The great Spanish-American writer and thinker George Santayana said, “Those who cannot remember the past are condemned to repeat it.” This pairs rather nicely with the title for this post, which I borrowed from that great American author of malapropisms, Yogi Berra.
When I look at what is left of the so-called “Nuclear Renaissance” in this country, both of these sayings come to mind. In recent weeks, developments at three nuclear reactor projects in three states – Tennessee Valley Authority’s Bellefonte in Tennessee, Southern Company’s Vogtle 3&4 in Georgia, and Progress Energy’s Levy 1&2 in Florida – show that they are all over budget and behind schedule.
This could be an indication that we are repeating the past, one where nuclear reactor construction resulted in hundreds of billions in cost overruns, abandonments, bankruptcies, defaults and the cancellation of more than half of the reactors proposed to be built in this country.
TVA Watts Bar 2 is one of two reactors that began construction in 1973. Unit 1 was completed in 1996, but TVA stopped construction on Unit 2 in 1988 when it was about 80% complete and $1.7 billion had been spent. In 2007 TVA decided to complete the unit with the expectation that it would come on line in 2012. Earlier this year TVA announced that the project was running over budget and behind schedule. In April, the utility released a revised construction schedule and cost estimate stating that the target start date for the reactor is now December 2015 and the project would “require additional funding of $1.5 billion to $2 billion, putting the total estimated cost of completion in the range of $4 billion to $4.5 billion.” If TVA’s new schedule holds, this 1,180 MW reactor will have taken 42 years and at least $6 billion to complete.
Vogtle 3&4 are two 1100 MW reactors being built at an existing reactor site by Southern Company subsidiary Georgia Power and its partners Oglethorpe Power, Municipal Electric Authority of Georgia and Dalton Utilities. Originally planned to come on line in 2016 and 2017 and cost $14 billion, this week the partners announced that they are engaged in a dispute with the project’s contractors about proposed adjustments that could add $900 million to the project’s cost. Further complicating this project is a reported dispute between Southern Company and the Department of Energy over the conditions Southern must agree to in order to receive its share of an $8.33 billion federal loan guarantee for the project.
If built, Levy 1&2 would comprise two 1100 MW reactors at a greenfield site. Progress Energy Florida first announced Levy in 2008 as a one-reactor project scheduled to come on-line in 2016 and cost $3.5 billion. Last month, Progress announced that the first of what is now planned as a two reactor project wouldn’t come on-line until 2024, citing low customer demand, the ongoing economic slowdown, low natural gas prices and the lack of a federal carbon policy. Meanwhile, the project cost has ballooned to $24 billion.
These developments will not surprise industry followers, whether pro or anti, but they should serve as a clear warning signal to anyone else who is still considering whether or not to invest in new reactors. For the undecided, a “wait and see” approach is the most prudent course. These projects will take years to play out, and we should not be surprised to see even more cost overruns, schedule delays, and even a cancellation. As Yogi Berra once said: “You can observe a lot by watching.”
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