transactions in world commerce. For most of the second part of the 20th century, the scientific and engineering frontiers expanded as the nuclear programs sprung around the world. Achieving the successful connection of a nuclear reactor to the grid requires the contribution of thousands of contractors across a variety of industrial sectors, the financial support of public and private capital and, the commitment of the authorities to fulfil and enforce international atomic regulations.
However, the economic history of nuclear power remains on its infancy. In this session authors offer an international historical perspective on the development of nuclear energy from its origins in to the present with particular emphasis on the economic, financial and business origins of nuclear programs all over the world.
The panel focuses on how the nuclear programs came about, over the creation of the industrial and financial frameworks required, on the business history of the companies involved with nuclear programs or the development of individual nuclear projects. During the session we expect to find transnational linkages to emerge from the national cases given the crucial role that technological transfers and international finance played for the development of nuclear energy.

Format:
This panel will follow a standard format, with six to eight papers and one or two discussants. Paper presenters will be expected to act as discussants. The papers will be pre-circulated. Each panelist will have between 15-20 minutes for presentation followed by discussion and Q&A.

Organizer(s)

  • Mar Rubio-Varas Universidad Publica de Navarra Mar.rubio@unavarra.es Spain
  • Joseba De la Torre Universidad Publica de Navarra jdelatorre@unavarra.es Spain
  • Duncan Connors Durham University Business School duncan.connors@durham.ac.uk United Kingdom

Session members

  • Hana Šústková, University of Ostrava
  • Thomas G. Rawski, University of Pittsburgh
  • Milagros Rodriguez, Universidad de Buenos Aires
  • Esther Sanchez-Sanchez, Universidad de Salamanca
  • Niklas Jensen-Eriksen, University of Helsinki
  • Takeo Kikkawa, Tokyo University
  • Federico Lazarín Miranda, Universidad Autónoma Metropolitana
  • Gloria Sanz Lafuente, Universidad Publica de Navarra
  • Jayita Sarkar, Boston University’s Frederick S. Pardee School of Global Studies
  • Markku Lehtonen, Universitat Pompeu Fabra
  • Matti Roitto, University of Jyväskylä
  • Ravi Madhavan, University of Pittsburgh
  • Qingfeng Tian, Northwestern Polytechnic University, Xi’an
  • Pasi Nevalainen, University of Jyväskylä
  • Miina Kaarkoski, University of Jyväskylä

Discussant(s)

  • Duncan Connors Durham University Business School duncan.connors@durham.ac.uk

Papers

Panel abstract

Nuclear power plants rank among the largest export transactions in world commerce. Achieving the successful connection of a nuclear reactor to the grid requires the contribution of thousands of contractors across a variety of industrial sectors, the financial support of public and private capital and, the commitment of the authorities to fulfil and enforce international atomic regulations. In this session authors offer an international historical perspective on the development of nuclear energy from its origins in to the present with particular emphasis on the economic, financial and business origins of nuclear programs all over the world.The panel focuses on how the nuclear programs came about, over the creation of the industrial and financial frameworks required, on the business history of the companies involved with nuclear programs or the development of individual nuclear projects.

1st half

U.S. Global Capitalism & the Economics of Nuclear Nonproliferation during the Nixon/Ford Era

Jayita Sarkar

Much of IR scholarship attributes U.S. commitment to prevent the global spread of nuclear weapons as the outcome of American national security interests. Yet, a closer look at U.S. nonproliferation policy reveals that it also has a compelling economic logic. Without incorporating the economic factors and their convergence with Cold War priorities of the American foreign policy, the understanding of U.S. nonproliferation policy remains incomplete. This study argues that American nonproliferation efforts, which in the Nixon/Ford era took the form of developing the Nuclear Suppliers Group (NSG) after India’s 1974 nuclear explosion, were guided as much by security risks from proliferation as by Washington’s aim to reclaim its market share and protect U.S. nuclear industry against West European competition.

Much of IR scholarship attributes U.S. commitment to prevent the global spread of nuclear weapons as the outcome of American national security interests. Yet, a closer look at U.S. nonproliferation policy reveals that it also has a compelling economic logic. Without incorporating the economic factors and their convergence with Cold War priorities of the American foreign policy, the understanding of U.S. nonproliferation policy remains incomplete. This study argues that American nonproliferation efforts, which in the Nixon/Ford era took the form of developing the Nuclear Suppliers Group (NSG) after India’s 1974 nuclear explosion, were guided as much by security risks from proliferation as by Washington’s aim to reclaim its market share and protect U.S. nuclear industry against West European competition.

