Some see a nuclear power plant cooling tower. Others see a rat-hole. Hang onto your wallet. Photo credit Wollenkratzer/Wikimedia Commons.
Dominion Virginia Power’s latest Integrated Resource Plan (IRP) includes construction of a third nuclear reactor at North Anna, just as previous IRPs have done every year since 2008. What’s new this year is that we finally have a price tag. Scott Norwood, a witness for the Attorney General’s Office of Consumer Counsel, says Dominion’s $19 billion forecast will mean an average rate increase of approximately 25.7% over current Virginia retail residential rates.
The 2015 IRP shows cost estimates for the new nuclear plant have spiraled upwards. Norwood notes that the forecasted capital cost is currently 55% higher than in 2011. This capital cost is not only ten times the cost of new natural gas generation, it is also higher than Dominion’s solar energy option—which happens also to be its least-cost option for complying with EPA’s Clean Power Plan.
Indeed, the NA3 price tag makes it far more expensive even than the other nuclear plants currently under construction in Tennessee, Georgia and South Carolina. All three are behind schedule and over budget, which hardly inspires confidence in the industry’s ability to contain costs anywhere.
In his testimony to the State Corporation Commission, Norwood argues that North Anna 3’s high price tag means it is not reasonable to keep it in the IRP. Section 56-599 of the Virginia Code requires the Commission to make a determination whether the IRP is “reasonable” and in the public interest.
Including nuclear in an IRP doesn’t commit Dominion to building a reactor or the SCC to approving it, so the SCC has not previously chosen to weigh in. Nor have elected leaders yet responded to the rising cost numbers.
Legislators may be tempted to ignore North Anna 3 until Dominion secures an operating license from the Nuclear Regulatory Commission (anticipated in 2017) and applies to the SCC for a Certificate of Public Convenience and Necessity (with a decision likely in 2018).
Yet delaying the conversation is expensive. Dominion is already spending hundreds of millions of dollars annually on North Anna 3 development—and one way or another, Dominion expects customers to bear the cost.
In 2014 the company successfully lobbied for legislation shifting the costs it had incurred through 2013 onto its ratepayers, a move that sopped up Dominion’s overearnings and prevented a rate cut.
But those costs were chicken feed compared to what’s coming. By the end of 2018, Dominion will have spent close to $2 billion dollars on North Anna 3. The company can afford to front the money, in part because of 2015 legislation “freezing” rates until 2020 and allowing the company to keep what could amount to hundreds of millions of dollars more in excess earnings.
If the SCC waits until 2018 to consider the merits of North Anna 3 and then denies Dominion permission to move forward, the company will argue for the right to bill ratepayers for all that money it threw down the rat-hole. The SCC might not prove sympathetic, but General Assembly members maintain a strong record of doing anything Dominion wants.
Still, allowing Dominion to soak customers for $2 billion would be a welcome outcome compared to the alternative. Worse would be for the SCC to approve the plant—or more likely, for legislators to take it out of the hands of the SCC and simply vote to let Dominion proceed. Dominion has begun spinning a tale about North Anna 3 being needed for energy security, resource diversity, and compliance with new environmental rules. All of these are wrong, but they play into narratives that resonate with many lawmakers.
Meanwhile, the vast sums required for a new reactor would siphon money away from much more cost-effective strategies that can deliver carbon pollution reductions far sooner, including investments in solar and energy efficiency. That makes it critical for the SCC to put an end to the North Anna 3 rat-hole this year.
The Commission will hold a hearing on Dominion’s IRP on October 20. The case is PUE-2015-00035.
Power for the People VA 
I have a farm in Dinwiddie county that had an agreement to build a Solar farm, but towards the end of the option contract the company pulled out and said, until VA made the power companies do a percentage of Solar power, rates will keep going up. NC has passed that law and they are building a lot of Solar farms.
I read this and think… “Where greed and corruption intersect in Richmond, Dominion will always be there, as long as we enable them.” Are we tiring of this yet, people?
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What do you suggest Virginia residents do to show our support for solar?
Thanks for the question, KD. There are lots of ways to get involved. Writing or, better yet, visiting your state legislators tops the list; when constituents demand solutions, legislators listen.
If you don’t feel you know enough yet to do that, attend a workshop or public information session. The Virginia Conservation Network, which is an umbrella group that includes most of the conservation organizations, has its annual legislative workshop in Richmond on December 5. It’s a great place to learn. The solar industry, through its trade association MDV-SEIA, has also partnered with environmental groups to hold public education sessions around the state.
If you are already active in your own community through a garden club, Rotary, a political committee, League of Women Voters, local chamber of commerce or anything else where you think other members might be interested in learning more about solar, consider inviting a speaker from MDV-SEIA or an environmental group like the Sierra Club.
Reading through the actual Dominion Virginia Power 2015 resource plan* gives a much different impression of the situation than Ivy Main’s article. The primary activity going on is that they will buy into the Atlantic Coast Pipeline, so they will have assured access to the (temporarily) cheap fossil fuel from the nearby Marcellus Shale formation, supplementing the Transco, TCO, and DTI pipelines (see page 71).
