Vogtle continuation decision tells me America still produces leaders that can make complicated, long-term decisions
The Georgia Public Service Commission unanimously approved a plan to continue the Vogtle Expansion Project. Georgia Power, a wholly owned subsidiary of the Southern Company, immediately accepted the deal contained in the plan and will continue moving forward with due diligence and effort.
The announced decisions made me even more confident that there is strong leadership remaining in America, despite our highly publicized political chasms.
As an outside observer, I had little remaining optimism going into yesterday’s Georgia Public Service Commission meeting to decide the fate of the Plant Vogtle Expansion Project.
Fortunately, it turns out that I had given up too early. After a few intervenors made oral comments that reiterated their known positions, the commissioners adjourned the public comment portion of the meeting and immediately turned to their executive decision meeting.
Commissioner Tim Echols, who has been quite public about his desire to seek an equitable risk sharing agreement that protected public interests while still enabling the important project to be completed, introduced a detailed, 16-point motion.
He’d brought a stack of paper copies of his motion to the meeting and took the unusual step of requesting a second for his motion before reading it out loud. I’m no parliamentarian, but I recognized that path as a way to allow some interruption and discussion of individual points of the motion during the initial read.
Echols had obviously done a massive amount of homework, legwork and battlefield preparation work in the creation of his motion. It contained a number of provisions that delicately balanced competing interests and extracted the best achievable outcome for as many people as possible.
It recognized that some stakeholders were going to be disappointed, both those who were seeking full cost recovery guarantees and those who would only be satisfied with a complete project abandonment decision. Others would get a little and give a little while the people most deeply involved would get a lot, but also be tasked with giving a lot.
After a short discussion and a few modifications, the amended motion passed unanimously. Even though one of the modifications shifted a significant cost from customers to shareholders, the Georgia Power Company attorney attending the hearing accepted the conditions under which the project continuation had been approved.
Will Davis produced an excellent review of the specifics of the deal at ANS Nuclear Cafe, so I won’t repeat them here.
Suffice it to say that the deal extracts a bit of skin from all participants and includes a number of provisions designed to incentivize exceptional, successful effort while also providing substantial penalties for sub-par performance.
The learning process that began before the project was started will continue and additional lessons will be discovered and documented along the way. Instead of yet another process of learning how to fail at the complex task of building a large, reliable, durable nuclear fission power plant, the Vogtle Expansion Project retains the potential to become a success.
There is a lot of hard work remaining to be accomplished and the path will be bumpy, but the effort and the investment should be worthwhile.
Failure remains a possibility – no matter what scriptwriters may say, it’s an ever present “option” – but yesterday’s decision retained success as a possible outcome.
As my life mentors have often pointed out, failure happens only when you stop trying. The people who remain involved at every level of the Vogtle Expansion Project deserve to be considered to be potential winners until they give up and stop trying to complete their challenging task.
PS – That last paragraph was inspired by a Twitter interaction with a Tea Party activist who was disappointed that the GA PSC did not make Georgia Power stockholders more responsible for the cost of completing the projects. She wrote that “conservatives don’t believe in rewarding failure.”
GPS Commissioners Chuck Eaton and Tim Echols explain their decision:
http://www.nucleartownhall.com/blog/chuck-eaton-and-tim-echols-georgia-public-service-commissioners-pressing-forward-with-nuclear-energy-plant-vogtle/
At least the GA PSC recognized that Westinghouse bears the major responsibility for the problems. I wish the South Carolina PSC and legislature would follow suit.
Glad to hear it but how long do you think the Southern shareholders will put up with the continued cost increases? The PSC’s decision passes the buck from the ratepayers to the shareholders to pay for any more cost increases. This project is far from done and it’s costs will continue to rise. My guess is that when it hits about $27 billion (up from the current $25 billion), the shareholders will pull the plug. Sad but true.
@Brian
I’m not sure that your interpretation matches with the way that utility company shareholders operate. Not many activist investors dip into these companies.
@Rod
I’m not talking about activist shareholders and yes I fully understand how it operates (I was a licensed Financial Advisor and I fully understand corporate finances). When shareholders carry the burden, the scrutiny on the money being spent by the company increases. When “insiders” and Institutions hold nearly 60% of your stock, money is the only thing that counts. Shareholders are not going to take a beating on this just because they like nuclear power…..in my opinion.
@Brian
Speaking for myself as an investor, shareholders rarely spend too much time focusing on the cost numbers for various projects or initiatives. They focus more on share prices and dividends along with some forward looking analysis of future earnings.
