Fitch: US Nuclear Power Growth Prospects Uncertain
NEW YORK–(BUSINESS WIRE)–The recent failure of modular construction to deliver lower prices and shorter timelines will likely keep a cap on U.S. nuclear development into the mid term, Fitch Ratings says. However, the U.S. Environmental Protection Agency’s Clean Power Plan, along with the rise in federally funded nuclear power research, could yield growth factors longer term.
The total cost to complete the Vogtle nuclear power plant expansion has risen to approximately $14.5 billion. Similarly, construction costs for the new units at the V.C. Summer plant have risen to approximately $12.4 billion. Both projects are approximately three years behind schedule. They are using a modular construction technique and technology developed by Westinghouse, the AP1000 PWR, which was designed to be less costly and faster. Four AP 1,000 reactors under construction in China have also experienced cost overruns and delays. In our view, the change in expectations about this technique could join other forces in keeping expansion down.
Last year, the U.S. Energy Information Administration forecast that nuclear generation will drop by approximately 10,800 MWe by 2020 on the low cost of natural gas and an expected lack of growth in electricity demand. In our view this number could grow if more plant operators find upgrades and local political pressure too costly to continue operations.
These pressures shut Dominion Resources’ Kewaunee plant, Duke Energy Corp.’s Crystal River plant, Edison International’s San Onofre plant, and Entergy’s Vermont Yankee plant. Exelon’s Oyster Creek is scheduled for retirement in 2019. Approximately eight additional merchant units, with an aggregate capacity of 6,334 MW, are also at risk of early retirement.