By Jennifer Hiller, The Wall Street Journal
A new nuclear reactor reached commercial operation in Georgia on Monday, completing a project whose delays and sticker shock helped upend the near-term prospects for nuclear power in the U.S.
The first two reactors at Plant Vogtle, operated by Southern Co., opened in the 1980s. Adding two new reactors cost more than $30 billion, more than twice the initial estimates, and are a major reason no other large nuclear-power facilities are under development in the U.S. and the industry focus has shifted to smaller designs.
Still, Plant Vogtle is now the nation’s largest nuclear plant, as well as its largest generator of carbon-free electricity, and its arrival comes as public perceptions of nuclear power have been shifting. The two newest reactors can each deliver power to around 500,000 homes and businesses, according to Georgia Power, a unit of Southern Co.
Chris Womack, chairman and chief executive of Southern Co., called the Vogtle expansion a “hallmark achievement.” “These new Vogtle units not only will support the economy within our communities now and in the future, they demonstrate our global nuclear leadership,” Womack said.
Southern also operates another nuclear plant in Georgia, and last year about a quarter of its generation in that state was nuclear.
The project in Georgia was plagued by delays, design changes and turmoil. Cost overruns there and at a project in South Carolina, later abandoned, caused the original contractor, Westinghouse Electric, to declare bankruptcy in 2016. Southern later took over the project, only to be hit by pandemic-related disruptions to construction.
The average Georgia Power residential customer has already paid around $1,000 for the plant’s construction, which lasted seven years longer than expected, said Liz Coyle, executive director of the nonprofit consumer group Georgia Watch.
“A cliché, but it’s about time,” Coyle said. “This is the most expensive form of electricity and we’ve long been concerned that Georgia Power’s customers, particularly their residential customers, are going to struggle to pay their power bills.”
Coyle added, “Bottom line, we don’t want Georgia Power’s residential customers to have to take a risk like this ever again.”
The industry has a long history of delays and soaring costs. That combination also doomed the only other new U.S. nuclear power plant begun this century. In 2017, Scana Corp. scrapped plans to finish the half-built nuclear-power plant in South Carolina.
The other most recent nuclear power reactors in the U.S. were completed in 2016 and 1996 by the Tennessee Valley Authority.
The experience at Vogtle tamped down the enthusiasm of the utilities industry to pursue large nuclear projects. Instead, utilities across the U.S. have started to include the proposed next generation of nuclear projects into their long-term planning. The idea behind so-called small modular reactors, or SMRs, is that they are potentially cheaper alternatives because they could be built in a factory and shipped to sites, one after another, to achieve economies of scale.
No one has delivered an SMR in the U.S., though, and that industry will also have to prove it can deliver with reasonable costs and timelines.
Womack said that both large and small nuclear projects need to be part of the solution to rising power demand in the U.S. “I think we have the experience. We’ve demonstrated the lessons learned. We’ve proven that this is doable,” Womack said.
The U.S. also plans to attempt for the first time to bring a closed nuclear plant back online. The Energy Department is offering $1.52 billion for a loan guarantee to finance the restart of an 800-megawatt reactor in Michigan that closed two years ago.
Another U.S. attempt at building a large reactor could go more smoothly because of lessons learned and improved supply chains, said Jacopo Buongiorno, a nuclear-engineering professor at the Massachusetts Institute of Technology, who is among those who think there could still be a future for the large machines in the U.S.
“We’ve gone through so much pain with this project that this is the time to capitalize on that experience,” Buongiorno said. Waiting five years to start another U.S. effort would mean the loss—again—of U.S. expertise in building large nuclear projects, he said.
Federal tax credits now available to nuclear power producers could alter the outlook. The owners of existing plants can now receive a production tax credit, similar to what wind projects receive, for the first time. Investment tax credits are also available for new projects.
The tax credits could be boosted by things such as paying higher wages, locating in a former fossil-fuel community or using domestic content during construction. That could bring the value of an investment tax credit to as much as half of a project’s cost, protecting against ballooning expenses, said Adam Stein, director of the nuclear energy innovation program at the Breakthrough Institute.
“If the cost goes over what you expect like it did at Vogtle, it’s still a percentage of that overrun,” Stein said.
Southern, the Tennessee Valley Authority and Duke Energy are among the utilities considering SMRs as a way to decarbonize their power generation mix in the next decade and beyond.
China and Russia are already operating SMRs. The first North American SMR is likely to be delivered in Canada.
In the U.S., SMR projects could include the Bill Gates-backed TerraPower, which plans to build its first reactor in Wyoming. Open AI CEO Sam Altman has backed Oklo, a nuclear-fission startup that plans to go public through a merger with his special-purpose acquisition company.