On the outskirts of the city, within sight of some wooden houses of the 18th century, American and Soviet scientists are pressing a unique search for cheap electric power for the 21st.

Here, in a collection of dingy, unassuming building known as The Institute for High Temperatures, the experimenters are working with intense magnetic fields and supersonic netstreams of scalding gases in an attempt to produce commercial electricity at vast savings over today's costs.

Using Jovian-sized machinery, the [WORD ILLEGIBLE] heats oxygen-enriched air to 2,000 degrees centigrade and then directs this now electrically-charged "plasma" through a hollow "energy chamber" inside a giant electromagnet. The plasma, blasting down the chamber 1,500 miles per hour, carries its electricity across the lines of force of the magnet, inducing electric current to flow from the apparatus.

After five years of preparation, the project, known by the enigmatic title of U-25B, has just successfully produced its first electricity, sending it into the Moscow power grid for prosaic consumption by comrades' reading lamps, television sets and other appliances.

The technique, an application of an arcane branch of physics known as magnetohydrodynamics or MHD, resembles the other MHD experiments under way elsewhere in the world as the advanced technological states scramble for more sources of power.

This experiment is unusual in at least two respect: it represents broad and genuine Soviet-American cooperation and it employs a bizarre American device known as a supercooled electromagnet. The magnet, cooled down near absolute zero by liquid helium pumped into an insulated vacuum jacket similar to a giant thermos bottle, generates levels of force intensely higher than ordinary electro-magnets, and thus, much greater amounts of electricity.

The magnet, weighing 40 tons, was brought here last summer in a manner that was itself a remarkable technology feat: it was flown nonstop from Chicago's O'Hare airport by a giant Air Force Lockheed C-5A jet cargo plane that twice was refueled inflight by military aerial tankers.

The cooperation between the two superpowers has taken years of research, million of dollars (and rubles) and many tense, sometimes painful bargaining sessions.Both the American and Soviet experimenters believe the payoff could be a practical design for power plants of the 1990s and beyond, making environmentally clean use of the two nations' vast coal fields.

According to William Jackson, a U.S. Department of Energy official who has been deeply involved in the MHD project for five years, "the Appollo-Soyuz joint mission was perhaps more complex, but the data we get from this program saves building a massive, expensive, duplicate facility." He estimated the cost of contructing the huge superheating apparatus $250 million.

The energy shortage familiar in America has not struck here yet. Gasoline is plentiful and cheap and the Soviet Union has just begun serious exploitation of vast natural gas and coal reserves in Siberia and the Far East.

But the Russians have been sobered by America's energy difficulties in recent years. While some Soviet sources have scoffed at a recent U.S. Central Intelligence Agency report predicting declining Russian oilfield production by the mid-1980s, there is clear awareness that fossil fuel sources - however vast - cannot be thought of as endless, especially for a country whose electric power needs rise each year.

"This test plant suggests the possibility of saving 25 per cent in fuel, which indicates the benefits," said Alexander Sheindlin, the Academy of Science member who runs the high temperature institute, during a recent interview. "Under general conditions of fuel scarcity, a method that enables drastic fuel saving is of prime important - both sides need it."

More than 3,000 persons work and study at the institute including about 7000 scientists, 400 designers and hundreds of engineers and technicians. The American contingent varies from one or two up to several dozen when tests are to be run or new agreement negotiated. They come from the matrix of government and private institutions that have stood for decades at the center of high technology research in the United States: Argonne Naitonal Laboratory, Massachusetts Institute of Technology, National Bureau of Standards, the new incorporates parts of the disbanded Atomic Energy, which incorporates parts of the disbanded Atomic Energy Commision.

The Soviets for years have concentrated on perfecting MHD as a commercial power generating source. The Americans focused on research. The High Temperature Institute already produces a modest amount of energy regularly from a more conventional MHD installation.

"We're ahead of the Americans," Sheindlin said.

"It shows what they can do when they concentrate their resources," said an American scientist. "Everything is fabricated right in their own shops. They have a high priority clearly and can get things done when they have to."

But it may be the special American "superconducting" magnet that holds the key to largescale future use of the MHD concept, one Soviet scientists said, because it promises to bring the cost of electric generation down to present commercial levels despite the pricetage on exotic new equipment.

The 40-ton superconducting magnet, devised and built by Argonne, can generate about five times the force field of a 2,000-ton conventional magnet because electricity can pass through its supercold coils without resistance. This means it takes virtually no electricity at all to bring the mgnet to its superconducting levels, making great energy savings even as it generates elevated amounts of power because of its more powerful force field.

A tour of the facility discloses an odd amalgam of American and Soviet cooperation. In the "penthouse" control room high above the generating bays where the MHD apparatus is installed, two Hewlett-Packard computers stand across a room from ecch other. One monitors the U.S. magnet, the other the Soviet-built energy channel, combustion chamber and related exhaust equipment. The two computers are not interconnected and thus cannot automatically share information.

"We haven't got far yet," says an American. The interconnection question is something that must be negotiated.

But the computer people talk to each other, share humor and seem relatively relaxed in each other's presence.

Down below, the U-25B occupies its own large platform in the immense generating room. The air is filled with an eerie, piercing whine - hot air coursing through the energy channel at 900 degress centigrade, reading it for the searing heat of a full plasma test.

Connected in the middle of a jungle of Soviet-built pipes, tubes, cables, gas connection, shock absorbers and other paraphernalia is the American magnet - blue and white with a large sign procliaming it a "U.S.-U.S.S.R. Cooperative Program in MHD Power Generation."

To Jackson and many of the other Americans, the fact that the magnet is here at all and apart of a major experimental project that has the backing of both countries is something to be much of.Major questions still remain to be answered regarding the reliability of the superconducting magnet, the durability of the energy channel, the safety and performance of interconnected equipment. The answers learned over the next few years may go long way to proving whether MHD is a plausible new way to generate power.