Loan guarantees offered for new Vogtle units

Wednesday, 17 February 2010

American new build has taken a huge boost from the first loan guarantee announcement. Two new reactors at the Vogtle site in Georgia now look likely, while President Barack Obama said, "This is just the beginning."

 

How Vogtle units 3 and 4 could look (Image: Southern)

The conditional commitment is for loan guarantees that would apply to future borrowings related to the construction of Vogtle units 3 and 4. It is offering one loan guarantee of $3.46 billion to Southern Co subsidiary Georgia Power, which has a 45.7% interest in the two new units, a second one of $3.07 billion covers Oglethorpe Power's 30% share of the project, while a third of $1.8 billion covers Municipal Electric Authority of Georgia's (MEAG's) 22.7% share. The City of Dalton holds the remaining 2.6% share in the new plant.

 

The loan guarantees will help the partners to obtain funds for up to 70% of their respective share of the costs through loans from the Federal Financing Bank. The total cost of the new 2234 MWe plant, including financing, is expected to be $14 billion, with secure cost recovery in a state-regulated market.

 

The project partners have 90 days to accept the conditional commitment, including obtaining any necessary regulatory approvals. The companies will work with the DoE to finalize the loan guarantees. Final approval and issuance of the loan guarantees are subject to receipt of the combined construction and operating licence (COL) from the US Nuclear Regulatory Commission (NRC), completion of final agreements, the receipt of any other required regulatory approvals and satisfaction of other conditions.

 

"To meet our growing   energy needs and   prevent the worse   consequences of   climate change, we'll   need to increase our   supply of nuclear power.   It's that simple."     US President Barack Obama

Southern Co received an early site permit (ESP) from the NRC for two additional reactors at Vogtle in 2009. Westinghouse and its consortium partner The Shaw Group are under contract to build two Westinghouse AP1000 units at Vogtle. Preliminary site work has already begun. Vogtle units 3 and 4 are expected to begin commercial operation in 2016 and 2017, respectively.

 

David Ratcliffe, CEO of Southern, said: "We are honoured by the administration's confidence in our ability to build the nation's first new nuclear power plant in more than three decades." He added, "It's an important endorsement in the role nuclear power must play in diversifying our nation's energy mix and helping to curb greenhouse gas emissions."

 

President Barack Obama and energy secretary Steven Chu announced the commitment at the International Brotherhood of Electrical Workers Local 26 in Lanham, Maryland.

 

Obama commented, "To meet our growing energy needs and prevent the worse consequences of climate change, we'll need to increase our supply of nuclear power. It's that simple." He added, "This one plant, for example, will cut carbon pollution by 16 million tonnes each year when compared to a similar coal plant. That's like taking 3.5 million cars off the road."

 

Acknowledging that the announcement would not be welcomed by everyone, Obama said: "Even when we have differences, we cannot allow those differences to prevent us from making progress. On an issue that affects our economy, our security, and the future of our planet, we can't keep on being mired in the same old stale debates between the left and the right, between environmentalists and entrepreneurs."

 

He added, "This is only the beginning. My budget proposes tripling the loan guarantees we provide to help finance safe, clean nuclear facilities."

 

An extra $36 billion in guarantees has been proposed in the FY2011 US budget, on top of $18.5 billion that was announced with the Energy Policy Act of 2005 and $2 billion that was subsequently added for fuel cycle facilities. Loan guarantees are meant to help utilities that want new nuclear reactors obtain private finance, which is the most challenging and costly part of new nuclear build.

 

Researched and written

by World Nuclear News