Quitting a construction project even later than the current stage can be seriously detrimental to future earnings potential. Capital equipment that never achieves revenue generating status becomes a big write-off and incurs disposal costs. Under the recently implemented tax reform bill, write-offs are substantiallly less valuable than under higher rates.
My understanding is that the project managers at Vogtle have learned how to do a better job over the years. They are making fewer errors, doing a better job of both scheduling and sticking to schedules, and they have made big strides in improving quality at the construction site and among suppliers.
People who draw lines from the past to predict the future often ignore the human element of learning and end up with rather inaccurate projections.
An interesting comment from a colleague of mine…
Part of the reason the nuclear industry is struggling so much is that in America, power generation is highly cost-competitive, and we have become too interested in building fancy Cadillacs instead of reliable Toyotas that work.
The initial construction cost for TMI-1 was US$400M, equal to less than $2B today. Although it wasn’t good enough, it was safe enough. A meltdown and a hydrogen explosion, and it probably hurt no one.
I do like the AP1000 design, but we could probably build reliable, super safe nuclear power plants for $3/Watt today, if we could quit over-engineering and over-regulating. Generation II PWRs with digital I&C systems, some enhanced safety features, and the improved materials, analysis capabilities and knowledge of lessons learned would be more than good enough.
TMI-2 had the meltdown. TMI-1 is still operating.
Right, E-P. Virtually identical in design. First unit is normally most expensive to build.
Regards,
Jim
“A meltdown and a hydrogen explosion, and it probably hurt no one”
A partial meltdown, no hydrogen explosion (some burn off) and it 100% didn’t hurt anybody. The NRC unnecessarily scared and stressed the hell out of the surrounding area with their “possible hydrogen bubble explosion” myth that could have been debunked by middle school chemistry students.
Faulty relief valve design and faulty training by B&W, IMO doesn’t mean the design of the plant “wasn’t good enough”
This being Atomic Insights, there is additional insight at TMI Operators Took Actions They Were Trained to Take.
Hi, Bonds 25.
By wasn’t good enough, I mean that it did not operate problem-free, did not operate again, and resulted in physical plant changes, changes to emergency response planning, reactor operator training, human factors engineering, radiation protection, and many other areas of nuclear power plant operations. It also caused the NRC to tighten and heighten its regulatory oversight. These are all part of nuclear power plant design. Hydrogen burn, hydrogen explosion, whatever. The core melted and the plant was toast. It’s an engineering failure that we should not repeat.
Most likely no one was hurt. For sure, any increase in cancer would be unobservable in the statistical noise. It was a tiny bit of radiation released – negligible. Edward Teller blames his heart attack on Jane Fonda, but he also says he was working 20 hours per day after the accident. 140,000 people evacuated, and that’s a pretty dangerous thing to do.
http://www.u-s-history.com/pages/h1622.html
https://en.wikipedia.org/wiki/Three_Mile_Island_accident#Voluntary_evacuation
Regards,
Jim
I wish them good luck. Considering the delays and overprice the project has encountered, I fear they will need it.
“That last paragraph was inspired by a Twitter interaction with a Tea Party activist who was disappointed that the GA PSC did not make Georgia Power stockholders more responsible for the cost of completing the projects. She wrote that ‘conservatives don’t believe in rewarding failure.'”
Why not write about all the liberal progressive anti-nukes opposing Vogtle? Why focus on one lone so-called Tea Party member? Is this a way of influencing people’s perspectives?
PS, for the record, having actually worked in commercial nuclear power plant for 40 years, I think the regulatory playing field should be leveled and no one should get handouts from our tax money. Make fossil and renewable and all the rest sequester their pollution – carbon or heavy metal or radioactive or whatever.We nukes sequester ours. And no handouts for solar, wind, nuclear, fossil or anybody. Everyone should get treated equally. Let the free market work under a level regulatory playing field. I predict nuclear would win hands down. I will also add – make the NRC have common sense regs that aren’t myopically focused just on big PWRs and BWRs. Lots wrong with 10 CFR 50, especially Appendix A GDCs that don’t encompass molten salt, sodium cooled, gas cooled, etc. We tie our hands around our back and then say the solution is more govt handouts from DOE to pay NSSS companies who pay the NRC to allow them to build. What a money laundering shell game.
Perhaps. But please keep in mind that in classical economic theory, there is no such thing as a “free market” that is both “free” and stable.
The free petroleum market of the latter nineteenth century begat Standard Oil Trust which begat Sherman Anti-trust which begat FTC. Which regulates US markets such that they remain as “free” as practical while still serving the societal goal of reasonable competition.
