{"id":198,"date":"2013-01-15T11:53:35","date_gmt":"2013-01-15T16:53:35","guid":{"rendered":"http:\/\/www.l-a-k-e.org\/blog\/2013\/01\/centralized-nuclear-bad-investment.html"},"modified":"2013-01-15T11:53:35","modified_gmt":"2013-01-15T16:53:35","slug":"centralized-nuclear-bad-investment","status":"publish","type":"post","link":"http:\/\/www.l-a-k-e.org\/blog\/2013\/01\/centralized-nuclear-bad-investment.html","title":{"rendered":"Centralized Nuclear Bad Investment?"},"content":{"rendered":"

\nA writer for Forbes spells out the question of nuclear investment:\nhow can something that expensive, over-budget, late, and phenomenally\nrisky be a good investment, especially when cheaper and faster energy\nsources are readily available?\n<\/p>\n

\nPeter Kelly-Detwiler wrote for Forbes today,\n\nNew Centralized Nuclear Plants: Still an Investment Worth Making?<\/a>\n<\/p>\n

\n

\n\n<\/a>\nJust a few years ago, the US nuclear renaissance seemed at hand. It\nprobably shouldn’t have been. Cost overruns from Finland to France\nto the US were already becoming manifest, government guarantees were\nin doubt, and shale gas drillers were beginning to punch holes into\nthe ground with abandon.\n<\/p>\n

\nThen came Fukushima. The latter proved a somewhat astonishing\nreminder of forgotten lessons about nuclear power risks, unique to\nthat technology: A failure of one power plant in an isolated\n\n<\/a>\nlocation can create a contagion in countries far away, and even\nwhere somewhat different variants of that technology are in use.\nJust as Three Mile Island put the kaibosh on nuclear power in the US\nfor decades, Fukushima appears to have done the same for Japan and\nGermany, at a minimum. It certainly did not help public opinion, and\nat a minimum, the effect of Fukushima will likely be to increase\npermitting and associated regulatory costs.\n<\/p>\n<\/blockquote>\n

\nHe goes into detail: they take too long (while gas and solar got cheaper),\nthey’re extremely expensive to build and run, and they’re all-or-nothing\ninvestments.\n<\/p>\n

\nI was going to compile this list of recent nuclear financial failures,\nbut he saves us all the trouble:\n<\/p>\n\n\n

\n

Electricite de France\u2019s Flamanville plant has\n\n<\/a>\nseen its budget explode from 3.3 to 6 bn (July 2011)\nto 8\nbn Euros ($10.5 bn) <\/a> as of last December, with a delay of\nfour years over original targets.  EDF in part blames stricter\npost-Fukushima regulations for part of the overrun).  To the\n\n<\/a>\nnorth, Finland\u2019s Olkiluoto \u2013 being constructed by Areva \u2013 has\nseen delays of nearly five years, and enormous cost overruns.  The\noriginal turnkey cost of 3.0 bn Euros has skyrocketed beyond all fears,\nincreasing at least 250%. Just last month, Areva\u2019s CEO conceded \u201cWe\nestimate that the costs of Olkiluoto are near those of Flamanville.\u201d\n<\/a> <\/p>\n

In the US, recent experience doesn\u2019t look much better:\n\n<\/a>\nProgress Energy (now Duke) first announced the 2,200 MW Levy\nnuclear project in 2006, with an estimated price tag of $4 to $6 bn\nand an online date of 2016. The cost estimated increased to $17\nbn in 2008. This year, Progress announced the project would cost\n$24 billion\nand come online in 2024. <\/a> The Levy plant currently has a\ndebt in excess of $1.1 bn for which customers had already paid $545\nmillion through 2011. As of now, the utility plans to proceed,\nwith the Executive VP for Power Generation stating \u201dWe\u2019ve\nmade a decision to build Levy… I\u2019m confident in the schedule and\nnumbers.\u201d <\/p>\n

In Georgia, Vogtle Units 3 and 4 (owned jointly by a number\n\n<\/a>\nof utilities, including Georgia Power) appear in somewhat better\nshape, but issues have cropped up there as well. Customers\ncurrently pay $10 per month in advance to cover financing\nassociated with the two 1,117 MW units. Georgia Power is allowed\nby legislation to recover $1.7\nbn in financing costs of its estimated $6.1 bn portion of the $14 bn\nplant during the construction period <\/a>. However, there have already\nbeen some cost problems, and Georgia\nPower is disputing its responsibility to pay $425 million <\/a>\nof overruns resulting from delays in licensing approvals. Total\ncost excesses to all partners total $875 mn. The two units were\nexpected to come online in 2016 and 2017, but in a Georgia PSC\nmeeting in December, an independent monitor noted that expected\n\n\n\n
\n\u201cFrom 2007 to 2010, the NRC received 18 nuclear applications\n( of which only twelve are still active). Of these, the\nconsulting outfit Analysis Group reported that for eight plants\nwhere they were able to obtain two or more comparable cost estimate,\n7 are over budget (including Levy and Vogtle), with updated numbers\n\u201coften double or triple initial estimates.\u201d\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\ndelays of fifteen months are largely\nas a result of poor paperwork <\/a> related to stringent design rules and\nquality assurance. Those delays will likely continue to cost more money.\n<\/p>\n

