The long-awaited nuclear renaissance appears to be closer to reality. The Obama administration continues to send strong signals of support for nuclear power as part of the nation’s “clean-energy” future. On Feb. 16, the administration announced the first-ever $8.5 billion loan guarantee for a new nuclear plant and said it had introduced plans to triple the amount of nuclear loan guarantees in the fiscal 2011 budget.
The loan guarantees to Atlanta-based Southern Co. and its partners for two new units at the Vogtle plant, in Burke, Ga., are offered by the Dept. of Energy through its loan guarantee program, established under the Energy Policy Act of 2005. DOE Secretary Steven Chu says the initial loan guarantees are the first “but not the last,” and that $10 billion remains to support additional projects.
Moreover, the President’s budget includes a $36-billion request for additional nuclear loan guarantees in its fiscal 2011 budget—an amount that could support five or six new plants. All told, the loan guarantees could jump-start construction at seven to 10 new plants.
The administration’s support may be a needed shot in the arm for an industry that has applied to build 28 new nuclear reactors at 18 sites. Efforts stalled in 2008 as the economy plummeted and nuclear proponents waited for a clear signal from the new administration on whether it would support new nuclear plants.
“This is a huge step for the industry,” says Jeff Merrifield, senior vice president of the power division of the Baton Rouge, La.-based Shaw Group. “It clearly lays out an agenda of the President of the United States.”
Merrifield said the vocal support the President gave the industry during his State of the Union speech was almost as important, if not more important, than the loan guarantee itself because it sends a strong signal to the financial community that the administration supports nuclear power.
The administration’s decision to financially support the construction of the two new 1,100-megawatt AP1000 nuclear reactors in Georgia, estimated to cost $14 billion, will help stimulate the nuclear industry. This will benefit even companies that don’t receive loan guarantees, Merrifield says.
Shaw has the engineering, procurement and construction contract for the Vogtle plant and four other units at two sites, including for Cayce, S.C.-based Scana Corp.’s VC Summer site, one of the three sites that are in the running for the remaining loan-guarantee money.
The other two contenders are a new unit at the Calvert Cliffs facility for Baltimore-based Unistar Nuclear Energy, for which San Francisco-based Bechtel and Areva, Paris, France, have the EPC contract; and New York-based Nuclear Innovation North America’s South Texas Project, a partnership between Windsor, N.J.-based NRG Energy and Toshiba Corp. Tosihba holds the EPC contract for the two units and will be supported by Irving, Texas-based Fluor Corp.
While construction on the plants cannot begin until the Nuclear Regulatory Commission issues a combined operating license, Shaw has begun preconstruction work at both Vogtle and VC Summer. Shaw has 650 employees and subcontractors working on-site and expects to hire an additional 250 craft employees this year. There are 500 workers at VC Summer, and another 400 are expected to be hired this year. Hiring will ramp up, with eventually more than 3,000 workers on-site.