Fuel for commercial politics – the nucleus of early commercial proliferation of atomic energy in three acts

Matti Roitto, Pasi Nevalainen and Miina Kaarkoski

Utilizing public sources our paper considers the trajectory of nuclear power history starting from the dawn of the atomic age (1945-1946) and the interrelation of technology, raw materials and regulation. We propose that the availability of the raw material, and limitations due to security issues were crucial in the development of the atomic technology and commercial utilization of the atomic power. By presenting three different cases (Britain late 1940s, Germany late 1950s and Finland late 1960s), we illustrate a) the transfer towards more commercial utilization of the atomic energy, from strategic to commercial resource par excellence, b) we consider the a shift from the “core areas of nuclear research” to the periphery –technologically and geographically, and c) in wider scale address the interrelation between initial investments and availability or scarcity of the nuclear fuel in this. This transfer was not just a commercial project; it had a strong political dimension,...

Utilizing public sources our paper considers the trajectory of nuclear power history starting from the dawn of the atomic age (1945-1946) and the interrelation of technology, raw materials and regulation. We propose that the availability of the raw material, and limitations due to security issues were crucial in the development of the atomic technology and commercial utilization of the atomic power. By presenting three different cases (Britain late 1940s, Germany late 1950s and Finland late 1960s), we illustrate a) the transfer towards more commercial utilization of the atomic energy, from strategic to commercial resource par excellence, b) we consider the a shift from the “core areas of nuclear research” to the periphery –technologically and geographically, and c) in wider scale address the interrelation between initial investments and availability or scarcity of the nuclear fuel in this. This transfer was not just a commercial project; it had a strong political dimension, too.

Economics, economists and hype cycles: the saga of the European Pressurised Reactor in Finland, France and the UK

Markku Lehtonen

While central in nuclear decision-making ever since the early 1960s, economics has until recently been secondary in public debate dominated by topics such as accident risk, energy security, and radiation-related environmental and health risks. This paper examines the growing weight and changing forms of economic argumentation in the governance of nuclear power, by focusing on the history of the EPR (European Pressurised Reactor). It analyses the public and policy debate around the EPR in Finland, France and the UK, tracing the trajectory of evolving perceptions of the EPR from a promising new technology, to a showcase of a French-led nuclear renaissance, and finally to a nightmare undermining the reputation and financial viability of the industry. Drawing on the concepts of “hype cycles” and sociology of expectations it seeks to understand the apparent discrepancies and diverging trajectories of promise and disappointment in the three case study countries.

While central in nuclear decision-making ever since the early 1960s, economics has until recently been secondary in public debate dominated by topics such as accident risk, energy security, and radiation-related environmental and health risks. This paper examines the growing weight and changing forms of economic argumentation in the governance of nuclear power, by focusing on the history of the EPR (European Pressurised Reactor). It analyses the public and policy debate around the EPR in Finland, France and the UK, tracing the trajectory of evolving perceptions of the EPR from a promising new technology, to a showcase of a French-led nuclear renaissance, and finally to a nightmare undermining the reputation and financial viability of the industry. Drawing on the concepts of “hype cycles” and sociology of expectations it seeks to understand the apparent discrepancies and diverging trajectories of promise and disappointment in the three case study countries.

Looking for cheap and abundant power: Business, government and nuclear energy in Finland

Niklas Jensen-Eriksen

The resurrection of nuclear energy in Finland in the early 2000s did not reflect only general international developments, but even more the special characteristics and history of the Finnish manufacturing industries. From the 1970s onwards, pulp and paper industry, which formed the backbone of the Finnish economy and later also some other energy-hungry industries, began to see cheap and abundant power as a key component of their business strategies. For industrialists, nuclear energy seemed a particularly attractive option, as Finland had few alternative energy sources. This paper is based mainly on previously classified and still underutilized internal business documents, as well as on interviews, government documents and published works. With the help of these sources, we can build a coherent picture of industry's long-term goals and lobbying strategies.

The resurrection of nuclear energy in Finland in the early 2000s did not reflect only general international developments, but even more the special characteristics and history of the Finnish manufacturing industries. From the 1970s onwards, pulp and paper industry, which formed the backbone of the Finnish economy and later also some other energy-hungry industries, began to see cheap and abundant power as a key component of their business strategies. For industrialists, nuclear energy seemed a particularly attractive option, as Finland had few alternative energy sources. This paper is based mainly on previously classified and still underutilized internal business documents, as well as on interviews, government documents and published works. With the help of these sources, we can build a coherent picture of industry's long-term goals and lobbying strategies.

