In February, when the Obama administration approved the first US nuclear plants in 30 years, dozens of potential projects were announced.
Just months later, those big plans have shrunk to a handful, delayed or scrapped because of lower than expected electricity demand, inability to get financing or because the utility decided natural gas is a cheaper, easier choice.
And what of the two nuclear plants approved in Georgia and South Carolina? They are behind schedule and face millions of dollars in cost overruns.
Utilities want customers to foot the bill for $800 million in extra costs, reports The Atlanta Journal-Constitution (AJC), and they will definitely pay for construction costs.
The projects are subsidized by US taxpayers by an $8.2 billion loan guarantee from the Department of Energy, but ratepayers ultimately bear the expenses of construction.
Georgia Power, a unit of Southern Co. that leads the consortium behind Georgia’s plant, already face $400 million in overruns tied to licensing delays and disputes over design change orders with contractors Westinghouse Electric Co. and The Shaw Group, reports the AJC.
And South Carolina Electric & Gas Co. already wants ratepayers to cover an extra $238 million for its plant, which is now delayed a year, until 2017.
"It’s going to take longer than they admit. It’s going to cost more than they admit," Mark Cooper, a research fellow for economic analysis at Vermont Law School, told the AJC.
The utilities partially blame the US Nuclear Regulatory Commission for the delays, saying they are being heavily scrutinized because of concerns over Japan’s meltdown.
"The first time through the process is not going to be as smooth," Scott Burnell, a spokesman for the U.S. Nuclear Regulatory Commission, told the AJC. "We do expect as time goes on, the additional reviews that are in the pipeline will benefit from the experience the first time around."
The US stance on nuclear is at odds with those of Japan, which is reducing its commitment to the technology in the wake of it devasting nuclear meltdown, and Germany, which has opted to eliminate nuclear power completely from its energy mix.
There’s also been plenty of heat because although the GOP faults the DOE over loan guarantees for renewable energy, particularly the $550 million loan to Solyndra, they’re in favor of $8.2 billion for two nuclear plants.
Their "Roadmap for America’s Energy Future" mandates construction of 200 new nuclear plants by 2050.
"If Vogtle 3 and 4 default on their loan repayments, it’ll be 15 times worse than the Solyndra debacle," says Kevin Kamps from Beyond Nuclear. "U.S. taxpayers would be on the hook for $8.3 billion. The nuclear utilities have no skin in the game, representing a tremendous moral hazard."
After the Fukushima disaster, President Obama set up a task force that found improvements to the existing "patchwork" of US regulations for nuclear plants are warranted. A systematic set of improvements has yet to emerge, but Westinghouse has been forced to adjust its design for the Georgia plant 19 times to meet federal safety standards, reports the AJC.
Meanwhile, nuclear experts, environmental groups and local residents want California’s San Onofre nuclear plant to remain shut down. Located on the Pacific Coast between Los Angeles and San Diego, it’s been shuttered since January when it leaked radiation. Although an unprecedented 1317 tubes have been plugged, leaked data indicates that 4,000 tubes show significant wear.
China Nuclear Developer Plans IPO
Meanwhile China’s leading nuclear developer, China National Nuclear Power Co, is planning an IPO to fund development of nuclear projects.
It plans to fund five nuclear plants worth $27 billion with the proceeds.
Even though nuclear companies aren’t required to pass environmental assessments before they go public, this time it was required because of concerns about the technology.
China has a policy that companies in heavily polluting industries, such as steel, mining, chemical and petrochemical, must pass environmental examinations before applying for IPOs. Until now, the nuclear industry was exempt from that requirement.
Read, What’s the Allure of Nuclear:
Loading...