I have often remarked that of all the arguments against nuclear power, in the end it will be its failure to be a competitive source of energy that will kill it. Not one single nuclear power project in the history of the U.S. nuclear industry was constructed on time and in budget. A new recent report by Bloomberg New Energy Finance (BNEF) provides more detail about the failure of nuclear energy to compete with other sources.
The BEFG states that over half of all the existing U.S. power plants are “bleeding cash.” Old plants are too expensive to operate and maintain and new plants are simply too expensive to construct without heavy subsidies from the federal and/or state governments.
This month, the construction of two nuclear power reactors in South Carolina at the V.C. Summer nuclear power plant was cancelled after eating up nine billion dollars. The original cost estimate was eleven and a half billion dollars. The intended start date for operations was 2018. When the project was cancelled, the estimated cost had more than doubled to twenty five million dollars and the earliest estimated operational date was in 2021. As is often the case with such cancelled projects, the rate payers will have to absorb some of the cost.
In George at the Vogtle nuclear power plant, the last two nuclear power reactors under construction in the U.S. are having serious problems. The original cost estimate for the project was fourteen billion dollars but now that estimate has swelled to twenty five billion dollars and the completion date has been push back by four years. The developers on the project are “are seeking more federal support for the project, potentially increasing a record $8.3 billion loan guarantee it has already been promised.” The Department of Energy has already denied a request from the South Carolina project for a three billion dollar subsidy so the prospects for federal support for the Vogtle project are dim.
Given the massive cost overruns of the V.C. Summer and the Vogtle projects, it is unlikely that any new nuclear power reactors will be built in the U.S. in the near future.
The owners of existing nuclear power reactors are struggling to pay for their continued operation and maintenance. They are trying to get states to subsidize their reactors on the basis of their low-carbon footprint which will help mitigate climate change. While New York and Illinois have chosen to provide requested support and some other states are considering it, there are states such as Ohio which have rejected such subsidies.
With the abundant cheap oil and natural gas as well as the falling cost of renewables such as wind and solar, the rising costs of maintenance and construction for nuclear power reactors would seem to spell doom for the U.S. nuclear industry.
The U.S. is not the only country struggling to keep its nuclear industry afloat. France gets about seventy five percent of its electricity from nuclear reactors although there are recommendations from the new president that that share be reduced to fifty percent. France has a major nuclear reactor construction firm that is partly government owed. Even with government support, a new reactor build project is behind schedule and over budget.
Russia and China have plans for the massive build up of domestic nuclear power reactors and plans to sell many nuclear power reactors abroad. However, recently both countries have begun to express doubts that they will be able to sell as many nuclear power reactors as had been planned. It appears that the global nuclear power industry is in decline.
V.C. Summers Nuclear Generating Station in South Carolina:
