On July 31, 2023, the Unit 3 nuclear reactor at Plant Vogtle started putting electricity on the Georgia power grid in everyday operation. Vogtle Unit 4 is scheduled to go online in March next year.
Vogtle Unit 3 is first nuclear reactor to be built from scratch in the US in 30 years.
The owners of Plant Vogtle — there are four — have something to be proud of.
It’s hard to imagine, but Vogtle Units 3 & 4 will be putting carbon-free electricity on the grid 60, 80, or perhaps even 100 years from now.
The blades of today’s wind turbines will be in landfills: they have a lifespan of 20 years, and the fiberglass composite used to make them is almost impossible to recycle.
By 2050, when Vogtle will be a relatively young 27, over two million tons of wind turbine blades are projected go into US landfills every year.
Solar panels have a longer lifespan, 25 to 30 years. But they are equally challenging, indeed slightly hazardous, to recycle.
With suitable care and replacement of some components, 100-year lifetimes are currently talked about for nuclear plants.
Mark Nelson, of Radiant Energy Fund, likes to call them potentially ‘immortal’.
That would make them like the Pyramids, or the Medieval cathedrals:
Vogtle’s build time
Some would suggest that Vogtle took as long as a cathedral to build.
The facts aren’t quite so bad.
The International Atomic Energy Agency (IAEA) calculates a reactor’s build time from the date concrete was poured for the pad under the reactor (not for any ancillary buildings) to the date the reactor goes into service.
For Vogtle 3, those dates were March 12, 2013 and July 31, 2023.
So a bit over 10 years.
Ten years is not fast, but it puts Vogtle in the middle of the pack for US reactors built after 1980.
Aside: In nuclear, four years is fast. The Japanese were, once upon a time, the world-beaters in nuclear plant construction time. Their 60 plants built between 1970 and 2000 had a median completion time of 3.8 years.
That IAEA metric does not include site excavation. Which, on the topic of deep time, resulted in the discovery of a 40-million-year-old fossilized skeleton of an Eocene whale, subsequently named Georgiacetus vogtlensis:
The Cost
Vogtle was expensive.
Exactly how expensive… is a little hard to say.
Here goes.
The recent Vogtle project, ‘Plant Vogtle’, includes the new Units 3 & 4, but not the earlier two units on the site:
‘Plant Vogtle’ has four owners:
Georgia Power, 45.7%
Oglethorpe Power Corp., 30%
Municipal Electric Authority of Georgia, 22.7%
and the city of Dalton Utilities, 1.6%.
Georgia Power is owned by Atlanta-based Southern Company, an electric and gas utility holding company.
Jeff Amy, an AP reporter based in Atlanta, is the keeper of sums on Vogtle. His July 2023 figure, for both Units 3 & 4, is $31 billion.
Keeping track was not an easy task. The Vogtle story was, in the phrase of Dan Yurman, who followed it for years, a “Nantucket sleigh ride of cost escalation and delays.”
The sleigh ride was punctuated mid-course with some high drama. Vogtle came close to ending up in a ditch.
On March 31, 2017, Japanese multinational giant Toshiba put Westinghouse Electric Company LLC, the prime contractor at Vogtle, into Chapter 11 bankruptcy.
That Westinghouse was a legitimate, if several times removed, corporate descendant of the legendary industrial firm founded by George Westinghouse in 1886.
Westinghouse had agreed to build Vogtle on a fixed-price contract. It then allowed costs to spiral out of control.
It had no prospect of recovering those overruns, and they were only getting worse. By 2017, Westinghouse and Toshiba were looking at having to swallow some $5 billion.
The Japanese, as a rule don’t, like American-style corporate bankruptcy.
But Toshiba, to survive, had little choice. Westinghouse came close to taking Toshiba down with it. Toshiba’s chairman resigned. The company sold off its prized semiconductor division to raise cash.
The drama at Vogtle was further heightened when cross-cut to the parallel storyline at Vogtle’s sort-of-sister in South Carolina. Her woes, if anything, were worse.
At the Virgil C. Summer Nuclear Station near Jenkinsville, Westinghouse was building two nearly-identical AP1000 reactors for South Carolina Electric & Gas (SCE&G) and the South Carolina Public Service Authority (Santee Cooper).
The situation at Summer was ugly. An August 2017 journalistic investigation by Andrew Brown of the Post and Courier carried the headline, “Early signs of ‘incompetence at every level’ went unheeded.”
