Nuclear Resurgence Dims Due to Rising Costs, Low Demand
In the span of a single week, the nuclear power industry's hoped-for U.S. resurgence took a few steps backward as several projects and existing plants from across the country either were shut down or began to face increased scrutiny from regulators due to ongoing problems and financial issues.
The setbacks raised the specter of a long-term decrease in domestic nuclear power-generation capacity, claimed Peter Bradford, a former member of the U.S. Nuclear Regulatory Commission (NRC) who is now an energy policy and law professor at the Vermont Law School. If the trend continues, Bradford says, "U.S. nuclear-power output will have reached a peak a few years ago that it will not attain again in our lifetimes."
The setbacks came in quick succession.
On April 30, the NRC rejected a license application from Nuclear Innovation North America for its 2,700-MW South Texas Project Units 3 and 4, near Bay City, Texas, due to the majority ownership stake of a company based outside of the U.S.—Toshiba—a violation of the Atomic Energy Act.
Citing lowering demand for electricity, Duke Energy on May 2 notified the NRC of its plan to suspend its application for two new 1,100-MW nuclear units at its Shearon Harris nuclear plant in Wake County, N.C. Dhiaa Jamil, president of Duke Energy Nuclear, stated, "Our most recent forecast indicates two additional nuclear units at Harris will not be needed in the next 15 years."
Additionally, on May 7, Dominion permanently shuttered its 556-MW Kewaunee nuclear plant, near Green Bay, Wis. The company stated it was "unable ... to take advantage of economies of scale, and Kewaunee's power-purchase agreements were ending at a time of projected low wholesale electricity prices."
Also in early May, Edison International officials stated they may decide to shut down the utility's 2,350-MW San Onofre nuclear plant in San Diego County, Calif.—currently off line—if it can't overcome problems at one of the units, Power magazine reported.
That same week, the Florida Senate unanimously passed new restrictions on the state's nuclear cost-recovery law, which allows utilities to charge customers for the costs of nuclear projects years ahead of the start of construction. Among other requirements, the new regulations will force utilities to prove their planned projects have "reasonable" costs.
One project at the center of the political debate in Florida over heightened scrutiny for nuclear project financing was Duke Energy's proposed $20-billion, 2,200-MW project in Levy County.
When announced in 2008, Progress Energy, which has since merged with Duke, estimated the cost of the project at about $14 billion. Today, while Duke has yet to state whether or when it will start construction, the utility estimates the plant's cost at between $19 billion and $24 billion. Last November, despite that rise in price—and the growing popularity of natural gas as a cost-effective energy source—the Florida Public Service Commission deemed the project "feasible" and allowed the utility to continue charging customers an additional $143 million in fees, according to the Tampa Bay Times.