America’s doomed nuclear white elephant
The Other Shoe Just Dropped, Dooming the U.S. Nuclear Revival Energy and Resources Digest, By David Fessler, Energy and Infrastructure Strategist, The Oxford Club,Wednesday, February 22, 2017 On February 9, 2012, the Nuclear Regulatory Commission (NRC) issued Southern Company (NYSE: SO) a construction permit and operating license for its two newest nuclear power plants. When completed, Vogtle units 3 and 4 will produce a total of 2,234 megawatts of power.
But investors who expected big returns were in for a big surprise… This nuclear white elephant was doomed from the start.
Over the last five years, Southern Company shares have appreciated a measly 7.62%.
And after you read this, you’ll understand why the next five years could be much worse for the entire nuclear industry.
Nuclear power plants continue to get more expensive over time. Saddled with massive cost overruns and huge delays, nuclear has a “negative learning curve.”
As the Pennsylvania Dutch say, “The further we go, the behinder we get.” It’s nuclear power’s cost escalation curse.
The Vogtle power plant is a classic example. Construction began on Vogtle units 1 and 2 in 1971.
The project took 18 years to complete and was a decade behind schedule. The final price was $9 billion for the two plants. That was 10 times the estimated price.
But it gets even better…
Construction began on units 3 and 4 in 2009. Unit 3 was originally scheduled for operation in 2016. Unit 4 was scheduled for this year.
Now unit 3 is scheduled for completion in 2019, and unit 4 is set for 2020.
The original cost for units 3 and 4 was $14 billion.
That’s now ballooned to $21 billion. This is the nuclear cost escalation curse in action.
And the U.S. nuclear power revival? It was doomed almost before it got started.
John Rowe, the former CEO of the largest nuclear power operator in the U.S., said that Vogtle units 3 and 4 will be uneconomical when – or if – they are completed.
I’m with Rowe on this one.
I don’t think these nuclear power plants will ever produce any power. In light of Obama’s efforts to reduce carbon, you would think that there would be a stack of permit and construction applications on the NRC’s desktops.
But there isn’t. Including Vogtle units 3 and 4, there are only five reactors under construction in the U.S.
Two are under construction in South Carolina. And the Tennessee Valley Authority’s Watts Bar unit 2 just received its operating permit.
The TVA unit took 40 years from permitting to operating status. You could blame the Fukushima disaster, but that’s not the real reason…….http://energyandresourcesdigest.com/invest-nuclear-energy-next-five-years-bloodbath-so-ccj/
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