Tennessee Valley Authority to Open First New U.S. Nuclear Reactor in Decades

October 2015

The Tennessee Valley Authority (TVA), a corporate agency of the United States that provides electricity for business customers and local power distributors serving nine million people in parts of seven southeastern states, is completing the final regulatory requirements to begin commercial operation at Unit 2 of its Watts Bar Nuclear Plant. Watts Bar 2 will diversify TVA’s power generation sources (to ~40% nuclear) and contribute to its sustainability initiatives through added carbon-free power generation. The move comes as TVA works to adapt to the EPA’s recently released final rule Clean Power Plan (CPP), which sets the first-ever national standards for CO2 emissions from power plants.

Key Details

Watts Bar Nuclear Plant is located between the cities of Chattanooga and Knoxville in Tennessee. Unit 2 is expected to be the first new nuclear reactor to come online in the United States in nearly two decades, when it begins commercial operation in early 2016. Unit 1 opened in 1996 and was the last nuclear reactor to be licensed in the United States. Unit 2 was expensive, complicated, and time consuming to build; it will have cost TVA $4–4.5 billion to construct when it is completed, nearly double earlier estimates.

Originally licensed in 1972, construction started and stopped on Unit 2 multiple times until 1988 when construction was halted due to fluctuations in power demands, the cost competitiveness of nuclear power, new regulations for new nuclear power plants, and safety/security concerns with nuclear power after the Three Mile Island accident. The TVA Board approved completion of the unit in 2007 because it was projected to provide cheaper, non-carbon emitting power, compared with other generation mix options. As of 2015, there are five new nuclear reactors under construction in the United States (see below table).

The next steps for TVA include receiving an operating license from the U.S. Nuclear Regulatory Commission (NRC), which will allow TVA to load nuclear fuel into the Unit 2 reactor. NRC’s regional Atlanta office has been instructed to issue the license after Unit 2 passes NRC inspections and TVA verifies the reliability of plant systems. Unit 2 just successfully passed a variety of maintenance tests to check construction quality. For the NRC to issue the operating license, TVA must show that construction is substantially complete, the facility will operate according to the license, and there is assurance the unit will have no adverse effect on public health and safety.

Implications

Diversifying electricity generation into cleaner fuels is a strategic priority for many of today’s public power utilities. The new nuclear reactors under construction are long-term projects designed to ensure that customers have clean and reliable energy for decades to come. The CPP rule will likely accelerate current market trends of shifting fossil fuel mix from coal to natural gas (including converting coal plants to natural gas plants given cheap natural gas prices) and expanding the use of renewables, particularly as costs continue to decline. In order to achieve the CPP’s targeted 32% cut in CO2 emissions from 2005 levels by 2030, natural gas, renewables, and nuclear energy will need to be prominent in the generation mix.

Watts Bar 2 will diversify TVA’s carbon-free generation output while helping Tennessee achieve emissions reduction targets under the EPA’s final CPP rule. The CPP allows states to use new nuclear reactors (including the five currently under construction) and power uprates that increase the carbon-free output of a nuclear reactor to meet state emission reduction goals. (An uprate is when a nuclear generation facility increases its maximum power level, for example, by using a slightly more enriched uranium fuel.) After spending billions of dollars and more than four decades on Unit 2, TVA is on the cusp of starting operations that will increase its generation capacity, help meet new regulatory compliance rules, and advance sustainability efforts through enough additional carbon-free power to supply 650,000 homes.

More Information

EPA: Clean Power Plan State at a Glance – Tennessee

Forbes: Tennessee Valley Authority Kicks Off A Potential Nuclear Energy Rebirth

Nuclear Regulatory Commission: Homepage

Tennessee Valley Authority: Watts Bar Unit 2

The Tennessean: TVA makes $4.5B bet on nuclear resurgence

Times Free Press: Watts Bar Nuclear Plant passes critical tests to ready Unit 2 for power generation

World Nuclear Association: Nuclear Power in the USA

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