Department of Energy Issues Final Loan Guarantees for Vogtle Units 3 and 4
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:
- Georgia Power – a subsidiary of Southern Company (45.7%)
- Oglethorpe Power Corporation (30%)
- Municipal Electric Authority of Georgia (22.7%)
- Dalton Utilities (1.6%)
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.
- Vogtle Units 3 and 4 will be the first reactors in the United States to use the Westinghouse Advanced Passive (AP1000) PWR reactor technology, which will require less equipment and infrastructure to operate and maintain, resulting in an expected reduction of operating and maintenance costs
- According to U.S. Energy Secretary Ernest Moniz, the Vogtle project has put the United States at the forefront of a “new generation” of advanced reactors and indicated that as the nation moves toward a low-carbon future, “the Department’s loan guarantees will play an important part in expanding the role of nuclear energy as a part of our all-of-the-above energy strategy”
- The DOE’s Loan Programs office currently supports a portfolio of more than $30 billion in loans, loan guarantees, and commitments to energy projects, including nuclear and renewable energy, with an additional $12.5 billion of loan guarantees available to support innovative nuclear energy projects
- Southern Company: Plant Vogtle Units 3 and 4 Fact Sheet and Plant Vogtle Units 3 and 4
- World Nuclear News: Vogtle receives final loan guarantees
- Power Engineering: Plant Vogtle nuclear reactors expected to cost $7.5B
This report is part of the Nuclear Minute series. To view all featured Minutes, please click here.
Contributing Author: Eric Hanson
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