Last Plant Standing

Is Southern Company's Innovation Strategy Enough to Save Nuclear Energy?

Last week, Southern Company announced that it would continue its project to build two AP1000 reactors at Plant Vogtle in Georgia. The decision, which still awaits approval by the Georgia Public Service Commission, could leave Vogtle as the only commercial nuclear power plant under construction in North America. So it’s important to understand why Vogtle is moving forward while many other nuclear projects around the country have been canceled.

As we think about the future of power utilities, there is a lingering question as to how these large, but necessary, investments in infrastructure and low-carbon energy will be made in deregulated power markets. Southern Company is unique not because it’s a vertically integrated utility in a regulated market—most utilities in the South are—but because of its commitment to innovation and public-private partnerships, something that most utilities gave up in the 1970s.

Southern Company is one of the only utilities to have a dedicated research and development department, investing over $2 billion in energy innovation since 1970. They invest in projects across the spectrum, from industrial battery storage and carbon capture to advanced nuclear. And it’s their investment in advanced nuclear in particular, something unheard of from other utilities, that made their decision to stay the course on the Vogtle project more logical. Nuclear isn’t just another way to make steam for them—it’s part of a broader strategy to innovate across the power sector.

In 2016, Southern Company announced a partnership with GE-Hitachi to work on their metal-cooled fast-spectrum PRISM reactor. They also announced partnerships with X-energy to develop another advanced nuclear concept, a high-temperature gas-cooled pebble bed modular reactor. Also in 2016, DOE awarded $40 million to a Southern Company-led public-private partnership to develop molten salt reactors, a partnership that includes Oak Ridge National Laboratory, TerraPower, the Electric Power Research Institute, and Vanderbilt University. Southern Nuclear has stated that it plans to have a demonstration reactor come online by 2025, with commercial deployment in the early 2030s.

As forward-thinking as Southern’s strategy has been, the Vogtle plants have been plagued with difficulties. The Vogtle reactors were originally scheduled to come online in 2016 and 2017 but are now not expected until 2019 and 2020 at the earliest due to several delays. Westinghouse took over construction of the Vogtle reactor in 2015 when it purchased the previous contractor CB&I, but then CB&I sued Westinghouse over the distribution of $2 billion in cost overruns across the four AP1000s under construction in the US, the Vogtle share of which was $1.3 billion. Westinghouse made several miscalculations on timeline and project management that led to many of these challenges, and Southern Company has stated that construction has been more productive since they took control in June.

Still, with prospects for increased government investment in energy innovation uncertain, the role of private investment in low-carbon technologies has never been more critical. While the success of the Vogtle project remains up in the air, dependent on extension of the production tax credit and additional loan guarantees, the significance of a public utility willing to make a big, long-term investment in clean energy innovation should be reason for hope.

But if the United States is ever to actually see a nuclear renaissance, we’ll need more than one innovative company and one successful plant. An advanced nuclear industry will likely mean smaller reactors, entrepreneurial firms, new leaders, and new policy.

See our recent report How to Make Nuclear Innovative for more.