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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--On Tuesday, President Obama announced $8.3 billion in federal loan guarantees to help Georgia Power (Atlanta, Georgia) build a two-unit, 2,200-megawatt nuclear power plant in Burke County, Georgia. The facility, Plant Vogtle units 3 and 4, will be built on the existing site that hosts Vogtle units 1 and 2. Georgia Power is the largest subsidiary of the The Southern Company (NYSE:SO) (Atlanta).
This will be the first U.S. nuclear plant to start construction in three decades. The new two-unit facility is expected to cost $14 billion to build. Unit 3 is expected to begin commercial operation in 2016 and Unit 4 the year after that, according to the Southern Company. Building the two-unit generator will create about 3,500 construction jobs. Once the facility enters commercial operation, about 800 permanent jobs will be created.
Georgia Power received an early site permit for Vogtle units 3 and 4 last year from the Nuclear Regulatory Commission (NRC). Preliminary site work has begun, but construction cannot start until the NRC issues a combined operating license (COL). Southern Company reportedly expects to receive a COL license next year.
"There will be those that welcome this announcement, those who think it's been long overdue," the president said in unveiling the loan guarantees on Tuesday. "But there are also going to be those who strongly disagree with this announcement. The same has been true in other areas of our energy debate, from offshore drilling to putting a price on carbon pollution."
"But what I want to emphasize is this: Even when we have differences, we cannot allow those differences to prevent us from making progress," Obama continued. "On an issue that affects our economy, our security, and the future of our planet, we can't keep on being mired in the same old stale debates between the left and the right, between environmentalists and entrepreneurs."
"We are honored by the administration's confidence in our ability to build the nation's first new nuclear power plant in more than three decades," said Southern Company CEO David Ratcliffe after the Obama announcement. "It's an important endorsement in the role nuclear power must play in diversifying our nation's energy mix and helping to curb greenhouse gas emissions."
The president made the announcement at an International Brotherhood of Electrical Workers (IBEW) training center in Lanham, Maryland. Compared to Vogtle units 3 and 4, new coal-fired capacity of the same size (2,200 MW) would emit 16 million tons of carbon dioxide annually, Obama said.
On Tuesday, President Obama also announced that he was proposing adding about $36 billion in new federal loan guarantees to spur development of nuclear power. A federal loan guarantee program to support nuclear power construction was first created as part of the Energy Policy Act of 2005. A total of $18.5 billion was authorized by Congress but never committed. In recent months the nuclear industry has lobbied for a significant expansion of those loan guarantees.
Tuesday's commitment of $8.3 billion in loan guarantees was the first commitment of federal loan guarantees to the nuclear industry. If Congress approves the additional $36 billion in new loan guarantees, expected to be part of the administration's 2011 budget, a total of about $46 billion in uncommitted funds would remain. Several utilities have applied for loan guarantees.
"This is exciting news, definitely a step in the right direction," said Britt Burt, Industrial Info's vice president of research for the power industry. "The irony is, nuclear power is one of the lowest-cost sources of electricity generation today. But, when the next generation of nuclear reactors is built, electricity from those reactors is expected to be very expensive."
Even with federal loan guarantees, nuclear power remains a "bet the company" proposition. The two-unit expansion of the South Texas Project is estimated to cost $10 billion-$15 billion, a price-tag that caused one of the minority owners, CPS Energy of San Antonio, to file suit to exit the project.
In recent days the Obama administration started sending signals of a willingness to increase federal loan guarantees in an effort to reinvigorate its energy bill, which remains stalled in the U.S. Senate. The surprise election of Republican Scott Brown to fill Democratic Senator Ted Kennedy's vacant Massachusetts seat has led the administration to rethink several of its legislative initiatives. Republicans have pressed for an expansion of the federal loan guarantee program for nuclear power, but have resisted the "cap & trade" system advanced by the administration as a way to reduce carbon-dioxide emissions.
At the Maryland event, the president reiterated his view that comprehensive energy and climate legislation still is needed. "We're not going to achieve a big boost in nuclear capacity unless we also create a system of incentives to make clean energy profitable. As long as producing carbon pollution carries no cost, traditional [power] plants that use fossil fuels will be more cost-effective than [nuclear] plants." Legislators, interest-groups, and the American people "need to move beyond the broken politics of the past," he concluded.
