In a message to South Carolina clean energy activists, Tom Clements of Friends of the Earth shared a report from the Charlotte Business Journal in which Duke Energy announces plans to postpone construction of a proposed nuclear power plant, with two generating stations, near Gaffney, SC. Along with Santee Cooper’s announcement that they will not build a coal burner near Flornce, SC, this bolsters the South Carolina Green Party’s contention that new generation is not needed and that our utilities should be expected to make major investments in efforts to curb consumption. This plant was first proposed back in the 70s or 80s, and shelved. Now it may be ready to be shelved again.
The article, in full, can be read at the first link above, or here below the fold.
Duke Energy’s public version of its “Integrated Resource Plan and 2009 REPS Compliance Plan” was filed on Sept. 1, along with a confidential version….
Friday, September 4, 2009
Duke Energy eyes delay for Lee nuclear project [AP1000]
Charlotte Business Journal – by John Downey Senior staff writer
Duke Energy Carolinas is likely to delay construction of its proposed Lee Nuclear Station for up to three years.
Duke’s latest long-term plan, filed this week with N.C. regulators, says the startup date for generating power at the Gaffney, S.C., plant could be put off to 2021.
The delay is particularly likely if Duke can’t find a construction partner for the $11 billion plant. The utility is moving its target date as concerns mount regarding the project’s cost. Also, demand for power appears to be growing more slowly than in recent years.
Duke’s updated plans also call for delays in building the utility’s proposed Buck Steam Station and Dan River combined-cycle gas plants.
Janice Hager, head of Duke’s resource planning, says it appears that demand for electricity — not adjusted for the weather — has been flat the last four years.
Duke’s new projections call for demand growth to return to an average 1.5% per year in the long term. But the company isn’t projecting a spurt in demand once the recession ends.
That makes room for the company to delay construction of some plants that Duke has long been planning.
The biggest change involves Lee, though Hager cautions the new construction schedule isn’t set in stone.
When Duke initially proposed the plant, it aimed to open it in 2016. The company acknowledged from the outset that the startup date wasn’t firm. Over time, the targeted opening date slipped to 2018. And Duke’s new plan says 2021 might be the best target date for Lee to begin generating electricity.
Tom Clements of S.C. Friends of the Earth says Duke’s delay fits a pattern.
Utilities are coming to grips with the enormous costs of nuclear plants and slowing growth in demand for electricity, he says. Duke appears to have missed out on federal loan guarantees, and the capital markets remain skeptical of nuclear projects, he adds. “I don’t see that they have the money together yet. I think Duke has dropped back into a wait-and-see attitude to watch what the first companies in do.”
But Duke says the Lee plant is still key to its plans.
Hager says the delay will give the company additional time to seek state legislation for recovering its costs for nuclear plant construction. The company has said for several weeks that it couldn’t consider going forward with a new nuclear facility in the Carolinas unless North Carolina adopts a law that, like South Carolina’s, streamlines the process for recovering its costs.
Duke may also be able to use the time to find a construction partner for the Lee plant. Hager says having a partner to share the cost would make it possible for Duke to start construction earlier, because that would remove some of the financial risk for the company.
Duke says it will continue to need additional power plants, even though growth in the demand for electricity has slowed. The company expects to resume its traditional growth rate after the recession ends. Energy-saving initiatives such as its Save-A-Watt program won’t reduce demand enough to avoid plant construction, Duke says.
“Even if the company fully realizes its goals for (energy conservation and efficiency), the resource need grows to approximately 5,500 megawatts by 2029,” its new planning report states.
So Duke plans finish the 825-megawatt expansion of its Cliffside coal plant on the border of Cleveland and Rutherford counties. And it will build the Buck gas plant in Rowan County and the Dan River gas facility in Rockingham County.
But it will slow down in pursuing those projects.
It’s the second delay in as many years for the Buck and Dan River plants. The Buck facility was originally scheduled to start operation in two phases. The first phase was to open in 2010 and the second in 2011. Last year, Duke postponed construction of each phase for a single year. Now the company proposes building the whole plant at once and starting production in early 2012.
Meanwhile, the startup of Dan River has been postponed to late 2012. And Hager says it could be pushed to 2013.
Hager notes Duke is dealing with several uncertainties in its new long-range plan. Key among those is how much energy Save-A-Watt will actually conserve and how quickly the demand for power will rise after the recession.
A quick rebound in demand for electricity has been common following U.S. recessions. But Richard Stevie, who handles the forecasting for Duke’s planning process, says the company has intentionally been more conservative with its latest forecast.