Construction orders for dozens of ironworkers weren’t handed out until mid-afternoon, so they pushed brooms. The scaffolding wasn’t there when the welders arrived, so they stood around.
The two South Carolina utilities decided to pull the plug on Summer, despite being $9 billion in. Work was about 35% complete. That $9 billion is set to be recovered over time by the utilities from their unhappy, and very vocal, ratepayers.
At Vogtle, the Georgia Public Service Commission (PSC) and Southern Company made an explicit ‘continuation decision’ in December 2017. Bechtel was brought to manage construction at Vogtle through to completion.
The missing datum in the Vogtle cost calculation is how much legitimate cost got written off in the bankruptcy. In a 2017 Georgia PSC memo, a figure of $4 billion is mentioned.
On its corporate books, Toshiba’s total write-down for Westinghouse, covering both Vogtle and Summer, was $6.3 billion.
Toshiba made a sizable $3.7 billion settlement payment to Vogtle’s owners. But that appears to be something like a refund, and so does not belong in the final cost calculation. Georgia Power ratepayers got some of that money back via a $25/month credit on their bills for three months that was labeled ‘Vogtle Settlement Refund’.
After all that, it’s important to note that Vogtle seems to be no financial threat to Southern Company, parent of Georgia Power. Southern’s market capitalization is at the moment $75.7 billion. Its full-year earnings for 2022 were $3.9 billion.
Measured by the combined customer base of its various subsidiaries, Southern is the second-largest utility in the United States. As a utility stock, Southern is widely held.
Federal funds were not really involved. Vogtle did benefit from two Department of Energy (DOE) loan guarantees, the first announced with some fanfare by President Obama in 2010. But loan guarantees, while they lower borrowing costs, are not outright subsidies, assuming the loan get repaid.
Westinghouse is still around, at present co-owned by two Canadian companies, Bookfield Renewable Partners, an investment management firm, and Cameco, the uranium miner.
Jobs
Vogtle was the largest jobs-producing construction project in the state of Georgia. News items report Vogtle providing 4,000 – 5,000 construction jobs in 2014 and as many as 9,000 at the peak of construction. Vogtle 3 & 4 are expected to provide 800 permanent jobs when the both units are in operation.
The ratepayers
A project the scale of Vogtle could only happen in a state with traditional, old-style utility regulation. The power market restructurings of the 1990s very intentionally disadvantaged technologies, like nuclear, that require large capital investment.
Georgia’s Public Service Commission (PSC) did a very conscientious job of protecting George ratepayers from the Vogtle cost overruns. The capital ‘cost’ of Vogtle to ratepayers — meaning how much will be added to the rate base on which the utilities are allowed a return — will be in the ballpark of $7 billion.
With electricity on the grid from Vogtle 3, a rate increase of $3.78 a month went into effect for Georgia Power residential customers. It should show up on their bills in August.
Utility ratepayers complain, as is their right, about any rate increase.
But for context, that Vogtle rate increase should be compared with other recent ones for higher natural gas prices.
In one quick, easy-to-find example, CoServ, a Texas electricity co-op, increased its rates $5.70 per month last November.
In May, the Georgia PSC approved a separate rate increase for Georgia Power to recover higher ‘fuel’ (read, natural gas) prices. That increase was 12%, about $15.90 on the then-average bill of $131.60.
Aside: That at the public hearing on that rate increase a representative of the Southern Alliance for Clean Energy took Georgia Power to task for allowing its customers to be the mercy of “unpredictable global markets.” That protester would presumably be pro-Vogtle.
Consumers in states with retail electricity markets, where natural gas price fluctuations get passed though quickly, have suffered rapid rate jumps from time to time. In Texas, there was a 44% bump in the four months after the Russian invasion of Ukraine.
And that’s in normal market operation, when state politicians don’t meddle. Gas and electric customers in Texas and Oklahoma are currently paying down, over 30 years, some $10 billion worth of special bonds to reimburse utilities for the high natural gas prices they had to pay during just the week of winter storm Uri in February 2021.
Some cost context
Stores about cost overruns and delays are a little too easy. Every large infrastructure project has them. Vogtle’s cost deserves some context.
For another nuclear build, we can look at Hinkley Point C in Somerset, England. In February 2023, EDF announced that costs would rise to £32.7bn (US$41.6 billion) and operation would be delayed by a further 15 months, to September 2028.
