COMPETITIVE POSSIBILITIES FOR NUCLEAR MERCHANT SHIPS A PARAMETER STUDY

Despite a considerable lack of experience regarding construction costs and operating costs of reactor vessels, at least the magnitude of the competitive position of the price of a nuclear ship owner plant can be determined through a parameter study based upon certain assumptions of thus far unknown cost factors. The study shows that with a size of the main power plant of over 50,000 WHP and high speeds, a competitive position can be achieved. This applies especially to large vessels and perhaps specifically to "container-ships”.

The question concerning the profitability of the nuclear reactor as the ship power plant arises time and again. Except for qualitative data regarding economic possibilities of a nuclear steam generator for merchant ships, no satisfactory answers have been found to this date. With the limited experience material regarding reactor vessels which do not exclusively serve military purposes, no precise answer can be given at the present time. Uncertainties in pre-evaluation of the competitive position of the reactor vessel can, however, be limited, when certain assumptions for heretofore unknown cost components (such as plant costs, repair costs, port charges, personnel costs) are established and subjected to a parameter study. It is found that even with a generous variation of the parameters, the competitive position of the reactor vessel is demarcated within defined limits.

Figure results of a parameter study can, of course, be evaluated only within the frame of the validity of the determined assumptions, However, they make it possible to recognize the weight of influence of the main parameters on the competitive position of the reactor vessel and to facilitate the answers to the following questions:

Is there a substantiated prospect of profitability of reactor vessels at prices, presumed achievable as of today, of a nuclear steam generator plant in the region of conventional vessel sizes and ship speeds?

Do the present cost development tendencies of the ship building costs, port costs, and personnel costs as well as the price of oil, contribute to an improvement of the competitive position of the reactor vessel in the near future? Could there be an essential advantage for the reactor vessel resulting from the curtailment of lay-days due to omission of intermediate refueling?

In what way does an increased load capacity of the reactor vessel, due to omission of the fuel tank, affect its profitability? In what way do depreciation periods and interest rates influence the competitive position of the reactor vessel?

What influence do reactor fuel costs and the reactor weight have on the profitability of the reactor vessel?

And finally, what may the reactor, as a function of its power output, cost in order to be in a competitive position with conventional ship power of the same output?

FREIGHT COSTS AS BASIS OF A PROFITABILITY COMPARISON

The freight costs without the profit to the shipowner are utilized as basis for this study for the evaluation of the profitability of a merchant ship with nuclear power. These freight costs cover differences regarding the conventional vessel in the individual cost components in the correct size ratio to the sum of the individual costs, from which the freight costs result. They represent the analogue for the electric current generation costs of a power plant (even though the latter can be calculated with greater accuracy) and contain all costs which incur to the shipowner upon operation and maintenance of a merchant ship.

The multitude of the parameters which influence the freight costs of a merchant ship, make an extensive parameter study possible with the aid of an electronic computer with justifiable expenditures of input data only when the number of parameters is limited to the independent parameters. This requires that all cost components of the freighter can be calculated as functions of these independent parameters.

Data taken from the shipping company experience and the shipyard experience of conventional ships are utilized as basis for the setting up of this

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cost function, which are taken from Literature (1-12). The cost functions are mathematical approximations of these data by means of simple polynomials and corresponding adaptation constants. It is assumed that unknown cost components of the reactor vessel (as for example repair costs, port costs, personnel costs, and operating funds) qualitatively show the same function of the independent parameters as is the case with conventional ships. Therefore, it shall suffice to attach to the cost functions, comparison factors which represent the cost difference as compared to the conventional ship, while the adaptation constants remain unchanged.

The functions allow, for example, as a function of the independent parameters, "ship size" and "ship speed" to calculate the power output, which follows the Propeller Law according to Equation (1). The price of the ship is arrived at in much the same manner, whereby in first approximation, the ship size (capacity) determines the price of the body of the ship and the power output determines the price of the conventional turbine plant including steam generator part, in accordance with Equation (2). Additional costs of the reactor vessel hull due to collision protection, safety doors, and emergency power plant are taken into consideration by the comparison factor for the conventional ship, whereby it is assumed, that the present very high expenditure for additional safety measures can be decreased to a bearable amount in the near future.

Calculated prices of European shipyards are utilized as basis for the price of the ship. Reactor costs are not included in the price of the ship. The ship prices result from the comparison calculation between the conventional ship and the reactor vessel and appear implicated only in the insurance costs and costs which are set up proportional to the ship prices, as for example the collision protection.

For reasons of simplification it is assumed that the ship prices of known shipyards can constantly be extrapolated exceeding 40,000 WHP. Necessary conversion of the hull of the ship, such as the transition to the two-screw-ship, have not been taken into consideration here.

The costs of the turbine plant of the reactor vessel shall not differ from the cost of a conventional turbine plant, i.e., the nuclear steam generator shall be in the position to generate superheated steam, which is not yet the case in the reference plants of the study.

