Five years ago, a study from the Union of Concerned Scientists correctly predicted a nuclear expansion at Plant Vogtle would be delayed and over budget. While Georgia Power puts together its estimate of final costs and schedule for the project, and whether to proceed on it, it is an open question whether the long-term benefits of building new nuclear reactors in the U.S. will be worth the growing cost.
The challenge to building new nuclear reactors in the U.S. has to do with new technology, the exacting construction and the relative affordability of other energy sources, experts said. While there could be long-term advantages to new nuclear energy, including its relative efficiency and lack of greenhouse gas emissions, the short-term costs are considerable and could sink the projects before they are completed, experts said.
The recently suspended nuclear expansion at the V.C. Summer Nuclear Station in South Carolina over its burgeoning costs has raised questions about the future of Vogtle’s two new nuclear reactors and other projects. The contractor on the Summer and Vogtle projects was Westinghouse, which filed for bankruptcy in March, and both projects were trying to implement a new type of nuclear reactor called the AP1000.
The technology is an “evolutionary design” that incorporates lessons learned from the older reactors, but, because it is new, there were likely to be hurdles implementing it, said Dr. Travis Knight, director of the nuclear engineering program at the College of Engineering and Computing at the University of South Carolina.
“The first of anything costs more,” he said, and that only adds to the challenge of bringing online new nuclear reactors.
“There is a very, very, very rigorous quality assurance requirement on all components,” Knight said.
Once Westinghouse was out and Santee Cooper, a partner in V.C. Summer, had a chance to analyze the cost of actually completing the project, it found the cost more than doubled its original $5.1 billion budget to $11.4 billion and the project would be delayed four more years than originally planned, to 2024. Santee Cooper’s board voted to suspend the project. Georgia Power, which has a 45.7 percent stake in Plant Vogtle, is also looking at increased costs and a delay in bringing the reactors on line, although to a smaller extent in its preliminary analysis.
Capital costs could increase from $5.7 billion to $7.4 billion and financing costs from $2.3 billion to $3.5 billion. Because Georgia Power has the only publicly reported numbers attached to the project, some have used those figures to calculate the total cost at $25 billion, but it cautioned against that figure because the costs for the other companies involved in the project are different.
If the costs came in at the highest estimate and were the same across the board for all partners, the project would actually exceed $27 billion. A full assessment will be delivered to the Georgia Public Service Commission by Aug. 31 and the PSC will then work with the companies on whether to proceed, with a decision likely before year’s end, officials have said.
Knight said Vogtle’s future is likely different than what V.C. Summer is facing, echoing others who have pointed out Georgia Power has a much larger number of ratepayers over which to spread costs. The new reactor project at Vogtle has been taken over by Southern Nuclear, a division of Georgia Power’s parent company Southern Co., which has a much greater track record in operating six reactors at three sites, including two at Plant Vogtle, Knight pointed out.
One way of assessing whether adding a new nuclear plant makes economic sense is by looking at measures that seek to compare energy technologies based on what it costs to build and operate them, called levelized cost of electricty, and comparing it with the value of the electricity it would add to the overall system based on the cost of producing it. According to a report earlier this year from the U.S. Energy Information Administration, a nuclear reactor that came online in 2022 would actually cost nearly $40 more in kilowatt hour of electricity produced than generating that same electricity by other means.
This was not surprising to the Union of Concerned Scientists, whose analysis predicted a mid-range cost overrun for Vogtle five years ago that is pretty close to the estimates now, said Steve Clemmer, director of energy research and analysis in the Climate & Energy Program.
“A lot of it was sort of speculation at the time, but now it is playing out in reality,” he said. At the time, the group was critical of Southern for not investing more in alternative technologies such as wind and solar, and, if anything, those issues are even more relevant now, Clemmer said.
“It’s been interesting to see those (nuclear) projects experience cost escalation where things like wind and solar have just experienced dramatic cost reductions, and have just become more economically viable,” he said.
Part of the arguments that have been made for both V.C. Summer and Vogtle is the need for a greater diversity of energy sources. While natural gas plants are cheap and are being built now, that might not always be the case, Knight said.
“Do you really want to put all of your eggs in one basket?” he said. “Do you really want to count on natural gas (prices) not going up in the next five, 10, 15 years? It’s not going to stay down as cheap as it is, certainly.”
For instance, natural gas production has a greater greenhouse gas impact and, at some point in the future, that might very well be considered in the cost, Knight said. From that standpoint, nuclear could have more value, he said.
A recently leaked draft report on climate change shows it is already having an impact in increased average temperatures and more frequent extreme weather events. The Union of Concerned Scientists is very interested in addressing climate change and, in theory, nuclear could be part of that, Clemmer said. But the costs continue to escalate well past what might be rosy estimates to build those new nuclear reactors.
“Even if you use (those) optimistic assumptions, nuclear is still twice as expensive as other alternatives,” Clemmer said.
Reach Tom Corwin at (706) 823-3213 or email@example.com