US nuclear plants abandoned

Article by Helen Tunnicliffe

SOUTH CAROLINA ELECTRIC & GAS (SCE&G) and Santee Cooper have abandoned construction of two nuclear reactors at VC Summer Nuclear Station in Jenkinsville, South Carolina, US. 

In a statement, Santee Cooper said that it had already spent US$4.7bn for its 45% share of the nuclear project. New analysis of the schedule and cost data from bankrupt contractor Westinghouse and subcontractor Fluor showed that the project would now not be complete until 2024, four years behind the most recent schedule, and cost US$11.4bn, 143% more than the board’s approved spend of US$6.2bn, which had already been raised from the original US$5.1bn.

According to World Nuclear News, SCG&E’s decision to abandon the project came after its own analysis reached similar conclusions – that an eventual spend for its 55% share of US$9.9bn was “prohibitively expensive” and would “materially exceed” initial cost estimates. The company initially investigated completing unit two and abandoning only unit 3, but Santee Cooper’s decision to suspend construction on both meant further analysis was unnecessary.

Santee Cooper said that its board will investigate other options to see if the project can be made economical again, but warned that additional resources, either in the form of federal support or partnerships with other utilities, will be necessary.

Westinghouse filed for bankruptcy in the US in March this year, blaming it on cost overruns at the VC Summer Nuclear Station and another in Georgia. Santee Cooper has largely blamed the abandonment of construction at VC Summer on these cost overruns.

“After Westinghouse’s bankruptcy and anticipated rejection of the fixed-price contract, the best case scenario shows this project would be several years late and 75% more than originally planned,” said Lonnie Carter, Santee Cooper president and CEO. “We simply cannot ask our customers to pay for a project that has become uneconomical. And even though suspending construction is the best option for them, we are disappointed that our contractor has failed to meet its obligations and put Santee Cooper and our customers in this situation.”

Westinghouse parent company Toshiba will pay settlement fees of US$976m to Santee Cooper and US$1.1bn to SCE&E. Santee Cooper said that the money will be used to avoid new debt, stabilise rates and benefit customers, and that it will continue to pursue Westinghouse and Toshiba to further offset costs.

Westinghouse CEO José Emeterio Gutierrez greeted the news with dismay.

“While we respect Santee Cooper’s decision, we are extremely disappointed. The South Carolina economy is sure to feel the negative impact of losing over 5,000 high-paying, long-term jobs, as well as not having available the reliable, clean, safe and affordable energy these units would provide. Also, at a time when other nuclear plants are being retired, the US energy sector is sure to feel the stunting impact of walking away from these two nuclear units,” he said.

Maria Korsnick, president and CEO of the US Nuclear Energy Institute, also said that the decision to abandon the construction of the plants is “disappointing”. She noted the economic, regulatory and other difficulties in constructing nuclear power plants but said that SCE&G and Santee Cooper “have always managed those challenges impressively”.

“While many factors have changed since these two companies started construction of the new nuclear units, one thing has not changed, and that’s the value of nuclear as a safe, reliable, clean source of energy,” she said, adding: “All the more now, we must impress upon our energy policy decision makers the vital role of nuclear energy in America’s energy portfolio. As America’s need for electricity continues to grow, which means hundreds of new generating facilities will need to be built, clean and reliable nuclear energy will be an essential part of America’s energy security."

Article by Helen Tunnicliffe

Senior reporter, The Chemical Engineer

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