First new US nuclear reactor in three decades may be among the last

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The US nuclear energy industry has reached a watershed moment. Plant Vogtle unit 3 began delivering commercial electricity to the Georgia power grid, becoming the first nuclear reactor the country has built from scratch in more than three decades.

Unit 3 and a twin reactor to open in the coming months may also be the last. Years of delays and billions of dollars of cost overruns have made the megaproject as much a cautionary tale as a new chapter for atomic investment.

Georgia Power, the utility driving the project, said on Monday that the reactor entered commercial operation. “It marks the first day of the next 60 to 80 years that Vogtle unit 3 will serve our customers with clean, reliable energy,” chief executive Kim Greene said.

The 1,100-megawatt Vogtle unit 3 was initially supposed to enter service in 2016, however. Vogtle’s start of operations was delayed once more in June after the company discovered a degraded seal in its main generator.

“It turns out nuclear construction is hard,” said Bob Sherrier, a staff attorney at the Southern Environmental Law Center, which challenged the project in court. 

“Along the way the company kept ratcheting up the cost estimates, pushing back the deadlines a bit at a time. Every time it was raised just enough where it was still within the bounds of justification that it made sense to proceed. But they were wildly off in their estimates every single time.”

Vogtle was conceived amid a flurry of interest around nuclear energy in 2008, as legislators and policymakers seized on it as a reliable form of power that is free from carbon emissions. 

“The resurgence of America’s nuclear industry starts here in Georgia, where you’ve just got approval, for the first time in three decades, to build new nuclear reactors,” then-US energy secretary Steven Chu said as Vogtle was authorised in 2012. 

The Georgia project was supposed to be the first among dozens of new reactors built across the country. But the renaissance floundered amid safety concerns after the 2011 Fukushima disaster in Japan coupled with plunging prices for natural gas, a competing generation fuel. In the end only four reactors moved ahead and two, Vogtle units 3 and 4, have been built. Unit 4 is scheduled to come online by early 2024.

Soaring costs at Vogtle, along with new reactors at the VC Summer nuclear project in South Carolina, forced engineering contractor Westinghouse into bankruptcy in 2017. While South Carolina utilities pulled the plug on their project, Georgia ploughed ahead.

“We’ve showed that even though we’ve got a lot of bruises and been called a lot of names . . . we’ll stay the course,” said Lauren “Bubba” McDonald, a member of the Georgia Public Service Commission utilities regulator since the time the Vogtle project won approval. 

The $14bn original cost of Vogtle units 3 and 4 has now ballooned to more than $30bn. The cost for Georgia Power, with a 45 per cent share of the project, will be about $15bn.

How the company’s costs are shared with its customers will be decided by the commission once unit 4 is operating: the law allows only costs deemed “prudent” to be passed on to ratepayers.

McDonald said the company should not expect an easy ride. “They are guilty until they prove themselves innocent,” he said. 

Georgia Power, a division of New York-listed Southern Company, did not respond to multiple requests for an interview.

The opening of units 3 and 4 will make the Vogtle complex, including two existing units, the US’s second-largest power plant by capacity after Washington state’s Grand Coulee Dam. More than half of Georgia’s electricity will be generated by zero-carbon sources, most of it nuclear, according to the Nuclear Energy Institute, a trade group.

Nuclear advocates hope that the lessons learned will pave the way for more projects at a time when efforts to tackle climate change have been thrust into the spotlight. Lawmakers have already funnelled billions of dollars into propping up ageing nuclear plants in the US and granted big breaks for the development of advanced nuclear technologies. 

“While certainly the Vogtle experience has gone differently than hoped at the outset, it’s resulted in a whole lot of learnings that are going to benefit any number of nuclear projects to come,” said John Kotek, vice-president of policy and public affairs at the Nuclear Energy Institute.

But while a host of advanced nuclear technologies are being developed — from micro reactors to small modular reactors — there are no other traditional large-scale light water reactors under way in the US. Critics say that investors have been turned off. 

“The only reason there’s a nuclear renaissance is because the federal government is throwing tens of billions of dollars at nuclear,” said David Schlissel at the Institute for Energy Economics and Financial Analysis. “Investors aren’t interested.”

For Georgians, the more immediate concern is what the project means for utility bills. Georgia Watch, a consumer group, estimates ratepayers have already paid $900 extra since construction began to cover financing costs. Bills are set to rise by another $3.78, or 3 per cent, on average when unit 3 comes online.

But the ultimate impact will not be felt until unit 4 comes online and the PSC decides how much of the burden will be left for ratepayers to shoulder. Georgia Watch estimates the final increase will add anywhere between 10-13 per cent to bills.

For the US nuclear industry, however, getting the project over the line is an existential question.

“If in the state of Georgia, this project is not completed, there won’t be another nuclear plant built in these United States in decades,” McDonald said.