Way back on page A-101, there is a table of capital costs, which contradict Ivy’s implication that nuclear costs are out of line with other clean energy sources. It gives the following values:
Nuclear: $8.59/Watt ($8.95/W_avg, assuming 96% Capacity Factor, p. 87)
Solar PV w/ Battery: $13.9/Watt ($46/Watt_avg, assuming 30% CF, p.85)
Wind offshore: $10.7/Watt ($25.5/Watt_avg, assuming 42% CF)
Solar PV: $1.92/Watt ($8.73/Watt_avg, assuming 22% CF, p. 87)
The levelized cost table on page 103 does show a cost advantage for solar over nuclear, before grid integration costs (such as the fossil fuel backup deployed with each solar farm) are included:
Fixed tilt PV: $95.9/MWh
North Anna 3: $126.5/MWh
Biomass: $152/MWh
Off-shore wind: $427/MWh
Fossil gas CC: $72.8/MWh
SCP coal: $138.4/MWh
The summary scorecard comparing several options (which include integration costs) for meeting the EPA Clean Power Plan rules is given on page 127. It predicts that compared to the least cost fossil fuel based option (which has a portfolio average cost of $39.85/MWh), the solar option adds 8.6%, the nuclear option adds 14.5%, and the wind option adds 30.9%. The solar option has 3 GW of PV, which produce an average of 0.66 GW; the wind option has 2.2 GW of wind, producing 0.92 GW on average; the average demand is 12 GW. So the amount of clean energy generated by either renewable option is small compared to the output of the proposed nuclear expansion (1.4 GW average), and compared to Virginia’s existing nuclear fleet (3.4 GW nameplate).
So the nuclear option cost is not out of line with that of (fossil backed) solar, is much cheaper than off-shore wind, and enormously cheaper than solar+batteries. In fact, much of the cost increase is attributable to the fact that it makes more clean energy than the solar option (with 8% lower CO2 emissions in 2030, p. 118). The nuclear option also delivers most of its clean energy long after the solar and wind plants have reached the end of their 25 year projected lifetimes (so that future clean energy plants will displace more fossil fuel, rather than replacing short-lived solar and wind installations). As usual, the non-nuclear options mean more fossil fuel use, more air pollution, and more CO2 emissions.
The very low grid average cost ($44/MWH in the nuclear option) compared to the new build cost of any of the options shows that grid costs are low when regulated utilities invest in long-lived low-fuel-cost assets like nuclear plants.
* the plan document is available here: https://www.dom.com/corporate/what-we-do/electricity/generation/2015-integrated-resource-planning
Dominion’s IRP is written to support Dominion’s preferred course of action, which includes NA3 and gas. So it does not present reasonable alternative scenarios. Its prices for wind and solar are unrealistically high, and the solar option assumes a need for separate, dedicated natural gas backup generation, an approach that suggests willful ignorance.
Yet even with its flaws, the IRP doesn’t support the nuclear cause from the ratepayer standpoint. At 19 cents/kWh, nuclear generation makes no sense. You say someday the capital cost will be paid off and the price will fall. But Dominion just retired a paid-off nuclear plant in Wisconsin because it isn’t economical to keep it running as a merchant plant. With prices for solar and wind continuing to trend downward, and storage technologies now following a similar pattern, it’s not realistic to assume that a nuclear plant built today will provide power more cheaply than renewables-plus-storage 30 years from now.
Dominion is pursuing NA3 only because it has a captive base of ratepayers and a compliant legislature that will go along with its plan in spite of—not because of—the economics.
Why did you (or them) not add the cost of pumped storage to Nuclear?
PV 1/4 the cost of nuclear, add in storage needs for storing nightime nuclear power and PV with storage wins as lowest source provider.
And this is with the outdated cost figures used for PV.
Everyone knows PV and battery storage costs are dropping.
So divide # for storage added costs in 1/2 at least.
Just one of these needed adjustment so an apple to apple comparison can be made tips the scales.
Do you know what $/kwh of battery storage was used to take PV at under 2$/kwh to near 14$/kwh.
This data point would be telling.
Nathan,
You forget that a new NPP will start operations in 2030 and then has to compete for 40years. So we should consider the situation halfway = 2050.
In 2050 even insolation poor Germany (much higher latitude) expect that solar will cost 2 – 4 c/KWh.
While expecting similar for onshore wind and ~6 c/KWh for offshore wind.
Similar decreases for storage costs.
So the new NPP then has a 2 – 5 times higher cost price of its produced electricity.
Btw.
Of course the utility will manipulate the figures as much as possible in order to serve their interests. So you cannot trust their figures.
Also using the pumped Hydro for PV instead of new nuclear plants eliminates some or all of any need for batteries.
Does anyone know why Virginia/Dominion excludes onshore wind in its projections?
Here wind turbine producers have adapted models for areas with low wind (larger blades, etc). That results in only slightly higher costs compared to wind turbines installed in areas with normal wind. So also much cheaper than offshore wind.
I assume that population density cannot be the cause as we in Netherlands with our very high population density (500persons/km²) install a lot of onshore wind,
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GBSR the area does not have the best wind resources.
What we need is to get all our governors in one room and agree that a least cost, least risk, least security, least power interruptions with the least GHG emissions should be aggressively pursues.
Wind exports east and west from the high wind corridor in the middle of the country.
Solar exports from the South west where you get 3x more power at 1/3 the cost of northern areas with high relative cloud cover. SW power lags the midwest and east coast by 1,2 up to 3 hours.
So excess power from the SW can kill the east coast duck curve, or at least cut the front 1/2 off.
Huge hydro potential, just in the Mississippi valley complex alone, all ready damed can be augmented with turbines instead of overflowing over spill ways.
Reality supporting, or RE supporting individuals accused of supporting coal pathetic, last ditch effort emotional yet empty arguments aside.