Massive cost overruns and long construction delays plunge Toshiba-Westinghouse into "nuclear nightmare"

See Beyond Nuclear's posts and updates, including links to major business press coverage (Bloomberg, Reuters, Wall Street Journal, etc.), regarding Toshiba-Westinghouse Nuclear's loss of more than 40% of its share value in just a few short days, due to massive cost overruns, and long schedule delays, at new reactor construction projects in the U.S. (Vogtle 3 & 4 in GA, Summer 2 & 3 in SC) as well as China.

Two dozen groups urge State of MA to divest from Entergy due to safety and economic risks at Pilgrim

NRC file photo of Entergy's Pilgrim GE BWR Mark I on Cape Cod Bay in Plymouth, MABeyond Nuclear has signed onto an effort spearheaded by the Association to Preserve Cape Cod, and endorsed by two dozen local groups, to urge the State of Massachusetts to divest more than $8 million invested in Entergy. The signatory groups cited the economic and safety risks associated with the nuclear utility's problem-plagued Pilgrim atomic reactor. A June 4th letter was sent to Governor Patrick and Treasurer Grossman, as described in a June 9th press release.

NRC recently placed Pilgrim on its "degraded" performance short list. The only other reactor in the country with a worse performance designation is FitzPatrick in upstate New York. Both Pilgrim and FitzPatrick are General Electric Mark I boiling water reactors, identical in design to Fukushima Daiichi Units 1 to 4.

Entergy's Palisades atomic reactor in Michigan was similarly designated one of the worst performers in the U.S. a couple years ago, after not one but two near-misses in 2011, and yet another one in 2012, as documented by David Lochbaum at Union of Concerned Scientists.

A year ago, energy economist Mark Cooper of Vermont Law School identified Entergy's six merchant reactors (half its national fleet), including Pilgrim, as at risk of near-term shutdown. This is due to a variety of factors, including economic uncompetitiveness and needed, costly safety repairs. In August 2013, Cooper was proven right, when Entergy announced the permanent shutdown of Vermont Yankee (another Entergy GE BWR Mark I) by the end of 2014.

Update on June 11, 2014 by admin

The State Treasurer of Massachusetts has responded to the Association to Preserve Cape Cod, expressing strong support for the efforts to permanently close Entergy's Pilgrim atomic reactor. However, the State Treasurer has indicated that divestment of state pension funds from Entergy would require the enactment of legislation -- that is, action by the state legislature, as well as the governor.

Radioactive "Moral Hazard": DOE loans, and guarantees, $6.5 billion for two new reactors for a 0%, $0.00 credit subsidy fee!

Aerial image of Plant Vogtle Nuclear Generating Station - photo credit to High Flyer. The photo shows the operating Units 1 and 2, as well as the construction site for proposed new Units 3 and 4.Southern Alliance for Clean Energy reports in a press release entitled "New Documents Confirm Utility Giant Southern Company Gets Sweetheart Deal from Energy Department for Multi-Billion Nuclear Loan Guarantees for Vogtle Reactors":

"As revealed today in an Energy & Environment News story by Hannah Northey, the credit subsidy fee for utility giant Southern Company and its utility partner, Oglethorpe Power, for billions of dollars in taxpayer-backed federal loan guarantees, is nothing, $0. This shocking information was disclosed two months after the Department of Energy (DOE) finalized terms of $6.5 billion worth of loan guarantees that were offered as part of an $8.3 billion package to build two new nuclear reactors at Plant Vogtle in Georgia. A third partner in the project, MEAG, has yet to have their $1.8 billion loan guarantee finalized."

Incredibly enough, despite the massive loan guarantees, Wall Street private investment firms were still so disinterested in Vogtle 3 & 4, that the loan itself had to come from the U.S. Finance Bank -- a U.S. taxpayer funded institution!

