For those learning English around the globe, Voice Of America (VOA) broadcast a new language lesson by telling the story of the latest crash landing of the financially out-of-control V.C. Summer atomic power construction project. South Carolina electric utilities had to call it quits on two half-finished Westinghouse Electric AP-1000 reactors with sunk costs between $ 9 billion and $11 billion, six years behind schedule, the bankruptcy of Westinghouse, possibly parent company Toshiba and nowhere near knowing how much more and how much longer it might take to finish. When VOA contacted Beyond Nuclear, the producer was looking for some historical perspective on the industry’s latest financial meltdown in the 21st Century from the anti-nuclear movement that began in the 1970’s.
As one co-founding activist with the Clamshell Alliance in New England, we all became familiar with “You can be sure, if it’s Westinghouse” to mean that it is going to be very, very expensive and way behind schedule. The “Clams” literally opposed the first groundbreaking shovel full next to the environmentally sensitive saltwater estuary in Seabrook, New Hampshire. In August 1976 there were two non-violent site occupations on the construction site organized by “affinity groups” and several large, legal assemblies to rally the public and inspire more principled resistance. The two Westinghouse 1150 megawatt electric pressurized water reactors were promised to Public Service Company at $450 million each. Fourteen years later and thousands of arrests for nonviolent civil disobedience and four bankrupted electric utilities, the final estimated construction cost of completion for Unit 1 in 1990 was close to $7 billion. Unit 2 construction was permanently cancelled in 1989 with an estimated $900 million in sunk costs. The Seabrook boondoggle was not an isolated event nor were Westinghouse reactors the only designs that lost control of cost-to-completion and time-to-completion. More than 120 units of nation’s nuclear power plant construction orders and projects of 1970’s and 1980’s, roughly half, were cancelled or abandoned with tens of billions of dollars in sunk cost. As Forbes reported in the magazine’s February 11, 1985 cover story headlined “Nuclear Follies,” “The failure of the U.S. nuclear power program ranks as the largest managerial disaster in business history, a disaster on a monumental scale. The utility industry has already invested $125 billion in nuclear power … only the blind, or the biased, can now think that most of the money has been well spent.”
So when the nuclear power industry announced it would venture back into the financial quagmire it should have immediately been recognized as folly. Nuclear power promoters ignored the warning signs and the tombstones in reframing a financial disaster into a “renaissance.” Nuclear power plant construction came at with such risk, all the major financial institutions warned that merely announcing construction would result in the downgrade of the company’s credit. In 2006, a Standard & Poor’s analysis of nuclear power development found “nuclear generation generally to have the highest overall business risk compared with other types of generation.” By 2007, Moody’s Investment Services acknowledged that this growing risk was due to the “size and complexity of the project, the long-term nature of the construction cycle and the uncertainties associated with all-in [total] costs, regulatory oversight” and many other unknowns. A 2009 report by Citigroup GlobalMarkets Inc. entitled “New Nuclear – The Economics Say No,” identified that construction costs, power price and operational costs for new reactors are large and variable enough so as to be dubbed “The Three Corporate Killers.”
Historically, the nuclear power ad men are skilled at re-imaging the same technology without legitimately addressing its fundamental economic failure, inherent dangers and long term despoiling of the environment. Splitting atoms to make steam to generate electricity remains an extremely wasteful use of energy. Only 33% of the heat in the fission process actually goes into making electricity while the remaining 67% has to be dumped into the environment to keep the reactor core from melting. The electricity industry is the leading consumer of increasingly precious water resources with a single nuclear power station consumes up to three billion gallons per day. The extreme cost of inefficiency and wasteful resource consumption has never been and never will be sustainable.
The industry is now eager to send politicians and consumers chasing yet another illusive and extremely expensive mirage, unproven Small Modular Reactors. The results should be expected to be no different. A handful of industrialists will walk off with tons of taxpayer and ratepayer money and fissile power projects will fizzle out in cancelled and abandoned projects. After repeatedly failing to demonstrate their argument for generating nuclear power on “economy of scale,” the industry now intends to sell its new notion that giant assembly lines in astronomically expensive factories will re-make the economics nuclear power competitive. In fact, it is a merely re-writing the prescription for financial disaster at the expensive of ratepayers and taxpayers.