The state of the US and indeed western nuclear industries is exemplified by the decision on Monday to abandon the 35% completed Summer Nuclear Power Station project in south Carolina.  These were the only nuclear plants being constructed in the United States and upon completion would have been the first new plants since the 1980s.

South Carolina Electric & Gas Company (SCE&G), principal subsidiary of SCANA Corporation (SCANA) (NYSE:SCG), announced it plans to cease construction of the two new nuclear units at the V.C. Summer Nuclear Station in Jenkinsville in the USA.

The decision was reached due to the revised anticipated costs of construction being more than US$25 billion up from US$11 billion, uncertainty regards production tax credits (the plants would need to be in production by 2021 which seems most unlikely to qualify) and the realistic level of payments from Toshiba.  In addition the co-owner of the project, the South Carolina Public Service Authority elected to suspend construction as they had determined that it would not be in the best interest of its customers and other stakeholders to continue construction of the project.

Based on an independent evaluation the parties concluded that completion of both Units would be prohibitively expensive.

SCE&G also considered the feasibility of completing the construction of Unit 2 and abandoning Unit 3 under the existing ownership structure and using natural gas generation to fulfill any remaining generation needs. This option provided a potentially achievable path forward that may have delivered SCE&G a similar megawatt capacity as its 55% interest in the two Units and provided a long-term hedge against carbon legislation/regulation and against gas price volatility. SCE&G had not reached a final decision regarding this alternative when Santee Cooper determined that it would be unwilling to proceed with continued construction of two Units or one Unit. Consequently, SCE&G determined that it is not in the best interest of customers and other stakeholders for it to continue construction of one Unit.

Based on this evaluation and analysis, and Santee Cooper’s decision, SCE&G has concluded that the only remaining prudent course of action will be to abandon the construction of both Unit 2 and Unit 3 under the terms of the Base Load Review Act.

The cost blowout was due to the construction of a first-of-kind AP1000 reactor.  The AP1000 is  Westinghouse’s  new generation reactor designed for lower cost of construction and higher safety.

The AP1000 plant was completely resigned from earlier generation plants with:

 

• Fewer safety-related valves
• Less safety-related piping
• Less control cable
• Fewer pumps
• Less seismic building volume

Nevertheless, in the USA it seems that nuclear plants are unlikely to be economic now or in the immediate future.