ATLANTA – America’s first new nuclear plants in more than a decade are costing billions more to build and sometimes taking longer to deliver than planned, problems that could chill the industry’s hopes for a jumpstart to the nation’s new nuclear age.
Licensing delays, soaring construction expenses and installation glitches have driven up the costs of three plants in Georgia, Tennessee and South Carolina, from hundreds of millions to as much as $2 billion, according to an Associated Press analysis of public records and regulatory filings.
Those problems, along with jangled nerves from last year’s meltdown in Japan and the lure of cheap natural gas, could discourage utilities from sinking cash into new reactors, experts said.
The building slowdown would be another blow to the so-called nuclear renaissance, a drive over the past decade to build 30 new reactors to meet the country’s growing power needs. Industry watchers now say only a handful will be built this decade.
The review of pending projects found:
Plant Vogtle in eastern Georgia has run into over $800 million in extra charges related to licensing delays. The plant is delayed seven months.
The long-mothballed Watts Bar power plant in eastern Tennessee will cost up to $2 billion more than budgeted and has been postponed until 2015.
Plant Summer in South Carolina has seen costs jump by $670 million, but with lower interest rates and cheaper-than-expected labor, the owners assert the project is still on or under budget.
Southern Co. and others in the industry say cost overruns are expected in projects this complex and are balanced out by other savings over the life of the plant. Southern Co. expects Plant Vogtle in eastern Georgia to cost $2 billion less to operate over its 60-year lifetime than initially projected because of anticipated tax breaks and historically low interest rates.
Regulators have been trying to make it easier to build, encouraging the use of off-the-shelf reactor designs that get approval in advance. New construction methods are supposed to require less in-the-field assembly, making building quicker and reducing human error. Interest rates and labor costs have been down after a bruising recession.
But the economy is also working against progress on new construction. The next company in line to build, Progress Energy, has pushed back construction plans for two reactors in Florida because of the economy, low demand and extremely cheap natural gas. It expects its first new reactor to be finished in 2024.
Plants burning natural gas are far cheaper to build than nuclear power plants. But utility executives say they need a diversified mix of power plants, including nuclear, because relying too heavily on a single fuel like natural gas backfires if prices go up.
The rising construction costs hit an industry already under financial pressure, after meltdowns last year at the Fukushima Dai-ichi nuclear plant after a tsunami in Japan.
Other utilities still seeking to build have said they expect the U.S. Nuclear Regulatory Commission to adopt new safety rules in response to the accident.
Industry leaders say soaring costs could threaten worthwhile projects, and send the wrong message to the public.
It’s important to get this project done right, because if every time we build a nuclear plant we go substantially over budget, ratepayers will begin to believe we can’t do a nuclear project on budget, said Tim Echols, a nuclear power proponent on Georgia’s Public Service Commission.