Energy

Lights Out for a South Carolina Nuclear Power Project

A pair of utilities announced that they were pulling the plug on construction of two nuclear reactors, leaving only one nuclear plant under construction in the United States.

Atomic plant Vogtle, is a 2-unit nuclear power plant located in Burke County, near Waynesboro, Georgia. Each unit has a Westinghouse pressurized water reactor (PWR), with a General Electric turbine and electric generator, producing approximately 2,400 MW of electricity. | Pallava Bagla/Corbis via Getty Images
Atomic plant Vogtle, is a 2-unit nuclear power plant located in Burke County, near Waynesboro, Georgia. Each unit has a Westinghouse pressurized water reactor (PWR), with a General Electric turbine and electric generator, producing approximately 2,400 MW of electricity. | Pallava Bagla/Corbis via Getty Images

South Carolina utilities have pulled the plug on two overbudget, behind-schedule nuclear reactors under construction there, dealing a fresh blow to the already staggering US nuclear power industry.

The price tag for the expansion of the existing one-reactor VC Summer nuclear plant north of Columbia had ballooned from about $10 billion to $16 billion since the project was launched in 2008. And with completion dates slipping to 2024 following the March bankruptcy of primary contractor Westinghouse, the partners behind Summer — SCANA subsidiary South Carolina Electric and Gas and Santee Cooper — announced Monday that the project was no longer worth finishing.

“The best-case scenario shows this project would be several years late and 75 percent more than originally planned,” Santee Cooper CEO Lonnie Carter said in a statement announcing the decision. “We simply cannot ask our customers to pay for a project that has become uneconomical. And even though suspending construction is the best option for them, we are disappointed that our contractor has failed to meet its obligations and put Santee Cooper and our customers in this situation.”

The decision leaves Southern Company’s similarly troubled twin-reactor project at Plant Vogtle, near Augusta, Ga., as the last nuclear plant still under construction. Summer and Vogtle were the first new American reactors ordered since the Three Mile Island accident in 1979.

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Santee Cooper, the junior partner in the Summer project, said lower demand forecasts and the boom in cheap natural gas combined to make the project less economical. And majority partner SCANA said its analysis showed the company would be unable to make a January 2021 deadline to qualify for federal tax credits that were aimed at reviving the struggling nuclear industry.

“Ceasing work on the project was our least desired option, but this is the right thing to do at this time,” SCANA chief Kevin Marsh said. The company said it still believed in the benefits of nuclear energy, but couldn’t justify the additional cost.

The Southern Alliance for Clean Energy, a leading critic of both the Vogtle and Summer projects, said the new reactors are about one-third complete — but ratepayers are paying for them already, thanks to laws that allow utilities to charge them for construction costs up front. In a statement Monday afternoon, the group cheered the South Carolina plant’s cancellation.

“This project has been a multi-billion-dollar disaster,” said Stephen Smith, the group’s executive director. “We also call on Georgia Power and their utility partners to protect their customers from the similarly risky, mismanaged project in Georgia at Southern Company’s Plant Vogtle.”

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Southern Company announced last week that it would take over management of the Vogtle project from Westinghouse as the work continues.

Only one US commercial power reactor, the long-planned Watts Bar Unit 2 in Tennessee, has come online since 1996.  And in states where nuclear plants sell the electricity they produce on deregulated markets, the industry is reeling as cheap natural gas and an increasing share of renewables undercut its profits.

Faced with the planned closures of several plants in the Northeast and Midwest, nuclear operators are trying to convince states to subsidize their plants as a reliable source of carbon-free generation. The Nuclear Energy Institute, the leading nuclear trade association, called the cancellation of Summer 2 and 3 “unfortunate” — but said nukes remain valuable “as a safe, reliable, clean source of energy.”

"All the more now, we must impress upon our energy policy decision makers the vital role of nuclear energy in America’s energy portfolio,” the NEI said. “As America’s need for electricity continues to grow, which means hundreds of new generating facilities will need to be built, clean and reliable nuclear energy will be an essential part of America’s energy security."