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Learning by Doing: The First Spanish Nuclear Plant

  • Joseba De la Torre and Maria del Mar Rubio-Varas
Abstract

In the nuclear sector, turnkey projects can be considered an investment in obtaining information through “learning by doing” to capture rents from the next generation of reactors. As the first U.S. turnkey export project, the first Spanish nuclear power plant served that purpose and paved the way for the subsequent growth of the nuclear sector, for both Spanish and U.S. firms. Making use of archival material, we analyze the networks created by the government, experts, and business leaders, which sought to obtain, accumulate, and learn from the scarce and conflicting information about atomic technology that was available at the time. We also discern how firms on both sides of the Atlantic acquired and perfected the specific capabilities required to build a commercial nuclear reactor.

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1 None of the three exports of U.S. reactors ordered before 1962 had commercial uses. The reactor for the nuclear plant of Taipur (India), which was also a turnkey project, was ordered in 1963 but was connected in 1969, a year after the Spanish Zorita plant was finished. “Nuclear Power Plants—Export Orders Since 1974,” box H 116, folder 524, RG 275, Records of the Export-Import Bank of the United States, National Archives and Records Administration, College Park, Md. (hereafter, EXIM Archives)

2 Thomas, Steve D., The Realities of Nuclear Power: International Economic and Regulatory Experience (Cambridge, U.K., 1988), 71; Ilbery, B. W., “Nuclear Power in Western Europe,” Tijdschrift voor economische en sociale geografie 72 (1981): 242–50.

3 De la Torre, Joseba and del Mar Rubio-Varas, María, “Nuclear Power for a Dictatorship: State and Business Involvement in the Spanish Atomic Program, 1950–85,” Journal of Contemporary History 51, no. 2 (2016): 385411.

4 Caro, Rafael, ed., Historia nuclear española (Madrid, 1995); Santos, A. Alonso, “Requisitos básicos para incrementar los activos nucleares en España,” Dyna 82 (2007): 462–70; de Pablos, Ana Romero and Ron, José Manuel Sánchez, Energía nuclear en España: De la JEN al CIEMAT (Madrid, 2001). Contemporary antinuclear texts included scattered business and financial information: Morata, Francisco Costa, Nuclearizar España (Barcelona, 1976); Fisas, Viçent, Centrales nucleares: Imperialism tecnológico y proliferación nuclear (Madrid, 1978).

5 De la Torre and Rubio-Varas, “Nuclear Power,” 409.

6 Balogh, Brian, Chain Reaction: Expert Debate and Public Participation in American Commercial Nuclear Power, 1945–1975 (New York, 1991); Hall, Tony, Nuclear Politics: The History of Nuclear Power in Britain (London, 1986); Hecht, Gabrielle, The Radiance of France: Nuclear Power and National Identity after World War II (Cambridge, Mass., 1998); Radkau, Joachim and Hahn, Lothar, Aufstieg Und Fall der Deutschen Atomwirtschaft (Berlin, 2013); Choi, Sungyeol et al. , “Fourteen Lessons Learned from the Successful Nuclear Power Program of the Republic of Korea,” Energy Policy 37, no. 2 (2009): 5494–508; Sirin, Selahattin Murat, “An Assessment of Turkey's Nuclear Policy in Light of South Korea's Nuclear Experience,” Energy Policy 38, no. 10 (2010): 6145–52; Müller, Wolfgang Dietrich, Geschichte der Kernenergie in der DDR: Kernforschung und Kerntechnik im Schatten des Sozialismus (Stuttgart, 2001); Schmid, Sonja D., Producing Power: The Pre-Chernobyls History of the Soviet Nuclear Industry (Cambridge, Mass., 2015).

7 Cowan, Robin, “Nuclear Power Reactors: A Study in Technological Lock-In,” Journal of Economic History 50, no. 3 (1990): 541–67.

