V.C. Summer nuclear project may still have future
COLUMBIA, SC (WIS) - There is a possibility that the $4.9 billion V.C. Summer Nuclear Generating Station could be completed someday.
Earlier this week, SCANA and Santee Cooper announced it would not complete construction on the project, but it is possible another company could finish the job.
"If the financial support was provided to the project, presumably it could be restarted as long as the utility maintains the license with the Nuclear Regulatory Commission," Travis Knight, Director of the University of South Carolina nuclear engineering program said.
WIS had several questions for Knight after it was announced this week that construction on the Jenkinsville facility would not continue.
"Support could come in the form of other utilities buying into the project to take a piece of the production it would provide, or in the form of federal assistance to help encourage this first-of-a-kind plant in the U.S," Knight said. "The two reactors of the same design being built in Georgia have received loan guarantees from the federal government; the terms of those guarantees were pretty onerous, as I understand from some other utilities, which is why many didn't take it when there were more plants on the drawing books."
During their testimony to the Public Service Commission of South Carolina this week, leaders from SCE&G said both the company and Santee Cooper had looked for partners to finish the project. Although they couldn't find another utility that was interested, the potential remains.
"Now, if someone were to step forward -- I don't want to mislead the Commission -- we would have an interest in taking with them, but I don't think it would be a quick process," President and CEO Kevin Marsh told the commission.
Marsh also said a few years ago, Santee Cooper approached Duke Energy about joining the project. Marsh also suggested that the federal government could pay to complete the project.
"So any agreement we would have, if there is a potential for one -- and I'm not aware of one today -- would need to be on equal terms for all partners. We'd have to share the same risk going forward and we were unable to do that in the previous discussions.
Knight said the demand for nuclear fuel continues to grow, so there may be a utility or company that wants to complete the reactors.
"Besides being a clean source of power there are other economic benefits," he said. "The fuel cost for nuclear is a small part of the overall cost of nuclear electricity. Larger costs include building the plant and running it. The operation and maintenance costs generate a lot of local jobs in the community and state. The majority of the cost of electricity generated from fossil fuels is in the cost of the fuel, which is money that flows out of the state with no benefit to the community. South Carolina doesn't have coal or natural gas."
"Why would such help be warranted?" asked Knight. "Nuclear power represents an important green energy source since it is a low carbon source of power that also doesn't have many of the other polluting aspects of fossil fuels. It is also baseload power that can be counted on unlike wind and solar. It is cost competitive with coal and natural gas and cheaper than wind and solar when government subsidies are discounted. Four of these new types of reactors are starting up or are close to being completed in China. It is an evolutionary design that builds on the current technology. The first of any kind of design will cost more to build and take longer since it is a learning process. Government has an interest in encouraging such innovations and spurring a new generation of building to help us meet environmental goals."
If there are no takers to complete the project, the utilities may be able to recoup some money by selling off pieces of the plant.
"If the project isn't restarted, then some of the components could be sold to other utilities that would build this new reactor design," he says. "Some components might be able to be used in other reactors or related technologies."
Since Santee Cooper and SCANA started planning to build the V.C. Summer Nuclear Generating Station in Jenkinsville, demand for electricity has dropped not only in South Carolina, but the region.
Knight said the oil shocks of the 1970's led to a slowdown in the economy and drop in demand for electricity.
"The reality is that utilities have to make decisions based on the best information at the time," Knight said. "No one predicted the dramatic growth in natural gas from fracking. One might not have predicted the Great Recession that slowed (decreased for a time) demand for electricity. These decisions are reviewed by the groups such as the Public Service Commission (PSC)."
"Utilities have an obligation to serve (provide power when you flick the switch)," Knight said. "To do that they must forecast demand years into the future and longer than the time required to bring on new plants."
"In the early 1970s there were many more plants in construction or planned at a time when the demand for electricity was increasing at more than 3% per year. With the oil shocks of the 1970s the economy slowed down and the demand for electricity slowed," says Knight. "This meant that investors couldn't recoup their investments as quickly so a number of plants were cancelled at various stages of construction or planning. Still, more than 100 were built and we still operate 99 today in the U.S. which provide 20 percent of our electricity in the U.S. and 75 percent of the non-greenhouse gas emitting sources of electricity."
When asked if he thought the decision to discontinue work on the project would affect other infrastructure or growth in South Carolina, Knight said:
"Every project has risk. The carrot/reward is the opportunity to make a profit. So long as that is possible then businesses will invest. The decision to abandon the plants is due to factors or issues with contractors outside of the state. This had to do with the schedule (delays) for delivery of key components by some of the suppliers to the vendor Westinghouse that is providing the reactor design. My understanding is many of the issues were with components supplied here in the U.S. A significant point that isn't necessarily the cause of this situation, however, is the fact that a number of the large components (steel forgings for pressure vessel, etc.) are supplied from overseas (Korea, Japan) since we either no longer have the capabilities here in the U.S. or greatly reduced capability compared to the past."
Knight explains why he thought the decision was made to abort the project:
"In addition to the components delivery schedule issues mentioned above, the more recent bankruptcy of the contractor (Westinghouse) and the abandonment of the project by a key player (Santee Cooper) are key factors. These factors combined to put the utility between a rock and a hard place which, unfortunately, sometimes happens."
"The growth in demand for power in SC and the region has slowed from the time that these reactors were first proposed. The Great Recession helped to slow things even more. This is will surely prolong the greater use of older coal plants that otherwise would have been retired. Future increases in demand however slow or fast will probably be made up with natural gas at least until those costs (fuel costs have traditionally been much higher) increase again."
Knight said the decision may slow the growth of nuclear energy in the near term, but it should continue to be explored as an option for powering our nation.
"The two plants of the same design are still being built in Georgia," he said. "We will also learn something from the four plants of the same design that are starting up now in China. . . We need a diverse energy portfolio that includes nuclear power. It is the largest source of green -- low carbon and clean -- baseload electricity. Hydro power is maxed out in this country and, if anything, will decrease."
"We must also maintain leadership in the technology. This is important for economic reasons besides the environmental benefits. Reliable power is the lifeblood of an industrial economy. It is also important to the health and welfare of the citizenry. But moreover, it is important to have a strong workforce and academic programs and R&D in this area. These support not just nuclear power but also nuclear safeguards and security. Do we really want the greater majority of nuclear experts in parts of the world that are less friendly to us (North Korea, Iran, China, Russia, etc.)? These and many other parts of the world have ongoing nuclear programs."
Travis Knight is a professor and Director of the Nuclear Engineering Program at the University of South Carolina College of Engineering and Computing.
Copyright 2017 WIS. All rights reserved.