Prices and weights of the nuclear steam generator plant, as far as they are used for a comparison of the freight costs of conventional ships and reactor vessels, are utilized according to Figures 1 and 2. The costs of the Straight Line I are hereby related to plants of the water pressure type of the present state of development, when they are built as second plants.1

The course of Curve II is an estimate, taken from the Literature, for future plants, when these will be built in large numbers and will be simplified due to moderated safety requirements. However, it must be pointed out that the plant costs assumed in Curve Course II represent a development goal for the year 1970 and can be achieved only when considerable research work is performed for the development of nuclear steam generator plants. It must not be overlooked that the development and construction of ship reactor plants is still in its early stages, while conventional ship power plants have been built for decades and are constantly being improved.

The costs of the ship equipment (instruments, work tools for deck and machinery) are set up as a function of the ship size and ship speed in accordance with [2], whereby the equipment costs of the reactor vessel are assumed higher than those of the conventional ship by 10%, due to instruments of the radiation control outside the reactor room and the equipment for additional crew members of the reactor vessel.

The personnel costs of conventional vessels are calculated as a function of the ship size in accordance with [2] and [4]. Personnel costs higher by 10% are

1 Prices and weight of the Curve Course I of Figure 1 and Figure 2 are achieved for the Siemens-Water-Pressure-Ship-Reactor SSR4.

2 Prices and weight of the Curve Course II of Figure 1 and Figure 2 lie within the magnitude of estimations for the American "Consolidated Nuclear Steam Generator" (CNSG) (12).

assumed for the reactor vessel, under the assumption that two additional crew members with special training are necessary.

The repair costs including the costs for maintenance work are taken from [2] and shall also be higher by 10% for the reactor vessel since detailed data or experience values are not available at the present time. With this assumption we should then be on the safe side; it is hoped that during the future operation of reactor vessels it will be found that perhaps even lower repair costs will occur than is the case with conventional boiler plants.

The insurance costs are assumed in accordance with [2] at 1.8% of the price of the ship, whereby the additional costs of the reactor vessel-they are the additional costs of the hull of the ship and the costs of the nuclear steam generator plant minus the costs of the conventional boiler-are fully charged. Since there is no insurance market for reactor vessels as yet, this value cannot be approximated. In general, however, it should be pointed out that a reactor vessel should not be charged with a higher insurance percentage than a conventional ship, because (1) the reactor vessel has altogether a higher value through which the risk is not proportionally increased, and (2) because the reactor ship is equipped with special safety equipment. The additional costs of the hull of the ship for collision protection, safety doors, and emergency power plant are set up in reference to [1] with 3% of the ship body costs. This value might be a little low for small ships and probably relatively high for large ships.

An additional liability insurance will have to be obtained for the reactor vessel, the cover sum of which depends on the reactor output. When the coverage provision ordinance for stationary reactors is utilized analogously, a rule coverage sum of DM 100,000.00 per Mth results, which must be multiplied by the so-called "population factor"-which, however, is not directly applicable for ships. The highest population factor in accordance with the coverage provision ordinance is the factor 2.

The conventional fuel costs are determined as a function of the price of the oil, whereby drive output, specific oil consumption, machine output factor, travel distance, and lay-days are precisely taken into consideration. Initial value of the parameter study is an oil price of DM 60.00/t and a specific mean oil consumption (Bunker-C-Oil) of 250 g/WHP, which contains an additional consumption of 12% for sick bay trips, waiting and halting periods, loading and unloading periods. Allowance will be made for a possible drop of the specific oil consumption below 225 g/WHPh at full load, by not utilizing lower limit values for the reactor fuel costs described below. Motor ships have an essentially lower oil consumption than turbine ships. Their output, however, is limited (30,000–35,000 WHP). For outputs, at which the reactor power becomes interesting, turbines hold the upper hand. Therefore, we did not include motor ships in the profitability comparison.

The manufacturing costs of fuel elements, payment of interest on mean fuel inventory, depreciation of the fuel through burn-up (fission material consumption), preparation costs, plutonium reimbursement as well as reserve storage and shipping costs are included in the fuel costs calculation of the reactor vessel. Based upon the presently achievable specific fuel output and burnups, we believe we are in the position to state a value of the amount of 1 hp/WHPh as being realistic, which is achievable for present day water-cooled power reactors.

For port and channel fees, experience values in accordance with Literature data [4], [11] are used, which can vary considerably from route to route. Port and channel fees of the reactor vessel are not higher than those of the conventional ship.

Other operating material costs, which incur for lubrication materials, chemicals for the water purification, filter, etc., are assessed by data given in [4]. The operating material costs of the reactor ship are twice as high as those of the conventional ships.

All costs are converted into calendar days. Some cost functions have a cost variation factor (literally translated) through which cost development tendencies are to be taken into consideration and make a preliminary calculation of the competitive position of the reactor vessel possible when the cost development is known. Cost data for the year 1961 are brought up to date in this manner.

