Construction of the first new U.S. nuclear reactors in more than 30 years will ramp up gradually following the Feb. 9 U.S. Nuclear Regulatory Commission decision to approve a combined construction and operating license for two new units at utility Southern Co.'s Vogtle nuclear plant near Waynesboro, Ga. NRC's 4-1 vote was welcome news for project participants and sector boosters, but it won't launch the nuclear "renaissance" once predicted—at least in the U.S.—for now. Proponents see stronger demand in China, the U.K. and emerging nations.
"This is a huge day, and I mean a huge day, for the nuclear industry in the U.S.," said Jeff Merrifield, power group senior vice president at The Shaw Group Inc., the engineer-procure-construct contractor at Vogtle, along with Westinghouse Electric Co. "It's a signal that things have truly turned the corner."
The commission affirmed the combined construction and operating license (COL) for the units using the AP1000 advanced reactor design, which NRC certified in December. Only NRC Chairman Gregory Jaczko dissented, saying that he wanted a binding agreement at Vogtle that mandates the safety changes Japan's Fukushima Daiichi plant adopted following the March 2011 earthquake-tsunami disaster there. "I cannot support issuing this license as if Fukushima never happened," he said after the vote.
But the other commissioners said plans to address the Fukushima disaster were sufficient.
Three Years of Preconstruction
Shaw and Westinghouse have been performing preconstruction at the site for more than three years (ENR 12/6/10 p. 30). The COL will mean a gradual ramp-up to nuclear-related work, including the first nuclear facility concrete pour in three to five months, Merrifield said. The $14-billion reactors are expected to go on line in 2016 and 2017 and provide more than 2,200 MW of power.
NRC is expected to approve a second COL within weeks for South Carolina Electric & Gas Corp.'s two V.C. Summer plant units in South Carolina, says Scott Burnell, an NRC spokesman. Shaw and Westinghouse, also the joint EPC contractor there, will begin construction at that site shortly after the COL is issued.
Industry executives and market analysts noted that issuance of the COLs provide a boost, but they do not expect to see a huge market resurgence. The current low price of natural gas provides a more economic fuel source in the short term and means that construction of any additional nuclear units is several years away.
Apart from the South Carolina approvals, "we don't expect Southern's COL approval to have any impact on other nuclear projects in the U.S.," says Mark Barnett, a stock analyst with Morningstar. "Several utilities are going forward with the COL application process, but none has committed to construction given the unfavorable economics at current low power prices."
Bill Johnson, CEO of Progress Energy, which is pursuing COLs for sites in South Carolina and Florida, noted "demand uncertainty" at a Feb. 9 industry briefing in New York City sponsored by the Nuclear Energy Institute (NEI), a nuclear industry trade group. David Christian, CEO of Virginia-based Dominion Energy, predicted no new nuclear construction projects "outside of the Southeast." Even in Texas, he said, a huge effort to build new units at the South Texas nuclear powerplant site in Bay City is "on hold and hard to predict."
The decision, however, is still "enormous," said Merrifield, for an industry that was decimated by rising interest rates and the 1979 Three Mile Island (Pa.) nuclear plant meltdown. Costly overruns led to plants being scrapped in the middle of construction.
In 1989, the NRC adopted a new licensing process, called part 52, that granted applicants the combined construction and operating license. In 2007, the U.S. Dept. of Energy announced loan guarantees for new reactors, sparking a rush of 14 utilities submitting 17 license applications for 26 units.