What looked like a start of a U.S. nuclear renaissance in 2008, when the first new nuclear units to be built in 30 years were announced, now, 9 years later, looks like a renaissance on hold.

The supplier of the four units, Toshiba/Westinghouse is in bankruptcy. Two units at Summer, South Carolina, have ceased construction and the owner consortia, SCANA/South Carolina Electric & Gas (55%) and Santee Cooper (45%) has announced they are abandoning the project. The two units at Vogtle (Vogtle 3 and 4), Georgia, will continue to be built with the owner consortia Southern Co./Georgia Power (45.7%), Oglethorpe Power (30%), MEAG Power (22.7%) and Dalton Utilities (1.6%) taking over the completion. However, instead of the originally planned start of operations in 2016/17 at a cost of $14 B the start of operation has moved out to 2021/23 and at a cost estimated to reach $28-29 B.

$28 B for the two units, each at 1117 MW, is $12,535 per kW, which is over 10 times as much as the cost of a new natural gas fired combined cycle gas turbine (CCGT)! The cost of electricity from the Vogtle 3 and 4 units will probably not be below 15 cents/kWh compared with less than 5 cents/kWh for a CCGT.

What could go wrong? Westinghouse’s AP1000 pressurized water design based on 20 years of R&D, had simplification as a major design objective with 50 % fewer safety related valves, 80% less safety-related piping, 85% less control cable, 35% fewer pumps, 45% less seismic building volume compared to Westinghouse generation II pressurized water reactor (PWR). It would, according to Westinghouse, “save money and time with an accelerated construction time from the pouring of first concrete to the loading of fuel”.

It looks like a “perfect storm” of several issues then hit the two projects. Probably the single biggest issue was that the supply chain was gone and had to be rebuilt basically from scratch. Interestingly some of the components were expected to be sourced from China as part of a bilateral co-operation agreement (2013). Other factors contributing to the delays and cost overruns may be found in project management shortcomings, optimistic budgeting as well as underestimation of risks.

The U.S. Government has been and remains strongly supportive of new nuclear, for example with very large loan guarantees. For the two Vogtle units the owner consortia have received $12 B in loan guarantees. Originally $8.3 B was approved in 2010 and finalized in 2014. Additionally, $3.7 B was recently (August 2017) approved. Further, a production tax credit (PTC) for new nuclear at 1.8 cents per kWh was approved in 2010, but with the condition that the new units had to be operationally latest by 2020 and capped for the first 6000 MW. Congress recently (June 2017) lifted the time restriction. (In comparison wind has presently a PTC at 2.3 cents per kWh for the first 10 years of operation, but it is schedule to be phased out over the next years, ending in 2020.)

For now, it looks unlikely there will be additional nuclear units built any time soon. Cost of energy will most likely be much too high to be competitive and the risks are too high for any company to take on, especially if they operate in competitive markets.

Both Lazard and EIA (U.S. Energy Information Administration) in their analysis of levelized cost of energy (LCOE) conclude that natural gas CCGT is the cost benchmark. For new generation coming online in 2019 EIA estimate natural gas CCGT to be at 4.5 cents per kWh, (onshore) wind without subsidies at 5.6 cents per kWh and solar without subsidies at 7.4 cents per kWh. Advanced nuclear, assuming a capital cost lower than the original budget for Vogtle, is estimated at 9.6 cents per kWh.

Argument has been made that things may change looking 30-40 years out, but it seems more likely that natural gas will remain low for quite some time, that wind and solar will continue to drop, while it seems unlikely the cost for nuclear will drop significantly. EIA in their 2017 outlook forecasts that in 2040 natural gas CCGT will be at 5.6 cents/kWh and unsubsidized wind and solar both will be at 6.0 cents/kWh, while advanced nuclear will be at 9 cents/kWh. Only in a scenario with very high prices for carbon dioxide (CO2) nuclear may be more competitive than natural gas, but nuclear still comes short of wind and solar. Already the capital cost for solar + battery is lower than the originally budgeted capital cost for Vogtle. Imagine what the difference will be in 30-40 years!

An indication of future costs and performance of nuclear will come when the very first of four AP1000 units in China is expected to come online later this year or early 2018, which will be more than three years after the original plan. China, more precisely its State Nuclear Power Technology Corporation, also made agreements with Westinghouse to develop a larger design of 1400 MW capacity, the CAP1400. China will own the intellectual property rights for this design.

Maybe a more viable route for a nuclear renaissance rather than to continue with the large (> 1000 MW) reactors could be to focus on small modular reactors (<300 MW) and/or medium modular reactors (300 – 600 MW). They may not initially be lower cost nuclear plants, but being modular and smaller they will be quicker to build providing the opportunity of a learning curve that can help reduce costs.

There are several conceptual designs for small and medium modular reactors, for example NuScale Power and TerraPower respectively. NuScale Power started 2007 based on research by Department of Energy (DOE) 2000 -2003. A first unit, rated at 50 MW, is planned to be in Idaho and to be completed 2026. The main investor in NuScale Power is Fluor Corporation. The company has a cost sharing agreement (2014) with $217 M in matching funds from DOE.

TerraPower, with Bill Gates as one of its investors and chairman of the board, has a unique technology, traveling wave reactor (TWR), with many benefits, not least the ability to use depleted uranium. It is still in the R&D stage. The company has agreements with many U.S. national laboratories, “allowing partnerships between these federal research institutions and private sector companies and universities”. In September 2015 the company signed an agreement with China National Nuclear Corp (CNCC) to develop and build a 600 MW prototype to be in Xiapu, China, by 2018-2022. The cooperation was followed up this month (October 2017) by the formation of a joint venture with CNCC to design and commercialize the TWR technology.

After all there may be a nuclear renaissance, but, if so, it may happen sooner in China than in the U.S.