The Vogtle Electric Generating Plant is a two-unit nuclear power plant located in Waynesboro, Georgia, capable of generating 2,430 MW. The plant is operated by Southern Nuclear Operating Company and jointly owned by four entities:
In August 2008, the owners of the Vogtle Electric Generating Plant announced that it would seek approval to construct and operate two additional units, Vogtle Units 3 and 4, with a combined capacity of approximately 2,234 MW. These units were designed to meet increasing demands for electricity (forecasted to increase 21% in the Southeast by 2030) and to comply with environmental standards that impact electricity generation fueled by coal. In 2012, the Nuclear Regulatory Commission issued construction and operating licenses for Vogtle Units 3 and 4. Construction on Unit 3 began in March 2013 and Unit 4 in November of the same year. The project has had delays and cost overruns, and Vogtle Units 3 and 4 are now expected to enter service in 2019 and 2020, respectively.
When the plants were announced, Vogtle 3 and 4 were the first new nuclear units to be built in the United States in the last three decades and at an estimated cost of $6.1 billion. Due to the costs and risks associated with constructing a new nuclear power plant, it is difficult, if not impossible, for companies to secure the necessary financing. Recognizing this issue, the United States Department of Energy’s (DOE) Section 1703 Loan Program provides loan guarantees to support innovative, clean energy technologies (like nuclear) that typically are not able to receive conventional private financing.
In late June, the DOE issued the final $1.8 billion of loan guarantees to owners of plant Vogtle for the construction of Units 3 and 4. These loan guarantees are in addition to the $6.5 billion that were issued to Georgia Power and Oglethorpe Power in 2014. Though the cost of constructing Vogtle Units 3 and 4 is now estimated to be greater than $7.5 billion, the most recent loan guarantee all but assures the owners will be able to secure the financing necessary to complete the units.
This report is part of the Nuclear Minute series. To view all featured Minutes, please click here.
Contributing Author: Eric Hanson
Sussex Economic Advisors is now part of ScottMadden. We invite you to learn more about our expanded firm. Please use the Contact Us form to request additional information.