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Released November 30, 2016 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Will Dominion Virginia Power (DVP) (Richmond, Virginia) build the North Anna Unit 3 nuclear power plant? The utility, a unit of Dominion Resources Incorporated (NYSE:D) (Richmond, Virginia), says maybe, maybe not. A group of the utility's customers wants to force DVP to either commit to building the plant, or abandon it. The utility said that's not going to happen.
If DVP decides to build North Anna 3, it plans to use GE Hitachi's Economic Simplified Boiling-Water Reactor (ESBWR) technology. North Anna will have generating capacity of about 1,470 megawatts (MW), according to the utility. GE Hitachi has teamed with Fluor Corporation (NYSE:FLR) (Irving, Texas) to provide engineering, procurement and construction (EPC) services to the project, if it is built.
Through yearend 2015, DVP collected about $600 million in pre-construction costs from its customers for North Anna 3, Richard Zuercher, manager of nuclear fleet communications, told Industrial Info. Outlays have "slowed considerably" this year, he added, due in part to the uncertainty surrounding the Clean Power Plan, now in litigation in the federal appeals system.
This summer, a consumer group filed a petition with the SCC asking regulators to force the utility to obtain SCC approval before spending any more on North Anna 3. A spokesperson for the SCC told Industrial Info there was no specific time frame for the SCC to rule on the petition from the Virginia Citizens Consumer Council or the utility's request that the SCC dismiss the petition.
Earlier this year, DVP filed its integrated resource plan (IRP) with the Virginia State Corporation Commission (SCC) (Richmond, Virginia). It said it was evaluating five paths to meet customer electric demand over the next 15 years. Building North Anna 3 was part of one of those paths, but the company did not indicate which path it preferred.
"If building North Anna 3 makes economic sense, we'll build it," Zuercher said. "Gas is cheap right now, but we don't believe in putting all our eggs in one basket. About a decade ago, when natural gas costs spiked, we had people screaming, 'Why don't you build a nuclear plant?' " he recalled.
DVP has applied for a Combined Construction and Operating License (COL) for North Anna 3 from the U.S. Nuclear Regulatory Commission (NRC) (Bethesda, Maryland). A spokesperson there told Industrial Info the commission could decide by early next summer whether to issue the license.
Before DVP can begin building North Anna 3, it must seek and receive a certificate of convenience and necessity (CC&N) from Virginia utility regulators. The utility has not yet filed for that certificate, and Zuercher said there has been no decision as to when, or if, that request will be filed.
"A COL from the NRC basically exists forever," he said. "If we decide we want to build that unit 50 years after we get a COL, we can do that. Whatever decision we make on building North Anna 3 will not necessarily coincide with the NRC's decision on our COL. If we receive a license, we may decide not to build it right away, or we may decide not to build it at all."
If the utility decides to add a unit to its North Anna nuclear campus, it will disclose the estimated construction costs at that time, Zuercher said. Critics have estimated the cost to add a unit to the North Anna campus at $19.3 billion, a figure the spokesman said was "not unreasonable." Industrial Info's North American Project Platform lists the total investment value (TIV) of North Anna 3 as $11 billion.
The fate of North Anna 3 depends in large part on where natural gas prices go, Zuercher continued. If the global economy picks up and the demand for gas increases, gas prices may increase, which could strengthen the case for North Anna 3. But if gas prices stay low, that likely would undermine the economic case for building new nuclear generation, and DVP might be better off adding more gas-fired generation.
DVP has been engaged in a heavy capital program to add new generation. It has built two billion-dollar gas-fired power plants recently, and has started constructing a third. For more on this, see May 6, 2016, article - Dominion Virginia Power Gets Approval for Next Billion-Dollar NGCC; February 24, 2016, article - Virginia Electric Utility Sets Five-Year, $9.5 Billion Capital Budget; and April 23, 2015, article - Dominion Unveils Plans for Another $1 Billion-plus NGCC.
Construction of new nuclear unit additions in Georgia and South Carolina have run well over projected costs and experienced lengthy delays. But Georgia Power (Atlanta, Georgia), a unit of the Southern Company (NYSE:SO) (Atlanta), which is building Vogtle units 3 and 4, said their calculations still show new nuclear generation as being cheaper than building new natural gas generation. For more on that, see September 8, 2016, article - Georgia Power: New Vogtle Nuclear Units Still Cheaper than Gas.
"Our critics say we should spend all our money on solar and wind," Zuercher said. "What they don't understand is that we are required to provide electricity whenever customers need it, even when the wind isn't blowing and the sun isn't shining. The average capacity factor for wind and solar is between 25% and 30%, but it is upward of 90% for a nuclear plant. Plus, if we went all solar or all wind, our emissions footprint would go up because we would have to run our coal or gas plants to back up renewable generation."