8 Balogh, Chain Reaction, 158. Further, the industry failed to acknowledge that the technology's commercial viability had still not been tested. Cohn, Steve, “The Political Economy of Nuclear Power (1945–1990): The Rise and Fall of an Official Technology,” Journal of Economics Issues 24, no. 3 (1990): 781811.

9 Calvo-Gonzalez, Oscar, “American Military Interest and Economic Confidence in Spain under the Franco Dictatorship,” Journal of Economic History 67, no. 3 (2007): 740–67.

10 De la Torre and Rubio-Varas, “Nuclear Power,” 392.

11 In May 1959, Harold Davies asked the British prime minister whether Spain would be one of the nations that could receive “plutonium or fissile or other nuclear materials” from Chapel Cross, given Spain's imminent membership in the Eurochemic consortium. The prime minister refused to answer. 605 Parl. Deb. H.C. (5th ser.) (1959) col. 1045, http://hansard.millbanksystems.com/commons/1959/may/12/spain-eurochemic-company.

12 See Solow, Robert, Learning from “Learning by Doing”: Lessons for Economic Growth (Stanford, 1997).

13 Lamoreaux, Naomi R., Raff, Daniel M. G., and Temin, Peter, eds., Learning by Doing in Markets, Firms, and Countries (Chicago, 1999).

14 Burness, H. Stuart, Montgomery, W. David, and Quirk, James P., “The Turnkey Era in Nuclear Power,” Land Economics 56, no. 2 (1980): 188202.

15 Gavin Wright, “Can a Nation Learn? American Technology as a Network Phenomenon,” in Lamoreaux, Raff, and Temin, Learning by Doing, 295–326.

16 Kazizuro Mishina, “Learning by New Experiences: Revisiting the Flying Fortress Learning Curve,” in Lamoreaux, Raff, and Temin, Learning by Doing, 145–84.

17 Joskow, Paul L. and Rozanski, George A., “The Effects of Learning by Doing on Nuclear Plant Operating Reliability,” Review of Economics and Statistics 61, no. 2 (1979): 161–68. A member of the AEC signaled the steep learning curve for U.S. nuclear manufacturers in the second half of the 1960s: Larson, C. L., “El estado actual y panorama futuro de la producción de energía nuclear en los Estados Unidos,” Energía Nuclear 68 (1970): 475.

18 De la Torre and Rubio-Varas, “Nuclear Power,” 397–98.

19 The INI was founded as the holding body of public companies in 1941.

20 The use of the term “technocrat” here corresponds to Balogh's usage, referring to nuclear experts, rather than to the common use in descriptions of Spanish policymaking, for example, in Sánchez-Vázquez, Luis and Menéndez-Navarro, Alfredo, “Nuclear Energy in the Public Sphere: Anti-Nuclear Movements vs. Industrial Lobbies in Spain (1962–1979),” Minerva 53, no. 1 (2015): 6988.

21 The history of nuclear energy in Spain began in October 1948, when a group of Spanish military officers and scientists met at the Laboratory and Research Workshop of the General Staff of the Navy (LTIEMA) with the aim of establishing the body called the Junta de Investigaciones Atómicas (JIA) Atomic Research Board, which would focus on three main activities: the training of highly qualified personnel, studying the existence of uranium deposits, and developing the required techniques related to uranium exploitation (mining deposits, metallurgy, physics, etc.). In order to provide the JIA with greater technical strength, the Sociedad de Estudios y Proyectos de Aleaciones Especiales (EPALE) was created, expanding its activities in the areas of geology, mining, physics, chemistry, and metallurgy. In 1951, the body was renamed the Nuclear Energy Board (JEN) as a center for research and development of nuclear technology in Spain, https://www.csn.es/la-energia-nuclear-en-espana.

22 Rubio-Mondéjar, Juan A. and Garrués-Irurzun, Jósean, “Economic and Social Power in Spain: Corporate Networks of Banks, Utilities and Other Large Companies (1917–2009),” Business History 58, no. 6 (2016): 858–79.

