- Southern CEO Tom Fanning predicted last week that only large companies working in regulated markets would be able to afford the kind of capital-intensive and long-term investments necessary to develop new nuclear plants, Platts reports.
- The Department of Energy (DOE) in June issued $1.8 billion in loan guarantees to support the expansion of Southern's Vogtle plant, which will be the first new units developed in the last 30 years.
- Fanning was critical of deregulated markets, which he said would not allow new nuclear plants to be developed.
Southern CEO Fanning used a speech last week at the Bipartisan Policy Center in Washington to criticize deregulated electricity markets for their chilling effects on the nuclear industry. The company is expanding the Vogtle plant in Georgia, a market where regulators allow costs to be recouped before the project is complete.
"We have the kind of regulatory environment that supports the kind of long-term, high-capital-cost big bets. In merchant markets you don't have any pricing that will support that kind of investment, and that's a shame," Fanning said, according to Platts.
While the addition of two reactors at the Vogtle plant will mark the first nuclear addition to the U.S. fleet in three decades, that project and the V.C. Summer nuclear facility (co-owned South Carolina Electric & Gas and Santee Cooper) are both behind schedule and over-budget. Some analysts say those issues will likely discourage further nuclear investment.
The answer may be smaller reactors, which appear to have support from the federal government, particularly as an emissions-free source of generation. The Department of Energy is preparing to spend more than $450 million to get licensing of the smaller facilities up and running, and Maine was considering allowing nuclear turbines with a capacity less than 500 MW to be developed without a referendum.
Over the summer, Utah Associated Municipal Power Systems (UAMPS) announced it would partner with NuScale Power to develop a small modular reactor capable of providing 600 MW of nuclear baseload, but the project was still in the very early stages.
Larger nuclear projects run billions of dollars — the Vogtle expansion will cost about $16 billion — which Fanning said makes it hard for anything but a large and established corporation to develop. "Once you start, you can't stop. You better have staying power to ride through the vagaries of the world's financial markets," he said.