Nuclear plant: too big to fail.
Owners of the last remaining nuclear-power plant under construction in the U.S. agreed to keep working, even as rising costs and unpredictable financial risks threaten the half-built project.
After several days of closed-door negotiations, lawsuits and intense political pressure to craft a deal, the owners agreed to finish work on the Alvin W. Vogtle Electric Generating Plant in Waynesboro, Georgia, US.
The owners have been struggling for the past couple of years after the designer and lead construction contractor, Westinghouse Electric Co., filed for bankruptcy after costs rose and the project fell years behind schedule. Earlier this year, Southern said the costs had risen again, this time by $2.2 billion. This pushed the total cost estimate above $27 billion, more than twice the original estimate.
The companies faced what amounted to a no-win proposition. If they walked away, they would have faced a political storm over who should pay for the massive sunk costs of the project, which wouldn’t generate any additional electricity but could require customers to pay higher electric rates. But staying meant taking on growing risk that the project’s budget would continue rising.
They faced political pressure. State officials, including Gov. Nathan Deal, urged them to continue work, citing the more than 6,000 construction jobs. The federal Department of Energy also said it would seek an accelerated repayment of loans to the project if work was halted.
Today:
The Vogtle Unit 3 nuclear power reactor has safely reached initial criticality, a milestone toward full commercial operations expected later this year in what would be the first new nuclear reactor in the United States starting activity since 2016. Vogtle Unit 3 has safely reached initial criticality, Georgia Power, Southern Nuclear, and Westinghouse Electric Company said this week.
I have no idea what the final cost was for this reactor but back in 2018, five years ago, "Southern said the costs had risen again, this time by $2.2 billion. This pushed the total cost estimate above $27 billion, more than twice the original estimate."
But on May 15, 2022: 250% over budget.
- Vogtle 3 and 4 stations are now likely to cost roughly $34 billion.
- Nuclear power continues to fail to gain commercial respectability in the U.S.
- The Vogtle plant is up to 10 times more expensive than alternative projects in Europe.
This was not a nuclear project, this was a "jobs program."
Nuclear energy, in the US, is dead, as far as my investing lifetime is concerned.
At 5%, $32 billion yields: $1.6 billion annually.
Cost of electricity by state, link here:
We'll come back in five years and see what electricity costs in South Carolina.
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