Nuclear powerU.S. nuclear power industry facing dire prospects

The U.S. nuclear industry is facing several daunting challenges, leading industry experts to conclude that nuclear energy may well be an energy source of the past. The price of natural gas is dropping fast because of new resources becoming available as a result of fracking, and wind and solar are making steady, if slow, gains.

The last nuclear plant construction in the U.S. broke ground in 1977. Despite the incentives offered by the U.S. Department of Energy, including a loan guarantee program worth tens of billions of dollars, new construction of nuclear plants has come to a halt. Older nuclear plants are closing, and plant expansions are put on hold.

The MotleyFool reports that among the projects which were terminated before building began:

• Duke Energy’s gave up on a $24 billion nuclear project in Levy County, Florida in early August because of delays and doubts it could recover costs. 
• NRG Energy gave up on expanding its South Texas Project in 2011, costing the company $481 million in a write-down. The project was to add two reactors to two existing reactors but cost overruns and low natural gas costs made it less economical than originally planned. 
• Electricite de France just reached a deal potentially to sell its nuclear operations to Exelon after the Calvert Cliffs Nuclear Power Plant expansion stalled and costs skyrocketed. The reactors that are currently operating are running into trouble with one reactor shut down after a control rod dropped into the reactor.

MotleyFoolnotes that other expansion projects in Prairie Island, Minnesota; LaSalle, Illinois; and Limerick, Pennsylvania were terminated due to the competitive offering from natural gas and wind power.

Existing nuclear plants are falling victim to increasing operating costs and competition from alternative energy.

• Entergy shut down the Vermont Yankee nuclear power plant last month because the plant was no longer financially viable.
• Edison International’s San Onofre Nuclear Plant in California was shut down for a year because of a radioactive leak before the company decided to shut it down altogether.
• A nuclear power plant in Kewaunee, Wisconsin was shut down earlier this year and will be decommissioned by Dominion.
• Duke also announced earlier this years that it would be closing its Crystal River nuclear plant.

There is one nuclear project moving forward — Southern Company’s Vogtle 3 & 4 expansion in Georgia. The project received a conditional $8.33 billion loan guarantee from the Department of Energy in 2010, but has been hobbled since by flawed construction, delays, and cost overruns.

Georgia Power, Southern Company’s subsidiary, is building the project and originally was budgeted for $14 billion. Last month it asked for another $737 million in overrun budget that could be passed on to ratepayers.