Nuclear Engineering and Technology Transfer: the Spanish strategies to deal with US, French and German nuclear manufacturers, 1955-1985

Joseba De la Torre, Mar Rubio-Varas, Esther Sánchez-Sánchez and Gloria Sanz Lafuente

We analyzed the process of construction and connection to the electrical grid of four nuclear power plants with different partners and technological support: those of Zorita (PWR by Westinghouse), Garoña (BWR by General Electric) and Vandellós I (GCR by Edef) (belonging to the first generation of atomic plants and producing electricity from 1969-72) and that of Trillo I (PWR by KWU, connected in 1988). These four examples allow us to observe how the learning curve of nuclear engineering and the acquisition of skills by Spanish companies evolved. Progressively the domestic industry achieved higher levels of participation, fostered by the Ministry of Industry and Energy. When the atomic plans under construction were paralysed by the nuclear moratorium of 1984, and several others projects were abandoned by the utilities along the way, Spain had developed an industrial sector around the fabrication of service components and engineering for nuclear power plants to compete...

We analyzed the process of construction and connection to the electrical grid of four nuclear power plants with different partners and technological support: those of Zorita (PWR by Westinghouse), Garoña (BWR by General Electric) and Vandellós I (GCR by Edef) (belonging to the first generation of atomic plants and producing electricity from 1969-72) and that of Trillo I (PWR by KWU, connected in 1988). These four examples allow us to observe how the learning curve of nuclear engineering and the acquisition of skills by Spanish companies evolved. Progressively the domestic industry achieved higher levels of participation, fostered by the Ministry of Industry and Energy. When the atomic plans under construction were paralysed by the nuclear moratorium of 1984, and several others projects were abandoned by the utilities along the way, Spain had developed an industrial sector around the fabrication of service components and engineering for nuclear power plants to compete internationally.

2nd half

The evolution of Japan’s electricity industry : The past, the present, and the future

Takeo Kikkawa

The nuclear accident at Tokyo Electric Power’s Fukushima Daiichi Nuclear Power Plant on March 11, 2011 has prompted Japan to fundamentally review its entire energy policy. Because such a serious accident occurred, surely Japan’s electric power industry and nuclear power policy need to change. The aim of this paper is to set out a positive direction for the electricity industry and nuclear power reform. To resolve issues facing any industry, you need to start by applying the right principles and theories, whilst also taking into account the historical context. This paper uses the method of “applied business theory” in order to do just that. Applied business history is about identifying the dynamism of industrial and corporate growth through the study of business history and, based on the findings, exploring solutions to contemporary problems encountered by the relevant industry and companies.

The nuclear accident at Tokyo Electric Power’s Fukushima Daiichi Nuclear Power Plant on March 11, 2011 has prompted Japan to fundamentally review its entire energy policy. Because such a serious accident occurred, surely Japan’s electric power industry and nuclear power policy need to change. The aim of this paper is to set out a positive direction for the electricity industry and nuclear power reform. To resolve issues facing any industry, you need to start by applying the right principles and theories, whilst also taking into account the historical context. This paper uses the method of “applied business theory” in order to do just that. Applied business history is about identifying the dynamism of industrial and corporate growth through the study of business history and, based on the findings, exploring solutions to contemporary problems encountered by the relevant industry and companies.

Development of Nuclear Industry under Conditions of Central Planned Economy

Hana Šústková

Atomic power, within the energy framework, was from the very beginning a question of competition of Eastern and Western block during the period of cold war. It was about prestige to prove that even the Eastern countries under command of Soviet Union, without an industrial development (except of GDR and Czechoslovakia) could build nuclear power plants with the help of The Council for Mutual Economic Assistance (CMEA). From the mid 1960´s the Czech company VÍTKOVICE began the production of components for nuclear plants for countries of so called Eastern block. The paper deals with the political pressure of the state and CMEA, the lack of experts, the economic problems within the concern linked with the introduction of nuclear power engineering into the others production programmes and the solutions which were possible only under conditions of planned central economy.

Atomic power, within the energy framework, was from the very beginning a question of competition of Eastern and Western block during the period of cold war. It was about prestige to prove that even the Eastern countries under command of Soviet Union, without an industrial development (except of GDR and Czechoslovakia) could build nuclear power plants with the help of The Council for Mutual Economic Assistance (CMEA). From the mid 1960´s the Czech company VÍTKOVICE began the production of components for nuclear plants for countries of so called Eastern block. The paper deals with the political pressure of the state and CMEA, the lack of experts, the economic problems within the concern linked with the introduction of nuclear power engineering into the others production programmes and the solutions which were possible only under conditions of planned central economy.