23 The Spanish Atomic Forum, with state support, became part of the European Atomic Forum (Foratom) in 1961. Report for the Government President, 1961, Secretaría files, box 137, Archives of Banco de España, Instituto Español de Moneda Extranjera, Madrid (hereafter, ABE-IEME).

24 De la Torre, Joseba and García-Zúñiga, Mario, “Was It a Spanish Miracle? Development Plans and Regional Industrialization, 1950–1975,” in Industrial Policy in Europe after 1945: Wealth, Power and Economic Development in the Cold War, ed. Grabas, Christian and Nützenadel, Alexander (New York, 2017), 162–83.

25 The reactor was paid for by a grant from the U.S. government of $350,000 and a loan from EXIM of $385,000. (Decreto ley 4 de abril 1957, Gaceta de Madrid [Law of the 4th of April 1957, Published in the Government Gazette]).

26 JEN report 14 Apr. 1961, Secretaría files, box 133, ABE-IEME.

27 Adamson, Matthew, Camprubi, Lino, and Turchetti, Simone, “From the Ground Up: Uranium Surveillance and Atomic Energy in Western Europe,” in The Surveillance Imperative: Geosciences during the Cold War and Beyond, ed. Turchetti, Simone and Roberts, Peder (New York, 2014), 2344.

28 Memoria JEN, 1961, Secretaría files, box 139, ABE-IEME.

29 Ibid.

30 JEN Act 6 Feb. 1962, Secretaría files, box 133, ABE-IEME.

31 They hoped that by 1968–1970, “the kWh prices from nuclear origin” would be competitive “with those produced in thermal plants that use imported fuels.” JEN report, Oct. 1961, Secretaría files, box 133, ABE-IEME.

32 Ibid.

33 Ballestero, Alfonso, José Mª Oriol y Urquijo (Madrid, 2014).

34 Informe de la Secretaria de la JEN a petición de la Dirección General de Energía Nuclear (Report of the secretary of JEN requested by the Nuclear Energy General Directorate), 14 Apr. 1961, Secretaría files, box 133, ABE-IEME.

35 J. M. Oriol y Urquijo, who was also president of UNESA since its creation.

36 Act of the JEN, 23 Oct. 1961, Secretaría files, box 133, ABE-IEME.

37 Ibid.

38 J. M. Otero Navascués, member of the army and a physicist trained in Zurich and Berlin, is considered to be the founder of nuclear research in Spain. He presided over the JEN embryo as executive vice president (1948–1950), general manager (1951–1958), and president (1958–1974). In 1965, Otero assumed the presidency of the European Energy Society, and in 1968 he became governor of the International Atomic Energy Agency (IAEA).

39 Act of the JEN, 4 Apr. 1961, Secretaría files, box 133, ABE-IEME.

40 Identical debates occurred at the same time in organizations such as the European Atomic Energy Society. Act of the JEN, 6 July 1961, Secretaría files, box 133, ABE-IEME. Eurochemical was created in 1957 as a joint initiative by members of the European Agency for Atomic Energy to process nuclear uranium. Spain entered the shareholding Eurochemic in 1959. Oficina de Enlace del FMI-BIRF-OECD-OCDE 1964–1966, Secretaría files, boxes 435 and 133, ABE-IEME.

41 Phase one would be done in the Canoga Park (U.S.) facilities with the “full participation” of five or six Spanish engineers and would be completed with American technical assistance on the JEN premises in Madrid over a period of twenty-seven months. Otero to Gregorio López Bravo, 9 Jan. 1962, Secretaría files, box 253, ABE-IEME.

42 Jaime MacVeigh to Gregorio López Bravo, handwritten report, Oct. 1961, Secretaría files, box 133, ABE-IEME.

43 Ibid.

44 Ibid. (emphasis added).

45 MacVeigh, Jaime, Ensayo sobre un programa de energía nuclear en España (Madrid, 1957). He also condemned the Spanish uranium program, “on the very questionable assumption that natural uranium would be used in the future.” He guessed correctly: between 1970 and 1980, Spanish natural uranium production would not surpass 250 tons.