On roads, bridges and tunnels, consider: Boston’s Big Dig, 1991 to 2007, $24 billion; the Long Island Rail Road Project, $11 billion; or the New York City Second Avenue subway line, $9 billion. After those, the rebuilding of I-4 near Orlando, Florida, at $2.3 billion, seems a bargain.
The mother of all overruns and delays must be the California High-Speed Rail project. The Central Valley segment, just Bakersfield to Merced, will with luck be open by 2031. The most recent (2023) estimate for that segment alone is between $29.8 and $32.9 billion, up from an initial estimate of $10.6 billion.
Humility and hubris
In the late 1970s, some advisors to then-President Jimmy Carter gave him their opinion that the US nuclear industry could be put on ‘hold’ for 30 years, while issues around weapons proliferation were sorted out. Then, they opined, it could be readily restarted.
They were wrong about that.
The Vogtle story illustrates just how deep the erosion of the US nuclear became during that 30-year hiatus.
The erosion was not in science, technology or reactor design, but in people.
The ones who know how to pour concrete, weld rebar, and run construction cranes without dropping things.
And the people who can manage complex projects with critical paths along which people pour concrete, weld rebar, and operate cranes.
By the first decade of the 2000s, the time of the first so-called Nuclear Renaissance in the US, the nuclear industry was like one of those Medieval peasants who lived near the relics of Roman engineering and occasionally wondered, “How did they do that?”
It was knowledge forgotten.
Circa 2010, the hubris came easy.
Westinghouse, along with General Electric, built the first generation of US nuclear reactors in the 1950s and 1960s.
The company with the same name did that.
But the people then at Westinghouse weren’t the same people with those accomplishments. Those people were collecting their pensions.
The Westinghouse nuclear division had been the victim of Wall Street 1990s pass-the-parcel. It was owned in succession by: CBS, Viacom, and British Nuclear Fuels Limited (BNFL). It finally landed up at Toshiba in 2006.
Along the way, Westinghouse was stripped of the boring, unglamorous engineering and manufacturing stuff. It became a Wall Street–sexy intellectual property company.
It owned a great Paul Rand logo:
And a design for a new ‘Generation III’ reactor, the AP1000.
On paper.
The people problem, solution #1
The October 1979, findings of the Kemeny Commission report on Three Mile Island came as something of a surprise to nuclear engineers.
Aside: Official title “Report of the President’s Commission On The Accident at Three Mile Island,” delivered to then-president Jimmy Carter in October, 1979.
Engineering-types had been prepared for a discussion of relief valves that failed and the poor design of the control panel indicator light that mislead the TMI operators into believing the valve was shut.
Instead, the Kemeny Commission concluded “the fundamental problems are people-related problems and not equipment problems.”
The nuclear industry needed to overhaul its culture, not upgrade its valves. It needed to prioritize training, education, managerial accountability, and information sharing.
To its credit, the nuclear industry took those recommendations to heart. The nuclear industry’s reform of itself post-TMI is a rarely acknowledged triumph. The Institute of Nuclear Power Operations (INPO) was one result. That was like the airlines getting together and deciding to privately fund the NTSB, the National Transportation Safety Board.
But the stakes for the industry were high, even existential. One executive at the time put it like this: the next TMI would be the nuclear industry’s last accident. Because the public wouldn’t keep it around. Given Germany’s 2011 reaction to Fukushima, half a world away, he may have been correct.
The reforms worked.
This is visible not just from the safety record post-TMI, but in the steady improvement of capacity utilization at US nuclear plants, which climbed steadily in the 1980s:
The people problem, solution #2
Despite the conclusion of the Kemeny Commission that US ‘Generation II’ reactors were safe — if operated conscientiously — there remained a big post-TMI problem for anyone who wanting to build a new reactor.
Getting it approved by the Nuclear Regulatory Commission.
Fortunately, the lull in US nuclear reactors orders in the 1980s and 1990s gave engineers plenty of time to think. And they had lot of ideas to play with.
Nuclear reactor design became a long game of endurance played against the NRC.
Innovative designs using technologies such as liquid metal were out. The NRC was only familiar with pressurized light-water reactors.
First and foremost, any new reactor design would have to have what was called ‘licensing certainty’.
Generation III
The so-called Generation III light-water reactors designed in the 1990s ended up being a conglomeration of features selected off the smorgasbord of post-TMI ideas.
Most of the new features involved safety — not just actual safety, which may have been good enough already, but features that could prove safety to the satisfaction of the regulators, a slightly different thing.
