10.101. The exact accounting of fuel costs is complex, but it is helpful to consider each batch of fuel in the reactor core as representing the end product of several manufacturing operations. The fuel, therefore, has a certain value determined by the cost of the materials and the operations. This fuel “investment” would be reduced should the spent fuel have any salvage value, e. g., for its plutonium content, after allowing for the cost of the operations necessary to recover useful materials and the charges for waste management (§11.44 et seq.).

10.102. The fuel within the reactor can be considered as an investment; hence, it is necessary to apply carrying charges to its value while it is in so-called commercial use, i. e., while it is used to generate electricity which produces revenue to cover all the plant costs. These carrying charges are an added contribution to the fuel costs. Carrying charges are also applicable to the time spent on the various operations performed on the fuel prior to its use in the reactor.

10.103. Rather than express fuel costs on an annual basis, as is done for fixed costs, it is more meaningful to apportion the cost of each fuel batch among the kilowatt-hours of electricity generated while the batch is in use. Major contributions to the cost of a batch are the cost of the amount of uranium to be fed to the enrichment plant, the cost of separative work (§10.11), fuel fabrication, and waste management. Changes in each of these contributions, such as a shift in the market price for uranium ore, would have a corresponding effect on the batch cost. Similarly, changes in the fixed charge rate would affect carrying charges for the fuel in and out of the reactor. However, nonreactor carrying charges for each batch are nor­mally included as part of the cost of the operations involved. If desired, the fuel batch cost may be expressed on an annual basis by determining the batches used per year.

10.104. Since each reload batch represents a certain investment, it is desirable to obtain as much energy from the assemblies in a given batch as possible by “suitable” in-core fuel management. However, if the fresh fuel enrichment is increased to extend the burnup, power peaking and vessel neutron exposure design constraints require consideration. There­fore, both economic and engineering parameters are important in devel­oping a suitable strategy. It is true that capital costs tend to be larger than fuel costs. Hence, generating costs on a unit energy basis are not very sensitive to fuel cost savings. On the other hand, on an annual generating cost basis, capital costs, by their nature, are fixed, whereas fuel costs are not. Since fuel costs may amount to on the order of $80 million per year per typical large generating unit, there is a significant dollar incentive for optimum fuel management.