The utility is asking for public comment on its plan to put the two partially complete nuclear reactors at the site on the auction block.
The long sad saga of the incomplete twin B&W 1200 MW design reactors at the TVA Bellefonte site in Alabama is coming to an end. The utility said this week that it is inviting public comment, due by March 18, on what should be done with the parts and pieces of the plants including the site and its infrastructure.
No specific reserve price for an auction has been posted, but TVA reportedly spent about $5 billion on the initial construction phase which began in 1974. Units 1 & 2 are 88% and 58% complete.
The catch is most of the some of the significant equipment, that is, a lot of the stuff with any real value for re-use, has long since been removed from Unit 2.
A few years ago that caveat didn’t stop Chattanooga businessman Franklin Harvey from pitching TVA with a plan to finish the reactors if the utility would guarantee that it would buy the power from them. The utility rejected his offer on the grounds that that the utility’s executives didn’t take his proposal seriously. There’s probably a lot more to it, but that’s what it comes down to.
In any case, TVA now says it will not need to build a new nuclear reactor for generation of electricity for at least 20 years. Along these lines the utility has also cancelled all NRC license work on two planned Westinghouse 1150 MW AP1000 nuclear reactors for the site. Separately, TVA continues to pursue an Early Site Permit for an SMR at its Clinch River site. That permit will be good for 20 years. No reactor design is referenced in the application to the NRC.
Back in 2011 TVA’s board of directors had a very different idea. It voted to complete the two Bellefonte reactors at an estimated cost of $11 billion. Later it hedged its bets saying it would only move forward with the twin reactors after fuel was loaded at Watts Bar II. That reactor was completed this year, the fuel has been loaded, and it will be in revenue service later in 2016.
Bumping up against the debt ceiling
One of the issues that bedevils TVA is its congressional mandated debt ceiling of about $30 billion. The utility’s debt load has hovered around the $25 billion mark for several years which leaves no room for a new $11 billion project. TVA has found some novel ways to finance projects including selling some generation facilities and then leasing them back.
According to Moody’s, “challenges confronting TVA include a decline in electric demand and a significant capital spending program driven by the replacement of coal-fired generating capacity in an effort to increase the company’s power supply from reduced CO2 emitting resources.”
On the plus side TVA’s service area is “ring fenced” which means that other independent power producers can’t poach its customers. Also, TVA sets its own rates, and its bonds are guaranteed by the federal government which keeps their ratings high and their interest costs low.
In September 2015 TVA’s Board approved the retirement of coal units at three plant sites with 3,000 MW of combined generating capacity. In addition, TVA is building two new combined-cycle gas plants: the 1,000 MW Paradise plant, which is expected to achieve commercial operation in 2017 and the 1,046 MW Allen Plant (2018), at an estimated cost of $2.0 billion. These costs per kWh come in far below that of completing the Bellefonte reactors and far sooner in terms of time to have the capital assets in revenue service.
Combined with the anticipated commercial operation of Watts Bar Unit 2, TVA anticipates reducing the reliance on coal-fired generation from approximately 32% of total generation currently to approximately 22% by 2020. It will increase generation from gas-fired and nuclear generating assets to approximately 23% and 41% , respectively, from 19% and 35% as reported in 2015.
What’s for sale?
Interested parties who successfully bid on the site would get the two partially completed plants, which have no nuclear fuel in the reactor pressure vessels. None was ever delivered to the site. This fact suggests that the scrap value of the steel in the plants might have value depending on the cost of demolition to get to it.
The package deal also comes with access to 500 Kv and 160 Kv electric switchyards, various office and industrial buildings, a railroad spur, paved access roads and site roads and lots.
There is also a helicopter landing pad. Overall, the site, which includes perimeter security, covers 1,600 square acres or about 2.5 square miles.
Because the sale would quality as a major federal action, the site’s environmental assessments would have to be brought up to date. Depending on the buyer’s planned uses for the site, new reviews might be needed said TVA.
The prospects of a new development of a small modular nuclear reactors or other type of nuclear facility at the site brought out the usual bombast from anti-nuclear groups. The Southern Alliance for Clean Energy, a group that is hard over in its opposition to nuclear energy, told the Associated Press on 2/17/16 that any such efforts would be “reckless.” Stephen Smith, the long time director of the group, said his group would “aggressively oppose such efforts.”
Elsewhere, the former Willows Creek coal-fired power plant about 20 miles from Bellefonte is being converted by Google into a data center. It’s significant power requirements are met by the access to high power grid connections and the site’s switchyard.
This model suggests that a developer of the Bellefonte site might have several uses in mind for it including industrial re-use, demolishing the existing structures for their steel, and providing a secure foundation for a future power generation project such as an advanced nuclear reactor design that might emerge from the current federal cost sharing R&D program recently announced by DOE. One or both of the exiting containment structures might be suitable for that purpose.
Anyone who wants to comment on TVA’s plan to sell the Bellefonte site, along with all the fixings, can send comments to TVA by email to sherryquirk [at] tva.gov. She is TVA’s general counsel.
If you have questions contact the Gregory Singer, TVA’s associate general counsel at gregorysigner [at] tva.gov
Comments can also be submitted at TVA’s project website https://www.tva.com/bellefonte