Long-Term Scenarios for Coal, Nuclear Power, and Natural Gas
In May, Southern Company cancelled the nation’s major coal sequestration project. This action was followed by the shutdown of massive nuclear construction projects in South Carolina, announced in July. An August decision in by Duke Power to suspend plans for nuclear construction in Florida added another major jolt for energy planners.
On August 31, Southern Company announced that it would attempt to complete its Vogtle nuclear plants, on shaky ground due to large budget overruns and lengthy delays. But with the bankruptcy of the Westinghouse Electric Company – the firm that was supposed to build the new nuclear reactors – and the loss of the synergies and industry learning that would come from multiple projects, hopes for an American nuclear renaissance now appears in tatters.
In the short term, these turning points create considerable pain for power company shareholders, ratepayers, and senior executives whose investment strategies had admirable intentions but fell short of feasibility.
But there may be even more important ramifications that are longer-term. Two technologies long thought essential for sharply reducing carbon emissions from electric generation and, thereby, slowing climate change, now appear to have a diminished future, at least in this country.
If we want to learn from recent developments, we need to ask what went wrong, if prescient strategic planning could have produced more favorable results, and whether there are lessons for fuels like natural gas, currently on a hot streak but whose role in the coming decades is a topic of fervent debate.
In the early 1980s, I joined a delegation of state officials from around the country that inspected abandoned nuclear construction sites in the State of Washington. The Washington Public Power Supply System had started out to build five large, 1,200 megawatt reactors, but finished only one, after the projected costs for completion became unsustainable. The fiasco led to the largest municipal bond default up to that time and the irreverent acronym WHOOPS for the red-faced power organization.
As our group visited a giant 480-foot tall, concrete cooling tower for a plant never completed, we jokingly wondered what would anthropologists think if they unearthed it centuries later, like an ancient Mayan pyramid. Would they try to discern some ancient religious meaning to this massive human endeavor?
The epic failure in the Northwest resulted from vast overestimation of future demand for electricity and an equally vast underestimation of the challenges managing projects of such magnitude. For a long time, the incident became part of the rationale for delaying further attempts to build new nuclear plants.
In 1984, the Office of Technology Assessment issued a report, “Nuclear Power in an Age of Uncertainty” (for which I served as an advisor). The report focused on safety, an issue that the American industry addressed with admirable vigor after the accident at Three Mile Island. In subsequent years, concerns about safety resided as a barrier to the growth of the industry.