‘Passive safety’ meant that the reactor would shut down and cool using natural forces, like gravity, instead of AC power supplies and motor-driven components. The distinctive barrel on top of the AP1000 is a water tank.
Emergency evacuations at TMI (and later Fukushima) had been a fiasco. The new designs would try to keep any accidental radiation release inside the site boundary.
That was for commercial, as much as safety, risk. In 1988, then New York governor Andrew Cuomo based what was basically a political hit on the Shoreham reactor on Long Island by using the size of the emergency planning zone as his de jure justification.
Core damage had proved disastrously costly at TMI. The designers could try to minimize that.
Lifespan hadn’t been much of an issue back the 1960s when reactors were young. The new ones would to be easier to maintain, even overhaul completely.
The designers had their own ideas for reducing construction time and costs. ‘Modularity’ was already a buzzword in the 1990s. Not as extreme as the modularity now proposed for factory-built small modular reactors (SMRs), but pre-fabrication of components that could be fitted at the construction site, like Legos.
By the time the designers were done, Generation III reactors looked great on paper.
There was just one problem: no one had actually built one.
The AP1000
Westinghouse’s original Generation III reactor was the AP600.
The AP600 had been designed in the 1990s in collaboration with the US Department of Energy, in something called Advanced Light Water Reactor (ALWR) program.
In that program, the AP600 subsystems got tested to death, everything short of building an actual working prototype.
Thanks to the DOE’s involvement, the AP600 breezed through its approval by the Nuclear Regulatory Commission in 1998.
But the AP600, at 600 MWe, was too small. Nobody ordered one.
Westinghouse’s next idea was to make it bigger.
Aside: When a nuclear company says this, it should always, always, raise an eyebrow.
In 2002 Westinghouse started a new round of get-it-past-the-NRC with a larger design, the AP1000.
The AP1000 more than just a scaled-up AP600. Westinghouse had licensed rights to a very successful large reactor design, the System 80, from financially troubled Combustion Engineering. They would merge its features with the AP600.
Aside: Three Combustion Engineering ‘System 80’ reactors at the Palo Verde Generating Station have been providing Arizona with 35% of its electrical power for decades. On occasion, Palo Verde power bails out Los Angeles and San Diego.
The AP1000, as a combination design, was definitely less baked than the AP600. After 15 revisions, the AP1000 got approval from the NRC in 2006.
There, the AP1000 story takes an fork in the road.
One fork leads down the Silk Road. In 2004, China sponsored a competitive evaluation of Generation III reactors. The AP1000 won.
China’s conditions on licensing the design from Westinghouse, not unlike those negotiated by South Korea with Combustion Engineering in 1990, involved a technology transfer. The Chinese could take the AP1000 design, improve on it, and call it their own.
Westinghouse stood to get something more valuable than money out of the deal. The Chinese had actual experience building reactors. The Chinese would be the ones to go through the pain of debugging the AP1000 for Westinghouse.
By the time Westinghouse started to build at Summer and Vogtle, the debugging wasn’t complete. Westinghouse submitted over 12,000 design changes between the concrete pour in 2012 and the bankruptcy in 2017.
Enter the NRC, and politics
Meanwhile, politics were altering the rules of the long game played between the reactor designers and the US Nuclear Regulatory Commission.
The NRC was starting to view its mission as overseeing the decommissioning of the existing US nuclear fleet, not encouraging new ones.
In 2009, the NRC gave the regulatory ratchet a Torquemada-scale twist with the Aircraft Impact Rule.
A bureaucratic product of 9/11, the Aircraft Impact Rule requires all new reactor containment domes built in the US be able withstand the impact of a large commercial airliner.
As with other over-the-top homeland security precautions, the remote likelihood of a such a event, weighed against the certain cost of mitigating it, was not a consideration.
Conforming with Aircraft Impact Rule necessitated three more AP1000 design iterations and delayed the Vogtle project by at least 2½ years.
These were not just paper changes. The Vogtle site plan had already had won approval from the Georgia Public Service Commission. Construction was ready to go. But the heavier dome required by the rule meant, for one example, that the old seismic studies had to be thrown out and done over.
The NRC of the time didn’t seem to much care. Its then-chairman, Gregory Jaczko, after leaving the Commission, started a wind energy firm and called for a global ban on nuclear power.