Markets are there to serve society, not vice-versa. When a market poorly serves a societal goal, it’s for society to change its regulations such that it does. Thirty-five years ago society deemed electricity cost too much and had too little renewable generation. So we created merchant markets and gifted PTC. They serve society’s goals admirably.
Well, perhaps merchant markets are a tad over-rated, but if not free, they are at least free-er than the more highly regulated markets such as enjoyed by South Carolina and Georgia. They also brought us closure to Wenaukee and Ft. Calhoun. For those societal elements for whom nuclear plant closure is a societal goal, “free” merchant markets serve society as admirably as they do Big Gas.
I think most people here wish society would make long-term low-carbon power generation one of it’s goals, and reflect that in its markets. But we aren’t there yet.
Meanwhile, SCE&G has proposing “over 40%” of the generation of its abandoned $10 billion VC Summer nuclear debacle with a used 540 MWe combined cycle gas plant, for $180 million.
Which is a bargain even if you can’t do the math.
Wenaukee……you mean, Kewaunee?
@Ed Leaver
Since I can do simple math by inspection, I wondered how a 540 MWe gas plant can provide “over 40%” of generation expected from a 2,200 MWe nuclear project. (540/2200 =~0.24 AND gas plant CF is typically about 40-60% versus 85%+ for a nuke.)
So I read the article you linked to to find out that SGE&E had been a little more careful in its wording. The proposed gas plant purchase will provide SCE&G with 40% of the capacity it was expecting from its share of the VC Summer project.
SCE&G owned 60% of the project, so it was expecting 1320 MWe of capacity from a completed project. 540 MWe is slightly more than 40% of that number, but the expected generation from burning gas is still lower than from operating a nuclear plant.
Also interesting was SCE&G’s response about the effect on customer bills from gas price variations. Current rate structures treat fuel costs as separate pass through items. SCE&G isn’t assuming any financial risk by switching to gas. Instead, it will pass 100% of that risk to customers.
Thanks for the clarification Rod, and the Kewaunee correction Bonds 25. Either way, it sounds like a no-brainer for SCE&G. Even for a used nine-year old gas plant, that capital cost differential serves as sobering reminder of what we face to eliminate fossil fuels.
I also agree with your assessment, from personal conversation, that support for commercial nuclear power is far from a matter of simple demographics. WNA has a worthwhile (to me) piece up on One environmentalist’s view of nuclear, which lends some perspective I myself hadn’t considered.
@Nobody
A PS note rarely qualifies as the focus of an article.
The reason I included it is because I do not believe that nuclear energy is correctly portrayed as an issue where “liberal progressive” people are the opponents and “conservative” people are the advocates.
The ven diagram of nuclear supporters is far more varied than that myth implies. So are the political and cultural leanings of the opponents. Traditionally, nuclear projects are huge construction efforts employing a work force with significant or even majority membership in organized unions. There is a lot of government involvement at all stages. Those features SHOULD make the technology worth supporting for members of the traditional left.
First, I am quite happy that the Vogtle project will continue. That said, the Tea Party member is correct – failure should never be rewarded. There are principles here more important. The ends do not justify the means.
Second, as to liberal progressives, they with their clownish costumes and garish protest signs have been the ones protesting outside nuclear power plants, not Tea Party members, not conservatives. And their politicians have shut nukes down – Mario Cuomo and Shoreham, and now his son Andy and IPEC. For 40 years I have seen what these people do, waiting to cross their protest lines to go into work. Now a few of them, smitten by the gospel of global warming, just happen to tout nukes at long last? Too little, too late.
Third, since you mentioned it in your response, over 40 years I have seen what unions have done at nukes first hand. I recall well when the engineers at a certain nuke unionized. As 3:30 pm came along, it didn’t matter what they were working on – out they went, dropping everything. Really!
Another thing to the anti-free market people above. It is not the job of govt to do anything except provide the common defense and protect the public. No one has a right to redistribute wealth for his pet energy energy (or any pet project for that matter). This elitist mentality that certain people just know more than the rest (for example, the voters) – “let this small group of do-gooders control govt and they’ll be benevolent” is a lie from the pit of hell. As CS Lewis said, “Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.”
@Nobody: Thanks for your reply. As the “anti-free market” person to whom you most likely refer, I appreciate your time and Lewis.
Perhaps it depends upon one’s definition of “free”. It isn’t as though the likes of Carnegie, Morgan, Astor, and Rockefeller never did any good, for in fact they took pride in their philanthropy and sincerely felt their oligopolies served the greater number.