NOMENCLATURE AND FUNCTIONS

Nomenclature of the independent parameters of a freight cost calculation: F-Utilization factor of the loading advantage, which exists more or less as a real advantage for the reactor vessel due to omission of the bunker oil weight depending on the position of the freeboard zones;

G-Loading factor, for bulk goods freighter=1

for piece goods freighters=0.75, for example;

H-Number of lay-days per round trip (port days, dock days, waiting periods);

i-Annual interest rate and tax rate in percent;

L-Length of the travel distance in nautical miles (return trip);

LF-Machine output factor at sea;

P-Heavy oil price in DM/t, alternative reactor fuel costs in DM/WHPh;

T-Depreciation period in years;

AT-Time period in years;

U-Ship speed in knots;

V-Loading advantage in tons;

W-Difference factor, W=0 conventional ship

W=1 reactor ship

Z-Load capacity in tdw (tons dead weight) of the conventional ship. Nomenclature of the intermediate sizes, which are necessary for the freight cost calculation:

No Power output in WHP;

Ps-Construction price of the ship (ship body plus conventional turbine plant in DM;

PR-Price of the conventional oil-fired boilers with after-heating surfaces in DM;

PR-Price of the entire nuclear steam generator plant (for examples of the freight cost comparison).

Quantities converted into calendar days:

Ky Insurance costs in DM/day;
KA-Equipment costs in DM/day;

Kp-Crew (personnel) costs in DM/day;

Kw-Repair (maintenance) costs in DM/day;

KBR-Fuel costs in DM/day;

Kвм-Other operating material costs in DM/day;

Ka-Port and channel fees in DM/day.

The functions for the calculation of the intermediate quantities are, as mentioned at the beginning, an approximation of data from the shipping company experience and shipyard experience [1-12]. They read:

body of the ship + turbine plant [2,6,7]

PR=a3(b3 No+c) (Figure 1)

PK 84 k4 No°.5 (Figure 1)

KA as (bs. U+b2·Z+cs) ds[2]

Kp=a6 (be Z+co).de[2]

Kwa(br.No+c7)-d7[2]

Ky ag(bg.Z+cs) [Ps+ (Ps-PK).W]/365+ag·k,.No[2], [4]

=conventional part + nuclear part

(1)

(2)

biok oil consumption (t/WHPh) for conventional ship
bioR=1 for reactor ship

(9)

R=

L 24.U

+H

(13)

=

In the equations (1)-(12) a, are cost-glide-factors of the form a, 1+a,AT with a, cost charge per year. d, are ratio quantities which express the price increase of the cost components y in comparison to the conventional ship. ß, b, c, K are adaptation factors, which can be taken from Table 1.

With the intermediate quantities, the freight costs as well as the competitive price of the nuclear steam generator plant, with which freight cost equality between the conventional ship and the reactor vessel can be achieved, are expressed with the following equations: i/365

[Ps+(Pr−Pk·W]1 — (1+i) — T

"freight costs" (DM/t)=

(Z+V.F).G/R

+KV+KA+KP+Kw+KBR+KBM+KH
(Z+V.F).G/R

"Competitive price of the nuclear steam generator plant"
(DM)=[F。(Z+V.F)G/R−Kv-KA-K,-Kw-KBR-KBM-KÁ]

- (1+i)−T i/365

(14)

Fo are the freight costs of the conventional ship; the K-values in Equation (15) refer to the reactor ship.

PARAMETER STUDY

Proceeding on the basic assumptions of the above paragraph, a parameter study is performed for ships of the size of 15,000, 36,000, 48,000, 60,000, 80,000, and 100,000 tdw, and for velocities of 14, 16, 18, 21, and 23 nautical miles per hour, whereby bulk goods freighters or tankers, which run as turbine ships, are being studied. For simplification, the capital costs are used from the day of the beginning of operation of the ship. For an interest rate factor of 6.75%, depreciation periods of 14, 20, and 25 years are used as basis. The remaining values of the reactor ship and the conventional ship shall be assumed equivalent and negligible. The conventional steam generator plant will probably have a shorter lifetime than the reactor due to boiler gas corrosion, but then it is not radioactive, while costs incur for the elimination of the radioactive reactor parts which reduce the scrap value of the reactor vessel.

In comparing the profitability, a certain loading advantage is attributed to the reactor vessel which results from the omission of the bunker oil which the conventional ship would have to carry on a pregiven voyage at pregiven freeboard regulations. The weight of the conventional boiler and the nuclear steam generator are taken into consideration in the calculation of the loading advantage according to Figure 2. In the parameter study we proceed on a utilization of this loading advantage in the amount of 50%. This is equivalent to carrying fuel in the amount which the conventional ship needs for half the round trip. This amount is replaced in the reactor vessel through the same weight of actual load.

The profitability comparison is performed for ships of the same water displacement and the same speed. Due to the fact that data regarding the amount of the profit shared on the freight costs by the shipowner are not available, utilizing the equivalent annual shipping volume as a basis is at the present time the only possible basis for comparison. Since the freight cost minimum of the conventional and the reactor ship lie very close together and below presently interesting ship speeds, as the calculations showed, no essential error is made in this mode of consideration.

Our considerations were purposely geared to the competitive position and not to the profitability of the reactor vessel. Ships which operate far above the optimal speed can no longer be considered profitable. However, to what extent higher freight net costs for fast ships can be absorbed through a larger shipyard proceeds based upon higher transport volumes, could not be evaluated due a lack of data regarding the share of profit on the freight costs. It is also known that fast ships attract good freight.