NATIONAL INTELLIGENCE BULLETIN

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 02988172
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 4
• Document Creation Date: March 9, 2023
• Document Release Date: September 18, 2020
• Case Number: F-2017-01987
• Publication Date: June 4, 1977

Approved for Release: 2020/09/11 CO2988172
The
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Published by the Director of Central Intelligence for Named Principals Only
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SATURDAY JUNE 4, 1977
VOLUME 4, NUMBER 129 TCS 629/77
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TCS 629/77 THE NATIONAL INTELLIGENCE DAILY
NR Record
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Approved for Release: 2020/09/11 CO2988172
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THE NATIONAL INTELLIGENCE DAILY TCS 629/77
SATURDAY JUNE 4, 1977 3
NR Rec
Brazil: Economics of the Nuclear Alternative
Brazil is laying the foundation for a
nuclear industry to meet its electric
power needs when hydroelectric sources
are being fully used toward the turn of
the century. Brazil hopes to achieve
nuclear self-sufficiency by establishing
a complete nuclear fuel cyde. The large
investments needed may worsen
Brazil's balance-of-payments situation
over the next decade or so, but in the
long run, establishment of a nuclear in-
dustry would bring substantial savings
of foreign exchange.
Imported energy accounts for nearly 30
percent of Brazil's total import bill and is
the largest single component of its huge
current-account deficits in recent years.
Imported energy, almost entirely
petroleum, met about 47 percent of total
energy requirements in 1976, up from 43
percent in 1970.
Hydroelectric power, the major
domestic energy source, meets one third
of Brazil's energy needs; most of the
remainder is met by oil, more than 80 per-
cent of which is imported.
Requirements
Demand for electricity will continue to
grow rapidly. Brazil could require as
much as 180 million kilowatts of electric
power capacity by the turn of the century,
up from 21.8 million kilowatts at the end
of 1976. Hydroelectric capacity is ex-
pected to reach only 110 million kilowatts
by the year 2000, as potential near the
main consumption centers approaches full
development.
Only about one third of potential
hydroelectric power is in south-central
Brazil where nearly three fourths of all
electricity consumption takes place.
About two fifths of Brazil's power poten-
tial is in the Amazon region, too remote
for economic transmission to major con-
sumption centers.
Brazil plans to have only 15 million
kilowatts of conventional thermal capaci-
ty by the turn of the century unless large
petroleum reserves are found. The coun-
try's large coal reserves have been
neglected because of their low heat and
high sulfur and ash content.
The government has increased oil ex-
ploration, spending $400 million on
domestic exploration last year, compared
with only $140 million in 1973. Brazil has
broken a long-standing policy by bringing
foreign oil companies back into domestic
oil exploration.
The Nuclear Option
Policy makers are turning to nuclear
energy against the contingency that oil
discoveries will fall far short of re-
quirements.
The nuclear agreement signed in 1975
with West Germany is designed to meet
Brazil's requirements through 1990, the
first stage of the current nuclear develop-
ment program. Under the accord, Brazil
will buy four 1,300 megawatt reactors
with an option on four more. Brazil will
also receive a pilot uranium enrichment
plant that can be expanded to commercial
scale, a fuel fabrication plant, and a fuel
reprocessing plant. If the agreement is ful-
ly carried out, Brazil will have 10,000
megawatts of nuclear capacity by 1990,
enough to meet 5 percent of the
economy's energy needs.
Reported cost estimates for the West
German agreement range from $4 billion
to $10 billion. Assuming that Brazil ac-
quires the full package�eight reactors
and a complete fuel cycle large enough to
support them�we believe the total cost
will approach $13 billion.
Brazil's known uranium resources can-
not support its nuclear development
plans. Official reserves are estimated at
about 26,000 tons of U308, little more
than the amount needed to provide the
first core and 10 annual reloads for the 8
reactors. Undiscovered uranium may ex-
ist in significant amounts, however, and
exploration now under way has turned up
evidence of uranium deposits at a number
of sites.
Balance of Payments
During its early years, the nuclear
energy program could add slightly more
to Brazil's foreign-exchange expenditures
than would thermal power. Over the
longer term, however, a nuclear program
should greatly ease energy import expen-
ditures.
Including capital costs for the fuel cy-
cle, for example, total foreign-exchange
expenditures required for the first 1,300
megawatt reactor�scheduled for comple-
tion in 1983�would be approximately
$1.6 billion, almost all of which would be
spent during the first five years of its ex-
pected 30-year life. Unless large uranium
reserves are found, an expanding nuclear
power industry would require growing
fuel imports. Barring a radical change in
uranium prices compared with those of
other fuels, however, uranium import
costs would be relatively small.
If an equivalent conventional power
plant fired with imported oil were built in-
stead of a nuclear reactor, foreign-ex-
change costs over the 30-year period
probably would exceed $4.5 billion.
Although conventional plants cost less
than nuclear plants, and Brazilian in-
dustry could supply more than 90 percent
of an oil-fired plant, fuel imports would
cost about $150 million annually. These
costs, moreover, probably would continue
indefinitely.
Foreign-exchange savings per unit will
increase as additional reactors are built
and as Brazilian industry expands its
ability to supply reactor components. By
the late 1980s or early 1990s, Brazil
probably will be able to manufacture 80 to
90 percent of the components for its new
reactors.
Imported enriched uranium fuel for a
1,300 megawatt reactor operating 70 per-
cent of capacity would cost about $40
million annually. Domestic enrichment
would cut this cost in half, and recycling
the uranium and plutonium contained in
the spent fuel could reduce it to as little as
$14 million per year�about one tenth the
cost of the oil imports needed to generate
an equal amount of power.
Despite large foreign-exchange savings
per reactor, Brazil's nuclear program may
have little beneficial impact on the
balance of payments until after the year
2000, when the growth of hydroelectric
capacity levels off. If nuclear power were
not available to replace hydroelectricity,
however, the cost of energy imports by the
year 2010 would be nearly twice the cost
of fuel imports with a self-sufficient
nuclear industry�and perhaps con-
siderably more.
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