Since it was first announced almost a decade ago I’ve followed the “nuclear renaissance” that Obama touted and noted that it would likely end in failure due to the poor economics of these projects given our current, failed regulatory climate. The Federal government provided loans to get some of these projects off the ground. Now, with the bankruptcy of Toshiba’s Westinghouse unit, the whole process is collapsing and leaving half-built reactors and rate payers (and investors) in many jurisdictions likely to hold the bag for huge investments that aren’t going to generate power any time soon.
Toshiba Corp’s U.S. nuclear unit Westinghouse filed for Chapter 11 protection from creditors on Wednesday, just three months after huge cost overruns were flagged, as the Japanese parent seeks to limit losses that threaten its future. Bankruptcy will allow Pittsburgh-based Westinghouse, once central to Toshiba’s diversification push, to renegotiate or even break its construction contracts, though the utilities that own the projects could seek damages. It could even pave the way for a sale of all or part of the business. For Toshiba, the aim is to fence off soaring liabilities and keep the group afloat.
These partially built reactors in Georgia and South Carolina were commissioned because local laws and regulations allowed for the costs of these investments to be passed on to the rate payer (local folks paying electric bills). In other states with different sorts of regulatory models, these sorts of investments would have been uneconomic, which is the primary reason why everyone else in the USA balked at the nuclear renaissance, even when it was partially underwritten by the Federal government with loans.
There are now two problems for rate-payers in Georgia and South Carolina:
1) the companies now have to build these reactors without price guarantee from Toshiba, meaning that the (likely) giant costs of the overruns will be borne by local ratepayers or the companies themselves. If the unit is in bankruptcy and walled off from the funds of the parent corporation (which is the purpose of the bankruptcy, I am assuming), it seems unlikely that anyone else would step up and backstop such a guarantee.
2) this bankruptcy is likely to cause significant delays in construction, meaning that the long, miserable process of getting certified to start up the reactor is going to be pushed out further into the future. This means that it will be that much longer until the unit starts generating power and “earns back” the investment, and all the costs of the reactors will accrue interest and financing charges for that much longer while construction proceeds (rate payers)
Note that there is precedent for taking gigantic write downs and abandoning abandoned reactors. Here is a link to the abandoned reactors in Washington and the famous Shoreham debacle in New York.
None of this seems to be impacting the stock prices of Southern Company (SO) and Scana (SGC) this morning so maybe the market knows something that I don’t. Scana is holding a press conference to describe their next steps in the process today and I didn’t seen anything yet scheduled on Southern Company’s web site.
Cross posted at LITGM
The nuclear power industry is ending in a debacle.
Nuclear reactors cost far more to build, run, and decommission than they need to, because of irrational fear of low dose rate radiation. I don’t know whether putting that right is politically possible: probably not. But even if it were, I don’t know whether nuclear power could be genuinely economical.
One thing I’ve never understood: the notion that building nukes in areas prone to earthquakes, or tsunamis, is wise.
France seems to handle it without trouble.
The whole anti-nuclear hysteria was a KGB operation in the 50s.
“France seems to handle it without trouble.” France is, or was, run for the sole benefit of the haute bourgeoisie of Paris. Would they want new nukes now? I don’t know. I suspect that no arm of US government is remotely as efficient as the French.
” no arm of US government is remotely as efficient as the French.”
Yes. It is US private enterprise that runs circles around the French. Even Britain does. A French IT guy once said, “We have a French Silicon Valley” but it is in the Thames estuary,
At this point most of the US government is designed purely to spend money and employ people. Actually getting anything done is a distant concern.
I work for Westinghouse. Many of us saw this debacle coming, mostly from poor decisions of senior management. That is all I am going to say at this point.
“because of irrational fear of low dose rate radiation”
There is nothing irrational in not trusting the people who build these things. They have a long record of lying and not doing what they need to, because it’s expensive. I give you Fukushima.
The low dose radiation nonsense, is just that.
I thing nuclear is a great way to generate power, but it needs to be done right. China is building pebble bed reactors which does seem to be a good way to do it. The plethora of ageing Westinghouse reactors are gonna be a large problem.
No, they are not going to be a problem Penny. Properly maintained, all those Generation 2 plants are good for at least 100 years of operation based upon the samples of stainless steel taken from the reactor cores and metallurgical analysis of the reactor vessels of retired generation 1 and 2 plants. Originally designed for 40 years, based upon these analyses, the NRC did not hesitate to give 20 year extensions to any plant who applied for it, and we were told by the staff that another 20 year extension was doable. If you had even a small amount of engineering education and looked at the design of western nuclear plants, you’d see a degree of conservatism that would make William Buckley green with envy. That conservatism is a major reason the costs are so high.