Please register your disapproval of this nuclear sweetheart deal, at taxpayer expense and risk, to President Obama, your two U.S. Senators, and your U.S. Representative! You can be patched through to your Members of Congress via the Capitol Switchboard at (202) 224-3121.

More.

RMI: "Nuclear Power's Competitive Landscape and Climate Opportunity Cost"

Amory B. Lovins, Cofounder and Chief Scientist, RMITitiaan Palazzi, Special Aid, RMIAmory B. Lovins, Cofounder and Chief Scientist, and Titiaan Palazzi, Special Aid (photos, left), of the Rocky Mountain Institute in Snowmass, CO, presented "Nuclear Power's Competitive Landscape and Climate Opportunity Cost" at "Three Mile Island 35th Anniversary Symposium: The Past, Present, and Future of Nuclear Energy" held at the Thayer School of Engineering at Dartmouth College in Hanover, NH, on 28 March 2014.

Lovins and Palazzi report that, when compared to nuclear power: (1) Efficiency and renewables are far cheaper; (2) Renewables can deliver similar or better service and reliability; (3) Renewables can scale faster;  and (4) For climate protection, efficiency and renewables are far more effective solutions than new nuclear build, which indeed is counterproductive.

Lovins and Palazzi's economic critique extends not only to proposed new atomic reactors, but even to existing, age-degraded reactors. They state "Reactors are promoted as costly to build but cheap to run. Yet as Daniel Allegretti ably described, many existing, long-paid-for U.S. reactors are now starting to be shut down because just their operating cost can no longer compete with wholesale power prices, typically depressed by gas-fired plants or windpower."

Lovins and Palazzi also discuss the financial history of nuclear power, extending back decades. They point out that U.S. nuclear power orders collapsed before Three Mile Island partially melted down on March 28, 1979, and that 40% of U.S. nuclear-unit cancellations occurred before then, due to economic challenges.

Lovins and Palazzi conclude that "efficiency is clearly cheaper than average nuclear operating costs, which exceed 4¢/kWh [4 cents per kilowatt-hour] at the busbar and 8¢ delivered. Thus overall, for saving coal plants’ carbon emissions, efficiency is about 10–50x more cost-effective than new nuclear build—or about 2–12x more cost-effective than just operating the average U.S. nuclear plant."

Regarding nuclear power's retreat, Lovins and Palazzi report:

"Nuclear power also has to run ever faster to stay in the same place as its 1970s and 1980s growth turns into a bulge  of retirements. After the next few years, retirements will exceed all planned or conceivable global nuclear additions, even with all license extensions as shown here. Power reactors’ terminal decline will be over by about 2060—and in view of both competition and aging, this projection by Mycle Schneider [Mycle Schneider et al., World Nuclear Industry Status Report 2013] is more likely to overstate its longevity than its brevity."

They conclude their presentation by stating: "So whether you choose e fficiency, cogeneration, or renewables, just being nearly carbon-free does not make new nuclear build an effective climate solution. Rather, because it saves ~3–50x less carbon per dollar than its main competitors, and deploys slower, new nuclear build reduces and retards climate protection. If climate is a problem, we must invest judiciously, not indiscriminately, to get the most solution per dollar and per year. Anything less makes the problem worse. Nor do we need nuclear power to offset PVs’ and windpower’s variability, or to scale faster than renewables, or to save or make money, because, as we’ve seen, nuclear power cannot do any of these things. So there is no reason to build more nuclear plants. Capital markets, seeing big new costs and risks without offsetting benefits, long ago reached the same conclusion. Existing nuclear plants, a future idea whose time has passed, will simply retire; the only choice is how quickly and at what cost to whom. End of story." (bold added)

DOE signs $6.5 billion federal nuclear loan guarantee for Vogtle 3 & 4

Aerial image of Plant Vogtle Nuclear Generating Station - photo credit to High Flyer. The photo shows the operating Units 1 and 2, as well as the construction site for proposed new Units 3 and 4.U.S. Secretary of Energy Ernest Moniz has announced that the Department of Energy (DOE) will sign an agreement with Southern Co. and Oglethorpe Power for a $6.5 billion loan guarantee that puts federal taxpayers on the hook if the Vogtle 3 & 4 new reactor project defaults on its loan repayments. This, despite the fact that the project is seriously over budget and behind schedule, as has been so common in the history of nuclear power. The sluggish construction has only been able to slog along thus far due to gouging of ratepayers via Construction Work in Progress (CWIP) surcharges on their electricity bills, illegal in most states.

