The nuclear option

Augusta, Georgia, U.S., Japan all have a ton riding on Vogtle project

History is being made, and you’re at ground zero.

 

Not just in golf this week, with the Masters in town, but in national energy policy as well.

For the first time since the 1970s, America has started work on a commercial nuclear reactor – four of them, actually: two at Jenkinsville, S.C., and two at the existing Vogtle nuclear plant about half an hour south of Augusta.

Vogtle nuclear units Nos. 3 and 4 are estimated to be finished by the end of 2020.

It’s exciting being at ground zero of what could be a clean-energy, nuclear renaissance in America.

That said, the massive, historic project has hit a huge and scary snag: the recent Chapter 11 bankruptcy filing of Vogtle primary contractor Westinghouse, a subsidiary of Japan-based Toshiba Corp.

Georgia Power and its parent Southern Company, which own nearly half the project, have underlined their commitment to finishing the plant – with their CEOs even going to Tokyo to hash out details. They entered into a 30-day “cost-to-complete and schedule assessment,” and secured funding to continue work at the site.

The project is over halfway finished, and 6,000 construction workers and some 30,000 ancillary jobs have come to depend on it.

The companies say they are working with their co-owners and the Georgia Public Service Commission “to determine the best path forward. We will continue to take every action available to us to hold Westinghouse and Toshiba accountable for their financial responsibilities…”

Ominously no one has yet said the project will definitely be finished. When asked by Bloomberg News if it might be abandoned, Southern CEO Tom Fanning said, “The clear indication is we want to complete this project. It’s important for America. It’s important for the citizens of Georgia. It’s important for the world, really, to have America complete its renaissance of nuclear.”

When the deal was signed years ago, Fanning said, Southern and the other owners insisted that Toshiba be a signatory and guarantor of the project, not just Westinghouse. And Fanning said that entailed more than a financial commitment.

“Not only do we have financial guarantees directly with the parent, Toshiba, but also we thought it was important to have their moral commitment,” Fanning told Bloomberg. “When you start a project that’s well over $15 billion, that’s going to take 10 years to build, you know there will be good times and challenging times. And we wanted everybody’s moral commitment. …

“We are committed right now to making this successful,” he said, though adding that the involved parties would use the 30-day assessment period to evaluate the data and make whatever decisions they need to.

What they haven’t said, but probably feel, is that failure is not an option. It would be catastrophic both financially and psychologically: As indicated by Fanning, after four decades, America needs to prove to itself and the world that it can do this.

A Bloomberg reporter speculated that another firm bullish on nuclear, such as Korean corporation KEPCO, might consider stepping in. And both the U.S. and Japanese governments have a lot riding on this project in terms of bilateral cooperation. The Trump administration, too, would surely want the jobs and energy to keep flowing at Vogtle.

With all that at stake, and all the power and energy behind it, it’s difficult to imagine this project won’t get done.

One way or another, history will be made.

 

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