If you did any research on the Fukushima accident, you’d have noticed that TEPCO cut corners in the design that would never have been allowed to happen at any US plant, such as putting the emergency diesel generators in the turbine building basement and skimping on the height of the seawall meant to protect from the maximum probable tsunami. After information was found that indicated the original maximum probable tsunami was too low, TEPCO kept delaying increasing the seawall height. The NRC would never had let that happen at a US plant either. Their stringent tenacity in making us applying low probability events in design is legendary. In fact, the group at Comanche Peak detailed with this job had a coffee cup made that pictured the starship Enterprise firing phasers at the plant containment domes. Even the local NRC inspector thought it was a great joke. I can guarantee you no operating American (or Canadian) plant was built by folks who had a long record of lying. That is an insult far beyond the pale and just confirmed my long standing low opinion of you. You do not run a plant at 95% capacity factor for 18 to 24 month stretches on lies, physics will not let you do it.
Mike K is correct. The current anti nuclear hysteria is a small echo of a KGB disinformation activity started in the 1950’s designed to get the US to unilaterally disarm that reached full bloom by the late 1970’s. All of the anti nuclear groups were either started or funded by them.
“Mike K is correct. The current anti nuclear hysteria is a small echo of a KGB disinformation activity started in the 1950’s designed to get the US to unilaterally disarm that reached full bloom by the late 1970’s. All of the anti nuclear groups were either started or funded by them.”
ROTFLMFAO
Take a look at the revealed KGB archives sometime.
PenGun, on this topic you haven’t a clue.
In Britain we have the absurd situation that radiation that’s deadly at a nuclear power station is not the least deadly in an NHS hospital. Bloody madness.
PenGun might be veteran of the KGB of the 1950s. I sometimes wonder reading his comments.
From afar, it appears that nuclear construction firms must have a very close relationship with the governing state or federal nuclear control authority and/or the power companies. They must, else why does it seem all construction runs into over-runs in cost, and delayed completion?
The ratepayers in GA are currently funding the decommissioning of Plant Vogtle, and will likely end up funding all of the cost overruns.
To my knowledge, France has a common design for all plants, such that any registered operator can work in any plant within the country, and know the plant backwards & forwards.
In USA, by contrast, each plant is ‘custom’, leading to construction problems, inspection ‘defects’ that must be checked off before placing the plant in service, etc.
It appears to the ignorant, me, that a common design, even if based in equipment available in 1997, twenty year old designs, would be a more cost effective way to build, design, and operate the plants. I read that instrumentation specified by the original designers was deemed obsolete and no longer available by the time construction proceeded to the point of ordering them. Re-design by obsolescence becomes the order of the day when ‘the newest and bestest’ is chosen instead of tried and proven equipment.
One thing not noted, seemingly, is that all the decommissioned power plants could be connected to coal, natural gas, or geothermal sources without disruption of power production for lengthy periods of time. Re-use of the turbines & generators along with the distribution plant seems to make a lot of sense to me, but, what do I know?
It may be that our current difficulty in building new nuclear reactors isn’t such a bad thing. The “sweet spot” in terms of economics is a type of reactor that is extremely wasteful, because they only use a small fraction of the energy potentially available from their fuel. They also generate large amounts of long-lived transuranic radioactive waste, much of which could be burnt and destroyed in more rational reactor designs. Fuel is now such a small fraction of the cost of producing energy with these reactors that we tend to ignore these facts. The people who build them claim that we have enough uranium to fuel them for thousands of years, that the real bulk of the waste they produce is very small, that nothing bad can ever happen from storing huge quantities of plutonium that will be around for many thousands of years in radioactive waste dumps instead of recycling it, etc. I have my doubts. Unfortunately, it is currently unprofitable to build the types of reactors that could eliminate these concerns. Under the circumstances perhaps it would be better to wait until building them makes more economic sense.
TomW,
The turbine generator sets and other power production block (called Balance of Plant or BOP) in nuclear plants and fossil fired plants are completely different. Coal/gas/oil fired plants have turbines that run at 3600 rpm and use superheated steam at 3000 to 4500 psi until the last few stages of the low pressure turbines. These turbines have 3 stages, high, intermediate, and low. The steam exiting the high pressure turbine is still over 1500 to 2000 psi and is re-routed back to the boiler to superheat it again and comes out the intermediate turbine still superheated and over 1000 psi as it goes into the low pressure turbines
Nuclear plants turbines run at 1800 rpm and (mostly) have wet steam (no superheat, about 0.25% water)at 800 to 1000 psi almost all the way through. This means that nuclear turbines are bigger and built much more robustly in order to run with so much water. By the time the steam gets through the high pressure turbine it is about 12% water. This steam is run through a moisture separator to get the water content back below 0.5% and then reheated to about 25 to 40 Deg F superheat before going into the low pressure turbines at about 200 psi. Trying to run a fossil turbine on these conditions would wreck it in a few hours. The electrical equipment can be re-used and sometimes is.