While I am a big supporter of nuclear power, the insane regulatory framework in the US and our broken financial incentive mechanisms for utilities has doomed the promised nuclear “renaissance”. The only places where nuclear plants in the US are even being attempted have “old school” regulation with “cost of service” opportunities that basically mean that the utility will recover whatever they put into service and earn a return on that investment. These include 1) South Carolina, where SCANA (a relatively small utility) is building two 1,100 MW reactors and 2) Georgia, where Southern Company (and a variety of municipal entities) are building two 1,154 MW reactors. The oddest entity, the Tennessee Valley Authority (TVA), is a Federal entity, which allows it to move forward with completion of a unit that is 1,180MW.
No utility in a state with deregulation (partial regulation) can contemplate a nuclear plant, because of the high costs which must be recovered from an open market. The price of electricity is very volatile, driven by demand, weather, and the price of alternative fuels. The low price of natural gas today, not foreseen when these plants were considered back in the late 2000’s, would make high enough energy prices to recapture these costs (and earn a profit) on an open market impossible. The price of natural gas could rise and other factors (such as the impending retirement of much of the US’ coal fleet due to EPA strangulation) could also make them economically viable; but these factors are not present today.
Beyond the enormous (and likely fatal) financial risk that these mega-projects have, (SCANA’s market capitalization is $6B, and the 2 reactors are “planned” to cost $9B), these projects have historically been plagued with immense delays and catastrophic failures such as abandonment. When these projects started, optimistic dates and costs were trotted out, ignoring both the sad history of mega-overruns and the fact that today’s regulatory and legal climate are even MORE unfavorable than those in the 1970’s when the earlier failures occurred. I knew that delays were inevitable, and unfortunately, enough time has passed that the companies are starting to admit their failures (to date).
This article describes how Southern Company has begun to waver from their cost and schedule estimates.
Southern Co. has had a simple message for the past few years: The effort to build the country’s first new nuclear power plant in a generation was on time and on budget. Now, that message is changing. The $14 billion project to build two reactors at Plant Vogtle is trending hundreds of millions of dollars over budget and trailing more than a year behind schedule, according to a report from a state-hired construction watchdog.
TVA recently has begun acknowledging their delays and cost overruns, too, per this article.
Unit 2 at the Watts Bar Nuclear Plant in Spring City, Tenn., is up to $2 billion over budget and three years behind, according to the Tennessee Valley Authority. TVA blames its own management oversight and planning. Instead of basing a plan and estimates on the twin reactor already running at Watts Bar, the utility used as a model the only other reactor work that had ever been deemed on time, close to budget and a success: Unit 1 at Browns Ferry. The trouble was that Browns Ferry and Watts Bar are completely different types of reactors with different work spaces and work needs.
Not only is the TVA admitting the cost and schedule delays, their official in charge of the plant just left the organization.
SCANA too has been acknowledging delays and cost overruns. Per the first article cited above:
In Jenkinsville, S.C., the Scana Corp.’s $9 billion expansion of its Virgil Summer nuclear power station began with work on two new reactors in late March. The Summer reactors already are reported to be at least $300 million over budget because components did not meet shifting safety standards.
Here is a SCANA presentation to EEI from their investor relations web site. Go to page 8, which shows the rising costs and tail of their planned nuclear investment. Frame this page and come back to it 3-4 years out and if it looks anything like this it will be a huge win for SCANA and the US nuclear power industry. Sadly enough, the odds are likelier that the Cubs will win the world series than that the “real” spend will look close to that graph. Note that SCANA is a 55% owner of this plant so it only represents their portion of the spend (other utilities and municipalities foot the rest).