But they ruined a lot of good men in the process, by means the US Supreme Court eventually ruled was unjust. And that is the way of “free” markets: left to themselves they always devolve to monopoly or oligopoly, which always results in greater cost to the consumer. Ergo EU Competition Commission and US FTC.
Likewise, if competition is unfettered and its every dog for himself at lowest short-term cost, then it’s over-worked workers and the commons — our environment — that take the hit.
Ergo Clean Air Act, Clean Water Act, EPA. child labor laws, excessive hours laws. OSHA — these are all there for good reason: Left to themselves, “free” markets are indeed tyrannical. So we regulate them such as to maximize — or at least improve — our personal freedom and well-being while still enjoying the benefits of “market forces.”
But those resulting markets whose forces benefit us are no sense “free”. To think otherwise risks losing sight the thought and effort that goes into making them work for our collective benefit, rather than against.
Thanks again.
If one wants or believes in truly free markets, then surely the first step must be for all corporations to disband. After all, corporations are artificial entities granted existence through governmental rules.
How one responds to this minor but accurate thought experiment is a touchstone to whether a person is truly idealistic about free unfettered markets or just an apologist (consciously or not) for corporate abusers.
Jeff Walther said:
“If one wants or believes in truly free markets, then surely the first step must be for all corporations to disband. After all, corporations are artificial entities granted existence through governmental rules.”
I’ve been giving this some thought lately. I am working as a contractor for a company that is employee owned. I install a lot of stuff from Schweitzer Engineering Laboratories (SEL) which is employee owned and seems to be able to eat their competition.
It seems like employee owned companies are a good compromise. People own the business and this gives the incentive to maintain a good work ethic. It also may withhold the excess greed at the top that seems prevalent in many traditional companies. People get their basic pay and in a good year get a nice bonus. I’d expect they have a bigger voice than the normal employee voice in how things are done. Since employee owned companies compete in whatever market they are in, the good things of capitalism, i.e. innovation and best prices for the customer are maintained.
Eino, are you a contractor for Schweitzer Engineering Laboratory or another company installing SEL gear?
Whatever, the major portion of Ed’s company is about 2 km up the street from me and forms an increasing portion of my view. Pleased to read your opinion; I opine that SEL is doing the right things. It certainly is expanding.
“Eino, are you a contractor for Schweitzer Engineering Laboratory or another company installing SEL gear?”
Just a contractor that sometimes installs and tests their stuff. I’ve seen their buildings on the hills outside of Pullman making quality American made relays.
“My guess is that when it hits about $27 billion (up from the current $25 billion), the shareholders will pull the plug.”
I’m sort of sad to put this 2 cents in, but I think that they could have built several gas turbines with the same capacity and bought a lot of fuel for this amount of money.
They had many years to design these units. I know they had pump problems, but isn’t the rest known technology that’s been used since the 1960’s? I can’t imagine wasting that amount of money. Was this thing managed by the good ol’ boy brother in law company? Were regulations slippery or pinned down? If the requirements were known and agreed to, I don’t think the lion’s share can be the regulator’s fault.
As best as I can make out, following this, the problems lie entirely in construction management.
Here at Washington State University there used to be a program in construction management. It has been upgraded to a degree in construction engineering.
@Eino: Regulations were slippery and not pinned down. The Aircraft Impact Rule in particular, imposed by NRC after the COL had been granted but before start of actual construction, had significant effect on the project. I don’t know the details, but it apparently involved significant redesign of the containment, the largest part of the project with the most massive casting, which with it’s large passive cooling gravity-feed emergency reservoirs, was itself new technology.
The Book on this has not yet been written, as Vogtle 3 & 4 are not yet done. Construction mismanagement no doubt played an important part — but only a part.
Many of the problems stem from the fact that a) the design was not sufficiently mature for construction, b) field changes are very limited under new licensing rules, c) Very bad choice of fabricator for modules.
Most of the modules have been delivered so that is largely an issue of the past. For Summer, there were numerous LARs because of a and b and I assume the same is true for Vogtle. One uncertainty going forward is that Westinghouse is essential for resolving these issues.
Sanmen should be starting up shortly so we should get an idea of how the AP1000 design performs. I would be interested in RCPs, steam generators and digital control system performance.
New England is freezing, and you know what energy source is providing more electricity than any other?
Oil. 30% right now.
https://www.iso-ne.com/isoexpress/
While this is quite unusual, it’s also one of the most expensive ways to produce electricity, right after kitten-powered treadmills.
