Sunday, January 27, 2008

Two planned nuclear plants call it quits

What scared them off?

AP is carrying a report this afternoon (Sunday Jan 27), first published by the Idaho Press, that MidAmerican is pulling out of its plans to build a nuclear power plant in Payette, ID. Elected officials in southwest Idaho say they've been told plans for a proposed nuclear power plant have been abandoned. The firm, which had about as much impact on Idaho's energy picture as a butterfly on a twig, seems to have skipped town with nary so much as a goodbye.

Emmett Republican Sen. Brad Little says MidAmerican Nuclear Energy, the Iowa company, which was studying locating a plant on 3,000 acres near the Paddock Valley Reservoir, told local consultants they were pulling out. Other elected officials confirm Little's account that they were told by MidAmerican officials the company was dropping out of the deal because of financial and other concerns.

Numbers might not add up

The market melt down and the turmoil in capital markets may be some of the reasons the privately held firm is backing out. They've still got investors who might be asking why the mid-range utility wanted to tackle the enormous capital costs of a nuclear reactor without other investors on board.

Another possibility is that MidAmeican had specified the new, giant Mitsubishi APWR, which has just filed its design with the NRC. Given the cost, and the time needed to certify the design, MidAmerican might have gotten cold feet just on these factors alone.

It's possible that Mitsubishi asked MidAmerican for financial support on the NRC design review, and without the near-term prospects of a revenue stream, MidAmerican balked. Finally, even if there was smooth sailing ahead for a brand new reactor design, no one has ever built one which makes the large forgings for the plant first-of-a-kind and thus more expensive.

The prospect of an anti-nuclear referendum on the Idaho ballot next year may also have weighed in the balance. That would be unfortunate if true. Economic development experts in the western part of the state can now start thinking about where the electricity is going to come from to keep the lights on.

Little said MidAmerican plans an announcement this coming week. We'll watch for it.

[Update 01/28/08] A Des Moines, IA, TV station reports that in a message posted on the Iowa company's Web site Sunday, Bill Fehrman, the project manager for the proposed Idaho nuclear power plant, says that after due diligence, MidAmerican Nuclear concluded it does not make economic sense to pursue the Payette County project at this time.

The decision was based on the economics of building a nuclear plant and not on whether the site near Payette was suitable, Fehrman says.

According to Fehrman's statement, MidAmerican still believes that that nuclear energy must be an important part of the nation's energy supply in the future.

Another nuclear utility stops work in South Carolina

Reuters reports that South Carolina Electric & Gas has suspended plans to submit a COL to the NRC. The firm had planned to specify two Westinghouse AP1000s for its Sumner, SC, site in a submittal scheduled for late last year.

A company spokesman said the company was concerned about the rising price of concrete and steel. However, Robert Yanity also said these costs are affecting all energy utilities, such as coal and gas, and are not confined to nuclear plants. He added that the firm is still "pro-nuclear," and may revisit its decision yet again in a couple of months.

If SCE&G decides to move forward to expand its nuclear capacity, it will file an application this year to take advantage of federal incentives for new reactors allowed under the Energy Policy Act of 2005, Yanity said. The new plant would be located at the site of the 966-megawatt V.C. Summer nuclear station in Fairfield County, about 25 miles northwest of Columbia.

The utility set a record for electric consumption on its system in August and set another record earlier this month amid freezing temperatures that exceeded its previous record set in August. Sooner or later Scana will need more generating capacity.

NRC's Klein still confident

Accordiong to Platts NRC Chairman Dale Klein said last week he expects "eventually" to see construction of all the units for which operators have formally indicated plans to file combined construction permit-operating license applications.

However, Klein said, the construction might be in two "waves." Klein made the comments to reporters January 22 after his presentation to the Nuclear Energy Institutes's Nuclear Fuel Supply Forum in Washington. He said NRC, on the basis of statements of intent by utilities, is anticipating 21 applications covering "about 32" units.

Klein told Platts some of the uncertainty may come from the "dynamics" between utilities and vendors. Because of current limits on the worldwide capacity to make the needed components, utilities may be looking for some assurance that the plants can be built on time and on budget, while vendors may be looking for a firm commitment from buyers before ramping up manufacturing capacity, he said. That would create a "chicken and egg" situation, he said.

NEI Response

The Nuclear Energy Institute has some thoughts on these developments. NEIS writes.

The decisions to delay or defer new nuclear projects takes nothing away from the inescapable fact that the United States needs more nuclear generating capacity, as part of a diversified electricity supply and demand management portfolio, to help meet the nation’s economic and environmental goals.

In particular readers are directed to review the issues associated with new nuclear builds. It makes for interesting reading.

1 comment:

Alex Brown said...

If you look at the number of plants that make it from "proposed" to actually being online that number is less than 50% for both nuke plants and coal plants, it should surprise nobody that some utilities have reconsidered, there will be alot more to do so before the first new unit is even online, and statistically speaking its probable that less that half the currently proposed reactors will ever actually run.