Capability upgrading and catch-up in civil nuclear power: the case of China

Ravi Madhavan, Thomas G. Rawski and Qingfeng Tian

Nuclear power epitomizes the unusual combination of expansion, rapid of technological, managerial and regulatory capabilities, growing competitiveness, burgeoning global involvement, and potential economic, environmental and security risk surrounding Chinese innovative efforts. Surprising features of China's nuclear buildup include the centrality of enterprise initiative in an industry seemingly dominated by government controls; the strength of nuclear safety oversight in an economy noted for weak prudential regulation; and China's unexpected emergence as a major player in the global market for nuclear installations - an instance of Christensen's theory of "new market disruption." Despite impressive gains, China's nuclear sector faces multiple challenges arising from institutional limitations, corruption, conflicts between supply-chain inadequacies and pressure for import substitution, and an ironic confluence of overseas market success with sudden erosion of the domestic industry's financial underpinnings.

Nuclear power epitomizes the unusual combination of expansion, rapid of technological, managerial and regulatory capabilities, growing competitiveness, burgeoning global involvement, and potential economic, environmental and security risk surrounding Chinese innovative efforts. Surprising features of China's nuclear buildup include the centrality of enterprise initiative in an industry seemingly dominated by government controls; the strength of nuclear safety oversight in an economy noted for weak prudential regulation; and China's unexpected emergence as a major player in the global market for nuclear installations - an instance of Christensen's theory of "new market disruption." Despite impressive gains, China's nuclear sector faces multiple challenges arising from institutional limitations, corruption, conflicts between supply-chain inadequacies and pressure for import substitution, and an ironic confluence of overseas market success with sudden erosion of the domestic industry's financial underpinnings.

The failure of the privatization of nuclear power plants during neoliberal state. The Argentine case (1994-1999)

Milagros Rodríguez

The questions that guide the investigation are the following; why the government's wanted to privatize areas that had historically been strategic? What legal instruments were implemented and for what purpose? What were its consequences in the long term? To answer those questions, we propose the existence of two stages in the privatization process: the first, located between 1994 and 1997, characterized by the implementation of a conventional scheme similar to that used in other energy companies; the second one, launched in 1997, aimed at improving the offer through a concession system. As a conclusion, will be outline some hypotheses in order to explain the failure of this policy as well as the consequences regarding the nuclear sector.

The questions that guide the investigation are the following; why the government's wanted to privatize areas that had historically been strategic? What legal instruments were implemented and for what purpose? What were its consequences in the long term? To answer those questions, we propose the existence of two stages in the privatization process: the first, located between 1994 and 1997, characterized by the implementation of a conventional scheme similar to that used in other energy companies; the second one, launched in 1997, aimed at improving the offer through a concession system. As a conclusion, will be outline some hypotheses in order to explain the failure of this policy as well as the consequences regarding the nuclear sector.

El Proyecto Nuclear Mexicano: legislación, minería e industria del uranio, 1945-1984

Federico Lazarín Miranda, Blanca García Gutiérrez, Tadeo Hamed Liceaga Carrasco and Martha Ortega Soto

En esta ponencia nos avocaremos a reconstruir y analizar a partir de tres ejes analíticos el Proyecto Nuclear Mexicano. El primer eje: la legislación mexicana, debido a que el gobierno consideró la trascendencia política y económica de dicho proyecto, se modificaron leyes y se creó legislación tomando como base la internacional. Con estas normas se llevaría a cabo el proyecto nuclear bajo el control del Estado mexicano. El segundo eje: la minería, de acuerdo con los planteamientos de la Agencia Internacional de Energía Atómica, cada país debía de localizar reservas de materiales radiactivos y entregar a dicho organismo sus resultados. El tercer eje analítico: la industria. En 1955, inició el proceso de creación de la industria nuclear en México, con la instauración de la Comisión Nacional de Energía Nuclear (cnen), que en 1972 se transformó en Instituto Nacional de Energía Nuclear (inen). A partir de 1979, el inen se transformó...

En esta ponencia nos avocaremos a reconstruir y analizar a partir de tres ejes analíticos el Proyecto Nuclear Mexicano. El primer eje: la legislación mexicana, debido a que el gobierno consideró la trascendencia política y económica de dicho proyecto, se modificaron leyes y se creó legislación tomando como base la internacional. Con estas normas se llevaría a cabo el proyecto nuclear bajo el control del Estado mexicano. El segundo eje: la minería, de acuerdo con los planteamientos de la Agencia Internacional de Energía Atómica, cada país debía de localizar reservas de materiales radiactivos y entregar a dicho organismo sus resultados. El tercer eje analítico: la industria. En 1955, inició el proceso de creación de la industria nuclear en México, con la instauración de la Comisión Nacional de Energía Nuclear (cnen), que en 1972 se transformó en Instituto Nacional de Energía Nuclear (inen). A partir de 1979, el inen se transformó en Instituto Nacional de Investigaciones Nucleares, además, se estableció Uranio Mexicano (Uramex). Por esta razón suponemos que el desarrollo de la industria nuclear en México se llevó a cabo en un proceso de mediana duración -aproximadamente 45 años.