It is also a shame.
Oil should be used for transportation. It’s going to run out some day, and you can’t beat gasoline for powering cars. Natural gas should be used for heating homes, and nuclear, hydro, coal and renewables should be used for electricity production.
Not blaming Obama too much, but a significant number of US coal and nuclear plants were shuttered during his admin. Meanwhile, China has almost 40 nukes, with 20 more under construction. They are also building lots of coal plants, although they have scaled-back their original construction plans. They have always been long-term planners.
Vermont used to get 72% of its electricity from nuclear power, and now it effectively burns fossil fuels instead. Sad.
We should be getting most of our electricity and most of our district heat from nuclear. Hydro can only be a bit player on the national scale due to supply limits, and the unreliables are unreliable.
We should build enough nuclear electric supply that lots of overnight space heat outside hot-water districts comes from surplus electric power rather than combustion of anything. We should aim for our vehicle fleet to be 80+% plug-ins of some type, as the Enevate silicon-based Li-ion cells which charge at 10 C are changing that game in the favor of electrics. All of this comes at the expense of natural gas and petroleum.
Hi, E-P.
I appreciate your strong pro-nuclear viewpoints.
Just to clarify why I suggested what I did…
I think methane should be used for heating, because it is 85% or more efficient at that. For producing electricity, it is best about 65%, even for combined-cycle plants.
I think hydro should be used for electricity, because it is cheapest, generally reliable, and can baseload or load follow. It is very dangerous, though, and expansion is greatly limited.
Coal is very dirty, but it is competitive and the US is blessed with massive reserves.
Oil for transportation since the infrastructure already exists for long trips, the hydrogen density of gasoline is extremely high, battery technology is not quite there yet (except for commuting and shorter trips), and the infrastructure improvements are massive.
Renewables have a fit, particularly for locations far from grid and/or with consistently favorable winds or sunlight.
I am not so sure about your comment about district heating from nukes. It is a fantastic idea, but it requires nuke plants to be built close to large cities. Not that it can’t be done technically, or it hasn’t been done, but I wonder if it is politically feasible in the near-term.
Regards,
Jim
I have a condensing furnace which achieves on the order of 97% efficiency HHV. That’s still a whopping 184 grams of CO2 per kWh of heat delivered. Using overnight surpluses of nuclear electricity to displace NG would reduce that to ~15 grams.
When I do have to burn NG or some other fuel, I’d prefer to burn it in a cogenerator. A system built on e.g. ground-source heat pumps mixed with cogenerators has the potential to be both very low-carbon and extremely flexible WRT wind and solar electric. Unfortunately the available residential cogenerators are too expensive to be economic these days.
You forgot the biggie: you can’t really use it for anything else.
Hydro is wonderfully useful when and where you’ve got it, but it is a depressingly small fraction of US grid generation and there is no way to increase this very much. It’s best taken for what it does today and otherwise ignored.
Except for this one detail: most trips are not long. If you could electrify the next 15 miles after every stop, you’d slash liquid fuel consumption by a staggering figure. Enevate has announced a silicon-dominant Li-ion anode which can charge to 80% capacity in 5 minutes. Right there is your “15 miles after every stop” so long as you have the electric power available.
This requires a re-think, I agree. I’m working on it.
(cot’d)
We already have two meltdown-proof concepts proceeding to demonstration. The Chinese have proposed 450 MW(th) swimming pool reactors for district heating; the design is easy and could be completed in mere years. They are working on finding a community to accept the first plant. Eliminating filthy coal smoke with a swimming-pool reactor sounds like a no-brainer to me, but I’m not Chinese and don’t know what they’ve been taught to fear.
The other is NuScale. NuScale is about 1/3 the size at 160 MW(th), and runs in a pool of water which provides walkaway-safe, meltdown-proof emergency cooling. Had we a sane regulatory system and informed public, we’d be getting ready to install such plants underground inside city limits to drive both the regional electric grid and space heat and DHW via hot-water piping at perhaps 80°C. Unfortunately the US regulatory system is batshit crazy and the public has been inculcated with radiation paranoia for 50+ years. The former is fixable with paperwork, the latter is not.
That’s a pity. By my calculations, the municipality nearest me could be both lit and heated by a single NuScale unit. It would be easy to have 2 levels of fallback, to electric resistance heat during autumn refuelings and to supplemental gas/biofuel heat during extreme cold. But I see no way to overcome the programmed paranoia.
Jim,
While NG is 85% efficient at heating, a heat pump connected to a 65% efficient CC plant heats at 195-260% efficiency.