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Vogtle nuclear power project – a money pit?

A lot is at stake in the Vogtle project. The new breed of reactors being built at the site — featuring advanced standardized design, streamlined licensing and new construction techniques — are supposed to keep costs steady and bring projects in close to budget and on schedule.

That in turn is supposed to spur a new golden era for nuclear power.

Cost overruns of almost $1 billion — so far — at Ga. nuke reactors June 6, 2012, by  Jay Bookman Last month, a consortium of utilities including Atlanta-based Southern Company announced cost overruns of almost $1 billion at two new nuclear reactors being built near Waynesboro.

That’s an arresting number under any circumstances, but it looms even larger when you realize that major construction on the Vogtle 3 and 4 reactors has basically just begun, with at least five more years of construction to come.

And if costs soar, who’s going to pay for it? Southern Company and its subsidiary, Georgia Power, own 45.7 percent of the project, so its ratepayers’ share of these recent overruns would come to more than $400 million. But according to Buzz Miller, Southern’s executive vice president of nuclear development, that cost will be borne by contractors who are building the project.

“Our official position is that there’s no way we’re going to pay that
amount,” Miller said Tuesday.

William Jacobs, a nuclear expert appointed by the Georgia Public
Service Commission to monitor construction at Vogtle, warns that
additional problems may be coming. In his latest report, he writes
that the project is already more than seven months behind schedule,
engineering work is not being completed on time, critical components
may be delayed and additional potential change orders “could
significantly impact” construction costs. Quality assurance issues
from major suppliers “continue to be a significant concern for the
project.”
In addition, he warns, project owners have yet to agree with
contractors on a long-term construction schedule.

“The project is being managed based on short-term forecasts showing
work to be accomplished in the next 60 to 90 days,” Jacobs writes. “A
first-of-a-kind project of this magnitude and complexity cannot be
effectively or efficiently managed using 60-to-90-day forecasts.”

A lot is at stake in the Vogtle project. The new breed of reactors being built at the site — featuring advanced standardized design, streamlined licensing and new construction techniques — are supposed to keep costs steady and bring projects in close to budget and on schedule. That in turn is supposed to spur a new golden era for nuclear power.

However, the problems at Vogtle are not isolated. Two new reactors
just under construction in South Carolina, using the identical
technology as at Vogtle, are already $560 million over initial
estimates and counting. And in Tennessee, efforts to complete a
nuclear plant abandoned back in the 1980s have almost doubled in cost.
Originally scheduled to accept nuclear material in April, the
Tennessee Valley Authority reactor is now expected to go on line late
in 2015 at the earliest. And TVA executives acknowledge that the fault
is largely their own……
http://blogs.ajc.com/jay-bookman-blog/2012/06/06/cost-overruns-of-almost-1-billion-so-far-at-ga-nuke-reactors/

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June 7, 2012 - Posted by | business and costs, USA

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