Unfortunately, these experiences are not outliers.\nFrom 2007 to 2010, the NRC received 18 nuclear applications\n(of which only twelve are still active). Of these, the\nconsulting outfit Analysis Group reported that for eight plants\nwhere they were able to obtain two or more comparable cost estimate, 7\nare over budget (including Levy and Vogtle), with updated numbers\n\u201coften double or triple initial estimates.\u201d <\/a> This is consistent\nwith an MIT study estimating \u2018overnight\u2019 costs nearly doubling from\n2002 to 2007. As utilities management consultant Stephen Maloney was\nquoted in the Analysis Group study \u201cNo one has ever built a contemporary\nreactor to contemporary standards, so no one has the experience to state\nwith confidence what it will cost. We see cost escalations as companies\ncoming up the learning curve.\u201d <\/p>\n

Last August, Exelon abandoned plans to construct\ntwo facilities in Texas, blaming low natural gas prices.\nTwo months later, Dominion Resources announced that it would shut\ndown its existing Kewaunee station <\/a> in Wisconsin as a consequence of\nlow gas prices and a lack of buyers. The latter move was particularly\neye-opening: building a nuclear plant is supposed to be the expensive\npart, while operation is expected to be relatively cheap. <\/p>\n<\/blockquote>\n

\nThe Forbes writer doesn’t even mention San Onofre or South Texas or Seabrook\n(more on those tomorrow).\nHe ends by comparing the utilities investing in these things to gamblers,\nand says ratepayers are often at the table whether they want to or not.\nWell, we don’t have to be.\nIt’s time for an intervention!\n<\/p>\n

\nThe Georgia legislature is in session.\nYou can contact\n\nyour legislator or the PSC<\/a> today\nabout\n\ntoppling Southern Company’s three-legged nuclear regulatory-capture stool<\/a>\nand\n\nfixing that 1973 Territoriality Law<\/a>\nso we can get on with solar and wind in Georgia,\nfor jobs and energy independence, for clean air and\nplenty of clean\n\nwater<\/a>.\n<\/p>\n

\n-jsq\n<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"A writer for Forbes spells out the question of nuclear investment: how can something that expensive, over-budget, late, and phenomenally risky be a good investment, especially when cheaper and faster energy sources are readily available? Peter Kelly-Detwiler wrote for Forbes today, New Centralized Nuclear Plants: Still an Investment Worth Making? Just a few years ago, […]","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_links_to":"","_links_to_target":""},"categories":[97,48,14,16,70,17,8,18,2,19,104,21,22,32,73,289,53,3],"tags":[8736,910,903,8720,912,909,8704,906,8706,8728,908,904,907,426,167,8707,8701,8708,8781,8699,8709,427,627,8702,905,12,7,911,117,8737,8711,8712,8715,389,8731,8758,108,8725,237,902,8700,6,626,913],"class_list":["post-198","post","type-post","status-publish","format-standard","hentry","category-activism","category-code-enforcement","category-economy","category-environment","category-ethics","category-ga-psc","category-georgia","category-georgia-power","category-government","category-history","category-nuclear","category-planning","category-politics","category-pollution","category-safety","category-science","category-sustainability","category-transparency","tag-activism","tag-analysis-group","tag-chernobyl","tag-code-enforcement","tag-dominion-resources","tag-duke","tag-economy","tag-electricite-de-france","tag-environment","tag-ethics","tag-exelon","tag-finland","tag-flamanville","tag-france","tag-fukushima","tag-ga-psc","tag-georgia","tag-georgia-power","tag-germany","tag-government","tag-history","tag-japan","tag-kewaunee","tag-lake","tag-levy","tag-lowndes-area-knowledge-exchange","tag-lowndes-county","tag-mit","tag-nrc","tag-nuclear","tag-planning","tag-politics","tag-pollution","tag-progress-energy","tag-safety","tag-science","tag-southern-company","tag-sustainability","tag-texas","tag-three-mile-island","tag-transparency","tag-valdosta","tag-vogtle","tag-wisconsin-plant-vogtle"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p585fK-3c","jetpack_sharing_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/posts\/198","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/comments?post=198"}],"version-history":[{"count":0,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/posts\/198\/revisions"}],"wp:attachment":[{"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/media?parent=198"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/categories?post=198"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/tags?post=198"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}