First new US nuclear reactor in 3 decades may well also be its last

Christina Macpherson

Aug 1

"The only reason there's a nuclear renaissance is because the federal government is throwing tens of billions of dollars at nuclear," ........ "Investors aren't interested."

Opening of Georgia Power's Vogtle unit 3 comes 7 years late and billions
of dollars over budget.

FT.com Myles McCormick in Houston, 31 July 2023

The US nuclear energy industry has reached a watershed moment. Plant Vogtle unit 3 began delivering commercial electricity to the Georgia power grid, becoming the first nuclear reactor the country has built from scratch in more than three decades.

Unit 3 and a twin reactor to open in the coming months may also be the last. Years of delays and billions of dollars of cost overruns have made the megaproject as much a cautionary tale as a new chapter for atomic investment.

The 1,100-megawatt Vogtle unit 3 was initially supposed to enter service in 2016, however. Its start of operations was delayed once more in June after the company discovered a degraded seal in its main generator.

"It turns out nuclear construction is hard," said Bob Sherrier, a staff attorney at the Southern Environmental Law Center, which challenged the project in court.

"Along the way the company kept ratcheting up the cost estimates, pushing back the deadlines a bit at a time. Every time it was raised just enough where it was still within the bounds of justification that it made sense to proceed. But they were wildly off in their estimates every single time."

"The resurgence of America's nuclear industry starts here in Georgia, where you've just got approval, for the first time in three decades, to build new nuclear reactors," then-US energy secretary Steven Chu said as Vogtle was authorised in 2012.

The Georgia project was supposed to be the first among dozens of new reactors built across the country. But the renaissance floundered amid safety concerns after the 2011 Fukushima disaster in Japan coupled with plunging prices for natural gas, a competing generation fuel. In the end only four reactors moved ahead and two, Vogtle units 3 and 4, have been built. Unit 4 is scheduled to come online by early 2024.

Soaring costs at Vogtle, along with new reactors at the VC Summer nuclear project in South Carolina, forced engineering contractor Westinghouse into bankruptcy in 2017. While South Carolina utilities pulled the plug on their project, Georgia ploughed ahead.

The $14bn original cost of Vogtle units 3 and 4 has now ballooned to more than $30bn. The cost for Georgia Power, with a 45 per cent share of the project, will be about $15bn.

How the company's costs are shared with its customers will be decided by the commission once unit 4 is operating: the law allows only costs deemed "prudent" to be passed on to ratepayers.

McDonald said the company should not expect an easy ride. "They are guilty until they prove themselves innocent," he said.

Georgia Power, a division of New York-listed Southern Company, did not respond to multiple requests for an interview.

............................................. there are no other traditional large-scale light water reactors under way in the US. Critics say that investors have been turned off.

"The only reason there's a nuclear renaissance is because the federal government is throwing tens of billions of dollars at nuclear," said David Schlissel at the Institute for Energy Economics and Financial Analysis. "Investors aren't interested."

For Georgians, the more immediate concern is what the project means for utility bills. Georgia Watch, a consumer group, estimates ratepayers have already paid $900 extra since construction began to cover financing costs. Bills are set to rise by another $3.78, or 3 per cent, on average when unit 3 comes online.

But the ultimate impact will not be felt until unit 4 comes online and the PSC decides how much of the burden will be left for ratepayers to shoulder. Georgia Watch estimates the final increase will add anywhere between 10-13 per cent to bills.................. https://www.ft.com/content/5d8e0c6c-59c9-4b40-806f-604889dd5fb6

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