View Plant Profile - 1011962
View Project Report - 17001442
Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy related markets. For more than 26 years, Industrial Info has provided plant and project spending opportunity databases, market forecasts, high resolution maps, and daily industry news.
This will be the first U.S. nuclear plant to start construction in three decades. The new two-unit facility is expected to cost $14 billion to build. Unit 3 is expected to begin commercial operation in 2016 and Unit 4 the year after that, according to the Southern Company. Building the two-unit generator will create about 3,500 construction jobs. Once the facility enters commercial operation, about 800 permanent jobs will be created.
Georgia Power received an early site permit for Vogtle units 3 and 4 last year from the Nuclear Regulatory Commission (NRC). Preliminary site work has begun, but construction cannot start until the NRC issues a combined operating license (COL). Southern Company reportedly expects to receive a COL license next year.
"There will be those that welcome this announcement, those who think it's been long overdue," the president said in unveiling the loan guarantees on Tuesday. "But there are also going to be those who strongly disagree with this announcement. The same has been true in other areas of our energy debate, from offshore drilling to putting a price on carbon pollution."
"But what I want to emphasize is this: Even when we have differences, we cannot allow those differences to prevent us from making progress," Obama continued. "On an issue that affects our economy, our security, and the future of our planet, we can't keep on being mired in the same old stale debates between the left and the right, between environmentalists and entrepreneurs."
"We are honored by the administration's confidence in our ability to build the nation's first new nuclear power plant in more than three decades," said Southern Company CEO David Ratcliffe after the Obama announcement. "It's an important endorsement in the role nuclear power must play in diversifying our nation's energy mix and helping to curb greenhouse gas emissions."
The president made the announcement at an International Brotherhood of Electrical Workers (IBEW) training center in Lanham, Maryland. Compared to Vogtle units 3 and 4, new coal-fired capacity of the same size (2,200 MW) would emit 16 million tons of carbon dioxide annually, Obama said.
On Tuesday, President Obama also announced that he was proposing adding about $36 billion in new federal loan guarantees to spur development of nuclear power. A federal loan guarantee program to support nuclear power construction was first created as part of the Energy Policy Act of 2005. A total of $18.5 billion was authorized by Congress but never committed. In recent months the nuclear industry has lobbied for a significant expansion of those loan guarantees.
Tuesday's commitment of $8.3 billion in loan guarantees was the first commitment of federal loan guarantees to the nuclear industry. If Congress approves the additional $36 billion in new loan guarantees, expected to be part of the administration's 2011 budget, a total of about $46 billion in uncommitted funds would remain. Several utilities have applied for loan guarantees.
"This is exciting news, definitely a step in the right direction," said Britt Burt, Industrial Info's vice president of research for the power industry. "The irony is, nuclear power is one of the lowest-cost sources of electricity generation today. But, when the next generation of nuclear reactors is built, electricity from those reactors is expected to be very expensive."
Even with federal loan guarantees, nuclear power remains a "bet the company" proposition. The two-unit expansion of the South Texas Project is estimated to cost $10 billion-$15 billion, a price-tag that caused one of the minority owners, CPS Energy of San Antonio, to file suit to exit the project.
In recent days the Obama administration started sending signals of a willingness to increase federal loan guarantees in an effort to reinvigorate its energy bill, which remains stalled in the U.S. Senate. The surprise election of Republican Scott Brown to fill Democratic Senator Ted Kennedy's vacant Massachusetts seat has led the administration to rethink several of its legislative initiatives. Republicans have pressed for an expansion of the federal loan guarantee program for nuclear power, but have resisted the "cap & trade" system advanced by the administration as a way to reduce carbon-dioxide emissions.
At the Maryland event, the president reiterated his view that comprehensive energy and climate legislation still is needed. "We're not going to achieve a big boost in nuclear capacity unless we also create a system of incentives to make clean energy profitable. As long as producing carbon pollution carries no cost, traditional [power] plants that use fossil fuels will be more cost-effective than [nuclear] plants." Legislators, interest-groups, and the American people "need to move beyond the broken politics of the past," he concluded.
View Plant Profile - 1011962
View Project Report - 17001442
Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy related markets. For more than 26 years, Industrial Info has provided plant and project spending opportunity databases, market forecasts, high resolution maps, and daily industry news.