About 41% of Dominion Virginia Power's electricity comes from nuclear units, the utility spokesperson said: "We have been working for years to lower our carbon footprint. We don't think carbon dioxide issues will be going away, regardless of what happens to the Clean Power Plan."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
If DVP decides to build North Anna 3, it plans to use GE Hitachi's Economic Simplified Boiling-Water Reactor (ESBWR) technology. North Anna will have generating capacity of about 1,470 megawatts (MW), according to the utility. GE Hitachi has teamed with Fluor Corporation (NYSE:FLR) (Irving, Texas) to provide engineering, procurement and construction (EPC) services to the project, if it is built.
Through yearend 2015, DVP collected about $600 million in pre-construction costs from its customers for North Anna 3, Richard Zuercher, manager of nuclear fleet communications, told Industrial Info. Outlays have "slowed considerably" this year, he added, due in part to the uncertainty surrounding the Clean Power Plan, now in litigation in the federal appeals system.
This summer, a consumer group filed a petition with the SCC asking regulators to force the utility to obtain SCC approval before spending any more on North Anna 3. A spokesperson for the SCC told Industrial Info there was no specific time frame for the SCC to rule on the petition from the Virginia Citizens Consumer Council or the utility's request that the SCC dismiss the petition.
Earlier this year, DVP filed its integrated resource plan (IRP) with the Virginia State Corporation Commission (SCC) (Richmond, Virginia). It said it was evaluating five paths to meet customer electric demand over the next 15 years. Building North Anna 3 was part of one of those paths, but the company did not indicate which path it preferred.
"If building North Anna 3 makes economic sense, we'll build it," Zuercher said. "Gas is cheap right now, but we don't believe in putting all our eggs in one basket. About a decade ago, when natural gas costs spiked, we had people screaming, 'Why don't you build a nuclear plant?' " he recalled.
DVP has applied for a Combined Construction and Operating License (COL) for North Anna 3 from the U.S. Nuclear Regulatory Commission (NRC) (Bethesda, Maryland). A spokesperson there told Industrial Info the commission could decide by early next summer whether to issue the license.
Before DVP can begin building North Anna 3, it must seek and receive a certificate of convenience and necessity (CC&N) from Virginia utility regulators. The utility has not yet filed for that certificate, and Zuercher said there has been no decision as to when, or if, that request will be filed.
"A COL from the NRC basically exists forever," he said. "If we decide we want to build that unit 50 years after we get a COL, we can do that. Whatever decision we make on building North Anna 3 will not necessarily coincide with the NRC's decision on our COL. If we receive a license, we may decide not to build it right away, or we may decide not to build it at all."
If the utility decides to add a unit to its North Anna nuclear campus, it will disclose the estimated construction costs at that time, Zuercher said. Critics have estimated the cost to add a unit to the North Anna campus at $19.3 billion, a figure the spokesman said was "not unreasonable." Industrial Info's North American Project Platform lists the total investment value (TIV) of North Anna 3 as $11 billion.
The fate of North Anna 3 depends in large part on where natural gas prices go, Zuercher continued. If the global economy picks up and the demand for gas increases, gas prices may increase, which could strengthen the case for North Anna 3. But if gas prices stay low, that likely would undermine the economic case for building new nuclear generation, and DVP might be better off adding more gas-fired generation.
DVP has been engaged in a heavy capital program to add new generation. It has built two billion-dollar gas-fired power plants recently, and has started constructing a third. For more on this, see May 6, 2016, article - Dominion Virginia Power Gets Approval for Next Billion-Dollar NGCC; February 24, 2016, article - Virginia Electric Utility Sets Five-Year, $9.5 Billion Capital Budget; and April 23, 2015, article - Dominion Unveils Plans for Another $1 Billion-plus NGCC.
Construction of new nuclear unit additions in Georgia and South Carolina have run well over projected costs and experienced lengthy delays. But Georgia Power (Atlanta, Georgia), a unit of the Southern Company (NYSE:SO) (Atlanta), which is building Vogtle units 3 and 4, said their calculations still show new nuclear generation as being cheaper than building new natural gas generation. For more on that, see September 8, 2016, article - Georgia Power: New Vogtle Nuclear Units Still Cheaper than Gas.
"Our critics say we should spend all our money on solar and wind," Zuercher said. "What they don't understand is that we are required to provide electricity whenever customers need it, even when the wind isn't blowing and the sun isn't shining. The average capacity factor for wind and solar is between 25% and 30%, but it is upward of 90% for a nuclear plant. Plus, if we went all solar or all wind, our emissions footprint would go up because we would have to run our coal or gas plants to back up renewable generation."
About 41% of Dominion Virginia Power's electricity comes from nuclear units, the utility spokesperson said: "We have been working for years to lower our carbon footprint. We don't think carbon dioxide issues will be going away, regardless of what happens to the Clean Power Plan."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