Thus in conclusion:
1. The entities that are embarking on the nuclear construction adventure are either virtually immune to market forces (TVA) or are under “old school” regulation that lets them recover the cost in customer rates regardless of whether or not it makes economic sense
2. While these entities went into the projects with optimism despite the dismal track record of delays and outright abandonment common to nuclear construction, their exhortations and optimism are starting to fade early on in the projects
3. The US has far more to do in the form of favorable “one permit” regulation and removal of potential lawsuits and other barriers, as well as additional financial incentives, before the US nuclear industry really has a chance
Cross posted at LITGM
The thought of building a nuclear power plant in CA is laughable – if the could have the patience to get through the bureaucratic hurdles then you get the environmentalists forever clogging the courts.
Add to that the inane demands of the legislature mandating a percentage of the power come from new “green” sources and the cost of power is going to go only one way –
I keep expecting brownouts every summer in California but the Obama recession seems to be keeping demnad just low enough to avoid them. Re-elected Senator McCaskill pointed out that this is a benefit of the rotten economy. Hurrah !
the national socialist democratic workers party want to creat shortages of electricty and drive up prices so that they can force some third world solution on us.they are all traitors to the constitution who promote policies that make it easy for an insane person to shoot up gun free schools or destroy energy production.they don’t care if our children die because of their socialist policies or if we freeze to death in our homes as long as they control every thing in your life.
In 2008, I really thought we would see the construction of new nuclear electric generation capacity. Then came the natural gas boom, and the Great Recession. I am sad that very few of these projects will ever be completed.
Looking ahead, I think it will be another generation before we see much new nuclear construction. I believe that by then we will be able to build nuclear powered generators in factories, ship them to a site, and drop them into place, much as can now be done with gas turbines.
Well, I can dream, its all I have left.
The real bottom line is one I have repeated endlessly:
These problems will be solved when the last lawyer is strangled with the intestines of the last environmentalist.
I spent five years preparing the first license application under the new rules (10CFR52) for a new pair of reactors in Texas. I’ve seen it up close and personal.
Part 52 was supposed to be a clean and straight shot to contruction and operation.
Seems no one in the NRC got that memo. The reviewers of the application seem to get stuck in a do-loop of questions and answers (RFIs – requests for further information) – especially the consultant reviewers who get paid by the hour.
Sometimes, equipment assumed in the original certification is no longer manufactured. For example certain fiber optic gear for the plant data network (FDDI) is obsolete and unavailable. Once you start to redesign, the whole process goes back to square one.
Sometimes, the regulations have changed from the original certification and now you’re stuck in regulatory limbo – do you or don’t you need a steam line isolation and reactor trip on high steam line radiation? Operating plants got to take out the trip but can new plants?
In another case, the spent fuel racks, which haven’t even been procured, undergo all sorts of rigorous analysis, when they haven’t been designed yet. (Racks are a commodity item and really not a big deal safety-wise.)
The governments of America are divided on whether or not to build more nukes or even to advance economically. A few people can say “No” even if most people say “Yes.”
The driver for more nukes is abundant, clean, reliable electricity at a stable cost. There are people who stand to gain from less of any of those elements of nuclear’s advantages.
In my younger days, I helped build the Diablo Canyon Power Plant in Avila Beach, California. Ground was broken in 1986, Unit 1 was pretty much completed in 1973, and then the environmentalist whacos and their phalanx of lawyers delayed the initial operation for 12 more years until 1985. This is how the plant came to be known as the “world’s longest erection”.
1986=1968 Dyslexia is a terrible thing.
re Diablo Canyon:
“This is how the plant came to be known as the ‘world’s longest erection”.
Why does it like a well-endowed and well-filled woman’s brasserie?
I started there in 1984, right after Unit 1 went critical.
You could tell it was winter because everyone started to wear long sleeve shirts. Absolutely stunning white-water views, especially from the plant manager’s office.
The purpose of nuclear plant regulation is to prevent new plants from being built, to drive existing plants out of business and to do this while seeming to be fair and unbiased. Judging from the comments, it seems all three goals are being met.
A plant may get built but it serves as a fair and unbiased warning to not build another.
If the same rule making philosophy governed the hiring and evaluation of government employees we would never have big government.