The loan guarantee was supposedly intended to entice Wall Street investment firms into loaning money for new reactor construction projects, given that the taxpayer would shoulder almost all of the financial risks. But Wall Street has not invested in Vogtle 3 & 4 -- the actual loan will come from the U.S. Finance Bank, which is federal taxpayer funded. Thus, nearly the entire financial risk for Vogtle 3 & 4 is placed squarely on the backs of federal taxpayers.

Energy Secretary Ernest Moniz will speak at the proposed new reactor construction site at 2 PM Eastern today, Thursday, Feb. 20th (you can listen to his address by calling 1-800-282-1696).

President Obama gave the Vogtle 3 & 4 federal loan guarantee offer (for a total of $8.3 billion) the highest profile possible, by announcing it himself at a press event in Feb. 2010. Despite this, it has taken over four years for the project proponents to sign on the dotted line, given their reluctance to put any of their own "skin in the game," in the form of credit subsidy fees. The nuclear loan guarantee program was authorized in the 2005 Energy Policy Act, and $22.5 billion was approved by Congress and George W. Bush for new nuclear facilities on Dec. 23, 2007 ($18.5 billion for new reactors, $4 billion for new uranium enrichment).

The $8.3 billion Vogtle 3 & 4 federal loan guarantee is 15 times bigger than the infamous Solyndra solar loan guarantee, which defaulted on its loan repayment, a $585 million loss to the U.S. Treasury. But the Vogtle 3 & 4 loan guarantee is at much higher financial risk of default than was the Solyndra solar project!

Beyond Nuclear's Paul Gunter blasted the deal in a Common Dreams interview. Southern Alliance for Clean Energy (SACE) also blasted the deal in a press release. Harvey Wasserman has penned an essay entitled "Obama's Nuke-Powered Drone Strike on America's Energy Future."

Please contact President Obama and Energy Secretary Moniz, registering your disapproval of this $6.5 billion nuclear loan guarantee, and urging them not to grant the remaining $1.8 billion nuclear loan guarantee to project partner MEAG for Vogtle 3 & 4. Also urge them to withdraw any further nuclear loan guarantee offers, with the remaining $10.2 billion authorized for new reactors, and $4 billion authorized for new uranium enrichment.

But the federal nuclear loan guarantees, and even the CWIP charges which are gouging Georgia ratepayers, are not the only subsidies benefitting this proposed new reactor project. If Vogtle 3 & 4 do get built and operated, the George W. Bush DOE also obligated U.S. taxpayers to ultimate liability for the risks and costs of the high-level radioactive waste they would generate. DOE hastily signed the contract in the last days of the Bush administration, despite the fact that federal courts are awarding $500 million per year in damages to nuclear utilities for DOE's breach of contract for failing to begin taking title to irradiated nuclear fuel in 1998 under the contractual agreements signed in the mid-1980s. The hastily signed contacts were exposed by D.C. attorney Diane Curran, IEER President Arjun Makhijani, and Beyond Nuclear's Kevin Kamps in a March 24, 2010 press conference based on a FOIA Request.

Update on February 20, 2014 by admin

Since when did Georgia Power/Southern Company take over communications for DOE?! When Beyond Nuclear's Kevin Kamps phoned into the teleconference call audio broadcast of the DOE-Southern Co. "loan guarantee signing ceremony," at the toll-free number listed above, a Georgia Power (not a DOE) public relations official answered the call and patched him through!