"Burning Money" image by Gene Case, Avenging AngelsPeter Kelly-Detwiler, Contributor to Forbes, has published an op-ed entitled "New Centralized Nuclear Plants: Still an Investment Worth Making?" He begins the piece:
"Just a few years ago, the US nuclear renaissance seemed at hand. It probably shouldn’t have been. Cost overruns from Finland to France to the US were already becoming manifest, government guarantees were in doubt, and shale gas drillers were beginning to punch holes into the ground with abandon." (emphasis added)
This, despite the massive public (ratepayer and taxpayer) subsidies which the nuclear power industry has enjoyed in the U.S. for well over half a century, as comprehensively reported by Doug Koplow for the Union of Concerned Scientists.
The Forbes contributor concludes that "the nuclear renaissance may be largely over before it started," with not only the vast majority of proposed new reactors in the U.S. being cancelled, but even paid-off old reactors like Kewaunee in Wisconsin being permanently shutdown due to crushing economics -- such as the expense of major, vitally needed safety repairs at the 40-year old reactor.
Kelly-Detwiler cites the "takes too long," "costs too much," and "bet-the-farm" nature of nuclear power for the "failure to launch" of the nuclear relapse.
Regarding that last point, Kelly-Detwiler writes:
'So it appears that the nuclear renaissance may be largely over before it started. And yet, many projects have not yet been canceled, with utilities and ratepayers accepting ever more risk in order to rescue sunk costs. In many cases, these costs have soared or will soar into the billions. As risk management expert Russell Walker of the Kellogg School of Management is quoted as saying in the Tampa Bay Times “When the stakes get higher, it gets harder for organizations to walk away…this happens a lot. It’s the same problem a gambler has: If I play a little longer, it’ll come around.” '
However, he points out that the only proposed new reactors that seem to be moving ahead are those privileged by Construction Work in Progress (CWIP) funding. He writes:
'In Georgia, Vogtle Units 3 and 4 (owned jointly by a number of utilities, including Georgia Power) appear in somewhat better shape, but issues have cropped up there as well. Customers currently pay $10 per month in advance to cover financing associated with the two 1,117 MW units. Georgia Power is allowed by legislation to recover $1.7 bn in financing costs of its estimated $6.1 bn portion of the $14 bn plant during the construction period. However, there have already been some cost problems, and Georgia Power is disputing its responsibility to pay $425 million of overruns resulting from delays in licensing approvals. Total cost excesses to all partners total $875 mn. The two units were expected to come online in 2016 and 2017, but in a Georgia PSC meeting in December, an independent monitor noted that expected delays of fifteen months are largely as a result of poor paperwork related to stringent design rules and quality assurance. Those delays will likely continue to cost more money...
With low natural gas prices, efficient combined cycled turbines, more efficient renewables and a host of more efficient end-use technologies, that’s a bet fewer and fewer seem wiling to take. Unfortunately for ratepayers at some utilities, they are at the table whether they like it or not…' (emphasis added)
If the op-ed's title is meant to imply that so-called small modular reactors might still save the day for the retreating nuclear power industry, it must be pointed out that the supposed justification for giant-sized proposed new reactors (such as the AP1000, at 1,100 MWe; the ESBWR at 1,500 MWe; the EPR at 1,600 MWe; etc.) was "economies of scale." Since small modular reactors represent the opposite end of the spectrum, it stands to reason these would be even more expensive than their super-sized, failed siblings.
In a classic February 14, 1985 piece entitled “Nuclear Follies,” Forbes wrote:
"The failure of the U.S. nuclear power program ranks as the largest managerial disaster in business history, a disaster on a monumental scale. The utility industry has already invested $125 billion in nuclear power, with an additional $140 billion to come before the decade is out, and only the blind, or the biased, can now think that the money has been well spent. It is a defeat for the U.S. consumer and for the competitiveness of U.S. industry, for the utilities that undertook the program and for the private enterprise system that made it possible.”