Levy nuclear plant project shelved

02 August 2013

Duke Energy has dropped plans to build two new reactors at the greenfield Levy site in Florida blaming regulatory uncertainty. It is the second time in recent months that Duke has shelved a nuclear project.

Levy Artist's Impression (Duke Energy)
The vision for Levy (Image: Duke Energy)

Having already spent about $1 billion in preparatory work, Duke has decided to terminate a contract for the construction of the new Levy power plant "as a result of delays by the Nuclear Regulatory Commission (NRC) in issuing combined construction and operating licences for new nuclear plants, as well as increased uncertainty in cost recovery caused by recent legislative changes in Florida." The engineering, procurement and construction contract, worth up to $14 billion, had been contingent on receiving NRC approval for Levy by 1 January 2014.

Duke applied to construct and operate the new power plant as far back as August 2008, but NRC decision making has been progressively slowed by additional work inspired by the Fukushima accident of 2011 and the need to review 'waste confidence' after President Barack Obama's administration terminated the Yucca Mountain high-level waste disposal project. Last year a legal challenge forced NRC to develop a new statement on waste storage and disposal, which the regulator said might take until September 2014. Until that statement is ready the NRC cannot approve any new reactor construction or licence renewal, although it continues to work on current applications and accept new ones.

The Levy licence application will stay with the NRC for eventual approval, and Duke said it "continues to regard the site as a viable option for future nuclear generation." The company has an agreement with the public service commission that will see it recover its costs to date, but Duke will cover the continuation of licensing.

Insurance payout
Duke Energy will receive a total of $835 million in compensation for the loss of the Crystal River nuclear reactor. This pressurized water reactor was offline for two years as engineers tried to devise ways to repair its containment structure, which began to delaminate when opened to replace steam generators. Duke eventually decided to simply close the plant in the face of rising cost estimates. The payout from Nuclear Electric Insurance Limited is its largest to date.

A future decision to build would be based on "energy needs, project costs, carbon regulation, natural gas prices, existing or future legislative provisions for cost recovery, and the requirements of the NRC," said Duke.

This is the second plan for new nuclear that Duke has dropped in the last few months. Two AP1000 reactors were slated for Shearon Harris in North Carolina but an application for these was withdrawn in May due to slower-than-expected growth in energy demand. The company has also been told that the NRC will take an extra three years to process the application to build two new units at Lee. All these plans concern 1200 MWe Westinghouse AP1000 pressurized water reactors, which would have been delivered by that company in partnership with Shaw.

Duke expressed concern for its ability to meet its customers demand in coming years given that polluting coal units at Crystal River are to close around 2020, while the nuclear unit there was closed this year. Without giving details, Duke said it was confident of constructing up to 1150 MWe of new gas-fired generation and having it in operation before the end of 2017.

Researched an written
by World Nuclear News