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Westinghouse problems – the final nail in USA’s nuclear industry coffin?

The Final Nail? https://dddusmma.wordpress.com/2017/01/06/the-final-nail/
JANUARY 6, 2017 When first introduced, electricity from nuclear power was to be too cheap to meter.

Then, while the first nuclear power plants were being built, extensive delays and modifications resulted in large cost overruns. The utilities incurred these cost overruns, as the contracts were mostly cost-plus, where the construction companies were reimbursed for their costs.

By the end of the last century, 100 nuclear power plants providing 20% of America’s electricity had been built, but the sentiment in the industry was that nuclear power was too costly.

The constant changes and delays while building the first 100 nuclear power plants were attributed to construction being done on site where it was difficult to control events and costs.

It was thought that costs could be controlled by building major components in a factory and then shipping them to the site for installation.

It was believed that a factory environment would allow for the use of manufacturing disciplines and quality control that would keep costs under control.

At the start of this century, there was support for a nuclear renaissance, where new nuclear power plants of a new and safer design could be built at a reasonable cost, with major components being built in a factory.

The Fukushima disaster raised the specter of radiation danger once again, but the new generation of nuclear power plants would shut down safely and automatically if there was a problem.

As construction was started at the four new nuclear power plants, two in Georgia and two in South Carolina, there was great confidence that this time it would be different: Costs would be controlled and the plants would be built on schedule.

With last week’s announcement that Toshiba would take a multi-billion dollar charge against operations due to cost overruns, quality control problems and delays at the four nuclear power plants being built in the United States, it is now clear that nuclear power may be dead … at least for the foreseeable future.

Westinghouse, the Toshiba subsidiary building these new nuclear power plants, has experienced many of the same problems that occurred in the last century.

Toshiba’s stock fell 30% with the announcement confirming the problems at Westinghouse, and of problems with the construction of other nuclear power plants being built in other countries.

Whereas the utilities incurred the overrun costs in the last century, this time the contracts were written so that the construction companies and supplier of reactors incurred most of these extra costs.

Nuclear power was already dying a slow death in the United States as there was considerable doubt whether existing nuclear power plants would receive a second extension to their operating licenses. See Nothing to Fear for a description of why nuclear power is dying in the United States.

The problems at Westinghouse probably preclude any construction company or supplier of reactors from entering into contracts where they would be liable for cost overruns, and it’s doubtful that any utility regulator would allow any utility to assume such liabilities in the future.

This may have been the final nail in the coffin for nuclear power in the United States.

January 7, 2017 - Posted by Christina Macpherson | general