Huge cost overruns, construction delays, and subsidies doom nuke renaissance – “Things have not gone as planned”
[Update – 3/29/17 – seven years and billions of dollars later:
Salem NJ Nuclear Power Plant
[Update: 11/15/09 – more nails – The reactor relapse takes 3 hits to the head ]
In a devastating story, the New York Times Business page lands what could be a knockout blow to the nuclear industry’s attempt to revive nuclear power. Nuke industry PR has argued that new “safe” and “cost effective” engineering designs have solved the safety and economic issues, while the global warming crisis warrants a huge expansion. But the Times story destroys those myths, on purely economic grounds:
In Finland, Nuclear Renaissance Runs Into Trouble
By JAMES KANTER
Published: May 28, 2009
OLKILUOTO, Finland — As the Obama administration tries to steer America toward cleaner sources of energy, it would do well to consider the cautionary tale of this new-generation nuclear reactor site.
The massive power plant under construction on muddy terrain on this Finnish island was supposed to be the showpiece of a nuclear renaissance. The most powerful reactor ever built, its modular design was supposed to make it faster and cheaper to build. And it was supposed to be safer, too.
But things have not gone as planned.”
At the same time construction costs are escalating, the industry is seeking even more subsidies by taxpayers and electric rate-payers.
The Times story is a huge warning to the Obama energy planners and to State level public utility regulators and policy makers.
Would NJ Legislators and/or the BPU allow electric consumers to get stuck with footing the bill for a failed technology?
According to the Times story:
“In the United States, Florida and Georgia have changed state laws to raise electricity rates so that consumers will foot some of the bill for new nuclear plants in advance, before construction even begins.”
The industry has had more success in getting states to help raise money. This year, authorities permitted Florida Power & Light to start charging millions of customers several dollars a month to finance four new reactors. Customers of Georgia Power, a subsidiary of the Southern Co., will pay on average $1.30 a month more in 2011, rising to $9.10 by 2017, to help pay for two reactors expected to go online in 2016 or later”.
But resistance is mounting. In April, Missouri legislators balked at a preconstruction rate increase, prompting the state’s largest electric utility, Ameren UE, to suspend plans for a $6 billion copy of Areva’s Finnish reactor.”
Any move by NJ BPU to allow rate increases to subsidize nuclear construction risks would be a political nightmare.
Finally, would private investors ignore “warning lights” and take on investment risks under current (and projected) market and regulatory conditions?
“On top of such problems come the recession, weaker energy demand, tight credit and uncertainty over future policies, said Caren Byrd, an executive director of the global utility and power group at Morgan Stanley in New York.
“The warning lights now are flashing more brightly than just a year ago about the cost of new nuclear,” she said.”
All this is something to watch for as the Corzine Energy Master Plan – which embraces new nuclear power capacity – moves towards implementation.