Past is precedent. It's unfair to suggest that long-term price risk for natural gas is a deal breaker, without acknowledging nuclear's parlous track record for containing all manner of costs, from licensing, to construction to decommissioning -- the last of which is still largely unkown and seems far more likely to be higher than estimated, rather than lower. Cost overruns averaged 207% for plants built built in the decade to 1977, accordig to the CBO, from a table cited in the Hidden Costs of Electricity (2012), and exceprted below:
6.1 Cost and Planning Risks of Nuclear Plants
The cost overruns that caused the flight from nuclear in the U.S. were dramatic: many units ended up taking years longer to build than expected and costing three times the original estimates or more. Table 12 presents data from the Congressional Budget Office showing the average cost overruns at projects commenced between 1966 and 1977.
In recent years, several new nuclear projects have been proposed in the U.S. The industry is focused on controlling costs and reducing construction periods with standardized reactor designs and streamlined permitting. However, the experience to date is not promising.
- Progress Energy’s two-reactor project in Florida was originally projected to be online by 2016 at a cost of $17 billion. The latest estimate is an online date of 2024 and a cost of $22.5 billion, or roughly $10,000 per kW (Progress Energy 2010).
- In late 2010, Constellation Energy scrapped plans for a new reactor at Calvert Cliffs after finding the terms of a Government loan guarantee unacceptable (Economist 2010).
- The effort to develop two new reactors at the South Texas plant was scrapped in April 2011. The project being developed by NRG and Toshiba, and the disaster at Fukushima was cited as the key reason for the abandoning the project. However, cost escalation had already put the project in a precarious position: cost estimates had risen to $18 billion, or $6,700 per kW, and another partner, CPS Energy, had already reduced its share from 50% to 7.6%. NRG has written off its $331 million investment in the project (Souder 2011).
- Georgia Power’s original (2006) cost estimate for the 2-unit expansion at the Vogtle plant was $14 billion, or roughly $6,400 per kW. The company has not officially revised this estimate since 2006. (Georgia Power experienced cost overruns of approximately 300% on a real-cost basis for the original Vogtle units.)
As with coal projects, utilities can often begin charging ratepayers for a new nuclear plant before it is in service, and in Florida and Georgia, laws have been passed ensuring that utilities can do this. This shifts the risk of project delays or cancellation from utilities to consumers. Customers are already paying for the two new units proposed in Georgia and the four proposed in Florida. One Florida newspaper estimated that ratepayers would pay over $750 million in 2011 alone (Sun Sentinel 2011), despite the fact that Florida Power and Light has said it will decide in 2014 whether or not to build two of the units. The ratepayer backlash has been significant in these states: a bill to overturn the cost recovery law was introduced in the Florida Senate in February 2012, and although the bill failed, consumer groups are planning to challenge the costs at the State Supreme Court.