New nuclear plant gets $6.5 billion federal loan. Nuclear comeback?
A new nuclear project in eastern Georgia – one of a handful of nuclear projects to be built in recent decades – will receive $6.5 billion in federal loan guarantees, the Energy Department announced Wednesday. It's a boost for a nuclear industry that has suffered amid high-profile disasters and a weak economy.
One of the first new US nuclear projects to be built in decades is getting a multibillion dollar boost from the federal government.
Energy Secretary Ernest Moniz announced Wednesday he will approve $6.5 billion in loan guarantees to Atlanta-based Southern Co. for two new nuclear reactors at its Vogtle Electric Generating Plant, about 30 miles southeast of Augusta, Ga.
The $14 billion project is one of a handful of new nuclear reactors to be built from scratch in three decades, a rebound for an industry battered by high-profile nuclear disasters and competition from cheap natural gas. Demand for carbon-free energy and a post-recession increase in electricity use could bolster nuclear energy's long-term outlook. But for now at least, new US nuclear power appears limited to the projects already under way in the Southeast.
"There have been bumps in the road in the short term," says Steve Kerekes, spokesman for the Washington-based Nuclear Energy Institute, an industry group that advocates for nuclear technology. "Overall, we feel optimistic about the potential for nuclear energy’s growth in this country."
The last new plant built in the US was finished in 1996, and the industry has struggled to bring new projects online since. In 2005, Congress set aside $17.5 billion in loan-guarantees to jump-start what was then hoped to be a "nuclear renaissance," but the effort largely disappointed.
Construction costs ballooned, the economy sank, and the 2011 nuclear disaster at Japan's Fukushima Daiichi plant renewed concerns about nuclear safety, which date back to the Three Mile Island meltdown in 1979. Cleanup at the Fukushima site is expected to last for decades.
At least four US nuclear plants have shut down in the past year due to financial concerns and aging issues, and several plans for new plants have been abandoned altogether. The $6.5 billion approved for the Vogtle plant and an additional $1.8 billion still under negotiation may be the last of the federal dollars going to nuclear power in the near term.
"Meanwhile, the cost of natural gas, solar and wind power has dropped dramatically," Edwin Lyman, a senior scientist at the Union of Concerned Scientists, said in a statement. "Put simply, nuclear power – even with all of the federal subsidies it enjoys – has been priced out of the market.”
Still, nuclear power made up 19 percent of US electricity generation in 2012, according to the US Energy Information Administration, and is projected to grow by 5 percent to 2040. It is a carbon-free source of power in an era of growing concern over climate change and other negative impacts of carbon emissions. Unlike wind and solar photovoltaics, nuclear offers a stable, predictable supply of base load electricity. After dropping four out of six years since peaking in 2007, US carbon emissions are expected to have risen 2 percent in 2013 on added coal use.
If the US continues to rebound from the 2008 recession, electricity demand is likely to grow, meaning nuclear could again find a stable footing in the market. A rough winter has also pointed to shortcomings in an over-reliance on America's abundant natural gas resources as a provider of electricity. Extreme cold has constrained pipelines and driven up spot natural gas prices to record highs.
"This winter’s weather has certainly reminded people of the volatility associated with natural gas," Mr. Kerekes says in a telephone interview, noting that there is competition for natural gas as a resource because it is also used as a heating fuel. "Some power stations could not get gas because it was going to heating."