46 MacVeigh to López Bravo, Secretaría files, box 133, ABE-IEME.

47 Otero to López Bravo, 9 Jan. 1962, Secretaría files, box 253, ABE-IEME.

48 Pacific Gas & Electric Co. of California 1961 Report, Secretaría files, box 139, ABE-IEME.

49 De la Torre, Joseba and del Mar Rubio-Varas, Maria, La financiación exterior del desarrollo industrial español a través del IEME (1950-1982) (Madrid: 2015), chap. 5.

50 Manuel López Rodríguez signals that the acquired experience allowed Spain to enter into the phase of “application properly speaking” with the second generation. Rodríguez, López, “La situación española de la energía nuclear,” Energía Nuclear 139 (1982): 329.

51 “La central nuclear de Zorita producirá más de mil millones de kw-hora al año,” ABC, 6 July 1965, 50. The plans for a second reactor never materialized.

52 Between 1950 and 1970, Madrid's population multiplied by 2.3 percent, reaching four million inhabitants in the process of accelerated industrialization. In 1950, the city represented 6 percent of the Spanish population; by 1970, this figure had reached 11 percent.

53 Bartolomé, Isabel, “¿Fue el sector eléctrico un gran beneficiario de ‘la política hidraúlica’ anterior a la guerra civil? (1911–1936),” Hispania 239, (2011): 789818.

54 Project of the Unión Eléctrica Madrileña, 1962, Secretaría files, box 139, ABE-IEME.

55 The government argued that it could not attach specific conditions to an “authorization” given that the legislation to rule nuclear facilities was still under study, thus the government used an alternative formulation: “agreement in principle.” Orden de 27 de marzo 1963, BOE [Official Bulletin of the State], no. 8, 3 April 1963.

56 The amount represented 15 percent of total costs. It would “cover the unforeseen” “expenses of Nuclear Insurance” and the transfer of knowledge to other companies. Project of the Unión Eléctrica Madrileña, 1962, Secretaría files, box. 139, ABE-IEME.

57 Export-Import Bank of the U.S., “Authorizations for Nuclear Power Plants and Training Center from Inception thru March 31, 1983,” exhibit B. (1959–1983), box H128, folder 705, EXIM Archives.

58 Puig, Núria and Torres, Eugenio, Banco Urquijo: un banco con Historia (1918–2008) (Madrid, 2008).

59 The first nuclear credits authorized by EXIM were two experimental reactors, for Euratom and for an Italian plant in 1959. The following nuclear credit went to Zorita. Export-Import Bank of the U.S., “Summary Sheet: Eximbank Financing Support of Nuclear Power Exports through December 31, 1969,” box H127, folder 3747, EXIM Archives.

60 The contract stated, among other things, that “transportation costs could only opt for financing . . . for shipments made in ships or aircrafts registered in the US.” Financial Activities, Zorita NP contracts, box 1885, ABE-IEME.

61 De la Torre and Rubio-Varas, Financiación exterior, chap. 5.

62 del Mar Rubio-Varas, María and De la Torre, Joseba, “Spain—the Eximbank Billion-Dollar Client: The Role of the US Financing the Spanish Nuclear Program,” in Electric Worlds: Creations, Circulations, Tensions, Transitions (19th–21st C.), ed. Beltran, Alain et al. (Brussels, 2016), 245–70.

63 Noticiero: Transporte de tres piezas gigantes, por ferrocarril y carretera, desde el Puerto de Cartagena hasta el emplazamiento de la Central de Zorita,” Energía Nuclear 42 (1966): 359–62.

64 Betchel contract, Control de Datos, box 1885, ABE-IEME.

65 Orden de 24 de junio de 1964, BOE, no. 153, 26 June 1964.

66 The letter-contract written by the bank (Dec. 1964) indicated that taxes or obligations would be assumed by the Spanish company. In addition, the UEM should provide Chase with all relevant information on its financial status and register for insurance against nuclear accidents. Letter-contract by the bank, Dec. 1964, Secretaría files, box 133, ABE-IEME.

