This letter to the editor was not printed by the Richmond Times Dispatch
Sadly, I will not be able to attend this year’s shareholders meeting for Dominion Resources on May 11th in Columbia SC. Were I there, I would be asking out-going CEO Tom Farrell some difficult questions about the proposed North Anna 3 reactor.
“The estimated cost of building the new reactor at North Anna is $19 billion. Dominion paid $192 million for the Kewaunee reactor in Wisconsin. You ran this reactor for 5 years and were not able to make it be profitable. Dominion closed Kewaunee in 2013. How can Dominion expect to run the North Anna plant profitably, if it is 100 times more expensive than one it has already closed for economic reasons?”
“Dominion has already put over $1 billion into the rate base for this project it claims to have not yet decided on, making this one of the most expensive non-decisions in history. Now Dominion wants to spend in 2016 over half a billion dollars (the cost of a very large solar array) to wait another year to decide on North Anna, while the clean energy regulations are being litigated. Why not invest this money is solar PV which could be generating cheaper electricity, without toxic radwaste, at a lower price, even factoring in the cost of batteries?”
The global investment for renewables new capacity exceeded investment in fossil fuels (including fracking) and nuclear combined in 2015. Is Dominion just unable to find capable people to tap into this clear emerging market? Dominion has a fairly small fraction of its capacity in high profile renewables.
Dominion is fundamentally failing to become a forward thinking utility and instead depends on its comfortable relationship with the state government to push off the costs of its mistakes (like North Anna 3) onto ratepayers and taxpayers. Wise investors would recognize that this is not a sustainable investment strategy.
I was quite pleased to find out today that the Kewaunee nuclear-power plant in Wisconsin will close next year. Partly i was happy because the owner of this plant is Dominion Resources which is trying to decide if it wants to build another reactors near my home in Louisa County Virginia. Dominion stepping out of Kewaunee increases the chances they will never build North Anna 3 for several reasons:
- Their own nuclear staff and expertise is diminishing
- It means they can be convinced a reactor with lots of license life should be closed
- They bought this reactor in 2005, hoping to buy more reactors in the region
- Dominion tried to resell the plant and no one wanted it
- Because it will help highlight that insufficient funds are being saved for decommissioning costs.
If you cant make the economics of an already operating plant, which has a license to run until 2033, how is it going to make economic sense to build a brand new expensive plant, with all the new reactors running wildly over budget and years delayed?
Dominion paid $220 million for the single small reactor (556 MW) in 2005 and has been trying to sell it since April of last years. But there are no buyers for this white elephant. The Washington Post article on the closure points out that fewer than 20 commercial reactors have been closed in the US and the last one was in 1998. But nuclear power in the US is losing it’s race against time. The fleet is aging far faster than new units are being built and while the NRC is granting life extensions to ever utility which asks for one, it can not beat the fundamental truth that these plants, even with sunk costs long covered are becoming greater liabilities than assets.
Separately, the World Nuclear Industry Status report for 2012 was released, here is part of the executive summary.
Reactor Status and Nuclear Programs
• Startups and Shutdowns. Only seven reactors started up, while 19 were shut down in 20111
and to 1 July 2012, only two were started up, just compensating for two that were shut down
so far this year. As of end of June 2012 no reactor was operating in Japan and while two
units at Ohi have got restart permission, it remains highly uncertain, how many others will
receive permission to restart operations.
• Nuclear Phase Out Decisions. Four countries announced that they will phase out nuclear
power within a given timeframe: Belgium, Germany, Switzerland and Taiwan.
• Newcomer Program Cancellations. At least five countries have decided not to engage or reengage in nuclear programs, although they had previously planned to do so: Egypt, Italy,
Jordan, Kuwait, and Thailand.
• New Nuclear Countries. Iran became the first country to start commercial operation of a new
nuclear power program since Romania in 1996.
Construction & New Build Issues
• Construction Cancellation. In both Bulgaria and Japan two reactors under construction were abandoned.
• Construction Starts. In 2011, construction began on four reactors and two so far in 2012.
• New Build Project Cancellation. In Brazil, France, India and the United States new build
projects were officially cancelled. In the Netherlands, the U.K. and the U.S. key utilities
withdrew leaving projects in jeopardy.
• Certification Delays. The certification of new reactor technologies has been delayed numerous times. The latest announcement concerns the certification in the U.S. of the Franco-German designed EPR2 that was pushed back by 18 months to the end of 2014.
• Construction Start Delays. In various countries firmly planned construction starts were
delayed, most notably in China, where not a single new building site was opened, but also in
Armenia, Finland and the U.S.