Delay is expensive in a big project. We can get an inkling of how expensive from an accountant’s footnote in Southern Company’s 2022 annual report, which cautions that a 3-month delay in the start of Unit 4 would add $135 million to cost.
The four Chinese AP1000s, built from the pre-Aircraft Impact Rule design, went online in 2018.
Aside: After Westinghouse’s bankruptcy, the Chinese soured slightly on the AP1000 and their upgrade of it, the CAP1400. China currently favors its indigenous Hualong One.
FOAK
Not a dirty word. ‘First of a kind’.
We can’t entirely blame Westinghouse for not knowing how to build Vogtle.
Almost no one in the US remembered how to build a nuclear plant.
There are three important parties in such a build. There’s the owner, in this instance Plant Vogtle. There’s the reactor vendor, Westinghouse.
Equally important, but given little attention in the media, is the Engineering, Procurement & Construction (EPC) company. The EPC is the engineering firm that puts, and tries to hold, the project together.
Westinghouse was both the reactor vendor and, via subcontractors like, Fluor Corp., the EPC company. Westinghouse, no doubt under Toshiba’s tutelage, also did a very Japanese thing and started absorbing its vendors when they ran into trouble. This proved to be a recipe for total disaster.
Vogtle was saved in October 2017 when Southern and the other owners hired San Francisco-based construction giant Bechtel to finish the project — on a cost-plus contract, we must note.
Bechtel, at least, had experience, having worked on some 150 nuclear power plant projects worldwide and on the Watts Bar Unit 2 in Tennessee, the last reactor to come online in the U.S.
There were further delays in the Vogtle saga, including suspension of work during the Covid-19 pandemic.
But, in 2023, a relatively happy ending.
The fruits of Vogtle
Let’s look at what some of the parties got out of it.
Southern and the Vogtle owners got a nifty new, if somewhat gold-plated, reactor. The sticker shock will, presumably, fade with time.
Westinghouse came out with it historic name tarnished. But the post-bankruptcy ‘intellectual property’ Westinghouse has an asset in the AP1000, a reactor design that has both made it through the hell of NRC vetting and actually been built in the US.
Before Vogtle, the NRC in 48 years of operating history had never overseen from application to finish.
NOAK
‘Next of a kind’.
The nuclear industry has a lot of trouble learning from mistakes.
With large nuclear, it’s a singular aspect of the technology.
If a SpaceX rocket blows up, the designers go back to the drawing board and try again.
If a nuclear plant blows up, you’re in court for the rest of your life. Learning by trial-and-error is not an option. Large nuclear is too big to fail.
Which raises the question of whether the copious errors at Vogtle and Summer can be some kind of learning experience.
At the moment, while everyone is catching their breath, the idea of another Vogtle seems preposterous. Dan Yurman, who used to be at Idaho National Labs and now writes a blog called Neutron Bytes, puts it: “[N]o electric utility CEO who wants to be around in time to collect his stock options is going to commit to commit build a new full size reactor for quite a while.”
But there are some arguments why building another Vogtle is exactly what some US electric utility should do, and within a few years.
The supply chain and the workers are there, for now.
The NRC staff knows the AP1000 design inside-out. The next US AP1000, if there is a next one, should have smooth sailing.
The question to ask is not how much did Vogtle cost, but how much will the next one cost? Or the 10th?
The AP1000 is not a bad design. It has its fans. MIT professor of nuclear engineering Koroush Shirvan wrote a paper in March 2022 optimistically entitled “Overnight Capital Cost of the Next AP1000.”
Shirvan tried to estimate the ‘should cost’ of the next AP1000 by subtracting out the extraordinary first-of-kind (FOAK) expenses incurred by the mistakes at Vogtle, as well as those attributable to the Covid-19 pandemic.
Using the conventional levelized cost of electricity (LCOE) metric, Shirvan found that a ‘next’ AP1000 would be decent on cost, although no outrageous bargain.
But the tenth AP1000 might be one.
LCOE calculations really don’t work on long-term capital projects, where lifespans are in decades. They just can’t look ahead that far.
Whether building another Vogtle is ‘worth it’ depends on how seriously one takes the long-term decarbonization goal.
When tourists today look at cathedrals and learn how long they took to build, they often wonder how people could have worked on them at all, if they didn’t expect to see them completed in their lifetime.
The answer, of course, is that they believed that were taking part it something bigger.
Climate-change believers should consider building more cathedrals of decarbonization, like Vogtle.