Vogtle site sees slippage as suppliers miss deadlines

The Associated Press reports, as a result of obtaining documents from the Georgia Public Service Commission, that the regulatory body’s staff says “there is a high probability” the twin nuclear reactors under construction at Southern’s Vogtle site will be delayed longer than the three years already on the record. How much of a delay isn’t clear.

If this turns out to be the case, the first unit, scheduled to come online in April 2016, will now not enter revenue service until sometime in 2019. As time is money in construction schedules, these delays will add to the costs for the plants which will eventually be passed on to ratepayers. Lawsuits, a perennial cost of doing business on very large construction projects, already have been filed by both vendors and the customer over the delays.

The report, circulated internally at the Georgia PUC on April 28, points out numerous problems with getting key components from suppliers and singles out Chicago Bridge & Iron Co. as one of them.  William Jacobs, the PUC’s consulting nuclear engineer, wrote in the report, according to AP, that contractors at the site have not done well in making up time once they fall behind on meeting key schedule milestones.

According to AP, Georgia Power, which expected to pay $5.1 billion for its share of the costs, now looks to have to shell out $8.2 billion.  Still, Southern believes the nuclear plants are a good buy and will serve the region for a very long time.

Georgia PUC Commissioner Tim Echols points out, in an interview with WTVC, that over the long term both Georgia Power and TVA will be moving away from coal and natural gas because of limits on carbon emissions.  He says this opens the door to more, not less, nuclear power despite the fact that TVA’s latest long term strategic plan slams the door on completing one of the Bellefonte units.

Echols says that TVA will finish Watts Bar II and this will be a nuclear success story along with the completion of the Vogtle reactors this decade.

As for the current low price of natural gas, Echols says it can spike any time due to unforeseen market issues. By comparison, once a nuclear reactor is up and running, operating it has very stable cost curves.

Can nuclear plants do a century?

In the world of competitive bicycling, a 100 mile run is called a “century” and at an average speed of about 15 mph, takes most of a day to complete.  In the world of nuclear power, most plants are built with the plan that they will be in service for the full term of their initial 40 year license, and then get one license extension for another 20 years.  An 80 to 100 year run, until recently, hasn’t been considered, based on what is known about metal fatigue, corrosion, and the management of a complex power station.

However, the CEO of Areva in the US is thinking out loud that maybe a century long run could be within reach.  In a panel discussion hosted by the Charlotte Business Journal in May, Gary Mignonga said he thinks that as an engineer the materials that go into today’s nuclear reactors could easily support a service life of 100 years. While Areva isn’t building any reactors in the US, it has a ongoing line of business servicing existing plants. So it knows a lot about their current condition and what kind of maintenance they will need in the future.

Another major vendor, Toshiba, also thinks reactors can have a longer service life than 60 years.  Ali Azad, CEO of the firm, told the panel the success factors are to prepare to recondition major components and fabricate replacement parts long before they are needed in a a crisis. He said these investment will improve the output of the reactors by a factor of five-to-seven percent and can pay off in 30 to 50 years of additional service life.

Azad wisely points out that the suppliers who provided the components for the reactor when it is built may be history by the 60th year of service. Very long lead times for major components, and indepth design reviews, are obvious steps to insure a longevity plan doesn’t fail due to a lack of the right parts or materials.

One of the outcomes of extending the service life of existing plants is that it could push new construction into the future. John Downey, a reporter for the Charlotte Business Journal, points out that in the case of the William States Lee III plant, planned by Duke Energy, it’s construction start date might be moved even further into the 21st century if Duke’s 2500 MW Oconee power station has its license extended another 20 years when it hits the 60 year mark in 2033.  That would put the need for the Lee plant at mid-century.

Future of the Lee plant depends on lots of variables

Downey also conducted an interview with Duke CEO Lynn Good (right) about the future of the Lee plant.  It’s clear from that dialog the company is in no hurry to commit to build it.  At a minimum it will wait to see how things turn out for Southern at the Vogtle site in Georgia and also at the V.C. Summer site in South Carolina. All four AP1000 reactors should be in revenue service in a 2020-2022 timeframe. How much they will cost, and how they will prosper, or not, will shape Duke’s plans for the Lee reactor site, which also references twin AP1000s in its NRC license application.

One of the key variables is that while Duke’s service area for the plant straddles North and South Carolina, only South Carolina has a regulatory rate structure that allows the utility to recover construction costs as the plant is being built. The North Carolina legislature hasn’t taken up the issue and, according to Downey’s report, isn’t likely to consider the issue any time soon since Duke hasn’t tagged it as a priority.

Duke’s low key approach to the Lee plant is shown also in its spending rate on the project. While the license application is making its ways through the NRC toward a 2016 completion date, since 2008 Duke has spent less than $500 million on the $11 billion project. Once the license is issued, it is good for a very long time so long as the utility doesn’t make major changes to its plans for the new reactors.

Other issues that affect a decision to build, according to Downey’s interview with Good, are whether natural gas prices will remain low for the next few decades and also whether EPA regulations related to climate change will force the utility to close some of its coal fired plants.  Renewable energy will have a role, Good said, but the variable sources of power they provide aren’t a substitute for baseload generation.

If Duke builds the Lee plant to bring it online sometime between 2030 and 2050, it could be still generating electricity through the middle of the 22nd century assuming the ideas of Areva and Toshiba about reactor life extension are proven in practice.

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