Problem for Modular Nuclear Reactors – they’re just as costly as the old ones

Prefab Nuclear Plants Prove Just as Expensive Modular method has run into costly delays and concerns about who will bear the brunt of the expense., WSJ, By REBECCA SMITHJuly 27, 2015

Building nuclear reactors out of factory-produced modules was supposed to make their construction swifter and cheaper, leading to a new boom in nuclear energy.

But two U.S. sites where nuclear reactors are under construction have been hit with costly delays that have shaken faith in the new construction method and created problems concerning who will bear the added expense.

“Modular construction has not worked out to be the solution that the utilities promised,” said Robert B. Baker, an energy lawyer at Freeman Mathis & Gary LLP in Atlanta and former member of the Georgia Public Service Commission, the state utility authority.

The new building technique calls for fabricating big sections of plants in factories and then hauling them by rail to power-plant sites for final assembly. The method was supposed to prevent a repeat of the notorious delays and cost overruns that marred the last nuclear construction cycle in the 1980s.

It hasn’t worked. Georgia Power Co., a unit of Southern Co. that is building one of the nuclear power plants, reports that construction is three years behind schedule, although it is making steady progress.

“The promise of modular construction has yet to be seen,” said Joseph “Buzz” Miller, executive vice president of nuclear development for Georgia Power. The Georgia plant’s delay will increase the project’s financing costs, potentially adding $319 annually to each residential bill, according to the public interest advocacy staff of the state utility commission. The utility is seeking to recover $778 million in total added financing costs from vendors. It hopes customer bills won’t rise more than 8% to pay for the plant.

Georgia Power expects to spend $7.5 billion for its 46% share in the Vogtle power plant, which is adding two nuclear reactors adjacent to an existing plant near Waynesboro, Ga. That tab is $1.4 billion higher than the spending limit state regulators approved in 2009.

The cost of the V.C. Summer plant that South Carolina Electric & Gas Co. is building near Jenkinsville, S.C., now stands at $6.8 billion for the company’s 55% stake, up $1.1 billion from a 2012 estimate. The company recently agreed to trim its profit margin on the project if regulators approve a revised construction schedule and cost estimate. The commission heard testimony last week but has yet to rule………

U.S. utilities proposed building more than two dozen reactors five years ago before the shale-gas revolution drove down the price of natural gas and made plants that burn gas a more attractive option for the power industry. Last month, the Nuclear Regulatory Commission said it was folding a division to manage construction of new reactors back into the division from which it was pulled a few years ago, acknowledging a nuclear renaissance hasn’t materialized. Write to Rebecca Smith at rebecca.smith@wsj.com http://www.wsj.com/articles/pre-fab-nuclear-plants-prove-just-as-expensive-1438040802