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The first nuclear power plant to break ground in over three decades finally got its loan guarantee approved. The Vogtle power plant, under construction in Georgia, will receive $6.5 billion in federal loan guarantees. Secretary of Energy announced the approval in a speech on Wednesday, and he will follow that up with a visit on Thursday.
The loan guarantee was originally agreed upon in 2010 between DOE and Southern Company, owner of the plant, for the construction of two new reactors. The two parties struggled to finalize the original $8.3 billion, due to disagreements over how much Southern would have to pay for the credit subsidy – essentially a fee paid to the government to compensate taxpayers for taking on risk.
The Vogtle plant is the nuclear industry’s flagship project – the first nuclear reactor under construction since the late 1970’s – and a symbol of the “nuclear renaissance.” The new AP1000 design from Westinghouse offers improved safety systems and would be the most advanced nuclear design ever constructed.
But the renaissance was stopped before it ever got started. Many projects were cancelled over the last few years due to several factors that conspired against the industry. The fallout from the financial crisis led to weak electricity demand, low natural gas prices, and the Fukushima disaster all combined to douse cold water on the industry’s revival. The original estimate for the cost of the new reactors was $14 billion, but the project has already had to deal with cost overruns. The industry has suffered from a track record of delays and inflated costs, but President Obama asserts that nuclear power is an integral aspect of his administration’s plan to develop a clean energy economy.
By Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com