What about a nuclear future?

The nuclear energy sector will be receiving $18.5 billion in loan guarantees to build new nuclear reactors.  Building new nuclear power plants ended about 30 years ago when cost overruns caused a myriad of unfinished plants to be abandoned. Will the subsidies jumpstart a nuclear renaissance or will it simply disappear into a black hole?  Is reviving the nuclear energy field a good idea?  These questions have no quick and easy answers.   

The New York Times has reported that the first recipient of the $18.5 billion loan guarantee will be announced with in the next few days.  The recipient is expected to be the "Southern Company to build two units at its Vogtle nuclear plant near Augusta, Ga.", the same plant that is credited with the abandonment of all nuclear building within this country.  No new nuclear reactors have been built in the last 30 years although over 34 were planned.

Vogtle Nuclear Power Plant was expected to include four units at a cost of $660 million.  Instead, only two units were built for $8.87 billion.  The huge cost overruns were credited with the reduction in scope of the Vogtle plant and the abandonment of other power plants. 

As it is there are 104 nuclear reactors in service in the United States.  As of April 2009, Europe, including Russia had 165 nuclear reactors in service.  Seventy-four nuclear reactors have been decommissioned or are otherwise out of use.  Several new nuclear reactors are planned across Europe.  As to when they will actually be built, well, who knows.

That brings us back to new construction that is expected to commence at Vogtle.  The two new units, units 3 & 4 have already received preconstruction approvals from the Georgia Public Service Commission (GPSC).  The GPSC has also approved “Georgia Power to recover the cost of financing the plant during construction, known as Construction Work in Progress or CWIP.”  This means higher electric bills for Georgia Power customers.  Ultimately, the pay-as-you-go increased electric bills should save customers about $300 million. 

But what about cost overruns?  After all this is the power plant that shut down nuclear expansion because of its high cost overruns.  Apparently, the GPSC and Georgia Power are supposed to be developing a way to provide “shared risk protection” to the taxpayers from cost overruns. 

Tomorrow, we will look at why there is a resurgence of interest in nuclear power.

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