67 Ibid.

68 A credit “directly approved” by WH. An American pension fund was used as escrow.

69 Tecnatom, Tecnatom, 1957–2007: Medio siglo de tecnología nuclear en España (Madrid, 2007).

70 “La Central Atómica de Zorita de los Canes,” ABC, 10 May 1962, 17.

71 Letter from UEM financial manager, 4 July 1969, Control de Datos, box 1885, ABE-IEME.

72 Ibid.

73 “La Central Nuclear de Zorita producirá más de mil millones de KW-hora al año,” ABC, 6 July 1965, 50.

74 Project of Unión Eléctrica Madrileña, Secretaría files, box 139, ABE-IEME.

75 López Rodríguez, “La situación española,” 334

76 Álvaro-Moya, Adoración, “The Globalization of Knowledge-Based Services: Engineering Consulting in Spain, 1953–1975,” Business History Review 88, no. 4 (2014): 681707.

77 This in-house formula, in which companies of the same group provided services to one another, would be instituted as the norm in the nuclear sector. Egurbide, Pedro, “El ‘consulting’ en España,” Información Comercial Española 513 (1976): 133–37.

78 Torres, Eugenio, “Las grandes empresas constructoras españolas: Crecimiento e internacionalización en la segunda mitad del Siglo XX,” Información Comercial Española 849 (2009): 113–28.

79 Martínez, Francisco Pascual, “Programa Nuclear Español,” Boletín de Información de la Defensa 36 (1969): 10.

80 Nuclear fuel had to be acquired “in the most economic conditions possible” (including credit for produced plutonium) and to be “of the most advanced technical quality in the international market” without paying taxes. Project of Unión Eléctrica Madrileña, Secretaría files, box 139, ABE-IEME. The United States maintained the free-world (i.e., noncommunist) monopoly on uranium enrichment until 1974; Spain turned to the USSR for enriched uranium by that date, telegram from the U.S. Embassy in Madrid to the Secretary of State, 23 Apr. 1974, NARA Document Number 1974MADRID02523, National Archives and Records Administration, College Park, Md.

81 Project of Unión Eléctrica Madrileña, Secretaría files, box 139, ABE-IEME.

82 Ibid.

83 Fustel, Emilio, “Grado de irradiación del combustible de la central nuclear de Zorita,” Energía Nuclear 32 (1964): 4251

84 “La central nuclear de Zorita (Guadalajara) se encuentra virtualmente terminada y en período de pruebas,” ABC, 25 Apr. 1968, 57, and “18 de Julio en Zorita,” ABC 18 July 1968, front page.

85 “El ministro de Industria inaugura las obras de la central nuclear de Zorita (Guadalajara),” ABC, 7 July 1965, 60; “Franco ha inaugurado ayer la primera central nuclear española,” ABC, 13 Dec. 1968, 55

86 “Future of Nuclear Plants in Spain,” ABC, 20 July 1969.

87 “La Central Nuclear de Zorita va a ser ampliada,” ABC, 14 May 1972, 68. The plans never proceeded.

88 Álvaro-Moya, “Globalization of Knowledge-Based Services,” 702–4.

89 Joskow and Rozanski, “Effects of Learning by Doing,” 168; Cowan, “Nuclear Power Reactors,” 550.

90 Koomey, Jonathan and Hultman, Nathan E., “A Reactor-Level Analysis of Busbar Costs for US Nuclear Plants, 1970–2005,” Energy Policy 35, no. 11 (2007): 5630–42.

A preliminary version of this paper was presented at the XVII World Economic History Congress (Kyoto, Japan, August 2015). We acknowledge the useful comments and suggestions received there. We are also indebted to the referees and editors of Business History Review for the many useful suggestions, comments, and corrections made to previous versions. The remaining errors are solely ours. Funds for this research were made available by the Spanish government through Ministerio de Economía y Competitividad (MINECO) research project reference HAR2014-53825-R.

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