Obama Administration Announces $8.33B in Loan Guarantees for New Nuclear Power Reactors in Georgia

Obama Administration Announces $8.33B in Loan Guarantees for New Nuclear Power Reactors in Georgia; First New US Nuclear Power Plant Project in Nearly 3 Decades

President Obama announced that the Department of Energy has offered conditional commitments for a total of $8.33 billion in loan guarantees for the construction and operation of two new nuclear reactors at a plant in Burke, Georgia. The project is scheduled to be the first US nuclear power plant to break ground in nearly three decades.

The two new 1,100 megawatt Westinghouse AP1000 (Advanced Passive 1000) nuclear reactors (earlier post) at the Alvin W. Vogtle Electric Generating Plant—Vogtle units 3 and 4—will supplement the two existing reactor units at the facility. As one part of the conditional loan guarantee deal, the US Nuclear Regulatory Commission (NRC) must determine if the AP1000 fulfills the regulatory requirements for a construction and operating license.

The AP1000 is a 1,117 to 1,154 MWe pressurized water reactor (PWR) nuclear power plant that is an extension of the older AP600 design. (It is considered a Generation III Advanced Light Water Reactor.) It is modular in design, thereby promoting ready standardization and high construction quality; economical to construct and maintain (less concrete and steel and fewer components and systems mean there is less to install, inspect and maintain); and designed to promote ease of operation.

To meet our growing energy needs and prevent the worst consequences of climate change, we need to increase our supply of nuclear power and today’s announcement helps to move us down that path. But energy leaders and experts recognize that as long as producing carbon pollution carries no cost, traditional plants that use fossil fuels will be more cost-effective than plants that use nuclear fuel. That is why we need comprehensive energy and climate legislation to create a system of incentives to make clean energy profitable. What I hope this announcement underscores is both our commitment to meeting the energy challenge—and our willingness to look at this challenge not as a partisan issue, but as a matter far more important than politics.

—President Obama

Ownership of the two reactors is split among Georgia Power Company (GPC), the largest subsidiary of Southern Company, one of the US’ largest generators of electricity; Oglethorpe Power Corporation; the Municipal Electric Authority of Georgia (MEAG Power); and Dalton Utilities. Total cost of the new units is currently projected to be approximately $14 billion.

Units 3 and 4 are expected to begin commercial operation in 2016 and 2017, respectively. Southern Nuclear, a subsidiary of Southern Company, will oversee the construction as well as operate the two new units for Georgia Power and the other owners. Southern Nuclear currently operates Plant Vogtle’s two existing nuclear power units as well as Georgia Power’s Plant Hatch nuclear facility near Baxley, Ga., and Alabama Power’s Plant Farley nuclear facility near Dothan, Ala.

The Energy Policy Act of 2005 authorized DOE to issue loan guarantees for projects that avoid, reduce, or sequester air pollutants or anthropogenic emissions of greenhouse gases and employ new or significantly-improved technologies as compared to technologies in service in the United States at the time the guarantee is issued. These are the first conditional commitments for loan guarantees to be offered by DOE for a nuclear power facility since enactment of the 2005 law. The Department’s Loan Programs Office administers the loan guarantee program.

The nuclear facility is eligible for loan guarantees because it achieves substantial environmental benefits by reducing greenhouse gases and other pollutants. In addition, the Westinghouse AP1000 reactor has incorporated numerous innovations resulting in significant operational, safety, and cost enhancements.

This is the fifth time that DOE has offered conditional commitments for a loan guarantee under The Energy Policy Act of 2005. Other recipients of commitments for loan guarantees for innovative technology energy projects include Solyndra, Inc., a manufacturer of cylindrical solar photovoltaic panels; Nordic Windpower, USA, a maker of two-blade, one megawatt wind turbines; Beacon Power, an energy storage company; and Red River Environmental Products, an activated carbon manufacturing plant.

Georgia’s need for electricity is growing and is expected to increase by approximately 30% over the next 15 years. Compared to a similar sized coal plant, the new Vogtle units will avoid significant greenhouse gas emissions each year: 16 million tons of carbon dioxide, 3,900 tons of nitrogen oxides, and 5,500 tons of sulfur dioxide.

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