In a week of big nuclear and solar power news, economics of energy is changing fast
At Darden Restaurants' headquarters near Orlando, this week dedicated its rooftop solar panel array, designed to provide 20 percent of the building's energy needs. (Photo courtesy Darden.)
Wake up and good morning. The energy world is changing fast, Floridians, and paying attention to what's happening may save your wallet from being looted. This week, two important events happened. U.S. regulators approved plans to build the country's first nuclear power plant in 30 years in Georgia. And Darden Restaurants, the Orlando company that owns such chains as Red Lobster, The Capital Grille and Olive Garden, dedicated this enormous rooftop solar array, capable of generating 1 megawatt (that's 1 million watts) at its headquarters.
The Georgia nuclear license to Southern Co. will give it the go-ahead to build two new nuclear reactors at its existing Vogtle nuclear plant site using the new Westinghouse AP1000 design. (Photo right shows Vogtle Unit 3 containment vessel under construction. Courtesy of Southern Co.)
This is the same plant design that Progress Energy says it will adopt to build two similar nuclear reactors at a new site in Levy County north of the Tampa Bay area. Progress Energy is in the waiting line for its own license from the Nuclear Regulatory Commission and probably won't see one for another year or two. Read more from the Tampa Bay Times.
The Georgia nuclear plant license was approved but not wholeheartedly. NRC Chairman Gregory Jaczko dissented in the commission's 4-1 vote for the license, saying he could not vote for Vogtle as if the Japan Fukushima nuclear disaster had never happened. The Vogtle approval does not require Southern Co. to incorporate extra safety measures in its new nuclear plant based on the risks identified in the 2010 Japan disaster. Read more from Reuters.
The Georgia 2-reactor plant is slated to cost about $14 billion and begin operating as soon as 2016 or 2017. Progress Energy's Levy County plants already are priced at an astonishing $22.5 billion and not begin operation until after 2021. Some analysts, including those from Synapse Energy Economics in Cambridge, Mass., say further delays in the Levy plant could push that price tag closer to $30 billion.
The Georgia nuclear plant project, a second one in South Carolina under way by the power company SCANA, and the Progress Energy Levy plant all have one thing in common. Legislatures in those three states have allowed power companies to charge their customers in advance to cover many of the costs associated with building nuclear power plants.
You do not see nuclear power plants slated for construction in states that require big projects to be built the old fashioned way: By the utility borrowing money from banks or other lenders, building the plant, then setting new electricity rates to help pay off the plant once it is actually operational.
So why do we care that Darden Restaurants put up a giant solar array on its HQ roof? Because Darden has tracked solar energy costs and benefits for years and now feels the time is right to commit to solar power. The new solar array could power 160 homes or, more to the point, handle 20 percent of Darden's energy needs at its headquarters. It is expected to generate 1.9 million kilowatt hours of electricity a year.
The company says it should take 10 to 12 years to pay for itself, depending on weather. Read more from the Orlando Sentinel story.
Bottom line? Energy economics are changing fast but in very clear directions. The costs of building nuclear power plants are soaring. The costs of many alternative energy plants are falling. Be careful that energy investments of monumental expense will make sense by the time they start operating.
-- Robert Trigaux, Business Columnist, Tampa Bay Times