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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Georgia Power Company (Atlanta, Georgia), a subsidiary of the Southern Company (NYSE:SO) (Atlanta, Georgia), has, for now, pulled the plug on a new nuclear power station the utility was considering building in Stewart County, Georgia. The potential nuclear plant, which has not been given a name, was in the very preliminary stages of development. It is not clear what sized nuclear plant Georgia Power was considering building.
Georgia utility regulators had authorized Georgia Power to collect up to $99 million from customers through June 2019 to study a potential nuclear site in Stewart County, south of Columbus, Georgia. That sum also would include the cost to apply for a construction and operating license (COL) that would be filed with the U.S. Nuclear Regulatory Commission (NRC) (Bethesda, Georgia). But last month, in a letter to the commission, Georgia Power said it was suspending its investigation of the new nuclear project. To date, Georgia Power has spent about $50 million of its authorized $99 million for preliminary work, spokesman John Kraft told Industrial Info. For more on the decision by Georgia regulators, see September 8, 2016, article -- Georgia Power: New Vogtle Nuclear Units Still Cheaper Than Gas.
In a March 1 letter to the Georgia Public Service Commission (GPSC) (Atlanta, Georgia), Georgia Power said it was suspending work on the Stewart County project due to changing economics, including load forecasts as well as lower fuel costs, Kraft said.
That decision comes after the utility experienced rising costs and missed construction milestones at its two-unit addition to the Alvin W. Vogtle Nuclear Power Station in Waynesboro, Georgia. Now about 60% complete, the current price tag to add two new units at Vogtle stands at $16.2 billion, several billion dollars over original estimates. A $16.2 billion price tag to add 2,234 megawatts (MW) of new nuclear generating capacity works out to about $7.25 million per installed MW of new capacity--roughly seven times the per-MW cost to build a new high-efficiency gas-fired generator.
Construction delays have pushed back the in-service dates for the new Vogtle units to mid-2019 and mid-2020. Most of the construction delays stemmed from the early years of the project. In the last few years, the project has hit its milestones. But in response to cost overruns and construction delays, the GPSC has started levying financial penalties on the utility. For more on that, see January 5, 2017, article -- Georgia Power Hit with Financial Penalties for Construction Delays at Vogtle Nuclear Plants .
Asked whether construction delays and cost overruns at Vogtle, or the recent bankruptcy filing by Westinghouse Electric Company, LLC (Cranberry Township, Pennsylvania), one of the plant's major contractors, colored Georgia Power's decision to suspend work at the Stewart County plant, Kraft replied, via email, "The project is at a natural transition point as we have completed development and site suitability work, and activities at the site have concluded. We are at a stage where we have to decide whether or not to continue, and we have decided to suspend work due to changing economics."
"We remain committed to preserving and providing cost-efficient generation options for our customers," Kraft continued. "Georgia Power will file an updated evaluation of new nuclear and other generation sources as part of the 2019 Integrated Resource Plan." "Any time you build a first-of-its-kind project, there will be unwelcome surprises and vertical learning curves. That goes double for nuclear, particularly when utilizing a new reactor design," said Britt Burt, Industrial Info's vice president of research for the Global Power Industry. "With low gas costs and declining costs for renewable energy, as well as customers' willingness to conserve energy, Georgia Power has numerous other, most cost-effective, ways to meet future electric demand."
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.
Georgia utility regulators had authorized Georgia Power to collect up to $99 million from customers through June 2019 to study a potential nuclear site in Stewart County, south of Columbus, Georgia. That sum also would include the cost to apply for a construction and operating license (COL) that would be filed with the U.S. Nuclear Regulatory Commission (NRC) (Bethesda, Georgia). But last month, in a letter to the commission, Georgia Power said it was suspending its investigation of the new nuclear project. To date, Georgia Power has spent about $50 million of its authorized $99 million for preliminary work, spokesman John Kraft told Industrial Info. For more on the decision by Georgia regulators, see September 8, 2016, article -- Georgia Power: New Vogtle Nuclear Units Still Cheaper Than Gas.
In a March 1 letter to the Georgia Public Service Commission (GPSC) (Atlanta, Georgia), Georgia Power said it was suspending work on the Stewart County project due to changing economics, including load forecasts as well as lower fuel costs, Kraft said.
That decision comes after the utility experienced rising costs and missed construction milestones at its two-unit addition to the Alvin W. Vogtle Nuclear Power Station in Waynesboro, Georgia. Now about 60% complete, the current price tag to add two new units at Vogtle stands at $16.2 billion, several billion dollars over original estimates. A $16.2 billion price tag to add 2,234 megawatts (MW) of new nuclear generating capacity works out to about $7.25 million per installed MW of new capacity--roughly seven times the per-MW cost to build a new high-efficiency gas-fired generator.
Construction delays have pushed back the in-service dates for the new Vogtle units to mid-2019 and mid-2020. Most of the construction delays stemmed from the early years of the project. In the last few years, the project has hit its milestones. But in response to cost overruns and construction delays, the GPSC has started levying financial penalties on the utility. For more on that, see January 5, 2017, article -- Georgia Power Hit with Financial Penalties for Construction Delays at Vogtle Nuclear Plants .
Asked whether construction delays and cost overruns at Vogtle, or the recent bankruptcy filing by Westinghouse Electric Company, LLC (Cranberry Township, Pennsylvania), one of the plant's major contractors, colored Georgia Power's decision to suspend work at the Stewart County plant, Kraft replied, via email, "The project is at a natural transition point as we have completed development and site suitability work, and activities at the site have concluded. We are at a stage where we have to decide whether or not to continue, and we have decided to suspend work due to changing economics."
"We remain committed to preserving and providing cost-efficient generation options for our customers," Kraft continued. "Georgia Power will file an updated evaluation of new nuclear and other generation sources as part of the 2019 Integrated Resource Plan." "Any time you build a first-of-its-kind project, there will be unwelcome surprises and vertical learning curves. That goes double for nuclear, particularly when utilizing a new reactor design," said Britt Burt, Industrial Info's vice president of research for the Global Power Industry. "With low gas costs and declining costs for renewable energy, as well as customers' willingness to conserve energy, Georgia Power has numerous other, most cost-effective, ways to meet future electric demand."
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.
