Plant Vogtle Decision Point: Time To Chart A Different Course
Construction on new nuclear units at Plant Vogtle in Georgia has been underway for 8 years. Now, with the prime contractor in bankruptcy and the project in jeopardy, it’s worth asking the question: is this project still a good idea?
Nuclear expansion at Vogtle was approved when electricity demand was growing quickly.
However, post-Recession, the economy has gotten more energy-efficient; strong GDP growth is happening without an increase in electricity consumption.
Source: Federal Energy Regulatory Commission; US Bureau of Economic Analysis
We won’t need the new nuclear power for grid reliability.
Georgia Power carries a 16% reliability buffer called a “reserve margin” to ensure a dependable power supply; even if growth is 50% faster than expected, Georgia Power's reserve margin stays above the 16% requirement without adding the new nuclear units.
Source: Georgia Power Company, Georgia Public Service Commission, US Energy Information Administration, Author’s calculations
The economics of electricity have changed since the Vogtle expansion was approved.
At this stage, clean energy options like energy efficiency and utility-scale solar are significantly cheaper ways to meet electricity demand. If a future energy need arises, new nuclear is not, and will not be, the most cost-effective option.
Source: Georgia Power Company, US Energy Information Administration, Georgia Public Service Commission, Solar Energy Industry Association, Author Calculations
Energy efficiency and solar can scale quickly to meet new needs without overbuilding the system.
Ongoing efficiency programs approved by the Commission and administered by Georgia Power are saving customers 2 billion kWh this year, and will result in 15 billion kWh-saved in total. Similarly, decisions made at the Commission have helped make Georgia a national leader in utility-scale solar generation.
Source: Georgia Power Company, Georgia Public Service Commission, Wall Street Journal
It is going to be expensive to finish the new nuclear units at Vogtle.
Over $5 billion has been spent on the Georgia Power part of the project to date, but it could take at least that much again to complete.
Source: Georgia Power Company, Southern Company, Georgia Public Service Commission, Author's Calculations
The average residential customer pays about $100 a year for Vogtle already, and this number is only going to increase. That kind of money could do a lot for customers without increasing the average bill at all.
Investing just one month of Vogtle’s $30 million monthly tab into efficiency programs would reduce customer bills by $250 million over the next decade. With one year of the current Vogtle spending, Georgia could add more than 320 MW of new solar to the grid, resources that could be online and generating carbon-free electricity in just two years.
The bottom line is that Plant Vogtle has priced itself out of the market.
At this stage, it is no longer the most cost-effective way of delivering low-carbon energy to Georgia’s grid. Customers would be better served by abandoning the project and devoting even a fraction of the ongoing costs toward additional investments in energy efficiency and solar.